There are many ways to make a fortune, but buying a winery isn't one of them. Those who can afford to plunk down several million dollars on a boutique winery may be more into the bucolic lifestyle and bragging rights than future profits. Buying a winery outright is the most expensive way to get into the business, but it's also the easiest.
Instructions
1. Research what's involved with wine making. The University of California at Davis has a world-renowned department of viticulture and enology offering programs in all aspects of the business. Visit www.wineserver.ucdavis.edu for more information.
2. Take stock of your assets and your determination. Producing quality wines year after year takes expertise in microbiology, agronomy, marketing, enology and machine repair, or the time and money to hire experts. Wine making is hard work regardless of whether it turns a profit and requires 100 percent determination and dedication.
3. Choose a location. Wines from states other than California, Oregon and Washington will be difficult to market. Every wine-growing region has different microclimates suited to the cultivation of specific varietals. If you favor one type of wine over another, buy a winery where those grapes grow.
4. Consider buying a winery Down Under. Australia is quickly becoming one of the world's fastest-growing wine exporters by volume, and Aussie vineyards are dirt cheap compared with those in California's wine country.
5. Find out if the winery has a strong, popular public identity, up-to-date equipment and facilities, and established distribution and sales networks. If growth is important, make sure that the existing facilities have room to expand.
6. Establish an annual output. Most U.S. wineries are small, familyor individually owned businesses, and produce from 3,000 to 10,000 cases per year. Anything more and you're leaving boutique territory and venturing into the mass-market realm.
7. Retain quality personnel. If the winery is strongly associated with a well-regarded wine maker, it's important that he or she stay on. Consistency is crucial to a winery's success.
8. Determine whether you want to cultivate your own grapes or just own a wine-making facility. In the Napa Valley, an acre of prime vineyard goes for about $64,000 to $102,000, not including the additional $15,000 to $20,000 to plant, maintain and harvest each acre. If you don't have the capital to invest in starting an average boutique vineyard--which won't produce for three years--consider purchasing grapes from growers. You'll knock five years off getting your brand to market--three for the vines to bear fruit and two to age your reds.
9. Decide if you want to build a tasting room (or keep an existing one), and who will manage it while you're away. Direct sales allow you to keep 100 percent profit; sell through a distributor and your share drops to 50 percent.
Tags: