Starting a Winery

1
Starting a Winery

• Some questions to ask when thinking about
  establishing a winery

2
Lifestyle

• Is it for you?
• Is this a retirement income?
• Social aspect working with friends/family.
• Do you really want to work weekends?
• Very labor intensive
• Running tasting room yourself / friends
• Bottle with friends and family, make it fun?

3
What is it you want to do?Type of Wine

• What style of wines to make
• Sweet / dry wines, appeal to every one
• Fruit wines, native / concentrate / fresh fruit
• Grape based wines / vinifera / hybrid local
• Cooking wines
• Sacramental wines
• Mead

4
What is it you want to do?Type of Winery

• Tasting room only, small and intimate
• Full service /meeting rooms, catering, weddings,
  buses, tour groups
• Retail only or wholesale?
• Custom labels for weddings special events
• Music on weekends outside in summer, inside in
  winter keeps people around to spend more money,
  makes it a day destination

5
Exit Strategy

• Privately owned business vs.
• LLC, corporation, cooperative
• Direct sale / keep in the family, employee buy
  out?
• Caution naming winery after wife or yourself
  reduces blue sky value.
• Investment, sell recover cost profit

6
Licensing

• Local requirements / County regulations
• State requirements
• Federal requirements
• Recommend obtaining local permits first, time
  consuming and can be complicated
• Obtain federal permits second, state will usually
  follow the lead from the federal approval
• Have business plan feasibility study done

7
Location, Location, Location

• Position yourself for ease of access to
  traveling public
• Marketing cost proportional to distance you are
  from pocket books
• Rich people with expensive cars/Harleys hate to
  drive on gravel roads
• If possible create a destination involving other
  wineries or farmers markets in your area.

8
Capital Intensive

• Using an engineer and architect can cost up to
  (10,000)
• Instead draw basic design on napkin doors,
  windows, overhead door, ceiling height and
  supplies you want to use for building
• For /- 1,000 building supply companys can give
  you blueprint, bill of materials, all engineered
  to state building code, ready for construction
• Use local builder whose quality you trust and
  will build at a percent of the cost of the
  materials they touch.

9
Capital Intensive

• Using a building supply company, you will know
  building cost up front, before you start
• 1640 sq ft enough for 6,000 gallon winery with a
  300 sq ft tasting room and unisex ADA compliant
  bathroom all within building
• If you own land minimal sit prep, building will
  cost about 100K with all water, electrical, LP
  building fixtures in place
• Using existing building? May be more involved
  and costly than new building

10
Its all about how you look

• Have vineyard large enough to look like a
  winery, source grapes/juice from growers
• Money is in the wine, 1 of grapes (50 cents)
  will produce approx 5 in wine _at_ 12/bottle.
• Producing wine from grapes yields about 10 fold
  increase in revenue
• Return on investment can be about 5-15

11
Winery Design / Tasting Room

• Tasting room wine descriptors help inform
  consumers looking at wines on display
• Color code make it easy to choose dry, semi-dry,
  sweet so new comers are not intimidated
• Custom labels for weddings, birthdays
• Self serve impersonal yet non intimidating
• Area to sit with friends inside to enjoy wine
• Meeting room require staff and extra prep
• Make T. room look like it is over flowing with
  wine
• Outside area critical for warm summers, picnics
• Breads, cheeses and snacks keep people around

12
Winery Design / Winery Layout

• Trench drain down center best drainage
• Tanks must have proper slope to drain
• Concrete floors must have good drainage
• Have ample hot water available
• Soften water to prevent scaling
• Carbon filter water for concentrates/fruit wine
• Ample room to bottle/store wine in same building
  or have separate storage
• Wet chemistry lab is inexpensive, pH, TA,
  alcohol, ML chromatography, free/total sulfur

13
Winery Equipment Cost

• Wine Tanks
• 500 gallon variable capacity 4,400
• 1,000 gallon variable capacity 6,900
• 2,200 gallon variable capacity 10,795
• 500 gallon fixed top tank 3,955
• 1,000 gallon fixed top tank 5,895
• 2,100 gallon fixed top tank 9,995

14
Winery Equipment Cost

• Plate/Frame filter 40x40mm 26sheets 5,395
• Filter sheets range 135-200/100 sheets
• Sterile filter cartridge housing 30
  580
• Sterile filter cartridge 30
  250
• 4 head manual filler w/pump
  2,695
• Semi-auto corker w/hopper
  3,695
• Semi-auto labeler
  4,395
• Capper heat shrink (polylam)
  250
• Capper spinner (tin)
  1,000-1,500

15
Winery Equipment Cost

• Flexible impeller pump 1 1/2 750
• Flexible impeller pump 2 1/2 3,795
• Crusher 3 ton/ hr with must pump 2,400
• Membrane press 290 gallon 23,500
• Water press 85 gallon
  2,595
• Water press 119 gallon
  7,500

16
Best advice I can give

• Spend one year visiting Midwest wineries
• Attend meetings, taking courses
• Learn all you can learn before you take the
  plunge
• You have to be an expert in many areas or hire
  consultants to make sure you are on track and
  not get started on the wrong foot.

17
Thank You

• Garry A. Penner
• Top to Bottom Consulting, LLC
• 11910 CR 5220
• Rolla, MO 65401
• pennerg_at_live.com
• 541-980-8225