Building the Foundation for Your Winery

I have found that one of the biggest stumbling blocks for people in starting a business is not asking enough questions. And if they’re asking questions, often they aren’t the right questions of the right people. Many times entrepreneurs are so lit up and passionate about their idea or vision that they just zoom forward without really vetting out the data and evaluating it with objectivity and brutal honesty.

I recently got some information about a new winery concept in Sonoma and although I’m not in agreement with all of their choices, what I do commend them for is ASKING THE RIGHT QUESTIONS from other winery owners, local businesses in that area, potential customers, regulatory agencies, potential vendors, etc. This is not the Build It and They Will Come model. Starting a business requires a plan. Let’s look at what I’m talking about.

Who is your customer?

If you are the first winery in the area, then it will probably be locals. Who are these people? Are they “tea totalers” or epicureans? What is the median age of the nearest town? What is their average income? Are they coming to your winery as a tourist destination, or as a relaxing afternoon? What are the demographics of the typical tourist? What is the high season for most of these tourists? Do most arrive by tour bus or car?

How will the customer buy your wine?

Are you setting yourself up for distribution? Are you a destination winery with sales in the tasting room? Are you creating a wine club? Are you selling online?

What is the best location?

Are there other wineries in the area? If none, why not? Is it a dry county/city? Are there other points of interest along the way or nearby? Is this route a primary thoroughfare from one city to another? If you will be receiving tour buses, can they access you easily? How far will people be driving to get to you: 30 minutes, 60 minutes, 90 minutes?

How will the customer know about you?

How will you get the word out about your new winery? Do you have quality signage that can easily be seen from the road? If your area will bring in tour buses, what will you do to entice tour guides to stop at your place? Will you be advertising? If so where?

What kind of experience will the customer have?

What does the outside of the winery look like upon arrive? Once inside, do they feel welcome, special, wanted? What does the inside of the winery look like? Do they see wine barrels or steel casks? Can they see into the winery itself? Are you charging for the tasting? If so, is that a turn off to the potential customer?

How will you leverage sales?

Once the winery is built and you have customers, what then? How are you going to make a sale? Why will they want to come back? How can you make your winery one to remember? What are you doing to train your sales people? Should you consider a wine club? Are you capturing customer information, i.e name, email, address? Did you ask them to sign up for your newsletter, Facebook page or blog?

Are you ready to be a winery owner? (part 1) Starting a business

Have you spoken to other winery owners? Have you asked them what they have done well to succeed? And asked them what didn’t work? Do you know what margin is needed to meet the ROI or profit you’re planning? What unique want or need is your winery solving for its customers? What’s your niche?

Here’s a peak at the new winery concept I mentioned, Cobblestone Winery.   Their location will be positioned at the very edge of the Sonoma Valley wine trail. Here’s how they have answered the questions above.

Who is your customer?

Oenophiles that are specifically coming to Sonoma for quality, high end wines. They are coming in from San Francisco.

How will you sell your wine?

Direct to consumer is largely an “untapped market” with higher profit margins. Therefore they are choosing their winery to be a destination with club membership as the main focus for sales.

Why did you choose this location?

Sonoma is less crowded than Napa with breathtaking beauty. Almost 16 acres with 553 feet of highway frontage. There is a light at the entrance for easy in/out access. The property is permitted for winemaking, barreling, tasting room, caves, events and construction.

How will you market the winery?

Sonoma already has a large marketing budget for the area. The winery will target key hotel, B&B, limousine and tour guides, recognizing and rewarding their support, building relationships with the local hospitality industry.

What will the customers’ experience be?

Large tasting room with individual tasting suites. Each will look over the barrel rooms or over the vineyard. Here highly trained sales people will lead tastings uninterrupted, informing them of the wine club membership advantages and close deals.

How will you leverage sales?

The sales staff will “engage the customer, qualify their needs, make a series of presentations leading to the club presentation, overcome objections and close the sale…sales employees will be compensated based on their sales performance.”

What is your business forecast?

“After 1½ years of finalizing permits and construction, the winery is projected to open in 2013 drawing 40,000 visitors and selling 8,710 cases of wine the first year.” (more information available)

Is the Cobblestone plan for you? Absolutely not. There is no one plan that is perfect for every winery. If you are a winery in a rural area, this would fail miserably. Whether this plan works for them or not, they ARE asking all the questions and creating a winery specific to their clientele and region, thereby creating their own niche.

Are you ready to be a winery owner? (part 2) Starting a business

Let’s look at another winery – Dixie Wine in Bullard, Texas. They also have a very different business model from most wineries. They are leveraging to a completely another kind of customer base – one where there are few wine lovers. With sweet fruit wines and labels such as Hillbilly Deluxe and Dixie Shine (click on their video), their market is a bit different from Cobblestone 😉 Whether you like the brand or not, they have figured out who their market is and have created a winery that draws those customers in.

The strategic question these two wineries have answered is “what problem are we solving for our customer?” To get there they have asked a lot of questions about their market and their customers. Cobblestone established the problem was that these oenophiles were treated like cattle, along with everyone else, in this dense winery destination. Oenophiles looking for premium quality wine want to be treated well. They want to feel special. Cobblestone is selling “exclusivity”, through premium club benefits such as pre-releases and best-of wines held back and offered to the club members. Notice the customers do not need wine in this busy wine area. The need they are meeting is “exclusivity” among very targeted market, oenophiles.

Dixie Wine, on the other hand, is delivering wine to a beer-drinking, pro-wrestling fan market. With their hillbilly atmosphere, they are creating a comfortable, fun setting for those who may have never tried or really enjoyed wine, and perhaps for those curious about this crazy winery! The problem they are solving is regular people who don’t want to think too much about the wine or take it too seriously.

Final Thoughts

The problem we’re solving for our customers here at Premier Wine Blends is “where do I get high quality, award winning custom wine blends NOW?” If 80% of your customers don’t know the difference between a Languedoc and Cotes du Rhone, then you probably shouldn’t be targeting wine connoisseurs. Or if most of the people you talk with want to know the difference between a Syrah and Shiraz, then that tells you what level of wine education they have and chances are, they aren’t interested in hearing about your double barreled aged Petite Verdot blend!

ASK THE RIGHT QUESTIONS. Who is your customer? What is their problem? (You gotta problem?) How are you going to be profitable? What works? From there, you design your business. If you are stuck on the questions, we can help. Or if you have the answers, but you’re missing the piece that will make it work, give us a call. Premium Wine Blends can help you answer the questions.

If you don’t have customers, you won’t have sales. And if it’s not profitable, it’s not a sustainable business. Get crackin’!
There are no foolish questions, and no man becomes a fool until he has stopped asking questions. ~Charles Proteus Steinmetz