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Vintners are bulking up for bottle crunch

NORTH COAST – A global shortage of glass for beverages such as wine and beer is forcing some producers of high-volume brands to explore methods such as bulk glass sourcing to have enough bottles to fill.

For Foster’s Americas, the 20 million-case-per-year Napa-based division of Australian beer and wine giant Foster’s Group, bottle supply for large-volume brands such as Beringer in Napa Valley and Meridian on the Central Coast became tight between October and December, according to spokeswoman Allison Simpson.

The shutdown, for renovation of a furnace in Illinois at main supplier Saint-Gobain, exacerbated a shortage of glass containers worldwide and required Foster’s Americas to manage its inventory of bottles week to week during that period. The division’s purchasing power allowed it to obtain priority in receiving enough domestically produced bottles during that production pinch.

To fill orders and compensate for increased costs of production, glass producers are importing bottles from plants in Asia, Eastern Europe and the Middle East.

“We’re managing our glass supplies more closely these days,” Ms. Simpson said.

To prevent bottling delays, Foster’s Americas now has 80 percent of its glass needs on hand and the remainder on order with confirmed production dates.

Jackson Family Wines, which produces 5 million cases a year of large-production brands such as Kendall-Jackson and a number of boutique estate brands, has weathered the glass crunch by planning bottling runs at least a year in advance, according to Chuck Shea, vice president of production.

Part of shoring up the bottling schedule included supplementing Jackson’s primary glass supplier, which is also Saint-Gobain, primarily served by plants in Seattle and Madera. Now Jackson also obtains bottles from Mexico-based Vitro Packaging via Vitro’s relatively new American Canyon distribution facility.

Advance planning helped Jackson avoid being bereft of bottles, but having fewer suppliers hasn’t helped, Mr. Shea noted.

Notably, Anchor Glass Container Co. closed its Antioch plant in 1997 after the company was sold to Owens-Illinois, and an Owens-Illinois wine bottle plant in Hayward closed in 2003 after a fire.

“The loss of those plants as well as major maintenance on other plants has created a shortage,” Mr. Shea said.

Another major contributor to the shortage is consolidation in the glass industry, according to a report released earlier this year by the management-consulting firm A.T. Kearney. The number of large glass-container makers in the U.S. dwindled from 15 in 1983 to three in 2006 – Gallo Glass, Owens-Illinois and Saint-Gobain – controlling 90 percent of the market. A similar trend is progressing in Europe, according to the report.

Though environmental compliance hurdles can be high for new glass plants, one and maybe two more are coming to ease the supply crunch on the wine industry. Cameron Family Glass Packaging plans to open a hydroelectric-heated wine bottle plant on the Columbia River in Washington late this year.

Closer to home, Fred Franzia, president of Bronco Wine Co., which makes the Charles Shaw brand, said last summer he was looking into building a $200 million bottle plant on land he has near Napa County Airport.

No applications for that project have been filed, according to the county planning department.

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