Bringing in the bottles

By JACK HEEGER, Register Staff Writer

Last summer Fred Franzia, of Two Buck Chuck fame, announced that he planned to build a factory in Napa Valley to make bottles for his wine.

The factory would be built on an 80-acre site he owns near the Napa County Airport. When Franzia unveiled the idea, he talked about the positive ecological impact it would have. Namely, having a bottlemaker in the heart of wine country would eliminate the need for about 62,000 truckloads of bottles to Napa each year, or about 375,000 diesel-driving hours. This would decrease emissions by more than 32,000 tons, he said. In addition, he said it would add about 350 jobs to Napa County’s work force and money to the tax base.

The plant is no sure thing, for several reasons. The proposed glass-making facility would need approval from the Napa County Airport Land Use Commission, the Planning Commission and the Board of Supervisors. Such a large facility for heavy manufacturing would undoubtedly stir up resistance among voters and environmental groups, and the economics of producing bottles in the U.S. are shaky, at best.

But such a plant would help ease a worldwide bottle shortage caused by consolidation, mergers and energy costs that have caused production expenses to rise. It would also be the first of its kind in Napa County — and bottles are big business.

A 2005 report by MKF Research of St. Helena showed that glass contributes nearly $162 million to the economy of Napa County, even without a manufacturer here.

A separate study released this month by the Wine Market Council indicated that sales of wine in the U.S. rose to 304 million cases last year. That translates to the equivalent of more than 3.6 billion bottles. Napa Valley accounts for 3.6 percent of all U.S. wine production, producing enough wine to fill nearly 130 million bottles every year.

Vintners in Napa Valley obtain their bottles from sales representatives of major glass manufacturers from around the world, or through distributors who handle sales for several manufacturers.

Because Napa Valley wines are at the highest tiers of quality, so, too, are the bottles holding the wines. The only bottle manufacturer with a sales office in Napa Valley is a high-end manufacturer, and the only bottle distributor in the valley works with only top-level companies.

By the bottle

Saverglass, a 110-year-old French company, opened a Napa office in 1995. “We specialize in the premium end, and that’s why we’re here,” said Daniel Repoux, president and CEO, who formerly served as Saverglass’ export director in France. “Napa Valley and Sonoma (wines) are premium wines.”

He said Saverglass offers its clientele “several hundred standard bottles” in varying shapes and sizes, and said the company has more than 3,000 individual items in its portfolio. That includes bottles for the distilled spirits industry, accounting for about 50 percent of the company’s sales.

Wine bottles come in six colors — flint (clear), green, deadleaf green, antique, amber and brown. Standard sizes are 375-milliliter, 750-milliliter, 1.5-liter, 3-liter, 5-liter and 6-liter. Specialized custom orders can include other sizes.

Saverglass prices range from 65 cents per bottle on up to “$3, $4 or even $5 for fancy highly-decorated bottles,” Repoux said, but added that 90 percent of the bottles range from 65 cents to $1.50.

Prices have increased significantly because of the dollar’s recent descent, since all of Saverglass’ production comes from France. But it isn’t just the exchange rate that has caused increases — the cost of energy to produce the glass has grown dramatically in recent years for both domestic and imported bottles.

“But the beautiful thing about glass bottles is that they can be recycled,” said Erica Harrop, whose Napa company, Global Package, distributes bottles for five European bottle manufacturers “and three others in a lesser way.”

Some of the ingredients that help sand to melt are already in the glass, so recycling helps to reduce fuel costs, she said.

The manufacturers she represents all specialize in high-end bottles, ranging in price between $1 and $2 each. “There’s always a demand for high-end — in all products — and Napa Valley (vintners) want the best and are willing to pay for it,” she said. The average weight of a bottle is a little more than a pound — and the ones she sells range from a little heavier than average to about two pounds.

She works with small vintners who “say they want something different and unusual,” she said. The companies she represents offer contemporary designs such as bottles with a reverse taper (wider at the top), and she said there are “some products coming out in the next few years that will shake the industry.”

Harrop, a UC Davis graduate who worked in wine production before turning to the bottle industry, sells to about 100 wineries on a regular basis, not only in Napa Valley, but also in Sonoma County and elsewhere in California.

Some wine writers have referred to a movement toward heavier bottles, and Repoux said it is the result of a trend toward the “premierization” of wine.

Producers have an incentive to market a more appealing product, and “the heavy bottle gives the perception of better quality (wine),” Repoux said.

Tight market

Saverglass sells directly to “a couple hundred” wineries, Repoux said. But “two or three times more use the product,” he said, buying through one of a half-dozen distributors.

High-end bottles such as those sold by Saverglass and Global Package are made in Europe, so getting them to the U.S. means added time in filling orders. If the bottle is a staple in the manufacturer’s inventory, it usually takes eight or so weeks. But if a customer wants a custom-made bottle, even if it uses an existing bottle design, bottles must be ordered six months in advance, Repoux said.

Bottles are bulk-shipped in containers. Saverglass has a warehouse in Benicia, while Global Package uses a warehouse in American Canyon.

Harrop and Repoux agree that bottle manufacturing capacity is tight and that demand is increasing. Two of the world’s largest glass manufacturers — St. Gobain and Owens-Illinois, which dominate with 70 percent of the glass market — are importing bottles from their foreign affiliates, Repoux said. “If they’re importing, one has to wonder why.”

Referring to the mergers of glass manufacturers, Harrop said, “When the market consolidates, it drives down prices.”

“The volume manufacturers don’t want to re-invest (in their factories) because the business is not profitable,” Repoux said.

But because the demand for high-end bottles continues, Repoux said that Saverglass is building a third plant in France, increasing production capability by 40 percent and enabling the company to produce more than a half billion bottles a year. Still, he said, “That’s only 10 percent of all of French production.”

Saverglass has 1,700 employees worldwide, increasing to 2,000 when the new plant opens. Eleven people are employed in the Napa office.

Global package employs one person — Harrop.

As for a bottle plant in Napa Valley — Franzia’s plan includes an eight-acre park and arboretum buffer between the glass plant and Highway 29 — Repoux said he didn’t think it was realistic. “I think it will be tough to get permits,” he said, adding that he didn’t think anyone would vote for it. “Napa Valley is the largest tourist attraction in California, and why would you put a plant in the middle of it?”

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