Let’s Get Down to Business.

Winery or Vineyard?  What’s the difference and how do you decide which type of establishment is right for you?  First, let’s take a look at the two types of businesses:

First, what exactly is a winery?

This is where wine is produced.  Everything from removing the leaves and stems to crushing the fruit to bottling the wine happens here.  When you see images of barrels upon barrels in a facility, this is an image from a winery.  Did you know that it is possible to own a winery without growing your own grapes?  Some wineries purchase grapes from vineyards all over the world to produce wine.  This is why wineries are capable of producing wines from grapes that are not native to that region.  They also do not have as much overhead costs when it comes to maintaining the business than that of a vineyard.

So, what is a vineyard?

This is where the grapes are grown.  When you see images of fields with rows of vines and trees, this is a vineyard.  This is where grapes are planted, grown, and harvested.  From here, they can either be sent to the winery on location or sold to other wineries.  Most vineyards do have their own processing facilities on location.  However, some businesses solely focus on producing and selling grapes.  It all depends on how you structure your business.

Now that you have a quick overview of each type of business, how do you know which one is right for you?

First, look at your budget.  Determine how much money you have to invest in a new business.  Vineyards do require a larger start-up cost and the payback period is much longer since the average time from plantation to the first harvest for grapes is five years.  However, if you choose this option, at the start of your business, you can purchase grapes from other vineyards until your vines are ready to be harvested.  Also in the long run, growing and harvesting your own crop would reduce your purchasing expenses. 

If you aren’t looking to farm and harvest grapes, but love wine and the wine-making process, a winery is the perfect fit for you.  By eliminating the land and vines from your business, you have created an establishment that focuses on developing the science of the wine-making process.  Your investments will focus on processing equipment and technologies regarding wine-making, whereas, if you owned a vineyard, your investments would be spread out between processing and harvesting equipment as well as land management. 

I will not say one venture is better than the other.  Each has its own strengths and weaknesses.  Your personality and business interest will determine which type of establishment is right for you.

Whichever you choose, let me know.  I will want to try your wine!

Random:  Check out this winery in California: Cleavage Creek Winery.  

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