Thriving in the Wine Business Without Getting Crushed

June 27, 2017 • 8 min read
Byron Beck

Byron Beck

PDX Correspondent

Wine isn’t cheap. Whether drinking it or making it, the good kind is an investment.

Getting into the wine business is tough, but for those willing to put down the cash (it can be a lot especially in the beginning) the reward is sweeter than a glass of rosé on a summer day.

The Business of Wine

Tim Hanni is an internationally renowned “flavor maven.” A trained chef, Hanni is one of the first two Americans to complete the examination and earn the title of Master of Wine. In his article, “10 Tips For Getting Into The Wine Business,” Hanni says the most common mistake when entering the industry is not being able to understand the business end of wine. It’s also the easiest way to lose money. “Business is business,” according to Hanni.

Hanni says if you have a nose for business, as well as wine, then you could be on the right path to becoming a vintner. “When transitioning from another field to the wine industry, many people are surprised to discover that solid general business acumen in marketing, sales, finance and many areas, outweighs wine knowledge and education.”

The SE Wine Collective

wine business

Located in Portland, Oregon, the SE Wine Collective is an urban winery and wine bar that is currently home to 10 local wineries. In the world of wine, the Collective is an incubator for small and upcoming brands. Beyond just providing a platform to produce wines depending on the need and desire, the SE Wine Collective can also provide compliance, marketing and winemaking guidance for their resident wineries.

Tom Monroe at SE Wine Collective knows there are unique challenges for those who want to get into the wine business.

“The wine industry is not easy, and it becomes increasingly more competitive as the winery gets larger. When the winery is smaller, it is very difficult to shoulder the cost per bottle,” says Monroe. “It’s important to understand how long it can take to build something profitable and how costly it can be along the way. There are people who have had success with their wine businesses, but there are that many, multiplied by a higher number, who haven’t.”

Veteran Winemakers Tell All

wine business

In the current economy, Katherine Cole doesn’t encourage wannabe winemakers to enter the scene unless they’re considering a collective or an urban winery like the SE Wine Collective. Cole is a wine expert and author. Her latest book is Rosé All Day: The Essential Guide to Your New Favorite Wine. “Land is expensive,” says Cole. “The math only works if you’re buying fruit and have a strong walk-in business. If you can sell your wine directly to consumers without wholesaling and distributing, it significantly help out in the first few years.”

Bryan and Laura Laing are the owners of Newberg, Oregon’s Hazelfern Cellars. They believe that passion can make anything work, even in the difficult world of wine. “The key to any business is work ethic,” said Bryan Laing. “Like any business, you need to understand what makes you different and cultivate an authenticity about who you are. It’s taken us over ten years to hone the skills necessary to make a beautiful wine.”

There are multiple ways into the wine business. According to Monroe at SE Wine Collective, it depends on your current skills and experience in making and selling wine, as well as your financing. “You can survive the first few years with a relatively small amount of money, but definitely need to keep your day job for a while. If you have greater personal means or capital partners, you might be able to accelerate the curve some,” says Monroe.

“You have to love it!” says Laing. There are alternative paths for those who want to enjoy their passion for wine without becoming a winemaker. One can work for an existing winery, become a sommelier, or sell wine for a distributor.

For those who are ready to dive in, picking the right spot is a consideration. “A great winery is not only a winery that produces great-tasting wines, but one where you can feel and taste the passion and character of the winemakers,” said Monroe. “The terroir of the wine, which includes everything from soil, climate and farming style, to the winemakers touch, should show through in each wine.”

Oregon’s Wine Business

wine business

Oregon’s wine business has grown to somewhere in the range of three billion annually, and it continues to grow. “[Oregon has] one of the highest average per-bottle prices in the world,” said Cole. “Oregon is known as a state that values quality above all.”

It’s the quality that helps Oregon stand out. “Our culture of supporting one another has gone a long way, but as newcomers and several large out-of-state, and out-of-country entrants come in, the realities of increased competition are here.”

“Oregon is still not very well known but the percentage of wines being awarded 90+ scores is off the charts – we can’t wait for what the future holds for Oregon as a whole,” says Laing.

Whether it’s wine, or any other small business, it’s important to create a solid mission, vision and goals for your business.

Brush Up on Your Wine Chops

For those that still want to know more, what’s the best way to learn more about wine? Author Katherine Cole suggests introducing yourself to the owner of a good small wine shop or bar. Let them know what you like and what your budget is, and then visit regularly. Before long, they might be greeting you when you walk in the door with something new. Wine shouldn’t be a burden. You shouldn’t have to go to school to learn about it. Wine should be enjoyed. Make a new friend, who happens to be in the wine industry, and let that friendship turn into your education.

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