Starting an Urban Winery Help!

Hi All,
So yes I am silly enough to think I can start a small winery. I have 10 years experience as vineyard manager/ assistent winemaker but little in the way of business savvy. Any pointers would be greatly appreciated. More specifically I am wondering what insurance is a good idea/required? Also does the TTB charge a fee for licensing or just bond followed by taxes? We will buy in grapes, have a tasting room, and sell direct to retailers.
-Casey

Why not get an Alternating Premise Bond first and avoid some start up costs?

Not really an option here. There are no wineries in the downtown Missoula, Montana area that we want to open shop in. Good idea though

Find a good lawyer with winery and trademark law expertise. Pay now or pay later.
Best wishes !

Casey,
There are about 30 small wineries within the city limits of Seattle, and at least that many around Woodinville.
Every one of the proprietors I have meet has seemed helpful and willing to share knowledge. I’d suggest as many visits as you can manage.

A friend-ex employee makes wine on Whidbey Island, and sells mainly out of his tasting room. Selling directly to customers seems a
better approach than selling to retailers.

P Hickner

Talking to lots of people is good advice.

Retail vs Direct depends on lots of factors, including pricing, number of staff, location (is there foot traffic?), production level and more. We sell mainly to retailers/restaurants and I like it. It is very efficient in terms of time. I’d like to sell more direct to consumer, but this is quite time consuming. My input is don’t us a distributor until your production is larger. Margins are too small. By selling yourself, you will maintain relationships with the restaurants and stores. The people there sell your wine for you.

Good luck!

Thanks all for the sound advice. We will definitely maximize sales at the tasting room glass sales and refillable bottles direct to customers. Realistically we will need to sell direct to retailers/restaurants too, but keep our production low enough to not need to step up to distributors.

I can understand the trademark law. What are the other things I might need a lawyer for? Also guessing it will be hard to find a lawyer in MT with great winery expertise. Got a firm in mind? Thanks for the heads up!

Casey,
Don’t be discouraged by any of the road blocks people have thrown up. All you really need to do is do your homework. Setting up a winery is not magic. You just need to follow the rules of the TTB (which is very straight-forward) and the state of Montana (which I know nothing about).
Find a compliance specialist to assist you in getting set up. Down here in California, you can usually find someone that will assist you for $2k to $$3.5K.
Trademarks should be less of a concern. You can do a basic search by looking online and verifying that no one, openingly, is using any label name/brand name that you plan to use.
Go for it, and we look forward to hearing how it goes up in Missoula…

Thomas,
Thanks for the words of encouragement. I have been doing a lot of homework and making slow progress. Cashflow projections are really no fun at all. Since we have no start up money and we’ll have to borrow what we need I am going the extra mile to make sure we can pay back the sizable debt we will need to get going. All my experience over the last ten years has been in the vineyard and the winery not in the office. So I’m a little slow but I’ll get there.
Casey

Casey-

I think it’s a great idea. Also, as a retailer happy to answer questions if you have them. Shoot me an email, I think most everyone would agree though, if the wine is good, the marketing takes care of itself eventually.

Casey,
I was thinking about this myself, but in the midwest. You mention no start up money…have you though about something like Kickstarter to raise funds? I know there are breweries doing it.

Sorry been offline for a while. I figured i will need about 500,000 to get it going. Kickstarter seems like a good thing but I don’t know how much to ask for? 500,000 seems like a lot on kickstarter, got any thoughts?
Casey

My suspicion is that getting 500K without solid business experience and a viable product in advance, is going to be a tough road.

I have seen many crowdfunded products “fail” as they all had good ideas, and poor business experience. They all thought that making one product in their basement, was as easy as making 10K products in the real world.


By fail, I don’t mean never delivered, I mean delivered significantly late, minus features etc. I also think many of these were new takes on old products (for instance the espresso machine that was wildly successful on kickstarter that still hasn’t shipped BUT was 1/3 - 1/2 the cost of what is currently available.

In other words your product is the same as everyone else, hasn’t even been made or tested in the marketplace.

None of this is direct at you or your skills, but rather a general statement on business today.

I am clearly not in the wine business, but I know quite a few “small” guys, and I doubt many / any of them started with 500K in the bank.

Casey,
My thought on Kickstarter would be to start small. Yes, 500K is too much to ask for this.

Maybe do a Kickstarter for one wine. Say, raising 8K to produce your first cabernet. this could cover, grapes, barrels, bottles, etc.

You need gifts for donor levels. Start with a thank you on your blog, then a t-shirt, then custom wine glass, then a free tour/tasting. You can’t give away wine, but you might be able to offer ‘givers’ first dibs at buying the wine.

As an example, I know 2 Shepherds has been pretty successful on there.

But yes, 500k isn’t going to happen. Start smaller and buy things one at a time-

Casey,
I’ve done this and consulted on this sort of thing, so I feel like I know the ins and outs pretty well. Feel free to PM me or email me (ibvinfication at gmail) with any questions. If I can answer them briefly, I will. You can do it for less that $500k – I did and we run about 300 tons a year through here.
Ian