Start Your Own Vineyard
High Life, May 2006
Please Squeeze Me: Considering starting a vineyard? It’ll take more than romance and reverie to make a large profit from your small fortune.
If you’ve ever dreamed of a life of wine, here’s a scene that will feel familiar – it stars with you on your beautiful wine country estate, hosting a lavish outdoor banquet with friends. You uncork a bottle of your own label cabernet, a Robert Parker prizewinner no less, and, raising the vintage to the sun, you announce a toast to all present, to the finer things in life.
It’s a wonderful image and feasible enough – the world of wine is full of those who hold such banquets regularly. But to a soul they know that it takes more than romance and reverie to get there. Behind that snapshot scene lie years of toil and patience, a stiff climb up a steep learning curve and plenty of luck. When it comes to wine, only the serious need apply. With that in mind, then – what does a prospective vineyard owner actually need?
The first requirement is money. Pots of it. More money than sense, probably. The hoariest cliché in the wine world, which no one tires of repeating, is “if you want to make a small fortune in wine, start with a large one.” Recently a couple from Minnesota spent $8 million on a plot in Yountville, in the Napa valley, and for that they got 11 acres without the vines planted, a decrepit septic system, no winery tanks or equipment and only a shell of a building. Once they’ve sunk in another $5 million they’ll be operational but it will still take a good five years before their fruit has matured enough to yield a decent bottle. And then there’s no guarantee anyone will buy it. Wine is not for the faint of heart.
In truth, the numbers needn’t always run this high. Not only is Napa the most expensive fruitbearing soil in America running at up to $400,000 per acre, but the Minnesotans had their hearts set on a winery as opposed to a vineyard. There is a vast difference. A winery entails tanks, barrels, crushers – a considerable capital investment. It’s not strictly necessary to go that far, if all you want to achieve is that aspirational banquet. In fact, some would advise against it.
“A common mistake we see is people building these elaborate wineries at the outset,” says Barbara Insel from MKF Research the foremost wine industry information house in North America. “There’s this idea that ‘if I build it they will come’, but wine isn’t like that. One sure way to lose a pile in wine is to throw money at it.”
Instead, Insel advises newcomers to dispense with the winery idea and start smaller. You can outsource all the hard work. “Once you own a vineyard, you can take the fruit to any number of custom crush facilities, which can make wine to your specification,” she says. “Or you can sell the fruit to an established winery and negotiate a few cases of your own label as part of the deal – your “vanity wine” to send to friends. There are all sorts of options.”
But first, you need a vineyard. So where to buy?
Ultimately the dream relies on a real estate deal. Anyone with a taste for the stuff – or a subscription to Decanter or Wine Connoisseur magazines – knows where the finest grapes are grown. But you have choices – do you want Cabernet grapes or Pinot Noir? Chardonnay or Syrah? The only way to settle such questions is to visit the respective areas first and try all the local wines until you find one you’re prepared to dedicate your fortune to producing.
“You can always sell good fruit,” says Arik Housley, the former Chamber of Commerce in Yountville, Napa. “If you’ve got prime property in a prime region, top wineries will ask for 10 year contracts on your fruit. If not, you can still sell it, but you need a broker – the last thing you want is fruit you can’t sell.” But it happens. One bad winter is all it takes.
A key factor in the fruit’s quality is the terroir, a French word meaning the vine’s environment – the soil, the climate, the slope, everything. Different grapes respond to different terroirs differently – it’s a tricky area to navigate, a subject for viticulturists and experts, really. “My advice would be to talk to a real estate agent, first,” says Housley. “Find the guy making the most vineyard deals in that area and he’ll know which grapes have been successful on which properties. That’s a good short cut.”
Perhaps also ask the realtor how small a parcel of land he’s willing to sell. Smaller plots are more manageable and present less risk, but equally they are in much greater demand and so cost much more per acre. Also, if your heart is set on having a house on the land – though many vineyard owners live away from their crop – be sure to ask that there’s either a building already there that you can renovate, or if not, that you have permission to build. Often wine regions have building moratoriums to restrain development and keep the land agricultural.
Not all properties have a proven track record of producing quality grapes. Some are as yet untried, even though they are situated in renown wine-growing regions. In these cases some serious soil research is in order. “You need to know percolation rates, nutritional status, and lots more,” says Jeff Cox, author of From Vines to Wines : The Complete Guide to Growing Grapes and Making Your Own Wine. “That kind of information is in the soil maps. And you’ll need an expert to explain it to you. It wouldn’t hurt to take a 2 year degree in viticulture and oenology yourself.”
To some the thought of going to school spoils the fun of it. And to be fair, most vineyard owners follow Barbara Insel’s advice and outsource all the hard work – they employ management companies who do all the agriculture for them so that they themselves don’t need to be on the property all year round. And they employ brokers to sell their fruit. The whole operation more or less runs itself.
But there are those who want to get stuck in, for whom wine is an obsession they are happy to devote themselves to. For these people, it makes sense to take a viticulture course and build a winery. Why sell your glorious fruit to someone else when you can make the stuff yourself and have the time of your life doing it? Nevertheless, you don’t want to take on the job alone – you need to hire a winemaker, far and away the most important hire for every fledgling winery.
“The top winemakers in Napa are probably Heidi Peterson Barrett or Philippe Melka,” says Housley. “You can hire them as consultants, but they’re very expensive and very hard to get. I’d recommend hiring their assistants. They’ve been tutored by the best and they make very similar wines, but they’re much cheaper!”
One thing a big-name winemaker will get you is a great wine, which is certainly the primary goal. But a renown winemaker also boosts your marketing impact, a huge factor in the wine business. With every acre yielding about 270 cases of wine, even the most gregarious owner can’t count on selling to friends alone for ever. And in such a crowded field, marketing your wine is quite a challenge. Some sell directly to tourists who visit wine country each year. For this reason, many small wineries include tasting rooms and tours. Others take to the road, selling their product conventionally to restaurants and hotels which requires a good sales manager and a hearty travel budget.
As Geoff Norsuch of Goosecross Winery says, “you need to be a people person. You need to be able to take rejection. One person will say it’s too oaky. The other will say it’s not oaky enough. There’s a lot of snooty nonsense that you get in the wine world, you know.”
But no one said it would be easy. Wine is a business, and like most businesses it pays to make a thorough, fully costed business plan. On the plus side, however, few other businesses afford such a wonderful blur between work and pleasure, nor the endless satisfaction of coaxing greatness from soil and sunshine. If you do find yourself at that glorious feast, uncorking that prizewinning Cab at your long oak table, you’ll know the real reason it feels so good is because you earned it. Sante!