If you’re a lover of fine wines, you must have dreamt of owning a winery. Imagine wandering through the vineyards, having the opportunity to enjoy what you love and turning it into a profitable business, plus the bonus of having your very name on the label of a great-tasting wine.
The wine industry is a growing industry as rich as a chilled bottle of Chardonnay. It’s a mega billion dollar industry which has a predicted long-term sales growth of between 4 and 6 percent. Wine sales have more than doubled since the early 1990s and the sales of wines produced have increased despite the downturn in the economy.
Not to crush your dream or anything but as promising as that sounds, the thing you need to know in running a winery is that it’s a very expensive and time-consuming venture. You have to have a lot of passion, commitment and patience as it’s hard labour. Furthermore, returns on investment generally take years to realise in this kind of industry.
The costs of running a winery are so great that it can scare away all but the most devoted connoisseurs of wines. The land alone in the Hunter Valley can cost you hundreds of thousands of dollars per acre. You’ll also be spending on winemaking supplies and equipment which can easily reach seven to eight figures. If money is not enough – which could very well be the case – there’s always a wealthy family member, a friend or an investor who may be willing to assist you, or perhaps applying for business loans or any kind of debt financing can help you with the funding of your winery dreams.
To set up a winery, you can follow these steps:
- Find a good land location ideally suited for grape growing in terms of soil content and lot size. Avoid building a winery in a lesser-known region as you’ll not likely find a market much beyond that locale.
- Apply for permits and licensing requirements.
- Set up a warehouse ready with production equipment and a tasting room.
- Purchase necessary equipment. Aside from the standard office equipment, you’ll also need vehicles for transporting grapes and wine crates, tanks, pallets and a forklift for moving pallets around the warehouse.
- Network with potential clients.
- Market to current and potential clients.
Most of us picture a winery as acres of lands surrounded by a vineyard where the grapes are grown, but that’s not always the case. Building a wine business can also be done through a variety of business models and people have done it differently. You can start your own winery by:
- Buying an already established winery if you have the means so you don’t have to start from scratch.
- Planting a vineyard.
- Focusing on retail wine sales first.
- Building wine brands. You can own a wine business and have no vineyard. If you’re starting and want a cheaper way to get into the business, this would be a good way to go.
Establishing a fully functioning winery is a huge undertaking and if you want to be a success in the highly competitive winemaking world, you need to have a deep pocket, long range vision, in-depth knowledge about the industry and an unwavering belief in the end result.