The process of fermenting wine in small oak barrels instead of large vats or stainless steel tanks. Fermentation = The natural process that turns grape juice into wine, fermentation is actually a chain reaction of chemical responses. During this process, technically called - primary fermentation, the natural sugars in the grape juice are converted by the enzymes in yeasts into alcohol.
Barrel fermentation requires very careful cellar attention. The barrels are usually made of oak and are about 225 litres in size, although larger ones are used occasionally. Even though barrel fermentation is more expensive (due to the added cost of the wine barrel in making the wine) and less controllable than fermentation in larger, stainless steel tanks.

 

It is agreed by thoughs in the know, that it can imbue certain wines with complexity, rich, creamy flavours, delicate and integrated oak characteristics, better aging capabilities, along with more engaging palate texture and a longer finish.
Barrel fermentation is especially beneficial to white wines. First, since white wines lack the tannins of red varietals, the wine can instead draw tannins from the oak barrels. White wines that have been barrel fermented have a less dramatic oak character / taste - than those wines that have been fermented in another stainless steel tank and then oak aged. The wine flavours are better integrated and harmonized. The fermentation process, tempers the flavours of the wood, imparting balanced flavours of oak. So in the wine, you will find hints of cinnamon, vanilla, or cloves rather than over whelming harder oak flavours.
In particular, a wine can become more creamy, rounded, buttery and toasty after being barrel fermented. Barrel fermentation is usually associated with white wine grapes like Chardonnay, but also on occasion with Sauvignon Blanc (e.g. Fume Blanc) and occasionally Chenin Blanc and Semillon are processed in this way.