Good Fruit Grower / April-1st 2008 / Options for ­starting a winery

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Options for ­starting a winery

Consider leasing property or using an incubator winery when first starting, suggests industry veteran Wade Wolfe.

Several options should be weighed by anyone thinking of starting a new winery, according to a well-known winery owner who has been-there and done-that.

Alternatives to building a winery from scratch can help keep start-up costs manageable, said Dr. Wade Wolfe, a Washington State wine industry veteran and co-owner and winemaker at Thurston Wolfe in Prosser, Washington.

Of the 550 wineries in Washington State, the vast majority produces fewer than 2,000 cases a year, Wolfe said. Most of those didn't have millions of dollars to invest at the beginning, so many owners, including Wolfe, have taken temporary spaces to start production and build volumes. Over the last 20 years, Thurston Wolfe Winery has been in four different locations, including a leased space in a Port of Benton County building. A few years ago, Wolfe and his wife, Becky Yeaman, built a 7,500-square-foot winery on 1.4 acres in the Vintners Village near Prosser. The price tag was expensive—$1.1 million—without equipment, Wolfe said.

Leasing or renting space, for example from a port authority, private entity or an incubator facility, can lower initial investment costs, Wolfe said during the Washington Association of Wine Grape Growers annual meeting in early February in Kennewick.

As an example of an incubator facility, Wolfe cited the Wine Loft in Prosser where several suites share a common production area in one building. He also mentioned port-owned or private properties that could be alternatives.

Sharing costs

An incubator can help share the costs of winemaking equipment, Wolfe said, and provide better quality equipment, considering that many start-up wineries buy used equipment. There are also potential benefits to a winery cluster that could provide better access to the public, and help build a brand with lower overhead, he said. That can help a new winery owner discovery how much product can be sold and at what price points.

On the downside, a building that wasn't designed specifically to house a winery operation may have mechanical issues, such as poor drainage or floors that won't support equipment or forklifts, Wolfe said. Low ceilings and narrow doorways can also be a problem, and there can also be solid waste and liquid disposal issues.

Some sites may look more like a strip mall and not provide an inviting atmosphere to attract customers, Wolfe said. Traffic and parking can also be a problem.

Ideally, a winery owner could postpone investing in a building and equipment until achieving a positive cash flow, Wolfe said. Often, new wineries over-build in anticipation of future volumes. That's where ­looking at start-up alternatives can provide advantages.