Silver Oak is getting into the barrel business.
On Thursday, the Oakville-based vintner announced it has bought Missouri-based A&K Cooperage, saying the deal makes it the first U.S. winery to purchase full ownership of a U.S. oak barrel maker.
Silver Oak had purchased a 50 percent stake in A&K in 2000 to age its cabernet sauvignon wines but wanted complete ownership, especially in the midst of growing demand for American oak barrels driven by a major increase in craft whiskeys and bourbons. It will rename the 15-employee business as The Oak Cooperage.
“Having control over our oak barrel needs and production makes complete sense from both an excellence and cost control standpoint,” David Duncan, Silver Oak president and CEO, said in a statement.
Several American wineries have made investments in cooperages or have parent companies that have stakes in the business. For example, Jackson Family Wines founder Jess Jackson invested in his own mill in France to make better staves for the French oak barrels used in his wines. The company also became a partner in Missouri-based Merrain International to manufacture the barrels. The investment reduced the barrel cost for Jackson Family Wines barrel by half, according to “A Man And His Mountain,” an authorized biography on Jackson’s life.
Brown-Forman Corp., which produces Jack Daniel’s but also owns Sonoma-Cutrer Wines, has Jack Daniel Cooperage in Decatur, Ala., and claims it is the largest maker of new whiskey barrels.
Silver Oak General manager Tony LeBlanc said the focus will be on improving the quality of the 59-gallon American oak barrels used to age its wines, which can retail for more than $100 per bottle. He said in a statement that the white oak gives “us the oak flavor profile and textural components that best complement our wines.”
The company said the purchase will allow its winemakers to have complete control over the grading and selection of every piece of stave wood, as well as the aging and toasting specifications of its barrels.
But Silver Oak also is exploring getting involved in barrel making for bourbon and whiskey given the boom in the sector with a influx of craft distillers. American oak barrels also are used for Tabasco, ginger ale and rum.
According to the Distilled Spirits Council, bourbon and Tennessee whiskey volumes rose 7.4 percent in 2014 to more than 19 million cases, providing $2.7 billion in revenue. The demand for barrels is being felt locally in Sonoma County’s burgeoning craft distilling industry, where vintners such as Purple Wine Co. are exploring entry.
Chris Matthies, owner of Sonoma Brothers Distilling in Windsor, said he encountered problems trying to locate barrel suppliers for his bourbon and whiskey. The distillery will have 50 to 100 gallons of its whiskey available by year’s end.
“There were a lot who told me they weren’t taking new clients,” Matthies said. “It’s becoming more and more difficult.”
An American oak barrel for whiskey or bourbon typically costs from $200 to $250, which Matthies noted is much less expensive than French oak barrels.
You can reach Staff Writer Bill Swindell at 521-5223 or firstname.lastname@example.org. On Twitter @BillSwindell.