The Barrel Business: U.S. Wood Products on a Boom

If you go back a century or two, it seems as though almost everything that was shipped anywhere, from gunpowder to cloth to seafood, was packed in a barrel for transport. Easily rolled down gangplanks and into port facilities, wooden barrels have been the containers of choice on shipboard since ancient times.

However, with the widespread development and use of cardboard packaging and metal containers early in this century, the business of making wooden barrels suffered a decline.

Today, although many consider cooperage a lost art, U.S. production of those deceptively simple wooden containers is caught up in a rather surprising fin de siecle boom.

Perhaps it would be appropriate to ponder the increasing numbers with a glass in hand. After all, most wooden barrels these days are used to age wine, whiskey and other spirits. U.S. exports of wooden casks, barrels, staves and other cooperage products show strong growth, and 1999 will be a record-setting year.

Such growth could not have been predicted back in 1994, when the United States exported just $21.9 million in cooperage products. But by 1998, the figures had more than tripled–reaching $70.3 million–and don’t even reflect the millions of dollars’ worth of high-quality American white oak lumber and logs that the United States now exports, some of which later will be made into staves and barrels.

Growth, investment and modernization in the wine and spirits industries overseas have created a demand for oak products that we are well positioned to satisfy. wood

Vintners in Europe, Australia, South America and South Africa are clamoring for new wine barrels. American white oak is increasingly the material of choice--less porous and easier to saw than species from other parts of the world, reducing cost and waste in manufacture.

Meanwhile, both used and new barrels that are made for aging distilled spirits find their way from the United States to markets in the United Kingdom, Ireland, Mexico and the Caribbean.

Costs are, and will continue to be, an important factor as vintners choose their cooperage products, and it is here that the United States enjoys a true advantage. The average cost of a finished barrel of American oak ranges from $235 to $350–generally about half the cost of a French oak barrel.

U.S. cooperage suppliers offer it all: from finished, toasted barrels to replacement parts. And–for vintners looking for a cheap way to add "oakiness" to their wine–even including toasted oak chips.

Oak stave and plank exporters often work directly with barrel makers in established overseas wine-producing regions.

In recent years, well-priced, high-quality Chilean wines have grown in popularity overseas. Chilean exports, which include both bottled and bulk wines, have grown from just 43 million liters in 1990 to 291 million liters in 1998, and are expected to surpass $680 million in value by the year 2000.

Red wines, especially Cabernet Sauvignon and Merlot, are Chile’s forte; these varietals can be enhanced by the vanilla and cedar notes imparted by American oak.

The Chilean increase in fine wine production may lead to an export opportunity for oak and oak barrel producers in the United States.

Chile’s wine industry now imports oak barrels, staves and chips worth almost $10 million per year from the world, and nearly $3 million from the United States.

After the United States, the United Kingdom is the world’s largest importer of cooperage products. And there’s plenty of growth, thanks to a so-called ‘renaissance’ for Scottish whiskey producers.

Of the $45 million worth that it imported in 1998, about a quarter came from the United States. U.S. barrel suppliers are well-placed to capitalize, since Kentucky bourbon barrels seem to fit the bill perfectly.

There’s a history to this trade. Early in this century, much Scotch whiskey was drunk ‘young,’ as only the well-to-do could afford aged whiskey. But beginning in 1916, the British government mandated that the whiskey be aged in casks for a minimum of three years.

Scotch producers scrambled to locate inexpensive supplies of casks. Used sherry casks, left over after British sherry merchants had bottled sherry imported from continental Europe, provided a solution for a time.

About 40 years later, a better source appeared, shortly after the U.S. Congress passed laws requiring that bourbon be aged in new oak barrels.

It was a boon for British scotch producers that continues to this day. After a bourbon barrel has been used once, it is often whisked off to Scotland where it is used to age whiskey.

Today the United States dominates the U.K. barrel market. Approximately 80 percent of all British barrel and cooperage product imports originate here.

As the U.K.’s penchant for barrels has grown, so too have U.S. exports, from less than $7 million in 1994 to over $35 million in 1998.

Which leads us to a mystery. Over the same period, reported U.K. whiskey exports have remained stable, and they even declined in 1998. If one assumes that whiskey production and barrel demand are directly linked–but they are not exporting all that extra whiskey–where is all the whiskey going? Or, what else are the barrels being used for?

Casks and Whiskey

As with a fine wine, much of the flavor and taste of whiskey depends on the cask. However, the importance of the wood in whiskey-making has historically been overlooked.

Whiskey produced before 1900 was not usually aged for long periods and would be matured in whatever casks were available. Casks might have held rum, butter, wine, herring or other goods.

Today, however, great importance is placed on the interplay between the wood, its previous contents and the flavor of the whiskey.

Whiskey casks are generally made of American white oak, French oak or Spanish oak. Each cask is made by hand by skilled coopers, and imparts unique qualities to the whiskey.

While in the cask, whiskey matures and changes, absorbing tannins and other flavor from the oak and from air passing through the porous wood.

glass of whiskey To complicate matters further, whiskey casks are usually used barrels that once contained sherry or bourbon, although some producers are experimenting with port, brandy and rum casks.

Some whiskeys are even filled in one type of cask and then "finished" in another. The combination of the natural variations in the oak, as well as the individual construction of casks and varied "prior lives," culminates in what connoisseurs regard as beautifully unique products.

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Bachelder is a marketing specialist and Bomersheim is an economist with the Foreign Agricultural Service’s Forest and Fishery Products Division. Tel.: (202) 720-2409; Fax: (202) 720-8461; E-mail: bachelder@fas.usda.gov; bomersheim@fas.usda.gov

Wine can be both fermented and aged in oak casks. Although barrel fermentation can add body and complexity to a wine, today’s are usually fermented in large tanks and then aged in casks.

Oak can infuse a variety of aromas and flavors resembling butter, vanilla, dill, coconut, cloves, caramel and cinnamon. American white oak (Quercus alba) gives much stronger flavors than the subtle ones afforded by French oak (Quercus pedunculata and Q. sessiflora).

Perhaps reflecting tradition and those subtler characteristics, French oak has been the traditional standard for fine wines, especially the expensive "reserves." But American oak is growing in popularity because of new techniques in barrel making that make the differences less distinguishable.

The manner that the wood in a cask is "toasted" can also change the flavors. Good toasting techniques can give American oak subtler flavoring qualities, allowing vintners to take advantage of the substantial savings in using American oak casks.