Michael T. Frow Susan L. Kerr. ChE 4273 Dr. Miguel Bagajewicz
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1 Michael T. Frow Susan L. Kerr ChE 4273 Dr. Miguel Bagajewicz
2 Overview Problem Definition Process Overview Consumer Satisfaction and Preference Application of Model Business Model Conclusions Recommendations
3 Problem Definition History of Wine Predates recorded history Fables of medicinal uses Integral role in cultures Safe alternative to drinking water
4 Problem Definition Wine of Today Unique product Evolved into an experience Past: Quality defined by producer Present: Consumer holds buying power Tasks of Producer Identification of consumer wants Adjustment of Product or Price
5 Problem Definition Quality Outsourced for Evaluation 1. Laboratories 2. Competitions Problems Increased Cost Defined Post Bottling Adjustment: Selling Price
6 Problem Definition Solution Quality can be found before bottling Engineered to reach desired quality Profit can be maximized Method Identification of Consumer Utility Adjustment to Process Competitor Comparison
7 Process Overview
8 Process Overview
9 Process Overview
10 Process Overview
11 Consumer Utility and Preference
12 Consumer Utility and Preference Theory Quantification of Consumer Satisfaction α S = d + d 1 2 β α = Inferiority Function Knowledge of product Function of Time β=superiority Function Consumer preference Comparison to competition
13 Consumer Utility and Preference Theory By Maximizing Satisfaction (S) β = α α / β d p d p d d Relation of Consumer Budget (Y) Y = d1 p1 + d2 p2
14 Consumer Utility and Preference Theory βis ratio of consumer preference β = H / H 2 1 Happiness Function H i = w i y i w i = weight Based on consumer preference Fraction of 1 y i = satisfaction score Based on consumer evaluation Manipulated by process
15 Consumer Utility and Preference Formation and Integration 1. Identification of Characteristics 2. Quantification of Consumer Perceptions 3. Relation to Physical Properties 4. Assignment of Weight 5. Integration into Process Limitations *Estimations used to generate consumer expectations.
16 Consumer Utility and Preference Characteristics Clarity Color Bouquet Acidity Sweetness Bitterness Body/Texture Finish/Aftertaste
17 Consumer Utility and Preference Weights of Characteristics
18 Consumer Utility and Preference Clarity Crystal Clear Clear Slightly Blurred Blurred Milky, Cloudy Sediment Present Turbidity (NTU) >4
19 Consumer Utility and Preference
20 Consumer Utility and Preference
21 Consumer Utility and Preference Clarity Utility Function y clarity = -.25x turbidity +1 Manipulation Bentonite Binds to proteins Cost: $7 / 8ounces g/l of 5% Aqueous Solution
22 Consumer Utility and Preference Color Hue Shade of color Ranges from brown to red Brightness Intensity of color Ranges from dull to bright
23 Consumer Utility and Preference
24 Consumer Utility and Preference
25 Consumer Utility and Preference Color Hue Measurement Absorbance Ratio = (D 420 /D 520 ) Red: <.44 Crimson: Brown: >1.0 Brightness Measurement % Brightness = D D (Dull) 1 (Bright)
26 Consumer Utility and Preference Color Hue Utility Function y = -x D420/D x D420/D520 Brightness Utility Function y = x Brightness Fraction Manipulation Increase cold soak time Alters flavor and aroma profiles
27 Consumer Utility and Preference Bouquet Olfactory characteristics of wine due to processing Result of tannins, esters, and other compounds Measured by solid-phase micro-extraction Analyzed based on number of components Complexity in bouquet is desired
28 Consumer Utility and Preference
29 Consumer Utility and Preference Body/Texture Feeling of wine in the mouth Depth and round feature Measured by % alcohol Range: 8-16 % Optimum: 12%
30 Consumer Utility and Preference
31 Consumer Utility and Preference
32 Consumer Utility and Preference Body/Texture Utility Function y Body/Texture = -625 x alcohol2 +150x alcohol -8 Manipulation Fermentation Time Increase time, increase alcohol
33 Consumer Utility and Preference
34 Consumer Utility and Preference Flavor Analyzed based on three attributes Sweetness Acidity Bitterness Balance is necessary
35 Consumer Utility and Preference
36 Consumer Utility and Preference
37 Consumer Utility and Preference
38 Consumer Utility and Preference Acidity ph Level Full Range: Optimum: Manipulation Malolactic Fermentation Acid Blend ($5/6ounces) 1 teaspoon/gallon
39 Consumer Utility and Preference Sweetness Residual Sugar Full Range: 0.2wt% Optimum:.1 wt% Manipulation Decrease fermentation time Bitterness Tannin Content Full Range: 0 3 g/l Optimum: 0 g/l Manipulation Increase aging Polyclar
40 Consumer Utility and Preference y acidity = -x ph x ph y balance =( y sweetness = -100x %Residual Sugar2 + 20x %Residual Sugar y bitterness = e-2x(tannin content) SUM OF SQUARES EMPLOYED FOR ERROR =(y acidity + y sweetness {(y average -y acidity sweetness + y bitterness ) acidity ) 2 +(y +(y average -y sweetness sweetness ) 2 -(y (y average -y bitterness ACCOUNTS FOR EFFECTS ON BALANCE bitterness ) 2 }
41 Consumer Utility and Preference Finish/Aftertaste Final step of wine evaluation Based on length of time on palate Measured by residence time on palate Cannot manipulate process to alter Will not be used in overall function
42 Consumer Utility and Preference Effects of Aging Largest influential factor of process Varies by type, time, and toasting effects Toasting method: pyrolysis of oak Ranges: Light Dark
43 Consumer Utility and Preference 250 Temperature(C) TIME (mins) Light Medium Heavy
44 Consumer Utility and Preference Temperature profile of medium toast. 200 Temperature (C) TIME (mins) 2 mm 6 mm 10 mm 14 mm
45 Consumer Utility and Preference
46 Consumer Utility and Preference
47 Consumer Utility and Preference Complications Consequences of Manipulations More data is necessary Diffusivity Profile Correlations of relationships
48 Consumer Utility and Preference
49 Application of Model
50 Application of Model
51 Application of Model
52 Application of Model Grapes Stems Crusher Destemmer 11 ton/ hr CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Sugar Tartaric Acid Calcium Carbonate (CaCO 3 ) Must CO 2 Sugar K 2 S 2 O 5 Tartaric Acid CaCO 3 Must Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Closed Tank Cold Soaking 20000L P-13 Flexible Impeller Pump 120 gal / min P-14 Must Refrigeration Coils 3" Butterfly Drain Valve
53 Application of Model Grapes Stems Crusher Destemmer 11 ton/ hr CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Sugar Tartaric Acid Calcium Carbonate (CaCO 3 ) Grapes from Vineyard Must CO 2 Sugar K 2 S 2 O 5 Tartaric Acid CaCO 3 Must Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Closed Tank Cold Soaking 20000L P-13 Flexible Impeller Pump 120 gal / min P-14 Must Refrigeration Coils 3" Butterfly Drain Valve
54 Application of Model Grapes Stems Crusher Destemmer 11 ton/ hr CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Sugar Tartaric Acid Calcium Carbonate (CaCO 3 ) Crushing & Destemming Must Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Must CO 2 Sugar Closed Tank Cold Soaking 20000L K 2 S 2 O 5 P-13 Tartaric Acid Flexible Impeller Pump 120 gal / min P-14 CaCO 3 Must Refrigeration Coils 3" Butterfly Drain Valve
55 Application of Model Grapes Stems Crusher Destemmer 11 ton/ hr CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Sugar Tartaric Acid Calcium Carbonate (CaCO 3 ) Must CO 2 Sugar K 2 S 2 O 5 Tartaric Acid CaCO 3 Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Must Closed Tank Cold Soaking 20000L P-13 Cold Soaking Flexible Impeller Pump 120 gal / min P-14 Must Refrigeration Coils 3" Butterfly Drain Valve
56 Application of Model Grapes Stems Crusher Destemmer 11 ton/ hr CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Sugar Tartaric Acid Calcium Carbonate (CaCO 3 ) Must CO 2 Sugar K 2 S 2 O 5 Tartaric Acid CaCO 3 Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Must Closed Tank Cold Soaking 20000L Must to Fermentation P-13 Flexible Impeller Pump 120 gal / min P-14 Must Refrigeration Coils 3" Butterfly Drain Valve
57 Application of Model
58 Application of Model
59 Application of Model Potassium Metabisulfite (K 2 S 2 O 5 ) Pasteur Red Yeast Diammonium Phosphate (DAP) Must Yeast K 2 S 2 O 5 DAP Must Membrane Press 7 tons / hr Covered Fermentation Tank (Outside) 9000L Refrigeration Plates P-15 Flexible Impeller Pump 120 gal / min P-19 Skins, Seeds, & Stems Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out 3" Butterfly Drain Valve Wine
60 Application of Model Potassium Metabisulfite (K 2 S 2 O 5 ) Pasteur Red Yeast Diammonium Phosphate (DAP) Must from Cold Soaking Must Yeast K 2 S 2 O 5 DAP Must Membrane Press 7 tons / hr Covered Fermentation Tank (Outside) 9000L Refrigeration Plates P-15 Flexible Impeller Pump 120 gal / min P-19 Skins, Seeds, & Stems Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out 3" Butterfly Drain Valve Wine
61 Application of Model Potassium Metabisulfite (K 2 S 2 O 5 ) Primary Fermentation Pasteur Red Yeast Diammonium Phosphate (DAP) Pasteur Red Yeast Must Yeast K 2 S 2 O 5 DAP Must Membrane Press 7 tons / hr Covered Fermentation Tank (Outside) 9000L Refrigeration Plates P-15 Flexible Impeller Pump 120 gal / min P-19 Skins, Seeds, & Stems Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out 3" Butterfly Drain Valve Wine
62 Application of Model Potassium Metabisulfite (K 2 S 2 O 5 ) Pasteur Red Yeast Diammonium Phosphate (DAP) Wine Pressing Must Yeast K 2 S 2 O 5 DAP Must Membrane Press 7 tons / hr Covered Fermentation Tank (Outside) 9000L Refrigeration Plates P-15 Flexible Impeller Pump 120 gal / min P-19 Skins, Seeds, & Stems Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out 3" Butterfly Drain Valve Wine
63 Application of Model Pressed Wine to Secondary Fermentation Potassium Metabisulfite (K 2 S 2 O 5 ) Pasteur Red Yeast Diammonium Phosphate (DAP) Must Grape Solids To Waste Yeast K 2 S 2 O 5 DAP Must Membrane Press 7 tons / hr Covered Fermentation Tank (Outside) 9000L Refrigeration Plates P-15 Flexible Impeller Pump 120 gal / min P-19 Skins, Seeds, & Stems Flexible Impeller Pump 120 gal / min Refrigeration Water (Brine) In Refrigeration Water (Brine) Out 3" Butterfly Drain Valve Wine
64 Application of Model
65 Application of Model
66 Application of Model CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Viniflora Oenos Malolactic (ML) Bacteria Wine Wine 2" Butterfly Racking Valve Closed Fermentation Tank 20000L Racking Elbow Refrigeration Water (Brine) In Refrigeration Water (Brine) Out 2" Butterfly Drain Valve CO 2 Lees Refrigeration Coils ML Bacteria K 2 S 2 O 5
67 Application of Model CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Viniflora Oenos Malolactic (ML) Bacteria Wine Wine 2" Butterfly Racking Valve Closed Fermentation Tank 20000L Racking Elbow Refrigeration Water (Brine) In 2" Butterfly Drain Valve CO 2 Lees Refrigeration Coils ML Bacteria K 2 S 2 O 5 Refrigeration Water (Brine) Out Pressed Wine from Primary Fermentation
68 Application of Model CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Secondary Fermentation Viniflora Oenos Malolactic (ML) Bacteria Wine Wine 2" Butterfly Racking Valve Closed Fermentation Tank 20000L Racking Elbow Refrigeration Water (Brine) In Refrigeration Water (Brine) Out 2" Butterfly Drain Valve CO 2 Lees Refrigeration Coils ML Bacteria K 2 S 2 O 5
69 Application of Model CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Malolactic Fermentation Wine 2" Butterfly Racking Valve 2" Butterfly Drain Valve CO 2 Lees Closed Fermentation Tank 20000L Racking Elbow Refrigeration Coils ML Bacteria K 2 S 2 O 5 Wine Refrigeration Water (Brine) In Viniflora Oenos Malolactic (ML) Bacteria Refrigeration Water (Brine) Out Viniflora oenos Bacteria
70 Application of Model CO 2 Potassium Metabisulfite (K 2 S 2 O 5 ) Decanted Wine to Hot and Cold Stabilization Wine Viniflora Oenos Malolactic (ML) Bacteria Wine 2" Butterfly Racking Valve Closed Fermentation Tank 20000L Racking Elbow Refrigeration Water (Brine) In Refrigeration Water (Brine) Out 2" Butterfly Drain Valve CO 2 Lees Refrigeration Coils ML Bacteria K 2 S 2 O 5 Sediments to Waste
71 Application of Model
72 Application of Model
73 Application of Model Potassium Metabisulfite (K 2 S 2 O 5 ) K 2 S 2 O 5 Bentonite Bentonite (Hot) Wine Felxible Impeller Pump 43 gal / min Wine Flexible Impeller Pump 43 gal / min Wine 2" Butterfly Racking Valve Closed Tank Hot & Cold Stabilization 20000L Racking Elbow Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Filter Frame Rough Polish (7 Micron) Wine 2" Butterfly Drain Valve Lees Refrigeration Coils
74 Application of Model Decanted Wine from Secondary Fermentation Potassium Metabisulfite (K 2 S 2 O 5 ) K 2 S 2 O 5 Bentonite Bentonite (Hot) Wine Felxible Impeller Pump 43 gal / min Wine Flexible Impeller Pump 43 gal / min Wine 2" Butterfly Racking Valve Closed Tank Hot & Cold Stabilization 20000L Racking Elbow Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Filter Frame Rough Polish (7 Micron) Wine 2" Butterfly Drain Valve Lees Refrigeration Coils
75 Application of Model Rough Filtration Potassium Metabisulfite (K 2 S 2 O 5 ) K 2 S 2 O 5 Bentonite Bentonite (Hot) Wine Felxible Impeller Pump 43 gal / min Wine Flexible Impeller Pump 43 gal / min Wine 2" Butterfly Racking Valve Closed Tank Hot & Cold Stabilization 20000L Racking Elbow Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Filter Frame Rough Polish (7 Micron) Wine 2" Butterfly Drain Valve Lees Refrigeration Coils
76 Application of Model Potassium Metabisulfite (K 2 S 2 O 5 ) K 2 S 2 O 5 Bentonite Bentonite (Hot) Wine Felxible Impeller Pump 43 gal / min Wine Flexible Impeller Pump 43 gal / min Wine 2" Butterfly Racking Valve Closed Tank Hot & Cold Stabilization 20000L Racking Elbow Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Filter Frame Rough Polish (7 Micron) Wine 2" Butterfly Drain Valve Lees Refrigeration Coils Hot and Cold Stabilization
77 Application of Model Bentonite (Hot) Potassium Metabisulfite (K 2 S 2 O 5 ) K 2 S 2 O 5 Bentonite Bentonite (Hot) Wine Felxible Impeller Pump 43 gal / min Wine Flexible Impeller Pump 43 gal / min Wine 2" Butterfly Racking Valve 2" Butterfly Drain Valve Closed Tank Hot & Cold Stabilization 20000L Racking Elbow Lees Refrigeration Coils Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Filter Frame Rough Polish (7 Micron) Wine Refrigeration (Cold)
78 Application of Model Decanted Wine to Aging / Storage Potassium Metabisulfite (K 2 S 2 O 5 ) K 2 S 2 O 5 Bentonite Bentonite (Hot) Wine Felxible Impeller Pump 43 gal / min Wine Flexible Impeller Pump 43 gal / min Wine 2" Butterfly Racking Valve Closed Tank Hot & Cold Stabilization 20000L Racking Elbow Refrigeration Water (Brine) In Refrigeration Water (Brine) Out Filter Frame Rough Polish (7 Micron) Wine 2" Butterfly Drain Valve Lees Refrigeration Coils Sediments to Waste
79 Application of Model
80 Application of Model
81 Application of Model
82 Application of Model
83 Application of Model Decanted Wine from Hot and Cold Stabilization
84 Application of Model Maturation Vessels
85 Application of Model Oak Plank Aging
86 Application of Model Decanted Wine to Bottling / Storage Sediments towaste
87 Application of Model
88 Application of Model
89 Application of Model
90 Application of Model Decanted Wine from Aging / Storage
91 Application of Model Sterile Filtration Fine Filtration
92 Application of Model Bottling and Corking Labeling and Boxing
93 Application of Model Shipping
94 Business Model
95 Business Model Goals Maximize return on investment (ROI) Maximize net present worth (NPW) Minimize total capital investment (TCI) ROI = NPW TCI Do not run out of working capital (WC) Minimize pay out time (POT)
96 Business Model Assumptions Location Oregon Grape Variety Pinot Noir Purchase grapes initially Replace with vineyard production
97 Business Model Assumptions Rate of Return (ROR) 10% Product Selling Price (p 1 ) $30 Competitor Selling (p 2 ) $30 Superiority function (β) 0.64 Happiness of Product (H 1 ) 0.78 Happiness of Competitor Product (H 2 ) 0.5 Total pinot noir market (Y) - $148 MM / year
98 Business Model Business Model 1 2 H H = β 1 2 H H = β 1 2 H H = β P d P d Y + = / d p d p d d α β β α =
99 Business Model d 1 β α * = 2 * 1 1 * 1 β p Y p d * d p p 1 2 α 1
100 Business Model Variables Production 0.1 to 2.0 MM Bottles / Year Advertising 2.0, 1.0, or 0.2 MM $ / Year 99% > WC > 50% of TCI
101 Business Model Assumptions α is a function of time α values based on advertising costs High - $2.0 MM / year Medium - $1.0 MM / year Low - $0.2 MM / year
102 Business Model
103 Business Model Assumptions Demand (d 1 ) varies with selling price (p 1 ) Constant α values Constant competition selling price (p 2 )
104 Business Model
105 Business Model
106 Business Model Assumptions Constant production Increase α Decreases WC Increases ROI Constant α Increase production Decreases WC Increases ROI
107 Business Model
108 Business Model Regret Analysis Assumptions Constant α, p 1, and production Increase p 2 Increase ROI Constant α, p 1, and p 2 Increase production ROI finds a maximum
109 Business Model Regret Analysis
110 Business Model Regret Analysis
111 Business Model Risk Analysis
112 Business Model Risk Analysis Assumptions Production costs 20% standard deviation Raw materials, labor, utilities Superiority function -β H 1 & H 2 20% standard deviation in each Inferiority function α 20% standard deviation for each year Selling price p 2 $30 with a standard deviation of $10
113 Business Model Risk Analysis
114 Business Model Risk Analysis
115 Business Model Risk Analysis
116 Conclusions Quality of wine can be evaluated before bottling. Process can be adjusted at negligible cost. A business model can be formed to maximize ROI.
117 Conclusions For higher values of α and lower values of β, the less a competitor s price effects the producer s ROI. Based on the current business model, the optimum production capacity is 1.15 million bottles / year at a selling price of $30: ROI 102% NPW $44,000,000 Pay Out Time 4 years
118 Future Work Incorporate more detailed economies of scale More detailed analysis of the physical properties and effects of process adjustments : modeling Study effect of bottle aging on happiness of wine
119 Acknowledgements Dr. Susan E. Ebeler, UC Davis Trung Hoang, T.A. Dr. Miguel Bagajewicz, Instructor OU CBME Department Sideways
120 Questions?
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