Oeneo, whose two core businesses are in closures and barrels, has sold its US oak stave mill in Bloomfield, Iowa for €0.9million. The company disclosed that the plant operated at a loss of €0.7million in 2004 and at €0.9million in 2003.
Spokesperson Nicolas Serpette said: "We couldn't keep it going at such a cost, we are going to instead invest in our core brands, Seguin Moreau and Radoux." With the capital generated from the sale, Oeneo's barrel division has already invested €385,000 into the Seguin Moreau French oak stave mill in the Dordogne region.
The company was unwilling to comment in any depth about why the Bloomfield plant had incurred such losses but attributed it, in part, towards the global downturn in the demand for American Oak.
Serpette told BeverageDaily.com that the operating losses of the factory reflect, at least in part, a shift in trend. "American oak has been declining over the last two years. The stronger, I could say, 'more woody', taste given by American oak is no longer popular, and is therefore losing favour with the winemaker."
Maturing wine in an oak barrel influences the product by adding flavourants, oak tannins and gradual oxygen permeation.
Oak is sourced mainly from three regions: France, the United States and Central and Eastern Europe. French oak is the most subtley flavoured and, due to the length of time that it has been used, best understood of the three - but it is by far the most expensive.
American oak is richer in compounds called tyloses that seal the pores and tubes of the wood meaning that American oak is generally less porous than the French variety.
The negative effect of this is that without micro-oxygenation, American oak barrels cannot provide the same level of oxygen permeation as French oak barrels can. This level is seen as essential to the maturing process.
But, tyloses do have a positive effect on the cost of production. Being impermeable, the wood can be sawn into staves rather than hand-split along the grain of the wood as is French oak in order to prevent leakage. Sawing the oak into staves means that coopers can use over twice as much wood from each log in stave production.
Lower costs had driven sales of American oak in recent years but these had also been riding on a general trend that had hitched demand for oak-matured wines. The revelations from Oeneo suggest that, for US oak, this could be coming to an end.
Serpette explained that "American oak is stronger and faster - French oak takes more time to impregnate the wine." The American variety has much higher levels of flavourants - especially lactones that give wine a 'woody' flavour. Analysis carried out at Stellenbosch University in South Africa ascertained that the levels of lactones are between 1 to 77mg per gram in French wood but as high as 158 mg per gram in American. Vanillins are also more prominent in American oak (11 vs 6 mg).
The strong flavours of American Oak can complement some wines, in particular rich reds such as Australian Shiraz and Spanish Rioja. But, according to Serpette, popularity of the 'woody' taste is waning when it comes to other wine styles.
For winemakers seeking to oak mature their wine, American barrels don't even seem to be the best cheap option for oaking wine.
"It needs to be a high-quality and high-priced wine to be able to afford to use an oak barrel," said Serpette. "The producer of lower priced wine who wants some oak influence is more likely choose alternatives such as chips or cubes."
In an industry that has of late been so driven by global tastes, Oeneo, despite this closure, plan to maintain as much choice as possible. "These trends are always changing. The story is to be ready."