Opening a winery and vineyards--lessons learned?

[winemaker81]

It may seem counter intuitive but the quality of the wine is secondary to the wine tasting experience.

A winery my wife and I visited last year is solid proof of this. The wines were sub-standard and WAY overpriced, but it was a fun atmosphere with live music and a couple of food trucks. The place was jam packed.

 

[Nebbiolo020]

@Aldo Good info, thx.

I spent a long, long time researching before deciding not to invest in a large winery in Amadore county.

My high level feedback is that if you want to make money in retail winemaking, you need to start studying wine tasting rooms and wine clubs. For boutique wineries, most of the profit comes from the wine club (recurring revenue) which comes from the wine tasting room.

It may seem counter intuitive but the quality of the wine is secondary to the wine tasting experience. The average wine drinker can’t tell the difference between a $10 bottle of wine and a $100 bottle of wine. Even so called experts can’t always tell (Check this out).

Some research shows that 90% of small winery profit comes from wine clubs (where people are signed up in the tasting room). Since it is such big business, California has TONS of great research on how to optimize your wine tasting room.

Sell your wine grapes as a last resort.

Drive people to your winery with social media.

The MOST profitable wineries are ones that do not grow their own grapes but buy them from other people. My .02!

That’s not necessarily true buying grapes from others tends to be more expensive sometimes than growing your own. As for tasting rooms driving sales kind of. We don’t have a tasting room at our winery at all and do not offer tastings on site we well to retailers and restaurants and consumers directly. What has proven to be true in my industry experience has been that wine quality matters more in my opinion. If you make a good product and put it in front of the right people it will sell itself.

 

[ovjock]

That’s not necessarily true buying grapes from others tends to be more expensive sometimes than growing your own. As for tasting rooms driving sales kind of. We don’t have a tasting room at our winery at all and do not offer tastings on site we well to retailers and restaurants and consumers directly. What has proven to be true in my industry experience has been that wine quality matters more in my opinion. If you make a good product and put it in front of the right people it will sell itself.

I’m not sure. With US sales of wine down 4.4% this year versus last year combined with the post-pandemic escalating cost of labor you have an oversupply of grapes and reduced margins. Oversupply plus COGS pushes down the cost a lot which means it is a buyers market for grapes. Right now, grape vines are being pulled up across California. See Grape Apocalypse. I would be a buyer in this market rather than a grower.

Regarding quality of wine, I commend your commitment and think it’s absolutely the right thing to do. I just wouldn’t depend on financial success based on people to being able to tell the difference between an average wine and a great wine.

 

[winemaker81]

Regarding quality of wine, I commend your commitment and think it’s absolutely the right thing to do. I just wouldn’t depend on financial success based on people to being able to tell the difference between an average wine and a great wine.

As I mentioned previously, last year the one winery/party I was at served substandard wine at premium prices. There were hundreds of people there, upwards to a thousand, happily slurping down that wine.

I accept that those people disagreed with my opinion of the wine. I was distinctly in the minority.

This is an interesting situation. If I opened a commercial winery, I'd focus my winemaking on making the best wine I could. And I'd focus my marketing on selling to whoever would buy it.

 

[Nebbiolo020]

I’m not sure. With US sales of wine down 4.4% this year versus last year combined with the post-pandemic escalating cost of labor you have an oversupply of grapes and reduced margins. Oversupply plus COGS pushes down the cost a lot which means it is a buyers market for grapes. Right now, grape vines are being pulled up across California. See Grape Apocalypse. I would be a buyer in this market rather than a grower.

Regarding quality of wine, I commend your commitment and think it’s absolutely the right thing to do. I just wouldn’t depend on financial success based on people to being able to tell the difference between an average wine and a great wine.

Grape supply has been down at least locally the past few years driving up cost, we have personally sold record wine sales we actually had to scale up for next year because we under estimated demand. As for grapes pulling up I have seen a bunch of new plantings this year and I saw a bunch in 2023 I did not see a single vine get ripped out for anything other than replacement. So I’m sure it’s happening but it’s not anywhere close to what that article says.

 

[Nebbiolo020]

As I mentioned previously, last year the one winery/party I was at served substandard wine at premium prices. There were hundreds of people there, upwards to a thousand, happily slurping down that wine.

I accept that those people disagreed with my opinion of the wine. I was distinctly in the minority.

This is an interesting situation. If I opened a commercial winery, I'd focus my winemaking on making the best wine I could. And I'd focus my marketing on selling to whoever would buy it.

I make the best wines I can then focus on appealing to things that people look for hence why while natural wine is stupid and a concept used more for committing fraud and selling dishonest products than anything else because people can label any wine that doesn’t turn out well as natural and get a pass on flaws that would be totally unacceptable otherwise, people will buy a bottle because of it so we have a natural wine for those customers and a traditional Cabernet for the other customers as well as a Merlot we’re adding more varietals next year.

 

[winemaker81]

I make the best wines I can then focus on appealing to things that people look for hence why while natural wine is stupid and a concept used more for committing fraud and selling dishonest products than anything else because people can label any wine that doesn’t turn out well as natural and get a pass on flaws that would be totally unacceptable otherwise, people will buy a bottle because of it so we have a natural wine for those customers and a traditional Cabernet for the other customers as well as a Merlot we’re adding more varietals next year.

Sorry, you lost me in your statement.

 

[Nebbiolo020]

Sorry, you lost me in your statement.

What I said sums up to, natural wine is an idiotic concept and nothing new. It is misused by bad actors in the industry to pass off wine that is not good and get more money out of it, despite that consumers will buy natural wines due to idiotic false marketing and trends. We sell a natural wine only to get those customers even if it’s an idiotic concept.

 

[Aldo]

@ovjock thanks !! Im in the restaurant industry, we have four locations up here where we could potentially start a Mexican wine club/ tasting area, we will follow your advice for sure even though it has prove to be hard as people don't normally pair Mexican food with wine but mostly beer and margaritas, could be a good niche where we can sig them up. The winery will be small, and im not too concern about not making a buck the first years, I've always read that wineries could take generations to be profitable but as we own the land, the investment (labor & permits included) its not quite as high as doing it up here in the US and I would not mind retiring making wine in my ranch at some point lol, usually we've been leasing our land for years to grow garlic, onion, tomatillos, etc so putting the land to a good use growing our own vines its always been the dream... I'm currently doing my masters in oenology and looking forward for this venture, the enoturism its not too great in the valley I'm at to drive business that way, as the most famous wine region in Mexico is Guadalupe Valley, so that would take its time. I appreciate your input, I will look into the wine clubs and recurring revenue for sure...

 

[winemaker81]

What I said sums up to, natural wine is an idiotic concept and nothing new. It is misused by bad actors in the industry to pass off wine that is not good and get more money out of it, despite that consumers will buy natural wines due to idiotic false marketing and trends. We sell a natural wine only to get those customers even if it’s an idiotic concept.

You lost me when you went into natural yeast. I admit it's possible I lost place in this thread, as we have so many going. If I did lose track of the conversation, I apologize.

Regarding "natural fermentation", I agree that many folks use it as a marketing tactic. Yeast don't care what humans think or want, so believing that the yeast growing in a vineyard are best for the wine makes no sense to me.

At the same time, friends firmly believe this and I cannot prove them wrong, so I simply do not argue a point where there is no solid proof on either side.

 

[ovjock]

@ovjock thanks !! Im in the restaurant industry, we have four locations up here where we could potentially start a Mexican wine club/ tasting area, we will follow your advice for sure even though it has prove to be hard as people don't normally pair Mexican food with wine but mostly beer and margaritas, could be a good niche where we can sig them up. The winery will be small, and im not too concern about not making a buck the first years, I've always read that wineries could take generations to be profitable but as we own the land, the investment (labor & permits included) its not quite as high as doing it up here in the US and I would not mind retiring making wine in my ranch at some point lol, usually we've been leasing our land for years to grow garlic, onion, tomatillos, etc so putting the land to a good use growing our own vines its always been the dream... I'm currently doing my masters in oenology and looking forward for this venture, the enoturism its not too great in the valley I'm at to drive business that way, as the most famous wine region in Mexico is Guadalupe Valley, so that would take its time. I appreciate your input, I will look into the wine clubs and recurring revenue for sure...

Also, FWIW, I see a lot of vineyards opening wedding venues to capitalize on the vibe of getting married in a working vineyard. It’’s an additional source of revenue.

 

[wood1954]

What I said sums up to, natural wine is an idiotic concept and nothing new. It is misused by bad actors in the industry to pass off wine that is not good and get more money out of it, despite that consumers will buy natural wines due to idiotic false marketing and trends. We sell a natural wine only to get those customers even if it’s an idiotic concept.

last year i pitched Avante yeast in my itasca must and didn't realize it was no longer viable. The natural yeast on the grapes began fermenting so i didn't realize my commercial yeast was dead. by the time i realized what happened i lost all my white wine to a horrible smelly natural yeast. I learned to rehydrate my yeast and i learned not to leave it to nature.

 

[Nebbiolo020]

last year i pitched Avante yeast in my itasca must and didn't realize it was no longer viable. The natural yeast on the grapes began fermenting so i didn't realize my commercial yeast was dead. by the time i realized what happened i lost all my white wine to a horrible smelly natural yeast. I learned to rehydrate my yeast and i learned not to leave it to nature.

We had one wild yeast that fermented several bins of cab that was so intense we tried to stun it with sulfites and pitch commercial yeast but the wild yeast won out and that wine ended up being the better of the 2 cabs, we kept them separate and now I’m interested in attempting round 2.0 with the same grapes seeing if I can get another successful wild ferment.

Both wines were made with the same grapes from the same block of the same vineyard and the only difference was one had native yeast the other had RP-15 and honestly it’s the perfect example of the difference that something as simple as yeast can play in how a wine tastes.

 

[sour_grapes]

but the wild yeast won out

How could you tell that?

 

[Nebbiolo020]

How could you tell that?

We had a lab take a look at a sample and they were able to identify species of the microbes in the wine sample.

 

[Hokapsig]

if you don't already know, having a winery is a LOT of work.

A LOT OF WORK.

1. get your wines made and make them so that they can be replicated (vintage to vintage noted).
2. LEARN how to sell those wines. Make sure you are telling the customer what they will be tasting BEFORE they taste it. Have tasting sheets available.
3. Always keep your tanks full. Always keep your equipment clean.
4. What they say about first impressions can not be understated. Pay heed to that.
5. Be different. Everyone has a Cab, Chard, Riesling, etc. Do different blends, do different oaks, do different levels of sweetness. Even with dry wines, sugar is your friend.
6. Oversize your bathrooms. you want people enjoying your wines, not waiting in line for the bathroom.
7. Get a wine that you want to be known for. Make it consistent and promote it. Listen to your customers about how they enjoy it and repeat that to new customers. Remember, you are selling the experience, not the wine. Selling the experience will translate into the sale of the wine.
8. Check out the thread about what to do in the tasting room. Lots of good info on that thread.

 

[Nebbiolo020]

if you don't already know, having a winery is a LOT of work.

A LOT OF WORK.

1. get your wines made and make them so that they can be replicated (vintage to vintage noted).
2. LEARN how to sell those wines. Make sure you are telling the customer what they will be tasting BEFORE they taste it. Have tasting sheets available.
3. Always keep your tanks full. Always keep your equipment clean.
4. What they say about first impressions can not be understated. Pay heed to that.
5. Be different. Everyone has a Cab, Chard, Riesling, etc. Do different blends, do different oaks, do different levels of sweetness. Even with dry wines, sugar is your friend.
6. Oversize your bathrooms. you want people enjoying your wines, not waiting in line for the bathroom.
7. Get a wine that you want to be known for. Make it consistent and promote it. Listen to your customers about how they enjoy it and repeat that to new customers. Remember, you are selling the experience, not the wine. Selling the experience will translate into the sale of the wine.
8. Check out the thread about what to do in the tasting room. Lots of good info on that thread.

What I will say is keeping tanks full can be both good or bad, we had bulk wine that sat for a couple years in tanks and could not sell it and ended up using it to make hand sanitizer during Covid and got some money back from selling it to a place that made sanitizer.

As for making something unique, that’s never going to work and you will not stand out, making cab and Chardonnay and all the big wines is the best way to make money just try to make a better wine if you can than most other wineries but play it safe and go with the popular grapes limits the risks.

With dry wines you don’t want or need sugar, it’s good for aging white whites but you run the risk of microbial instability with red wines.

At my winery we sell the wine not the experience and put no money into it you cannot even taste the wines at our facility we are 100% online and retail sales only to stores and restaurants.

 

[winemaker81]

At my winery we sell the wine not the experience and put no money into it you cannot even taste the wines at our facility we are 100% online and retail sales only to stores and restaurants.

Since it's obviously working for you, no one can say you're wrong. But my practical experience in NC, VA, and NY wineries indicates your POV is only one possibility.

The wineries I see doing the most business are generally doing what @Hokapsig stated. Party venues, live music, and food trucks are huge business. Wineries are not drawing in dozens of people using this strategy, they're pulling in hundreds. When we went to Grandfather winery (NC) last year, at 3PM we were parked in the third parking lot, 'cuz #'s 1 and 2 were full. The place was mobbed and folks were 5 deep in line buying from 5 baristas (or whatever ya call purveyors of plonk).

Mrs. WM81, who is not much of a drinker of anything, got a sparkling rose that was actually ok; she liked it and would buy it again. I purchased a flight of their "premium" reds and was totally underwhelmed. These wines were priced $24 to $32 USD per bottle, and at half that price I'd have over-paid. Yes, that underwhelming. That said, the teeming throng outvoted my opinion of the wine, and I admit we had a good time hanging out, listening to a really good local band.

These wineries are not focused on pulling in folks that appreciate good wine. They're pulling in anyone with dollars to spend. And it's working.

You have a specific business model that is working for you, and I'm happy for you. Other folks are doing just fine with their business model.

7. Get a wine that you want to be known for.

I see most wineries doing this. Brand recognition is important.

Go to the Syracuse NY area and look for Red Cat. This wine is marketed by Hazlitt winery, and it's made from hybrids that are strongly on the Labrusca branch of the family tree. To me, it's syrupy alcohol, but it sells like hotcakes! People that don't drink wine often know what Red Cat is. The funny thing is that most Red Cat drinkers don't know that Hazlitt also makes very good reds and whites. Hazlitt covers ever base possible among wine drinkers.

As I've stated previously, if I was planning to open a winery, I'd be scouting the competition. What are they doing and what is working well? Imitation is the most sincere form of flattery. And it may be a good business model.

 

[Nebbiolo020]

Since it's obviously working for you, no one can say you're wrong. But my practical experience in NC, VA, and NY wineries indicates your POV is only one possibility.

The wineries I see doing the most business are generally doing what @Hokapsig stated. Party venues, live music, and food trucks are huge business. Wineries are not drawing in dozens of people using this strategy, they're pulling in hundreds. When we went to Grandfather winery (NC) last year, at 3PM we were parked in the third parking lot, 'cuz #'s 1 and 2 were full. The place was mobbed and folks were 5 deep in line buying from 5 baristas (or whatever ya call purveyors of plonk).

Mrs. WM81, who is not much of a drinker of anything, got a sparkling rose that was actually ok; she liked it and would buy it again. I purchased a flight of their "premium" reds and was totally underwhelmed. These wines were priced $24 to $32 USD per bottle, and at half that price I'd have over-paid. Yes, that underwhelming. That said, the teeming throng outvoted my opinion of the wine, and I admit we had a good time hanging out, listening to a really good local band.

These wineries are not focused on pulling in folks that appreciate good wine. They're pulling in anyone with dollars to spend. And it's working.

You have a specific business model that is working for you, and I'm happy for you. Other folks are doing just fine with their business model.


I see most wineries doing this. Brand recognition is important.

Go to the Syracuse NY area and look for Red Cat. This wine is marketed by Hazlitt winery, and it's made from hybrids that are strongly on the Labrusca branch of the family tree. To me, it's syrupy alcohol, but it sells like hotcakes! People that don't drink wine often know what Red Cat is. The funny thing is that most Red Cat drinkers don't know that Hazlitt also makes very good reds and whites. Hazlitt covers ever base possible among wine drinkers.

As I've stated previously, if I was planning to open a winery, I'd be scouting the competition. What are they doing and what is working well? Imitation is the most sincere form of flattery. And it may be a good business model.

We’re known somewhat for our Cab.

 

[GSMChris]

The wineries I see doing the most business are generally doing what @Hokapsig stated. Party venues, live music, and food trucks are huge business. Wineries are not drawing in dozens of people using this strategy, they're pulling in hundreds. When we went to Grandfather winery (NC) last year, at 3PM we were parked in the third parking lot, 'cuz #'s 1 and 2 were full. The place was mobbed and folks were 5 deep in line buying from 5 baristas (or whatever ya call purveyors of plonk).

I certainly am aware of places like this in the Paso Robles area where I live... They are selling a party experience rather than wine. Nothing wrong with that - it certainly has the green flowing - but it's a very different business model and one that I avoid like the plague. Good news is that there are now 300 wineries here and I can chose from the other 250.

I should probably add that one of the biggest wineries to offer this model has dumped tens of millions into building the facilities and has been sold twice since then for an ever decreasing number. And rumor has them running out of money again as people aren't getting paid. I usually introduce that place as a great example of how to make a small fortune in the wine industry - step one - start with a large one.

edit - turns out there are 230 wineries in Paso Robles AVA. so my numbers above are a little off....