The Wine Business: How to Start a Winery
Starting a winery is a dream come true for wine lovers ready to take the next step in their careers. But just like any other business, there’s a lot of planning and investment to consider.
This article includes everything you need to know about starting your winery or vineyard to help you succeed in the industry.
How to Start a Wine Business
If you’re looking to start your winery, you essentially have three options when it comes to location:
- Purchasing a new site and building from the ground up.
- Buying and recycling an old property.
- Purchasing and refurbishing an old winery.
The last option may be the easiest, but remember, it can become the most expensive. Depending on the renovations you will need, it will either be a smooth transition or take a lot of extra time and money just to get it running.
Like any other business, you will need to:
- Research Your Market
- Begin Developing Your Wine Brand
- Research Licensing and Laws
- Research Equipment and Wine Production
- Find a Location
- Determine the Cost
- Write a Business Plan
- Secure Financing
- Launch Winery Specific Marketing
- Hire and Train New Staff
How Much Does it Cost to Start a Winery?
With so much preparation for acquiring high-quality equipment for wine production, securing a location, acquiring insurance, and abiding by federal wine industry regulations, opening a winery can easily cost $500,000 and up to $1 million or more.
Prepare to put down anywhere from $5,000 to $10,000.
Alcohol and Tobacco Tax and Trade Bureau
Before opening anything, you will need to apply for a permit to legally operate your business and register your winery with the FDA. After your wine labels have been approved by the Alcohol and Tobacco Tax and Trade Bureau, you will need to stay on top of your state’s licensing requirements for making and selling wine.
The main license types include:
Wine Retailer/Wholesaler - allows for purchasing of wine from wholesalers and selling at the retail level.
Wine Bar - buy wine and beer wholesale to sell for sipping on the premises.
Wine Store - sell sealed wine for consumption off-premises with tax and retail pricing.
Seek Education in Winemaking and Viticulture
If you’re thinking about becoming a vineyard owner and want to know how to make your own wine, it would be wise to familiarize yourself with the ins and outs of viticulture (growing grapes) and enology (winemaking).
There are many course options you can take to become certified in winemaking, like the Certified Specialist of Wine certification offered by the Society of Wine Educators. Universities and community colleges throughout the United States, like Cornell, Penn State, and Texas Tech, also offer in-depth winemaking certifications.
To make great wine, you’ll need to know the difference between red and white wine production and the bottling process.
All wine grapes undergo crushing and fermentation after harvest, but grape skins need to soak in the grape juice (or must) for longer when making darker wine like red wine.
Keep in mind that if you plan to practice winemaking and think you’ll produce 100 gallons of wine or more, you will need to register your business to legally do this.
You will also need a lot of serious equipment to start winemaking, such as stainless steel tanks, pumps, taps, labelers, washing stations, filters, and more, so it’s imperative to research.
You’ll probably spend most of your time organizing financing to purchase the best supplies.
How to Start a Vineyard
Before deciding which plot of land to purchase, there are a few things to consider regarding location.
Grapes thrive in warm and temperate climates, making Napa Valley, France, and Spain some of the most ideal places for winemaking.
You will also need to consider the soil type in your vineyard, as grapes are best grown in deep, well-drained, fertile loams. Sand, gravel, clay, and slate are a few great options, depending on what type of grapes you’ll be growing.
There is also the question of a hillside versus a flat vineyard and sun and wind exposure. Viticulturists have historically preferred southwest-facing hillsides. An open sun-exposed slope is best, as grapes do not do well in the shade. Your grapes will need lots of sunshine and wind to balance their residual sugars. Sun and wind also protect against unwanted molds and mildew that could harm the vine.
Lastly, you’ll need to ensure your land is well-prepared and organized for your vineyard by amending the soil with lime, nitrogen, and compost to keep the pH balanced. The planting holes for your vines should be about 12 to 24 inches deep, and their spacing should be no closer than one meter apart.
Invest in good equipment like tractors to till and clean up the land as needed. You may want to consider speaking to local farmers and fellow winemakers in the area, as they’ll be able to help you get the most out of your vineyard.
In order to help your wine business become profitable, you will need to purchase at least five to ten acres of land for optimal growth.
Consider Starting a Micro Winery
If you feel overwhelmed at the idea of starting your own vineyard and aren’t ready to commit to the investment, a micro-winery could be the perfect choice for you.
A micro-winery is the best of both worlds, as it’s essentially a winery without its own vineyard. You will still need the same equipment for winemaking as with a full-scale vineyard, but the cost will be much less.
The owner of a micro-winery purchases the needed grapes from a separate supplier instead of growing their own vines, making the production requirements much smaller.
A micro-winery is a wonderful way to start your wine business if you’re ready to scale up without the larger, more expensive commitment.
How to Open a Wine Bar
With wine bars becoming more and more trendy over the past few years, opening your own wine is something to consider. It offers many of the same benefits as owning a winery without as much startup cost.
As mentioned above, you will need to apply for both a wine bar license and possibly a wine store or wine retailer license, depending on if you want to sell bottles of wine to be taken off the premises.
Wine bars purchase wines from wholesalers and serve them inside the business by the glass, bottle, or even half-glass sizes.
Depending on the building and renovations, opening a wine bar usually requires an investment of around $100,000, though it can quickly climb to as much as $500,000 if you’re starting everything from scratch.
If you have restaurant or bar experience and you love the social atmosphere of downtown life, having your own wine bar and tasting room is a wonderful way to build a business within the industry.
Keep in mind that you will also need to consider certain retail taxes according to your state’s requirements.
Ready to Start Your Wine Business?
With so many wine business jobs to consider, starting your own winery could be a good option if you’re prepared to go all into the industry.
Depending on which option you choose, you will be able to open your own winery, wine bar, or micro-winery in no time. Just make sure you apply for the proper licensing with the Alcohol and Tobacco Tax and Trade Bureau and abide by your state’s alcohol laws.
To get a better understanding of which wines you want to include in your business, practice wine tasting by shopping our collection of premium wines.
If you want to sample quality wines consistently, consider joining the Wine Club for endless sipping options.
Check out The Wine Blog for more information on all things wine.