Winery Startup Costs

The decision to start any new business is not one you should take quickly or without checking into the potential costs in the future. Starting a winery is a dream of many people in the 21st-century, particularly as the demand for wine is soon expected to outstrip existing production levels. Despite the success that can be made from starting your own winery, you may be shocked by the costs you will need to cover over the first few years of your new wine business. A recent study from the University of Washington put the total time needed to turn a profit from your winery at around eight years.

Preparing and planning

There are many issues to consider when you begin to plan your new winery, which should include those regarding where to start your business. In the U.S., most people look at the traditional wineries of California as the location they wish to enter. However, land in established regions is scarce and can cost upwards of $30,000 per acre. Instead, it can be a good idea to follow the example of the thousands of winery owners in all 50 states and look closer to home. Starting a winery in a less traditional wine-producing region can lower costs and still yield excellent wines.

Vines and equipment

Once you have found the plot of land you wish to start your winery on, you will find yourself needing to decide on the best option for vines in your region of the world. Employing experts to test the soil in your area to provide advice on which vines to invest in can be expensive but will save money further down the line. Investing in vines is an expensive business with average costs of between $35,000 and $45,000 per acre depending on the quality of the vine purchased. Your costs do not stop here, establishing your vines and maintaining them in the crucial first three to four years will cost around $20,000 per acre per year.

After you have decided on your vines and where you plan to build your winery you will face the issue of equipment to operate your new business. A refrigeration system, storage facility, and a tasting room are all recommended if you are to maximize your sales in the coming years. This does not include the cost of designing your label and creating a bottling line capable of handling your products after your vines have become established.

Licensing should always be considered

No matter where you live, you are going to face some form of regulation at the state and national level. In the U.S., each state and local government will have regulations in place when you are first starting your winery and will be added to by the myriad of rules created at the federal level. in the U.S. for example, each winery must register with the Food and Drug Administration and meet local food safety guidelines. The problems in many countries begin to expand for a winery when you decide to sell your wines across state lines or in other areas of the world and must meet the regulations of other governing bodies.

Total costs

It is possible to find success as the owner of a new winery, particularly if you have a large amount of funding behind you. Some estimates state the initial cost of starting a winery is upwards of $1.5 million, which can be a difficult number for most ambitious entrepreneurs to contemplate. Don’t forget in addition to all of the standard expenses you will also have to pay for things like vineyard insurance, labor and much more. The overall costs of starting and operating a winery can be high but the number of success stories is growing with the average path to profitability sitting at between five and ten years before profits can be counted. The tasting room is often seen as an extravagance by those establishing a new winery, but some experts believe around 90 percent of sales for small winery owners come from this small expense. Once your winery is established, your attention will switch to marketing your products in what is a profitable landscape.