Wine isn't just a beverage. The flavour and character of wine is affected by the elements, geography and the fermentation process. A bottle of wine tells a story and running a wine business means telling those stories for a living; sharing your passion, travelling and meeting interesting people.
We’ve previously talked about working in the wine industry, becoming a sommelier and becoming a wine merchant, so in this article, we look at starting a wine business, from having your own winery to starting a wine shop or running a business online. Here are the numerous ways to get started in this fascinating field…
Establishing a Business Model
Firstly, there are several ways you can run a wine business. As well as the various types of business, there are different levels of involvement. You might be an investor, manager, or running it as part of a team. If you’re running a wine business, this could mean purchasing grapes, establishing a relationship with a vineyard, investing in a vineyard, starting one yourself or dealing with multiple suppliers for your shop, e-shop or wine bar.
It’s also worth asking who you will sell your wine to – retailers, wholesalers or direct to consumers? Once you’ve decided on whether you’re a wholesaler, retailer or service business, you can take the following steps.
First Steps in Starting a Wine Business
Regardless of what kind of business you create, there are some standard initial things to do…
- Establish a name, brand and business entity
What kind of wine do you like and why do you like it? Are there brands you’re fond of? What’s your own brand’s identity? Once you’ve thought of an effective name for your brand and company, register your business. Every local government has a clear route (with lots of paperwork!) for establishing a business. The UK government’s site for this is quite a good example.
- Create a business plan
This will involve researching overheads, from salaries (including your own) to marketing costs, rent, margins (cost of creating a bottle of wine vs how much you sell it for) and more. Many of these details are similar to those of a business plan for a restaurant business. You can read more about business plans in our guide to starting a successful restaurant.
- Sort out licences, permits and taxes
Unless you’re lucky enough to live in a beautiful wine region, chances are your business will depend on international suppliers. The EU has strict regulations on wine production, some of which are there to address over-production. Like all of its laws, there is comprehensive, publicly available information and paperwork on their wine regulations.
How to Start a Winery
In this case, let’s separate it to the two most common approaches – starting a vineyard and buying a winery. Each has their pros and cons.
Starting a Vineyard
This is, in many ways, like being a farmer. It would involve buying or leasing land, planting, harvesting, creating the wine, bottling it, and of course, selling it. The disadvantages are the immense workload and financial investment, not to mention the sometimes-long wait time for a return on said investment.
According to a guide from Cornell University, it might take over five years before you see a profit. So, this should be taken into account! It’s quite typical for a vineyard owner to have another source of revenue (e.g., a day job or another business) for those first few years.
The advantage is that it can be lucrative if you create a recognisable brand and flavour. After all, every vineyard is unique and there will be no other wine exactly like yours. And you’ve probably noticed the price difference between a bunch of grapes and a quality bottle of wine, so the margins can be fantastic. There’s also the satisfaction of creating a wine and nurturing it, watching its journey from seed to bottle.
Buying a Winery
This is a more expensive route to the wine business, but a faster one. You might buy a small business that has potential or invest in one that’s already thriving. The obvious advantage here is that much of the work is already done for you; purchasing and installing equipment, preparing the land, initial hiring and perhaps even marketing or brand-creation. The downside, besides the initial cost, is that the company, its culture, its branding and even the taste of the product will already be established. It might be difficult – or even a bad idea – to put your own new spin on it.
Opening a Wine Shop
Like a vineyard, you can choose to either buy an existing one or establish your own. However, a third option – and a popular one – is to run one that’s part of a franchise. A franchise will already have many elements you’d otherwise have to work for; namely brand recognition and a built-in market. However, even more than buying someone else’s vineyard, a franchise doesn’t allow for as much independent decision-making. While you might get a say in what to stock and when, the franchise might dictate everything from prices to branding and even opening hours.
Opening a Wine Bar
Many considerations related to opening a wine bar are covered in our guide to starting a restaurant, including deciding on the premises, financing and writing a business plan. Opening a wine bar will require the right location, ideally somewhere with busy footfall with affordable rent. Many combine the wine bar business with a wine shop, but if you do that, make sure you have the appropriate licensing. The premises itself can be small (smaller than the average restaurant or pub, for example), but this means less room for customers too.
According to Startups.co.uk, working in a wine bar beforehand is advisable, opening your eyes to the nuts and bolts of the business before you put your own money into it. And, naturally, a relevant qualification is a huge asset (more on that below).
Starting an Online Wine Business
Of course, you can run a wine business without setting foot in a vineyard or opening a bottle. One growing industry is online wine. This is vastly different from the businesses above, in that it’s essentially an e-commerce endeavour.
An online wine business can flourish, especially if you get into a subscription model (where customers stock up on monthly or quarterly intervals). To get started, you will likely need someone with IT experience, or a third-party company. Your site should have:
- An easily navigational menu
- A broad stock of products
- A newsletter subscription option
- User-friendly payment facilities
Popular wine sites have cross-navigational options, so that customers can browse by region, year, price, ingredients, and the website distils the information to find the right wine for them. There is also, as you might imagine, more than enough paperwork. The EU laws for selling alcohol online are extensive, and Quora has a good guide.
Le Cordon Bleu – a Fine Vintage
Le Cordon Bleu are world leaders in spirit and wine courses, from diplomas in Wine, Gastronomy and Management to certificates in Wine and Beverage Studies and evening wine classes, such as our Food and Wine Pairing Course, and many more.
