It always sparks my interest when people ask me about getting into the wine/viticulture business. Just yesterday my finance and I were in a tasting room in healdsburg, I like to check out other tasting rooms to get ideas for our own which is starting construction soon. I pulled out my John Tyler business card and the couple standing next to me were curious about my name. It is a converstaion starter anywhere I go pretty much. Once I said that my family owned vineyards they couldn’t stop asking me questions about growing grapes. The couple was from LA and come up to wine county once a month, they confessed they would really like to live here but their jobs prevent them from moving out of the city to the country.
“What do you think about growing grapes verses owning a winery?” asked the husband. Wow, where do you start with that question? Neither of course is “easy” by any means, I said. But if I had to think about which one was more cost effective I would have to say grape growing. With a winery you spend literally millons on equipment that basically stands idle for more than half the year, except for when you are crushing. Lets just say you spend 3 million, on a small winery. Then if you don’t own your own vineyards you must go out and by grapes. Depending on the wine you want to make, 2$ chuck verses a 45$ bottle of Pinot Noir will dictate how much you spend on the grapes. In our area, Russian River Valley it is not un heard of to charge $4,500 a ton for high end Pinot Noir or Chardonnay grapes. So right there you are looking at a nice chunck of change on buying grapes. Lets just say you spend $27,000, which would buy you about 6 tons, not a lot but enough to do a few hundred case of wine. So you have your winery, and your grapes but what about a winemaker? Unless you plan on making the wine yourself you will need a hire a wine maker, running you approximately $85,000-$100,000 a year, maybe more. Unless you are planning on bottling the wine in glass bottles and making a homemade label on your PC, you will need to develop a label for your wine. If you are talented enough that you don’t have to hire a graphic designer you can save a bundle there. Hiring a designer for a wine label can run you $4,000-$10,000 dollars, this might include the development of a website too, which is crucial it you want to sell this wine. This price does not included wine making supplies, yeast, dry ice, labor etc. Those can run you a few thousand dollars as well each year. Lets just say $10,000 a year. What about corks and foils, you will need those too… rough estimate for 500 cases, top grade corks and foils $5,000. What about bottling this wine? Renting a bottling line can be very pricey and cost you a few thousand dollars, probably about $3,000 each time you plan on bottling.
How do you plan on selling this wine? And please don’t plan on just selling it to “family and friends”, it is not that easy. Especially if you want to build a brand. So you will need marketing efforts, sales people and travel expenses. If you are a new brand, be prepared to give a lot of wine away to competitions, media outlets and distributors to try and get your name out there. This can be thousands upon thousands a year, lets just say $20,000 a year as an estimate, it could be more or less depending on your situation.
Needless to say, when you add everything up, starting a winery if not for the faint at heart. Nor is it profitable untill you have been up and running for years, I have heard the average is 10 years to pay off the cost of starting a winery and to make profits.
With my calculations, just for one year of starting and operating a small winery you are looking at around $3,200,000. Wow! We are not talking about a few pennies here, And keep in mind this is for your first year of operation, not to mention I am sure I have forgotten other misc things, like hiring an accountant, monthly electricity bills and other expenses that occur with running a business.
So to end my story, I let these very nice people in on a secret, un less you have an extradonary amount of disposable income and you really know what you are doing, I think you are in for an expensive ride! I think you are better off drinking the wine instead of making it.
Glad I read your article. My husband and I live on a historic property outside of Waterford, Virginia. The soil is good for grapes. We have many Vineyards in Loudoun County, in fact one on our road that we live on. Our home is a charming 18th century dwelling. We both work and have no time to mantain our 15 acres. The barns are run down. We thought about letting a local vineyard plant grapes on our property. Is that something that is worth looking into? What is something like that worth?
Thanks,
Gail
Hi Gail-
Thanks for your comments and question. Leasing land to other growers/ranchers can be a very lucrative way to get use from land that you have no time to manage yourself. Vineyard management companies can offer to pay high prices per acre to lease land and plant vineyard. I will advise that this will most likely have to be a long term arrangement as vineyards take a lot of advanced investment (time and money) before they even come into production but I would say it is definitely worth looking in to. Good luck and thanks for visiting the site.
Thank you for such a good article. My fiance and I where thinking about starting a vineyard, but are unsure as to how prohibitive the costs to start it up are. We have about 250 acres of farmland in central pa that has mostly gone fallow for a few years, and are very interested in planting a few acres, to at least pay for the taxes on the rest of the land. Any thoughts or tips you could give us would be greatly appreciated. Please note that we would want to sell the grapes, instead of starting a winery as well.
Hi Matt-
Thanks for the comment. Vineyards do take a lot of start up costs that most do not forsee. Vineyards really don’t start producing a good size crop until about the 3rd year or so you should be prepared to continue your investment for a few years. Also try to chose a varietal that will be in demand so you can have an easier time selling it. Hope this helps!
Few Questions:
What kind of land/soil is good for growing grapes?
Who can test the soil to check to see if conditions are right to grow grapes?
What is the minimum amount of acres you need to make your own small brand?
If I were to just grow grapes, what kind of equipment and hand tools would I need?
What type of pesticide are used in this industry?
Hi Maria- thanks for your comments. You have some really good questions. To answer them I’ll just go down the list. It is important to have soils that are high in nutrients; nitrogen, sulfur and others. You can add these things to the soil but it is helpful if they exist naturally. I am sure that there are comanies that can come out and test the soil for nutrient avaliability.
There really isn’t set minimum production to start your own brand. There are some wineries that start out with just 100 cases or so. It’s important to start out small and then grow, keeping your supply and demand in balance. There is information avaliable so that you can figure out how many acres of a certain varietal will produce # of cases. Also remember that vines don’t start producing a good size crop until 2-3 years after planting but you still need to maintain them during those years.
Most maintence on vines you can actually do with your hands but pruning sheers are a definite must
There are a lot of pesticide type products avaliable these days and it just depends on what your target is. We usually use sulfur to prevent mold and mildew.
Hope these help and good luck if you do decide to start your own vineyard.