Starting A Micro-Winery
Many wine connoisseurs consider a micro-winery to be a winemaking venture which buys its grapes rather than growing them. This isn’t necessarily true of all micro-wineries for some small operations do grow several acres of grapes specific to the type of wine they produce.
What is a Micro-Winery?
A micro-winery is a small-scale winemaking operation that produces limited quantities of wine. Winery sizes are classified by the number of bottles they produce. The very smallest are Limited Production (<1,000), Very Small (1000-4999), and Small (5000-49999).
The wine business market size is about $381 billion, and 96% of it is created from 11,220 wineries which range from Limited Production to Small [2023 statistics]. The small winery business holds a significant portion of the wine business market today.
How Many Grapes Are Needed?
A typical micro-winery produces less than 10,000 cases per year. These 10,0000 cases translate to 120,000 bottles. It takes approximately 1 ton of wine grapes to make about 600 bottles of wine, or about 3.3 pounds of grapes per bottle.
Micro-wineries often use traditional winemaking techniques and focus on producing high-quality wines with unique characteristics. Unlike larger wineries, micro-wineries may source their grapes from a specific vineyard or region or they may be growing grapes for a more hands-on approach to the winemaking process.
Micro wineries may also offer a tasting room or other experiences for visitors to sample their wines and learn about the winemaking process. The site can become an event center, hosting weddings, reunions, and even corporate events.
Overall, micro wineries are known for their attention to detail and their commitment to producing exceptional wines with a personal touch. The wines are often referred to as boutique wines, indicating a certain exceptionalism.
Starting a Micro-Winery
When you are creating wine for a business, starting a micro-winery can be an exciting and rewarding business venture. If you are wine-making for profit, the steps to build your business are very similar to any other business. Follow the steps below and with good planning–as with any other small business–you increase your chances of success.
Average start-up costs of a micro-winery range from $500 for the smallest of operations to $19,000 or more for a beginning commercial setup. For a full winery setup, costs can range $1.5 million and up.
Costs include equipment, marketing, inventory, employees, insurance, etc., and if you decide to have a brick-and-mortar component, you will have to consider any purchase or rent and other costs associated with that.
Here are some steps to get you started:
Sure, you like to drink wine! But drinking wine is a far step from producing and selling good wine.
Start by researching the wine industry, local regulations, and the business aspects of starting a micro-winery. Find out what permits and licenses you need to obtain, what equipment and supplies are required, and what the costs are.
If you are planning to produce wine as a commercial operation, you are required to file with the Alcohol and Tobacco Tax and Trade Bureau. You also need to check your state and local regulations.
If you only plan to produce wine for yourself, federal law allows you to make up to 100 gallons for a single adult in the household or up to 200 gallons if there are 2 adults in the household.
The very basic equipment needed for making wine includes 2 stages of fermentors for the fermentation process, airlock, hydrometer, tubing, bottles, and closures (or a corker).
2. Business Plan:
Create a business plan that outlines your mission, target market, financial projections, marketing strategies, and production goals. You’ll need this to secure financing, communicate with investors and partners, and keep your business on track.
As with any business plan and marketing strategy, you need to revisit these documents on a regular basis and make any necessary changes. It has been proven that businesses that do this are much more successful than ones that ignore these roadmap documents.
Find a suitable location for your winery, taking into consideration factors such as proximity to grape sources, accessibility, zoning regulations, and customer traffic. Especially if you are planning to have an event center or tasting room, you need to make sure that your site is close to a population center. Be sure to allow plenty of room for parking.
When searching for a wedding venue for my daughter, we visited our local wineries. One particularly beautiful winery sat on top of a hill overlooking the river. It was absolutely perfect except for one major thing. The earthy smell of a feedlot for cows permeated everything. Automatically we dismissed it from our list. They produced great wine, but the site was not appropriate for events, in my opinion.
When choosing your site, view it from the eyes of your public. How will they see your great wine venture? it’s just as they say: a boss needs to go in the front door occasionally to see what his customers see. Sometimes it can be quite eye-opening.
Equipment can be as involved or simple as your business vision. If you are going commercial, invest in equipment such as a press, tanks, barrels, bottling line, and laboratory tools to produce quality wine. Consider both new and used equipment to save on costs.
Get the basic equipment if you are just starting out or you are only producing for yourself. To reiterate the list above, the basic equipment would be 2 stages of fermentors for the fermentation process, airlock, hydrometer, tubing, bottles, and closures (or a corker).
Identify grape sources that will give you the quality and quantity of grapes you need to produce your desired wines. Consider partnering with local grape growers or purchasing grapes from established vineyards.
Starting your own vineyard might be another option for you. Planting a small vineyard on your land can cost as much as $35,000-$45,000 per acre. There are additional challenges with a vineyard, such as maintenance of that land, employees, etc. Also, additional time will be needed if you are only depending upon your own grape harvest, for it may take 2-3 years before you have an adequate harvest. Having your own vineyard does give you some control over your wine production and costs for your small winery, but it is labor-intensive.
6. Permits and Licenses:
Apply for the necessary permits and licenses required by your state or local government to operate a winery. This may include a winery permit, a federal basic permit, and a state license. Remember that you will probably have to collect sales tax on everything that you sell, so this would be another permit to pursue.
Develop a marketing plan to promote your wine and reach your target audience. Consider branding, packaging, website development, and social media marketing.
Your branding should include your labels, packaging, and logo, all representative of your winery. If you are going fancy or rustic, make sure that your labels and packaging illustrate that type of branding.
Website development is one of the most important things that you can do for your winery. Everyone today looks up places to go on their phone or desktop. There are no more yellow pages. If you aren’t on the web, people are not going to find you. If you need information on how to proceed with this, check out building a website.
You can go a lot of different ways with social media. You can have a page on Facebook or a presence on Twitter, Instagram, or one of the other sites. You can make videos for YouTube. If this is not something you want to do but know you must, hire a freelance social media guru to handle it for you. Regardless, you need a presence online.
With significant competition in the industry, good marketing is going to be crucial to your success. You must determine your unique selling proposition (USP)–what is going to set your wine apart from all other wines on the market? One small Ontario, Canada, winery has recreated a 170-year-old port wine. As a result, the Potter Settlement Artisan Winery is winning awards and sales from this venture. That is just one example of a Unique Selling Proposition–no one else has that port wine.
Once all the above steps are completed,you are ready to begin producing wine. The process varies slightly between white wine and red wine production. Here is a simple breakdown of the process:
Crushing the Grapes
Crush the grapes to separate skins and grape juice. If producing white wine, the juice has to be separated from skins, seeds, etc. in order to keep the clarity of the wine. Red wine is produced by leaving the juice, skins, seeds, etc. together to create a rich color and flavor.
Fermentation can be natural or assisted by adding yeast to the crush. Most vintners prefer to control the fermentation by adding a yeast mixture manually after killing the natural, wild yeast within the juice. Fermentation can take anywhere from 10 days to a month or more, depending upon the winemaker’s taste, and can be done in several stages.
Once fermentation is complete, the raw wine is filtered to remove any extra microorganisms and material bits that might be in the wine. Sometimes, other ingredients such as egg whites or clay are added so that anything within the wine will adhere to these additives and fall to the bottom of the container.
Aging and Bottling
Many times in the wine-making industry, the clarified wine is moved to barrels to complete the aging process. This is a secondary fermentation process that can lower the overall acidity level of the wine. It’s highly recommended to do this for barrel aging will create a more palatable and stable wine. Oak barrels are preferred for this step.
Additional aging can take place once the wine has been funneled into the wine bottles. Some wineries prefer to continue aging their product in large stainless steel or ceramic containers before it is bottled.
Becoming a Winemaker
Start small, perfect the process, and gradually scale up production as demand increases.
Starting a micro-winery can be a complex and challenging process, but with thorough research, planning, and execution, it can also be a fulfilling and rewarding venture.