Hi! New here - A couple of winemakers used to making wine are starting a brand from scratch and have questions!

[T.Harris]

Thanks everyone for the feedback

[John_Morris]

My gut reaction is that you shouldn’t rely exclusively on a club or mailing list until you’ve established a little name recognition.

Questions:

• What’s your story?
• Do you have a tasting room where you can expose people to the wines? Or placement in a local tasting bar?
• Have you considered restaurant sales? That could give you more exposure, and the validation of the establishments and their somms.
• What are you making?

[Nick_G_A_J_E_W_S_K_I]

Sending you a note on Instagram, look forward to chatting on all things social media and sales strategy!

[John_Morris]

P.S. Best of luck!

[Brian_G_r_a_f_s_t_r_o_m]

First thing to do should be to gain licensure to sell/ship to as many states as possible. Right now, it’s “CA only.” If you’re looking to advertise on social media, just know you’re inviting a relative deluge of disappointments (social media is not “CA only”) ---- and are any of those disappointed non-CA’ers ever going to circle back and check again? I wouldn’t bet on “Yes.” …

[T.Harris]

Thanks everyone for the feedback

[T.Harris]

Thanks everyone for the feedback

[John_Morris]

@T.Harris

Okay good. Everything I’ve been reading online kind of made it feel like we kind of HAD to do something, some kind of list or club. I want to leave it open (at least to start) while possible. I did want to think of way though to offer repeat buyers or people who wanted to join in some way some incentives, like free shipping for case purchases, just a little something nice for their support

I probably wasn’t clear. Absolutely put together a list, but I wouldn’t necessarily limit sales to that.

[Mike_S]

You have to establish a brand that says we have great wine at a great price. If you have that you can have a club. Why would I want to sign up for any wine club purchase not knowing if I like and want your wine. I think people having access to a bottle of two to know who you are and what your wine is like coes first. Good Luck

[Karen_Troisi]

Do you have your own 02 or are you producing under a 17/20 license? 17/20’s cannot ship into some of the larger wine consumption states (like NY). Also I believe17/20’s have restrictions on sampling, etc. so make sure you understand the licensing before you develop an operating model/plan. 02 is more expensive but gives you more flexibility.

Since you are only making 2 wines I would focus on DTC and pick just a couple of states and focus on those. DTC shipping permits can be expensive (and remember the more states you go into, the more time you will spend filing reports or paying someone to file reports for you).

Making wine is the easy part - good luck!

[Lenny_Rite]

Is there really a market on $40 Rose and SB from the brand you never heard of?

[Robert_M_yers]

@T.Harris

The story is that we are two winemakers with a ton of passion for making the best wines we can while also being people who love doing things in the outdoors and living healthy lifestyles. We love good people and good wine and want to do a better job of bringing them altogether because that’s what the whole of wine drinking is about! Teach people where and how to drink wine, let them see us being real, skiing, hunting, mountaineering, etc doing the cool stuff we do. Let people see that you can be dirty around a campfire or covered in snow at a tailgate in a parking lot and share a great glass of wine with your friends just as you would a beer and that it doesn’t have to be a snobby affair

Sounds like you know the folks you want to target and that you are kind of selling a lifestyle. I’d try to tie the wine to your passions and similar minded people. Then find unique cool, yet more functional packaging that makes it easier to enjoy around those activities (out with the cork and glass)
There has to be another reason to spend $40 on Rose as those in the know can buy the worlds best for that and those that just want a nice drink are probably looking to spend no more than half that.
I’m just gathering from your post that you are trying to build a community of like minded people who also like wine.
I’d be trying to get into every coffee, lunch, sandwich shop on the coast and in the mountains of CA.

[gavin.f]

Congrats on taking the leap!

I think the most important thing is that you have to know where you want to take this.

Is success having a sold-out mailing list and a yearly profit margin of X% that gives you $Y/yr? Is it getting to a certain case volume so you can sell to Z company in Q years?

Different destinations require different trails.

It’s also okay to not know. But then you know you need to maintain your options, so you really do know, you know… ?

[Marc_Hauser]

I wouldn’t underestimate how hard it is going to be to find customers. You’re competing with innumerable wineries and distributors, many of which are trying to market wine through the same social media channels that you’re eyeing, and some of which have giant bankrolls to fund it.

I’m risk-averse and a pessimist at heart, so take this with a giant grain of salt, but it’s really, really hard to make a go of it as something of a flyer in this industry.

That being said, consider working with Naked Wines. They’re a platform for small winemakers that can be very effectives. It’s a turnkey solution in a way, and they’re very successful. It’s not for everyone, and there’s a cost, but it’s a route to market.

[Roy_Piper]

As someone who started our wine brand from scratch and helped two other brands get up and running (they are still running stronger than ever many years later), I will say it is much more difficult now than when we started our winery 14 years ago. There are many more brands out there, critical scores have less influence than they ever have and we are entering a period where prices and production costs are pushing many people’s limits. Consolidation is happening right now for a reason.

In your case it appears you are making a rose and SB in year one. Very good.

My advice is always the same to new wineries and that is to always consider the following at least one year BEFORE beginning a wine project and make sure you have the answers in writing, not as a handshake agreement.

1. Do you have three years total expenses in cash to fund the project? Do you have income sources (job, savings) from elsewhere to pay your living expenses for the first three years if you are going full-time? You stated your hope is to use successful sales in year one to pay for expenses in year two. This is a risky strategy because if sales are lower than expectation, you would lack the funds to continue in year two and now you are going backwards.

2. Put yourselves in the shoes of the eventual buyers and ask "Why should they buy our wine instead of all the other options available of the this varietal and at this price? “Passion” is not enough. Most small wineries are passion projects.

3. What’s the business strategy? Is the goal to be less expensive than the competition or more expensive? If less, how do you plan to show buyers the “value” of choosing your wine and is there enough time to build market share that way? If your wine will be more expensive than the competition, what “value” are you adding that makes your wine worth the extra cost? This can be qualitative,“values driven,” “scarcity,” or even pretty looking packaging, but it must be something unique or rare and you need to clearly define it.

4. Do buyers for the wine category under consideration even care about pricing or values differentiation? With Cabernet and Pinot, a $25 price difference is a lot of differentiation. In rose, $5 is a lot, but the lower the price-point, the less room to maneuver and still stay viable as a business.

5. Is the business model to sell direct or by three-tier? Do the numbers pan out in the scenario you choose?

6. If direct, how will you build your list of buyers? If retail, do you have the wholesale contacts to push the wine? If a combo, you need both.

7. Will the owners be hands-on in marketing and winemaking, and if so, where will they find the time to do these activities (especially marketing) if they have other full-time jobs? if you are married, how will your spouses feel about you having two full time jobs?

8. Do you own your own estate? If so, that can be a fantastic differentiation point. If not, then ask yourself "Why should consumers buy our wine instead of the competition from the same vineyard source? If vineyard source is not a marketing point, then what is the “angle” you plan to market to potential buyers to get noticed?

9. Is there enough profit margin possible to make the venture worth it at the scale under consideration? 100 cases each of SB and Rose, assuming a net profit margin of $10 per bottle (that’s a lot) and 100% direct sales (that’s rare), only provides a total profit of $24,000 per year. At 500 cases of each, a margin of $10 per bottle provides $120,000 of profit assuming 100% direct sales. But since there are two of you, that provides just $60,000 per year of income, each. It is a lot harder to start a brand with 500 cases of each bottling than 100 cases each. And a 100% sell-through rate at even 100 cases each is very hard to do as a startup nowadays.

10. Do you have a locked-in fruit source and custom crush facility contract? Do you have the proper licensing? Unless you are adept at compliance, do you have someone to help you get established legally, since you plan to start selling within a year?

11. Given you wish to make and sell wine in the next 12 months, do you have your packaging and labeling designed?

12. Have you and your partner worked through how costs, profits and losses will be divided? Are roles clearly defined so someone is a decision-maker for winemaking and someone else for marketing? Do either of you have experience in marketing wine of that varietal and at that price point? What if extra funds are needed beyond the startup stage, who provides that? And if one person provides more capital than the other partner, do they become the defacto owner and decider?

13. What is your exit strategy? Sell the winery? Pass it on? Close it? What if one owner wants out, how is that achieved? Does the other partner have the funds to buy out the other?

These are just some of the topics that need to be clearly thought out before taking the leap, imho. I find this is true of $20 million dollar wineries as much as small start-ups. It’s all the same pond and business is business.

I hope this helps. Good luck with the winery!

[Max_S1]

It used to be called Underground Cellar, not sure what the market is now.

[David_Patte]

100% – went through all this before I started in 2018. I did have 3 years cash reserves, but now that’s all gone : ) This can easily happen if you expand too quickly. Started with 300 cases, then 600, then 1500 was in retrospect, a bit of an overreach (I am in 8 States now-- but I overestimated how much each distributor would sell-- long story there).

[Vincent_Fritzsche]

I think the OP has sorta ended the thread, but I’ll add:

Don’t make a lot of wine to start.

Better to have too little than too much.

It’s very easy to make too much.

Otherwise lots of good advice here.

Bottom line - have a specific reason for why you’re making your wines and then tell people about that truth.

Oh and make good wine. Still working on that!!

[Robert_Dentice]

@Vincent_Fritzsche

Don’t make a lot of wine to start.

Unless your buying expensive fruit it is true to say it more expensive to bottle and sell wine than to make it?

[Vincent_Fritzsche]

Fruit costs pretty much are the number one direct cost, thought maybe not for really cheap wines. Bottling is a major cost but selling is the thing. And maybe it’s not that it costs so much but it costs for the wine to sit there, financially and emotionally.