I have now been a part of building two brands in Napa Valley and have watched many others start their own over the years. I remember the first time I told a collector friend of mine that we were considering starting a winery (what became Memento Mori Winery) and he laughed. He said that would be like me deciding I wanted to start painting and expecting to create Picassos. He said there was no way we could make wines as good as the ones we loved drinking. I figured he was probably right; but having started many companies, I also knew that was the reaction almost everyone gives you when you say you are going to try and do something hard. They almost always shit on the idea and take the angle of âtrying to protect you from the pain involved with failing and making a fool out of yourself.â
I see a lot of threads on WB around âVanity Projectsâ and owners that are out over their skis trying to make wine. Maybe in some cases there are projects that are just vanity projects. But in my 18 years in Napa I havenât met an owner focused on vanity yet. Most are just trying to survive. Many are people that have come from an industry they were successful in and they want to try to make something that really means something to them. Something that represents something they believe in. Many of the new brands are fledgling farmers or winemakers trying to create breathing room for their families. They have been growing and/or making wine for others for decades and are finally taking the jump (and risk) to put themselves out there in hopes of setting their families up financially.
As is true with most all new businesses, most of the new projects fail. But a failure in wine is especially painful. The reason is because it is so different than a traditional business where you put out a shingle and can immediately start selling. In wine, you need to grow the fruit. If you plant your own vineyard that means waiting 4 years for a harvest you can make wine from. Then after that long wait, you have almost three more years before you can sell anything. And god forbid in that seven year wait there is a pandemic, inflation, global uncertainty, glass shortages, or all the other potential hazards. So there they are in 2020 ready for their first harvest and there is a fire that wipes it out. Oh thatâs right, Mother Nature and global warming were also factors they never needed to worry about in the other industries they came from before making wine.
But by 2021 they got a great growing season and finally have a bottle of wine to sell in late 2023. They are a couple million dollars into the project and everything cost more than they thought, but they didnât do it thinking they would make money right away (cause wine is terrible for that). They did it because they wanted to move their families forward, or to put their passion on a bottle and give it a place in this world. And hopefully that release where this new wine no one has ever heard of went well! Hopefully the critics who usually are careful with unknown brands were kind to them. They need that since no one has been able to taste the wines because building a site for tastings will run $10-30M of which they donât have.
They go home after the release and celebrate that they sold $80K worth of wine! They are millions in debt but the dream has been fulfilled and now that they have launched it and it is only up from here! Right?
Then they start hearing the the 22 vintage might get panned by critics the way 2011, 2017, and 2020 did. Combine that with a heavy harvest and your tonnage comes in twice as expensive as you were expecting. And fruit cost are all due in the fall two years before you can sell the wine. This happened in 2018 and blindsided everyone. It happened in 2023 as well. Not only were people not prepared for the cost of fruit, they also had no idea how they were going to pay the crush fees for double the cases.
It is a conundrum. I mean when something goes wrong, one of the last things you can do is look to the price of the wine. Pricing in wine is so sensitive. Problem number one? You canât lower the price. You just canât. People will feel that you screwed them in the previous vintages or that the wine is now a terrible investment going forward. One of the kiss of deaths in wine is for your wine to be discounted online. Those that think they can dump excess inventory online to try and raise cash to pay for harvest almost always see their Direct to consumer business fall apart. Problem two? If you raise the price to try and balance all the craziness in the market you will be labeled. You will be cocky, arrogant, or worseâŚa Vanity Project. This is why I launched Vida Valiente Winery at the prices I did. I hope to not need to change the price for a decade. Just start at a price that can hopefully keep you afloat after 8 years of investment and zero revenue.
lol. I am not complaining. I promise I am not. I am typing this all because I think the people on this site are really smart. I mean fuck, I thought I was too. Then I got into wineâŚand Mother Nature and hundreds of other problems punched me right in the face. Smart matters a little. Perseverance matters a lot more. I think you guys are smart on this site. So I wanted you to have perspective. Show some of the brands you loved at one point some grace. It is a SUPER hard business. Many will need your support and understanding to make it.
For those brave enough to enter the fray and make wine- take my free humble advice. If you are faint of heart, donât get into wine. If you are really worried about what people think, donât do wine. If you want to make money, donât do wine.
Make wine because you love it. Make it for you. Brand it with a story that means something to you. Brand it in what you see as the best version of yourself, or the world, or something you love. If it does well in a good year celebrate it, for it is fleeting. If you lose a harvest or get panned by critics, raise a glass. Celebrate again that you are doing something hard and you are doing it because you love it.
I believe that if you do it this way there is a sliver of the market that will come with you on that beautiful wine journey. OrâŚthey wonât. But we risk takers know that making everyone happy just isnât something under our control. Just do it in a way you are proud of it.
