In today’s challenging landscape of rising costs and extreme competitiveness, wineries actively seek strategies to increase their profit margins. They are building their sales and customer bases by leveraging social media marketing, strengthening relationships with wine club members, and improving online accessibility. Simultaneously, wineries are increasing their efficiency by investing in automated machinery and artificial intelligence (AI) to gain efficiency and save time. They also install solar arrays to conserve energy and transition to self-generated gases to reduce costs. Many of these alternatives require capital expenditures (CAPEX). Still, they deliver long-term savings and improve the winery’s environmental footprint ― a positive for an environmentally conscious younger demographic.
An untapped opportunity for many wineries is how they source the nitrogen winemakers use to battle wine’s archenemy ― oxygen. Nitrogen sparging removes suspended oxygen in the juice, nitrogen purging evacuates air from bottles before filling and corking them to prevent oxidation, and nitrogen gas pressure pushes wine between vessels during packaging.
Challenges with Gas Delivery
Traditionally, wineries contract with gas companies to regularly deliver nitrogen cylinders or tank refills, a practice that has been used for many years. However, this dependence on external suppliers carries hidden costs, including wasted nitrogen left in the cylinders when “empties” are returned to the gas company. Additionally, a small percentage of gas losses from tanks daily are due to nitrogen being “boiled off” into the atmosphere. Safety risks are also a concern with high-pressure cylinders that weigh over 100 pounds. Furthermore, wineries end up paying for the 99.999% purity gas that companies produce, even though they don’t always need such high purity levels.
The market shift from delivered gases to ‘own production’ has two main drivers, improving efficiency and taking control of your delivery schedule; delivery issues lead to delays that directly impact wine production.
“Producing your own nitrogen really puts you in control of your process. The cost savings are clear and the peace of mind that comes with this has been a game-changer for many wineries,” says Peter Asquini. “If you need nitrogen to make and bottle your wine, you need it immediately, so any disruption in supply presents significant problems for our customers.”
Asquini is the Business Development Manager at Atlas Copco, a 150-year-old global air and gas equipment manufacturer. The company began making generators for on-site nitrogen production when their customers began searching for an alternative that would allow them to control their nitrogen supply. It offers nitrogen generators with either PSA (Pressure Swing Adsorption) or Membrane technology.
Benefits of On-Site Nitrogen Generation
Creating nitrogen at your winery removes the risk of missed deliveries, supply chain disruptions, and gas scarcity in some parts of the country, which can lead to gas company allocation limits.
This approach also shifts the cost structure from variable to fixed, mitigating risks inherent in delivery contracts, including price changes triggered by unforeseen circumstances and surcharges. And, unlike purchased gas, on-site generation allows wineries to customize gas purity (% of oxygen) according to what each step in the winemaking process requires.
Asquini highlights a recent customer’s experience. “A large California winery with 24/7 continuous gas usage was concerned about costs and delivery issues and came to us for an alternative. We worked with them on the project and specifications and at the end of the process we installed a generator that let them begin generating nitrogen at their facility. Their costs went from over $23,000 per month for delivered bulk gas to $8,500 a month with self-generation.”
“CAPEX is a big issue, of course, and we’re all very aware of the cost of capital,” adds Paul Humphreys, Vice President of Communications at Atlas Copco Compressors. “Their projected savings over 15 years ― the lifetime of the equipment ― is over $2 million, and the business case and project payback really fitted with their business goals.”
Discover Your Nitrogen Self-Generation Potential
The opportunity to save money, ensure consistent supply, improve worker safety, and reduce a winery’s carbon footprint makes it worthwhile to evaluate the potential on-site nitrogen generation that can deliver for your winery. To obtain a payback analysis for installing nitrogen self-generation, visit www.atlascopco.com/BYOG.
If you’re interested in learning more, please join us on July 20th for an in-depth webinar about the benefits of producing your own nitrogen.
