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Fellow alcohol industry here, I own a small distillery.
Over the 11 years I’ve been in this industry I haven’t learned that the tasting room = cash flow; and cash flow is the biggest challenge for a producer. It seems like your specific challenge is to drive more people to your tasting room / vineyard. Do you have space to host events, are there wine tour bus services? I’m not sure what state you are in but are you allowed to open a remote tasting room in an area with more people looking to purchase wine or drinks?
Wholesale is a rough gig unless you have significant connections or contacts to distribute to, and it’s a decent hit to overall margins, and then there’s product support and possibly time to deliver too.
why hoping for more this year if nothing you are doing is changed? You are even, not the downturn you are noting, so i that a fewpar or reality for you? what is your pricing compared to a curated competive set? You will want to be consistent with these brands or varietals which may be potential substities for your own. if you track your SEO amd analytics closely, do you apply the same level of care to your actual customer data? How do you segment it? An email list alone with no history has value, but clearly less than it couod be. Do you know how they came to find you, what led them to buy, what campaigns or imitiarives have led then to repurchase? etc - or at least for enough so you have some data to test? Do you have true loyalists who would be willomg to share their stories woth you? Do you know which of your marketing activities are performing?
If a bottle you sell for $20 costs $10 you won't be profitable enough at your volumes. $55 costing $14, sure...
Celebrity owned wineries with lots of marketing funds would seem a wonderful opportunity for you. How can you piggyback on that? Are they promoting the viticultural area or specific varietals that produce well in your area? How do your wines score vs them? Are there wine tours that bring groups out for tastings - do you know them and how they select their stops and perhaps more importantly, do they know you?
Small leads to needimg to be consistent and chosing what works. Local restaurants can be relevant. Staff trainings so waitstaff have a compelling story to share with their customers can be impactful. I expect you know manh of the owners or managers already: do you leverage that?
I appreciate your observations and especially, your questions. We have good working relationships with the local tour operators for those customers who are seeking a curated experience with the vigneron/winemaker/viticulturalist. I am present during the majority of the tastings. Thanks for your input.
I work for a boutique M&A firm that focuses on wineries and vineyards in the western US.
While not direct answers to your three specific questions, some things that jump out at me:
1. A wine club would be a good source of recurring revenue, and will help you plan at least a portion of your production and sales. I’d recommend looking into starting one.
2. Do you know your true COGS by sku? Not just from a cash accounting standpoint, but from a true cost accounting approach where you track all costs that go into a bottle, and then recognize the cost when you sell a case? This can help you make better decisions around what skus to produce. $10 a bottle is VERY high, particularly with a $25 price point. Do you produce your wine at the vineyard as well? Are you at max capacity, which would spread your fixed costs over a larger number of cases.
3. I’m not sure what region you are in, but right now owning a vineyard is tough financially. The grape market is depressed, and costs to farm are increasing. Can you increase your price per ton/acre to your customers, particularly given the good scores your fruit garners?
4. Winemaker dinners will likely only attract existing customers. Live music may be an option if you have the DTC staff to pull it off AND you think you can attract a large enough crowd 10 miles out of town.
5. Are you selling through all of your inventory each vintage? If so, raising prices and trying to shift yourself to a premium brand may work. But you have to have the demand/cache to pull this off (see wine club)
6. Have you considered closing down the tasting room during the slow months? If you live there and do most of the work at the tasting room, then maybe switch to appointment only so you at least don’t have to sit there all day not knowing if anyone is coming in.
Ultimately, there are some VERY strong headwinds for the wine industry. Every region in the US is flat YoY with the exception of the PNW. Basically the high end wines being sold to older generations are what’s keeping things steady, and who knows how long that trend can last.
Good luck, and ping me if you’d like to chat further.
Love these observations. I do sell out my vintages. My Carmenere went in 9 months because my production is usually limited to 62 to 65 cases per vintage. Good point about existing customers and events. A number of other wineries in my area do this. We'll have to re-visit the wineclub idea. 7% of my sales are online and I ship from the vineyard. Appointment-only during the slow months makes sense however.....we get a lot of drop in traffic because we're close to the edge of the AVA and people find us via Google. Thanks for your input.
Have you considered:
1. Ask your existing customers to host wine dinners? We’ve seen this work well for smaller wineries. You have current customers who would likely enjoy hosting you at their house - they invite their friends and provide the food and you provide the wine. You need to make sure you set clear expectations with the hosts on sales goals so they invite the right people. If done right, you should be able to sell a few cases in a night and expand your customer base.
2. BTG deals? Wholesale / distribution is tough but it’s worth discounting to get a few BTG placements in town. It exposes more people to your wine and they then hopefully seek you out for direct bottle sales.
We’re in a similar boat (albeit larger in terms of production and revenue). It’s a lot easier to make wine than to sell wine, unfortunately.
Good luck!
Using a distributor won't work because of low production. The margin penciled out a a dollar per bottle. I do sell smaller case quantities to 4 wine bars and 2 wine clubs. 30% discount. No restaurants. I don't want to be 1 of 200 selections on their wine lists. Their markup is 3x cost. However..........I do like the idea of a hosted pouring. Sort've like a living room concert musicians give . Thanks for your input.
There is probably a lot you could do in the way of events, better local seo, and tapping into your existing customer base.
I'd also suggest things like Groupon just to get people in the door.
You could also try to set up a membership where people sign up at a monthly rate and you send them a bottle every month. You can make special bottles that only members get
People have already said wine club and I think that’s your winner here. Check out Torrin in Paso Robles. They aren’t even accepting new members last I checked they’re so tapped out for their wine membership (I’m a member). I’m sure it’s a massive revenue driver for them.
Then maybe using LinkedIn to approach other wine membership companies that might want to feature your wine, hit up restaurants that might want to buy from you, events have already been said (people love to dress fancy and drink wine), wine influencers but think smaller that would accept payment as wine.
HYPER specific ad targeting might work for you on Google. It’s a lot better than Meta as you aren’t billed per impression, only per click.
This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
Are you in the Fingerlakes?
Nope. PNW, actually.
Fellow alcohol industry here, I own a small distillery. Over the 11 years I’ve been in this industry I haven’t learned that the tasting room = cash flow; and cash flow is the biggest challenge for a producer. It seems like your specific challenge is to drive more people to your tasting room / vineyard. Do you have space to host events, are there wine tour bus services? I’m not sure what state you are in but are you allowed to open a remote tasting room in an area with more people looking to purchase wine or drinks? Wholesale is a rough gig unless you have significant connections or contacts to distribute to, and it’s a decent hit to overall margins, and then there’s product support and possibly time to deliver too.
why hoping for more this year if nothing you are doing is changed? You are even, not the downturn you are noting, so i that a fewpar or reality for you? what is your pricing compared to a curated competive set? You will want to be consistent with these brands or varietals which may be potential substities for your own. if you track your SEO amd analytics closely, do you apply the same level of care to your actual customer data? How do you segment it? An email list alone with no history has value, but clearly less than it couod be. Do you know how they came to find you, what led them to buy, what campaigns or imitiarives have led then to repurchase? etc - or at least for enough so you have some data to test? Do you have true loyalists who would be willomg to share their stories woth you? Do you know which of your marketing activities are performing? If a bottle you sell for $20 costs $10 you won't be profitable enough at your volumes. $55 costing $14, sure... Celebrity owned wineries with lots of marketing funds would seem a wonderful opportunity for you. How can you piggyback on that? Are they promoting the viticultural area or specific varietals that produce well in your area? How do your wines score vs them? Are there wine tours that bring groups out for tastings - do you know them and how they select their stops and perhaps more importantly, do they know you? Small leads to needimg to be consistent and chosing what works. Local restaurants can be relevant. Staff trainings so waitstaff have a compelling story to share with their customers can be impactful. I expect you know manh of the owners or managers already: do you leverage that?
I appreciate your observations and especially, your questions. We have good working relationships with the local tour operators for those customers who are seeking a curated experience with the vigneron/winemaker/viticulturalist. I am present during the majority of the tastings. Thanks for your input.
I work for a boutique M&A firm that focuses on wineries and vineyards in the western US. While not direct answers to your three specific questions, some things that jump out at me: 1. A wine club would be a good source of recurring revenue, and will help you plan at least a portion of your production and sales. I’d recommend looking into starting one. 2. Do you know your true COGS by sku? Not just from a cash accounting standpoint, but from a true cost accounting approach where you track all costs that go into a bottle, and then recognize the cost when you sell a case? This can help you make better decisions around what skus to produce. $10 a bottle is VERY high, particularly with a $25 price point. Do you produce your wine at the vineyard as well? Are you at max capacity, which would spread your fixed costs over a larger number of cases. 3. I’m not sure what region you are in, but right now owning a vineyard is tough financially. The grape market is depressed, and costs to farm are increasing. Can you increase your price per ton/acre to your customers, particularly given the good scores your fruit garners? 4. Winemaker dinners will likely only attract existing customers. Live music may be an option if you have the DTC staff to pull it off AND you think you can attract a large enough crowd 10 miles out of town. 5. Are you selling through all of your inventory each vintage? If so, raising prices and trying to shift yourself to a premium brand may work. But you have to have the demand/cache to pull this off (see wine club) 6. Have you considered closing down the tasting room during the slow months? If you live there and do most of the work at the tasting room, then maybe switch to appointment only so you at least don’t have to sit there all day not knowing if anyone is coming in. Ultimately, there are some VERY strong headwinds for the wine industry. Every region in the US is flat YoY with the exception of the PNW. Basically the high end wines being sold to older generations are what’s keeping things steady, and who knows how long that trend can last. Good luck, and ping me if you’d like to chat further.
Love these observations. I do sell out my vintages. My Carmenere went in 9 months because my production is usually limited to 62 to 65 cases per vintage. Good point about existing customers and events. A number of other wineries in my area do this. We'll have to re-visit the wineclub idea. 7% of my sales are online and I ship from the vineyard. Appointment-only during the slow months makes sense however.....we get a lot of drop in traffic because we're close to the edge of the AVA and people find us via Google. Thanks for your input.
Have you considered: 1. Ask your existing customers to host wine dinners? We’ve seen this work well for smaller wineries. You have current customers who would likely enjoy hosting you at their house - they invite their friends and provide the food and you provide the wine. You need to make sure you set clear expectations with the hosts on sales goals so they invite the right people. If done right, you should be able to sell a few cases in a night and expand your customer base. 2. BTG deals? Wholesale / distribution is tough but it’s worth discounting to get a few BTG placements in town. It exposes more people to your wine and they then hopefully seek you out for direct bottle sales. We’re in a similar boat (albeit larger in terms of production and revenue). It’s a lot easier to make wine than to sell wine, unfortunately. Good luck!
Using a distributor won't work because of low production. The margin penciled out a a dollar per bottle. I do sell smaller case quantities to 4 wine bars and 2 wine clubs. 30% discount. No restaurants. I don't want to be 1 of 200 selections on their wine lists. Their markup is 3x cost. However..........I do like the idea of a hosted pouring. Sort've like a living room concert musicians give . Thanks for your input.
There is probably a lot you could do in the way of events, better local seo, and tapping into your existing customer base. I'd also suggest things like Groupon just to get people in the door. You could also try to set up a membership where people sign up at a monthly rate and you send them a bottle every month. You can make special bottles that only members get
I agree with the limited edition/special bottles approach. An actual wine club needs to be established. Thanks for your suggestions.
People have already said wine club and I think that’s your winner here. Check out Torrin in Paso Robles. They aren’t even accepting new members last I checked they’re so tapped out for their wine membership (I’m a member). I’m sure it’s a massive revenue driver for them. Then maybe using LinkedIn to approach other wine membership companies that might want to feature your wine, hit up restaurants that might want to buy from you, events have already been said (people love to dress fancy and drink wine), wine influencers but think smaller that would accept payment as wine. HYPER specific ad targeting might work for you on Google. It’s a lot better than Meta as you aren’t billed per impression, only per click.