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for leasing barrels remains cash manage- ment. Corey Braunel, co-owner of Dusted Valley Winery in Washington's Walla Walla Valley, points out there are four differ- ent ways to finance capital investments: self-financing, which requires large cash reserves; using an annual line of credit, an attractive option when interest rates a r e l o w ; a n a s s e t - based lending vehicle like a term loan; and leasing. For Dusted Valley, he says, "Our biggest concerns in the evaluation of an asset-based lending program are the cost of capital and if the t e r m m a t c h e s t h e life of the asset." In the case of H&A, this makes leasing more attractive. or many small and mid-sized winer- ies, the cash flowing into annual bar- rel purchases is as important as the wine those barrels hold. At prices hover- ing around $1,000 to $3,500 per barrel, depending on quality, new French oak can eat up a large portion of a winemaker's o p e r a t i n g f u n d s . I n addition, managing the p u r c h a s e s a n d p a y - ments, often to mul- tiple cooperages, can require hours of paper- work. To deal with it all, many winemakers find help through compa- nies offering leases and other services. Leasing companies offer different packages with different benefits, from tax advantages to protecting a credit line. But the primary reason BY ANNE SAMPSON + The high cost of barrels within the wine industry is a given. + There are multiple ways to manage these costs. + Leasing programs offer flexibility, tax advantages and ease of use. AT A GLANCE Lease Out the Barrels Companies offer wineries help with cash flow via barrel leasing programs. 5 2 V I N E YA R D & W I N E RY M A N A G E M E N T | J a n - F e b 2 017 w w w. v w m m e d i a . c o m