Like many wine bloggers, when I started writing about wine I had dreams about owning a winery. I even had the brilliant idea of blending two cultures by owning a small winery in Virginia and another in Saint-Èmilion.
Now that I am older and wiser I know better, but I still see a lot of people out there who think they want to own a winery. Let me tell you why you don't:
5. Weather is a bitch
Last year was a difficult year for Virginia Wineries because of weather. That was followed by a mild winter which lead to early flowering and then BAM, frost! Once Virginia Winemakers made it through the frost scare we hit extremely warm temperatures and last week a freaking Derecho Storm swept through the vineyards. Only two people in Virgnia had ever heard of a Derech Storm prior to last week, now it is all everyone can talk about it.
The point is, if you own a Vineyard, your life revolves around weather a mis-timed hailstorm, a dry hot summer or a wet autumn can ruin your crop for a year and you don't have a lot of control over any of that.
4. With Yelp, Twitter, CellarTracker and other forms of social media everyone is a critic, most of them are stupid.
Social media has made it easy for everyone to be a critic, and there has been a lot written about the democratization of wine critiquing. The fact is, most people don't know what they are talking about, which makes their wine and winery reviews worthless. But, it doesn't change the fact that they are out there for every one to see right alongside the reviews from people who know and understand the wine.
For example, this is from the first review about Breaux Vineyards on Yelp (emphasis mine):
But then they veer off with high priced (and well known) varietals like Cab Franc, Merlot, and Cab Sauv as well as the lesser known Nebiollo. They high priced and, IMHO, not that good and VERY expensive.
Given the number of medals Breaux has won for their reds it is unlikely this reviewer is right about the fact that they are not very good. But, it is ludicrous to claim that the Nebbiolo is "lesser known". Barolo is considered the "King of Wines" and has been sought after by people all over the world for hundreds of years. Just because this reviewer doesn't know about it doe not mean it is "lesser known".
And that is the first review as you go down the list of reviews you find error after error. But, as a winery owner, you just have to ignore them and hope you get more positive than negative reviews.
3. Professional wine critics are a pain too!
Every year after En Primeur finishes the waiting game in Bordeaux starts. Everyone is waiting for scores to be published, especially those of Robert Parker. Without high scores it is almost impossible for Chateaux whose names aren't Lafite or Margaux to get noticed on the market.
But that's fine, because wine critics are professionals, they taste blind and write based on the inherent attributes of the wine, not their personal biases. Surprisingly, that is true of most critics. Having been through En Primeurs a few times I can tell you that the majority of critics take the job very seriously. But, the top critics don't taste blind and they are well known to have biases, sometimes even vendettas, against certain Château.
Those are the problems facing the wines that do get regularly reviewed. There are a whole different set of problems for those regions trying to get noticed by wine reviewers. Last year the wine world erupted when it was found out that Jay Miller, formerly of the Wine Advocate, was soliciting money from wine regions in Spain to review their wines. Note well, he was not asking for money to publish good reviews, he was asking for money just to show up.
That's a problem for smaller regions: getting your wine in front of an international critic or wine magazine can be a challenge. Without that exposure it can be impossible to grow your business.
2. Middle men and regulations will take all of your money and time
The United States, and most other countries are filled with antiquated laws about how and where you can sell your wine. I am not just talking about the regulatory jumble you have to go through just to be able to make your wine and sell it in your tasting room, but stepping outside of your tasting room is expensive.
Say you open a winery and enjoy some success, local restaurants start coming to you about adding your wine to their menus and local wine shops want to sell your wine. The first thing you find out is that you probably can't sell to them directly. Most States have laws that require your wine to be sold through a distributor. Distributors know this, and know they have you over a barrel (pun intended), so they will pay you half of what you charge for your bottle of wine to distribute it for you.
That's right, the $20 bottle of wine n the tasting room is $10 to your distributor. The distributor will mark it up 50% in order to sell it the restaurant 2 miles from your winery who came to you in the first place.
To make your life even more fun as you build a following you find the rules vary from State to State. Have a fan in Utah who want you to send her a case of your wine? better know Utah's rules, which will be very different than the rules to ship to your fans in California. Overseas fans? Forget about it.
Because of Puritanical laws that are still on the books and enforced, operating a winery can be a regulatory nightmare.
1. You don't have enough money
Starting a winery is simple, right? You plant some vines, harvest them, age them and, tada, wine!
Not quite, first plan on 2-3 harvest before you can make your first wine, 4-5 before you can release your first red. That is literally years of work before you start seeing money from your investment. You can offset that by buying grapes from other vineyards in the short term, but then you are stuck with whatever you can get with no guarantee of quality.
Then you have all the problems outlined here: lawyers to help you with he regulatory issues equipment to protect the vines (do you know how much it costs to rent a helicopter to keep frost from the vines, ask a Virginia Winemaker, most of them know).
Add to that, the cost of equipment, hiring staff (and you want staff, trust me you are not in good enough shape to harvest by yourself), building the tasting room, and hundreds of hidden costs. Unless you are already a multi-millionaire you don't have enough money to run a winery the right way. That means short cuts that can compromise the quality of your wine, or releasing wines before they are ready.
Owning a winery is about passion, not profit. That's why they say the quickest way to make a little bit of money in wine is to start with a lot.
3 comments:
Allan - very interesting and correct post. That said there are also reasons to own a winery if you have the resources.
1) Weather - yes it can be a pain, but it is also awesome to watch the different vintages and see how each of the "problems" effect the resulting wine. in wine you can really taste and appreciate the weather variability.
2) I spend my day walking a vineyard, tapping into barrels, thinking about the coming harvest, talking about wine, etc instead of being in an office all day. I love every single day that I am working.
3) You meet some of the greatest people on the planet. Everyone is your friend when you can supply wine and it is always a great way to start a conversation with someone you don't know.
4) You get a wild appreciation of everything you eat and drink by understanding agriculture.
5) Critics of all types can help you direct the style you want for a customer base. People are very vocal about wine so it is easier to understand where and who you customer base is then in most industries.
Now sure it isn't all sunshine and flowers, but it is a pretty awesome way to live. To be fair, I don't own a winery, but I am deeply involved with all except emptying my pockets for operations and capital. The points that you nail that I do think people need to understand more is the cost and regulations in producing wine.
You stole my thunder, I was gong to create a corollary post entitled 5 Reasons You Do Want to Own a Winery :). Those are all excellent reasons for owning a winery and surrounding yourself with wine :)
Colleen and I have been lucky enough to share the ups and downs of our winery with you and others. On a great day, I cannot wait to make more wine, help more folks in the industry and share my passion with all that will listen. On a bad day, my perfect job is to be a weed whacker operator along the side of a long road. If there is more road and weeds, I just keep going. No decisions, no emergency calls, no major responsibilities, no problem. My reality is that just owning any other business, I have a lot of people that I work for: My staff, my customers, the bank and my suppliers. Fortunately on most days I am allowed to share the bed with my partner.
Mother nature has a lot to say about my business and many times I feel like a sailor trying to get the most out of what she gives me. The critics don't bother me so much. I like to get medals but I like to see satisfied customers the most. This years goal is to structure some down time in regularly so burnout is avoided. thanks for thinking of us. you may not have taken the leap, but you have great respect by telling the stories and showing the respect to those that have. Cheers
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