Wine 2.0 A small Napa winery uses high-tech aerial cameras to tend its vines. Result? Robust yields.
By Kelly Barron

(FORTUNE Small Business) – Ah, the legendary romance of winemaking. Apple-cheeked peasant girls treading grapes under a harvest moon. Intimate tastings. And, of course, multispectral imaging and neutron probes. Huh?

Times are changing fast in the storied vineyards of Napa Valley, where a billboard reads, WINE IS BOTTLED POETRY. These days the best wineries are relying more on technology to compete. And few wineries better demonstrate the marriage between traditional craft and high-tech gadgetry than Cakebread Cellars.

The Cakebread story takes us back to the early '70s, when Jack Cakebread and his wife, Dolores, plunked down $2,500 as a down payment on a 70-acre Napa Valley ranch. Over the years they transformed their pastures into vineyards, shuttling between the winery and Oakland, where Jack owned an auto repair shop. During the week Jack would identify upscale restaurants around the country by combing through newspaper archives at the public library. Each weekend he'd fly to a new city and badger restaurant owners to buy his wines, while Dolores made local deliveries in the family station wagon.

Today Cakebread Cellars grows grapes on 300 acres in Napa and elsewhere in Northern California. The vineyards yield 95,000 cases of wine annually, for an estimated $30 million in revenues. Cakebread maintains an excellent reputation for quality, especially in its sauvignon blanc. The wines aren't cheap, fetching an average of $75 a bottle on restaurant wine lists. Even so, Cakebread ranked No. 1 in Wine & Spirits magazine's recent survey of bestselling wines at 50 of the country's finest restaurants.

Cutting-edge science helps Cakebread maintain the quality of its wine. The company sends airplanes equipped with multispectral imaging equipment over its vineyards to identify troubled areas. Meanwhile, neutron probes measure water levels in the soil. The goal is to grow uniform vines while controlling grape maturation, both crucial to producing the complex flavors that distinguish Cakebread wines. "If the quality isn't in the vines, it won't be in the wine," says Jack Cakebread, 74, pointing to a cedar wine barn outside his office. "You might as well turn that into a bowling alley."

How does multispectral imaging--the same technology NASA uses to study the surface of Mars--help Cakebread create the spicy melon and fig aromas of its sauvignon blanc? A special aerial camera measures light reflected from the earth's surface in bands of green, red, and blue. The resulting photos display blotches of color that indicate which vines need water and nutrients. Near harvest time, scion Bruce Cakebread, 48, the winery's president and chief operating officer, hikes into the vineyards with his chief winemaker. The images help them massage their vines to maturity, watering them more or less to yield the richest fruit.

Several years ago a root louse in the Phylloxera family devastated vineyards throughout Napa. Cakebread, like other wineries, was forced to replant, at a cost of $25,000 to $75,000 an acre, and had to wait five years for the new vines to become productive. Multispectral imaging wasn't yet in wide use. Had it been, Cakebread could have used the technology to identify trouble spots caused by the root louse. (The cameras can also detect damage from another nasty critter called the glassy-winged sharpshooter.)

Cakebread's futuristic technology comes from Vineview Imaging and Geovit Vineyard Services, both small Napa consultancies. At an estimated cost of $7 an acre for each photo session, multispectral imaging easily pays for itself, says Bruce Cakebread. Last year Cakebread spent roughly $7,000 to image some 600 acres--including vineyards from which it buys grapes. The company also acquired four new vineyards in 2003, using imaging technology to assess which land was worth buying.

Last year Cakebread also spent $50,000 on probes that read moisture levels by radiating neutrons into the soil. (Engineers use the same technology to check soil density under highways and skyscrapers.) The neutrons lose energy when they hit hydrogen, indicating the presence of water. During the peak growth season Bruce Cakebread spends an hour and a half each morning poring over neutron-probe reports and laying out daily irrigation schedules. "To get 80% of the quality is quite easy," Bruce says. "To get the last 20%, you have to go whole hog."

Strategic irrigation helps Cakebread get the most out of its vines. And Cakebread's rigorous quality control yields pricey wines that earn profit margins of about 60% at wholesale and more than 75% for bottles sold directly at the vineyard.

Meanwhile, Cakebread's patriarch is taken with a newfangled GPS application that monitors agriculture from space. "I've got to tell Bruce about this one!" he says. Maybe some of the best ideas really do come through the grapevine.