How to Start a Wine Business?
When it comes to learning how to start a winery business, there’s a lot of information available. In fact, there’s even a BinWise article on opening a winery. That article is a high-level overview of the process of starting a wine business. If you’re planning to run a winery, you should know how to create a winery business plan. It'll help you get settled before you look into buying a winery.
A winery business plan is similar to other business plans (including a restaurant business plan) in many ways. That said, there are also steps specific to wineries. We'll walk you through every stage of the process.
Is Winery a Good Business?
Before you jump into a wine business, you’ll want to know what you’re getting into financially. Opening a winery requires significant investments of time and money. It won’t be cheap by any means.
However, the payoff is worth it. On average, the wine industry has been growing over the last few years (it’s estimated to grow by 4.2% from 2020 to 2027). Next, we’ll take a look at wine industry growth to see what kind of earnings you may anticipate once you (and the vines) are off the ground.
In 2018, the US wine market value totaled $70.5 billion. Nearly 70% of that came from US wines. That value comes from a steady rise in the wine industry since 1994, as more people consume wine, and more wine is produced.
Before 2020, the wine industry was projected to grow by 4-8% in 2020 and beyond. Of course, things changed in 2020, and for wine businesses, those changes were good.
The COVID-19 pandemic has given more people a reason to stay home and drink wine. From learning wine terms to taking sommelier classes, more folks have leaned into wine culture the last three years. If you’re looking for the right time to start a wine business, now’s that time.
Winery Business Plan
A winery business plan includes everything in a regular business plan, including:
- An executive summary
- An in-depth business description
- The details of labor and operations
- A market analysis
- An explanation of your product plan
- A marketing plan (you can draw from restaurant marketing ideas)
- An analysis of financial plans
- An investment proposal (depending on financial plans)
- Milestone plans
Of course, all those sections of your business plan will be curated towards a winery. In that sense, this will be a winery business plan. Given that fact, there will be other factors that you’ll need to include.
10 Winery Business Plan Needs
The traditional business plan involving everything outlined above is for a restaurant or bar. It could be for a store, or a marketing or advertising firm. Those are all examples of relatively straightforward businesses.
A winery business is more nuanced. All the expertise that goes into a successful winery needs to be in the winery business plan. From planning for climate to choosing your vines, your winery business plan has more specific needs than a standard plan.
The following 10 winery business plan needs are a good place to start. Depending on the winery you plan to open, they may be all you need. There may be more required for your vision, though. Let these be a guide and a stepping stone toward your business plan.
10. Finding a Winery Location
Finding a winery location is–of course–key to opening a winery. When it comes to adding this step to your business plan, the main thing to do is scout out potential locations.
To narrow it down, start by choosing a general area you’d like to set up in. Whether you want a US winery or an international spot, you can’t move on without making this decision.
9. Choosing Bottle Design
This one is lower on the list because it’s less of a strict business plan component. However, choosing your wine bottle sizes and label design does feed into your plan for getting started. This will be a nice distraction from other, intense business decisions you’ll make.
8. Reviewing Climate Needs
Reviewing your climate needs feeds into finding a location and choosing your grapes. Different wine grapes do best in different climates, and you’ll need to do a lot of studying up on climate relations to grapes.
7. Grape Selection
Choosing your grapes may come after you find a location, or you may choose a location based on the grapes you want to grow. It’ll be good to have some idea of what you want to grow as you’re looking for a location. Remember to remain flexible with these steps, too.
6. Wine Cellar Needs
Any winery worth its vines has a good wine cellar. Some places have caves, some have built structures in old (or new) buildings. Your wine cellar (with wine storage cabinet options) potential could depend on your location, but you also have the option to build up whatever you like.
5. Alcohol Laws
From laws about selling alcoholic beverages (including online liquor sales) to who can work at a winery, there are lots of alcohol-related laws (including how to ship wine) you'll need to get familiar with. If you’re unsure on where to start, a search through your county, city, or state tax and commerce offices should help. Reaching out to local wineries to glean their expertise is also a good idea.
4. Selecting Winery Equipment
Selecting winery equipment is something you won’t fully be able to do until you know the size of the winery you’re opening. This is because the amount of equipment you’ll need depends on your winery size. That said, your business plan can include a rough estimate of what you’ll need, and what it will cost.
3. Estimating Costs
Of course, estimating costs will go beyond equipment. This is in the financial part of your business plan. It’s noted here because a lot of your costs will be winery specific. From equipment to vines to bottle supplies, there’s a long list of goods to secure.
2. Distribution Plans
Your distribution plan (perhaps with wholesale alcohol distributors) will depend on where you want to sell your wine. If you’re looking to mass-produce and get your bottles in large stores, this part of your plan is crucial. If you’re looking to sell locally in small batches (learn more about what is a batch in selling terms), this might be a simpler process. Either way, figuring out the logistics of distributing your wine (and potentially other products) will be essential.
1. Winery-Specific Marketing
Anyone opening a business knows how important a marketing plan (including wholesale marketing) is. It’s part of every business plan, and the need to keep marketing never ends. Your winery-specific marketing plan will encompass everything from advertising to promoting different bottles to hosting events (like happy hour). It’s also closely tied to curating your space for tastings and other guest-centric bar event ideas.
Frequently Asked Questions About Winery Business Plans
Once you have your business plan (maybe even an eCommerce business plan if you’re selling online) written up, you still have a long road ahead of you. There’s a lot that goes into starting a winery business, and even once it’s opened, the work never really ends.
For some inspiration to keep moving forward, we focused on frequently asked questions that center on the profits of a winery. If you’re ever staring at your business plan, thinking “How will I do this?” These questions and answers can help serve as motivation.
How Much Does It Cost to Start a Winery?
On average, the cost to start a winery generally ranges from $600,000 up to the low millions. You may be thinking that’s an insane amount, and it’s quite substantial, but it doesn’t all need to come from your pockets. This is where investors come in handy.
How Much Money Can You Make Owning a Winery?
The money you can make owning a winery depends on a lot of factors. From bottle price, to the amount of land you have, to the vine growth year. There are things you can control, and things you can’t. On average, a winery brings in around $88,000 a year (that’s for an average size winery). That’s a good number to start with, but keep in mind, it’s all dependent on your winery.
Is a Wine Business a Good Investment?
Overall, yes, a wine business is a good investment. Wine is a beverage people have always liked and always want more of. Even if there are years when the vine growth isn’t great, vineyards are known to bounce back. Opening a winery takes a lot of work, but the long term investment is worth it.
How to Start a Wine Business: Get Growing!
The title of this section is a bit of a misnomer. Once you have your business plan written up, you won’t be ready to start growing your vines and bottling your wines. You will be one step closer though!
While the practice of writing a business plan is a lot of work, it’s only the beginning. Now you know what you need to do. You certainly know more than you did before. That said, the business plan is, just that, a plan. Now it’s time for work. As you work, you can always come back to the BinWise blog to learn more.