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Can you afford a vineyard? Can you finance a wine-making operation?

Updated on July 15, 2011

Just a dream?

A lot of people would love to have a vineyard. The simple bucolic life of a winemaker and the romantic draw of the Old World vines is too much to resist for many of us. But how on Earth can anybody afford to get into winemaking. You have to pay for land, equipment, education, marketing, upkeep and so much more.

This lens is going to provide some alternatives that vary from impossibly intricate to fun and silly to surprising in elegant simplicity.

We're going to find out if YOU can finance a winemaking operation.

margin notes

Furthermore, this study doesn't include the costs of storing, shipping, marketing or distributing the wine. Fat lot of good it does to make a million dollars worth of wine and then not be able to move it anywhere in time to make more wine the next year.

Also, the study uses a sort of mean average for grape insourcing costs. To make wine that you don't immediately want to spit out, you're gonna need to buy good grapes.

If I just buy grapes and equipment... Still very expensive

How much will it cost if you just buy grapes and own the winery and equipment? A LOT.

It's true that a lot of the cost comes from running the vineyard, but there are still several very large costs to running a winery. While there is a lot of money to be made by making wine out of other people's grapes, it's still cost-prohibitive for most people who just love wine and aren't millionaires.

For those who are millionaires, you might not have to read much further. Insourcing excess grapes from other vineyards to make wine is called a Bulk winery investment and it has several advantages, even though it's still very expensive.

I'm gonna go into some detail, to show that it is still expensive. If you are curious or a nerd, read on. Otherwise, you might want to skip to the next section where it gets more affordable. (hint: it tends to get cheaper and cheaper as you go down the page.)

A study from 2004 that tried to estimate the cost of making wine suggested using a cost of about $25/sq. ft. (Folwell & Castaldi 2004). That and equipment costs are going to make it impractical to just make 100 bottles of wine. Your building needs to be a certain size just to hold the press, destemmer, holding tanks, barrels, etc. This means your initial costs are static (they won't change much) and that they're going to be really prohibitive.

Afterwards, you've got to buy grapes and whatnot. The study ends up finding what it considers to be a favorable cost of $4.65/gallon if you're making 300,000 gallons. Unfortunately, most people don't have 1.4 million dollars to spend on making 851,000+ bottles of wine EACH YEAR. This is just way too much. The cost goes up per bottle significantly as the quantity comes down. Let's say you just make one third of that amount of wine, the cost per gallon ends up being $5.51 for a total investment of $551,000.

This isn't a linear fall either. Because the cost of the equipment and winery is static, you'll save less and less money per bottle as you lower the number you make.

Folwell, R.J. and M. Castaldi. 2004. Bulk winery investment and operating costs. XB0997E. 15 pp.

Two steps removed: Pretty Affordable

So bulk wineries make wine without owning a vineyard. This is sort of one step removed. They just own and operate a winery. Can you be two steps removed?

Yes! Thanks to companies like Crushpad and Yo' Vineyards, you can just own a barrel or two of wine. You pay these winery owners to buy grapes for you and make wine to your specifications. You can visit the winery at various points during the year and try things out. You get constant updates about how the crops are doing and you get to see pictures and movies of people working with the plants. Then you pick the aging process and the blending.

This way, you can get 30 cases of wine (about a barrel) for as little as $5,000. That's just under $14 / bottle. If you were going to drink a bottle of red wine each day for a year, you might have spent this money anyway. Plus, instead of buying some generic BAD wine, you get to drink a wine totally personalized to you. It's as if you were the winemaker!

Maybe just one vine: Save up a little

Okay, so we don't have the cash to own a vineyard. How about a yard of vines?

A lot of vineyards offer to let you sponsor a vine or two at their vineyard. This is generally in the ballpark of a hundred and some dollars. It's a fun gift to think that you or somebody you like has a yard of vines somewhere out there. Some places literally put your name on or near the vine and will let you visit. They can even ship you some wine that your vine contributed to.

There's a whole hub already devoted to adopting vines!

Can we just buy seeds and plant a vineyard? DIY - nothing cheaper

Yes. You can have a vineyard. And it will actually produce wine in about seven years.

Heck, let's just buy a vineyard

Now, I know I threw out buying a vineyard outright at the very top. But let's revisit just in case because new developments in the global real estate market are creating unique opportunities to own vineyards or shares of a vineyard for under $100,000. For 38,000 Euro (approx. $50,000), you can get a hunk of low-interest, low-tax agricultural land that doesn't alter your residency and has no property taxes ever. You'd own a piece of land free and clear for the rest of your life in the south of France.

The plots offered at O'Vineyards are a quarter acre large. The vines produce about a barrel of wine each year. That's about a bottle a day. You can vary the yields up or down to your liking (within reason: no possibility of making 3,000,000 bottles from a quarter acre plot :D).

Each year, to get a good barrel out of the land, you have to put about $5,000 into growing the grapes and making the wine. But you can make that back by selling the wine.


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    • profile image

      John Hrusovszky 5 years ago

      Great information.

      When we built our new home, we also planted a very small hobby vineyard (25 vines). That cost us about $500.00 (we did the work ourselves -- just purchased the vines from a professional). After 4 years, we began producing our own wine from our own grapes. These 25 vines only produce about 24 bottles of wine, but it's all ours from our own grapes. It's well worth the experience. I would not trade it for anything. In fact, we're talking about increasing the size to 100 vines now.

    • camdjohnston12 profile image

      camdjohnston12 6 years ago

      WOW.Great information here.

    • profile image

      Kurt Santana 6 years ago

      I always like to read finance related news. Thank you very much for your share.

    • profile image

      funky23 6 years ago from Deutschland

      helpful topic thanks for the time ..

    • profile image

      longduck 7 years ago

      hi we live in the langduc roussillon region of france. wine region here seems to be changing. coops are not so popular anymore because quality has been compromised for quantity. now it seems winemakers are focusing on quality again. it seems like a lot of work and effort goes into the vineyards here. i wonder if they actually make a profit with all so much competition.

    • profile image

      Essertier 7 years ago from Arcadia, California

      I've worked in the wine business for over 35 years...wholesale, distributing, retail and importing. One day I was working with Dan Lee, owner, of Morgan Winery in Monterey County. In my younger years, I always thought winery producers had brick and mortar wineries. Dan was the first producer who explained to me the inner workings of how some wineries come to be. He started as a wine maker for Durney and Jekel. He hired a graphic artist to come up with label, sourced fruit from his previous connections and used a co-operative to bottle, label and store his wine. If a person doesn't have a lot of money to start, like Dan, one can lease almost anything...from barrels to vineyards. It wasn't until years later he actually built a winery and hired a winemaker. By the way, he eventually married his consulting banker (Donna) who helped orchestrate his business plan. With the luck of the market and low overhead, it's possible.

      I think, however, today there are simply too many brands and labels. The market is saturated in almost every category. The wine industry will no doubt undergo an adjustment period in the next five years. Many brands and labels will end up at Trader Joes without returning.

    • Peggy W profile image

      Peggy Woods 7 years ago from Houston, Texas

      We used to be part owners of a vineyard. Notice the "used to be part?" Nice dream but was not the best investment for us as it turned out.

    • profile image

      Rose Barrett 7 years ago

      This is why we leave the wine making to the professionals. Great hub.

    • proj_finance profile image

      proj_finance 7 years ago

      well, if you are really determine to own a vineyard and make wines, then go for it...Vineyard are just amazing.

    • profile image

      what is considered a good credit score 7 years ago

      No, am not affordable a vineyard and also not finance a wine-making operation.

      Thanks for sharing information

    • JWThomas profile image

      JWThomas 8 years ago

      You can start small you don't hafe to get every thing at one time. Get a small wine kit about a 1 gallon kit and try it out

    • profile image

      007 8 years ago

      im doing it...

    • sulli profile image

      sulli 8 years ago

      Good post. It's my dream to own a vineyard. It's all about the experience and beauty.

    • Chris Fletcher profile image

      Chris Fletcher 8 years ago

      There are a lot of affordable wine making kits online today, too, that sound good. Nice hub here.

    • profile image

      B. Evans 8 years ago

      Thanks for the good info. I'm gonna make a class lesson out of it. Very biz savy advice

    • samuilgr8 profile image

      samuilgr8 8 years ago

      Helllooooooo, Awesome!!!! Good Lens

    • vonowen profile image

      vonowen 8 years ago from USA

      There's nothing impossible to make this dream a realization. I always believe in the quote "If there's a will there's a way" If you really want this type of business and if you love it then GO FOR IT Man.


    • Princessa profile image

      Wendy Iturrizaga 9 years ago from France

      Very good idea!

    • mroconnell profile image

      mroconnell 9 years ago from France

      Princessa, that's true. The neat thing about a lot of the strategies mentioned above is that you get a winemaker to do most of the hard work for you. I think most of the fun is in doing that work, so I'm more than happy to do it. And I allow the customer to do as much work as she or he wants when I'm making their wine (it's free labor for me AND it makes it more fun for them).

    • Princessa profile image

      Wendy Iturrizaga 9 years ago from France

      It is certainly a nice dream... the vineyard and drinking your own wine on a warm afternoon. But reality is harder than that and owning a vineyard is a lot and I mean an awful lot of work.

      Great hub, I enjoyed it!