Does retiring on your a vineyard with it’s own winery sound good?
And why not when it seems like every vineyard and winery in the country seems to be owned by a retired couple who have a similarly romantic tale: they fell in love with wine in some exotic and international wine country and they wanted to re-create that beautiful experience, with a few of their own tasteful tweaks, here. But the dirty little secret that these winery owners don’t want anyone to know is this: owning a winery is isn’t a retirement plan. It’s actually a toiling endeavor.
Just ask any of the people who were drawn in by the romance and the challenge of the wine industry but lacked the marketing plan or management acumen to develop the venture into a sustainable business.
So, what makes a winery successful? We’ve narrowed down the 5 pillars to success in the business of making and selling wine.
1. The Tone is Perfectly Set
Setting up a production facility and a tasting room isn’t too complex but the winery equipment is costly and the tasting room must be tasteful because it will act as your biggest physical revenue-driver. An impeccably designed interior is the key to many successful wineries because it means that their establishment can turn into an even space that may be rented out for business parties, weddings and wine club tastings.
2. Paperwork is Straight and Up to Date
The biggest differences between this and a farm selling just about any other product is that the labeling, sales and consumption side is highly regulated and expensive to keep licensed and legal. Every country with a wine region has their own unique bundle of tangled red tape to cut through but America’s is one of the most stringent.
- Licenses and permissions must be acquired from the Alcohol and Tobacco Tax and Trade Bureau (TTB)
- The label for the bottle must be approved (also by the TTB)
- Sales must be tracked and excise taxes must be paid.
To see the TTB’s full page of winery regulations, click here.
For more information about labeling regulations, this USA Wine Label Information page is a brief breakdown of the parts of a typical label.
3. The Winemakers Know Their Drinkers
The trouble with wine is that it doesn’t follow the same supply and demand principles that shape the ebb and flow of other industries. The winery owner is a key figure in the marketing of the wine. They are the person that many business owners want to meet and make a relationship with because they want to be as close to the product as possible.
While they are getting to know their market, small brands will try to approach wholesale distributors who will sell the wine to business customers for them.
4. They Seek and Hire The Best
From the planting of the vines to the tending of the plants and the making of the wine, each part of the process is so important to the end product that winery owners don’t typically cut corners for fear of ruining the harvest or an entire crop of plants. Every hire must know exactly what they are doing to make the agriculture side of the winery work with the making and marketing of the wine.
The other thing that successful wineries do well is that they start small, which includes a small staff. Winery owners will often stretch their abilities to learn to do as much of the day-to-day work as they can. In doing this they get a better feel for the systems they have in place, and they can better understand and analyze issues when they arise.
5. They Employ a Winery POS System that Works
It is crucial that wineries manage the tasting room sales, retail sales, events and wine clubs through one point of sale system. Too many wineries fall victim to their own money management, which includes under-pricing or pricing themselves right out of this competitive (and prohibitively expensive at about $300,000 per acre in Napa alone) market. Get the numbers straight from day one so that the creative side of the business can flow like wine.
Let us never forget that a vineyard is a farm, first and foremost. It will take about four years before your vines will produce a crop fit for the presses. The winery is like a fancy market stand that helps you sell the product of your laborer’s labors. The farm work is year-round and the crops are finicky and the unpredictability of weather is even more so.
Getting the winery up and running is just one part of the puzzle that is your dream vineyard. But it is the piece that will allow you to create a sustainable business, no matter what the elements throw at you.
Now, if you had the time—about seven years before you reach a viable product—and the money—in the seven figures, altogether—would you risk it all to build your dream winery?