Flavors of Wineries | Custom Crush Vs. Building

What do you mean when you say “winery?”

We get a lot of people coming to us saying the want a winery, and the first thing we have to do is find out what they are really interested in. The term winery can mean a lot of things.

A “label”
This is a legal brand under which you can sell wine. You need to be licensed to sell wine by the Feds and the state of California, but beyond that you need little else other than a relationship with a good custom crush facility.

A Winery Building
A facility permitted by Sonoma County (via a special use permit” for making wine – usually limited to a maximum number of cases that can be produced as well as other limitations. Most wineries have limited tasting room abilities – such as appointment only or trade only.

A Tasting Room
A public tasting room is what a lot of people think about when they want a winery – and it is the most difficult element to deliver. You are operating a business open to the public and you have to meet all the requirements such as handicap access, bathrooms, etc as well as be able to deal with the accompaning traffic.

From our perspective, having some experience in the wine business in the North Coast, we can understand wanting to start a “label” but we typically see no reason for wanting either a winery building or a tasting room – at least in the beginning. But I get ahead of myself.

The only reason to have a winery building and/or a tasting room is so that you can make and sell wine from your “label”. It is the label or the brand that drives the enterprise. It is not an enterprise to be entered into lightly, it requires a great deal of committment. Unlike a vineyard, which you can hire a vineyard manager to farm and then enter into a long term contract with a winery for the fruit and thereafter not be that involved, a wine label is a very, very personal business—only you can make it work.

And, to make a wine label successful, you don’t need a winery or a tasting room (well maybe you need a tasting room, but we’ll get to that).

Of the 10 or 12 hottest new wine labels in Sonoma County, none is making wine in a facility that most of us would consider a winery. Most are making wine in shared facilities where they rent space and have access to the equipment. Some have rented there own spaces and installed equipment, but all are either in light industrial warehouse space or in old apple processing plants. None are in the classic image of a stone building in the middle of a vineyard. Why? Becuase it costs way too much money for little to no return.

To start a new wine label you need a few things—keep costs down, keep capital investment low, have access to great grapes, and have a clean place to make wine with proper equipment and a lab. If you come to me and say you want to start a wine label and your first step is going to be to purchase or build a winery I would say you are looking at the business from the wrong end – you are letting the tail wag the dog. If you want to start a wine label, then start the label with as little complication as possible and focus on making great wine and pushing it out through a distribution channel. Selling direct is becoming more and more viable in our Internet economy and building a mailing list that buys your wine is the basis of most new labels distribution plan.
From there, as your brand grows, you can evaluate whether bringing production in house makes sense.

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