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Wine-On-Tap Trend Gains Steam On-Premise

October 14, 2013

One strong trend in the on-premise wine scene of late has been the spread of wines on tap. Key brands are steadily entering the segment, inspiring on-premise players from independents to national accounts to get onboard.

Napa-based Free Flow Wines, which kegs more than 300 different premium wines and boasts accounts like Marriott, Kimpton, Caesars and P.F. Chang’s among others, has been among the companies driving growth in the category. Its lineup runs from Cupcake up through super-premium wines like Simi and Chateau St. Jean and above. Free Flow’s stainless steel kegs—holding the equivalent of 26 750-ml. bottles—correspond with wholesale bottle prices of about $7-$15, with the $12 a bottle segment leading the way.

Free Flow recently moved into a 22,000-square foot space in Napa, its third expansion in three years. Co-founder and CEO Jordan Kivelstadt tells SND the company is currently producing about 6,000 kegs a month, triple its output from a year ago. Its new automated keg line, installed in recent days and said to be the first of its kind for wine in North America, will give it a capacity of 30,000 kegs a month.

The Wine Group’s Concannon Vineyard recently partnered with Free Flow to present its Conservancy Cabernet Sauvignon in keg format. “The response has been overwhelmingly positive,” says John Concannon, the winery’s fourth-generation vintner, adding that while independent accounts have been most enthusiastic so far, national accounts are also testing it and he expects chain interest to expand looking into next year.

Concannon says wine-on-tap offers “greater efficiency behind the bar, less spoilage, perfect cellar temperatures and serving size variation.” Its negatives “mostly surround line cleaning and managing the keg float, which is where Free Flow Wines supports in the process.”

In addition to firms like Free Flow, which facilitate wine-on-tap offerings for existing brands, there are also a few companies marketing keg-only wines under their own labels and offering logistics support as well. Such keg-only wine brands include Boston-based Richer Pour and New York-based Gotham Project. Richer Pour, in business about a year, is now adding eight to 10 accounts a month—mostly restaurants—although it has also tested successfully at event venues like Bank of America Pavilion, Boston’s 5,000-seat waterfront amphitheater. Richer Pour’s current lineup includes a North Coast Cab, a Monterey Pinot Noir, a Santa Barbara Chenin Blanc, a Carneros Chardonnay and a Paso Robles white blend, all priced at $200 a 20-liter keg (or about $7.35 a 750-ml.). Spanish and Italian wines are also in the works.

Richer Pour co-founder David Gordon says the group is focusing on the Northeast, but also exploring other regional markets. The brand’s fully recyclable kegs—made from cardboard and plastic with the wine held inside a medical-grade Mylar bag—are one of its main selling points. “Wholesalers, especially those who don’t distribute beer, like it because they don’t have to deal with keg deposits and returns,” Gordon says.

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