Supply chain bottlenecks giving Napa Valley something to 'wine' about
Wine corks stranded at sea due to supply chain delays causing ‘tremendous’ pressure, Portocork CEO signals
Portocork CEO Dustin Mowe discusses rising shipping and supply costs impacting wine country with FOX Business’ Kelly O’Grady.
Ongoing supply chain and shipping delays are giving Napa Valley business leaders something to "wine" about, as a cork shortage and rising costs bottleneck the industry.
Portocork, one of the world’s largest wine cork harvesting and processing companies, has 138 million corks stranded at sea on shipping containers, according to its CEO.
But the most "tremendous" pressure reportedly comes from rising shipping rates, with the cost of transferring a single container from Portugal to Oakland, California, going from $2,500 to $14,000.
"Biggest challenge basically we're faced with is just the shipping line," Dustin Mowe told FOX Business’ Kelly O’Grady, "and then a tremendous amount of pressure being able to tell customers, ‘Sorry, we can't deliver for another month or several weeks.’"
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Mowe noted that without the capacity to provide wineries with their cork inventory, it could impact national supply.
Supply chain and shipping delays are adding "tremendous" pressure to Napa Valley's wine country, Portocork's CEO says on "Varney & Co." Wednesday, as the industry also faces cork, bottle, seed and fertilizer shortages. (iStock)
"That’s put a tremendous hit on our ability to supply," Portocork’s CEO continued.
Recent lockdowns in China are also raising global market and labor concerns, further putting Napa Valley’s $34 billion wine industry at risk.
In addition to supply chain disruptions, America’s wine country has also seen a shortage of bottles, seeds, fertilizer and a worsening drought within the last year.
"It’s millions of dollars of investment these folks have made over many generations, so hopefully it’ll be resolved soon," Dr. Kaan Kurtural, a viticulture specialist with the University of California Davis, previously said on "Cavuto: Coast to Coast."
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Dr. Kaan Kurtural, a viticulture specialist with the University of California in Davis, explains how the supply chain crisis is impacting the wine industry. FOX Business' Kelly O'Grady reports.
Some vintners and distributors have decided to leave California altogether and tend to vineyards in the Midwest, like the founders of Hoffman Family of Companies David and Jerri Hoffman, who hope to invest $100 million in turning Missouri’s relatively small wine country into a tourist destination.
"We’re pretty excited about what’s going on and how quickly we’ve been able to assemble these vineyards," Hoffman told FOX Business’s Grady Trimble last May. "We think that the people locally have responded very well, and we see an opportunity to consolidate the vineyards and to produce our grapes and distribute those nationally."
FOX Business’ Talia Kaplan and Sumner Park contributed to this report.