The exact cost to build and open a winery in this modern age will fall around $600,000 to $3 million. If you’re looking to build a backyard winery, the cost will stay under the $600,000 mark.
Regardless of the size of the winery you intend to open, you should be ready to put in a lot of funds. Note that from paying for the land and purchasing equipment to acquiring the best vines and paying your workers, it is really not for the faint-hearted.
There are various components of the business you will need to focus on especially if you intend to go all the way and own an estate winery.
You will have to make a very important decision concerning the type of grapes you will grow for the business because not only will it determine the quality and type of wine you produce but it will also go a long way in determining the location of your business.
Other factors you will also need to consider is the cost involved in setting up the business as this could be substantial, licensing requirements and marketing and distribution plans. All these factors and components are essential as they go a long way in making the business a thriving and successful venture.
How Much Does It Cost to Start a Winery?
The cost analysis as it relates to starting a winery business in the united states of America, Canada, United Kingdom, and Australia can be said to be almost the same except for few variations.
For instance, most of the equipment that are needed to launch a winery production company are manufactured based on international standard hence they are sold same price across different countries except for the additional price of importing the equipment from the country where it was manufactured.
Other factors that may be slightly different in terms of costing when it comes to starting a winery business in any of the countries listed above are cost of labor, cost of transportation and logistics, local tax, business incorporation fee, rent/leasing amongst other factors.
Over and above, when it comes to starting a medium scale winery company, you should be prepared to either rent or lease a standard facility big enough to accommodate your machines, workers and warehouse/storeroom; this is going to be one of the areas where you are expected to spend the bulk of your start–up capital.
Estimated Cost to Open a Winery Business
These are the key expenses you are expected to make when starting a medium scale but standard winery business in the United States of America;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
- Marketing promotion expenses for the grand opening of the winery in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- Cost for hiring a business consultant (writing business plan inclusive) – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The budget for permits, Insurance and license – $5,000.
- The money needed to acquire land that will be suitable for the variety of grapes you will like to plant can cost you between – $100,000 – $300,000 per acre.
- Construction of the vineyard facility and tasting rooms and other administrative blocks could cost about – $200, 000.
- Cost for the purchase of commercial winery equipment (Semiautomatic Fillers, Monoblock Fillers, Screw Cappers, “A”&”TOP”&”BEER” Monoblock Fillers, Counter Pressure Monoblocks, Semiautomatic Labeling, Automatic Labeling Monoblocks, Cork & Screw Capper Feeders, Champagne Solutions, Crusher-Destemmers, Crushing-Rollers, Grape Selection Processing, Cellar Equipment, Must Pumps, Pumps, Presses, Tanks, Refrigerators-Heaters, Filters, Flotation , Cross Flow Filter, Glue Labeling Monoblocks, Packaging Machines, Conveyors and Mobile Bottling Solutions) – $150,000.
- Equipment for the offices such as filing cabinets, safety gadgets, computers, printers, telephones, fax machines, furniture and electronics could cost about – $15,000.
- Creating and launching an official website could cost about – $700.
- Other expenses such as signage, business cards, advertisements, publicity and promotions) could cost around – $2,500.
- The cost for opening party: $2,000.
- Miscellaneous: $5,000.
You will need an estimate of seven hundred and fifty thousand dollars ($750,000) to successfully set up a medium scale but standard winery in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.
Starting a small scale but standard winery business in the United States of America will cost about two hundred and fifty thousand dollars to five hundred thousand dollars ($250,000 to $500,000).
Please note that in other to achieve this, you may buy off a small winery company that is put up for sale or you may purchase used winery equipment and machines. With that you will be able to cut your start–up cost to the barest minimum.
When it comes to starting a standard and large scale winery business, a business whose products (wines) will be distributed all across the United States of America and other countries of the world and also a winery business that has the intention of selling franchise, then you should look towards budgeting well over two million, five hundred thousand dollars ($2.5 million).
Factors That Influence the Cost of Building and Opening a Winery
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Setup You Want
Structurally, there is a wide range of concepts to choose from when looking to build a winery. You need to consider if you want a free-standing structure or if you want a place that features a full commercial kitchen adjacent to the tasting room.
Howbeit, don’t forget that this sort of business structure will warrant an extra significant amount of capital. For basic structures that don’t feature a kitchen, you should anticipate a startup expense that ranges from $100,000 to $500,000.
Nevertheless, if you want to add a place where people can organize formal events, you will be looking at around $500,000 to over $1,000,000.
Your Specific Location Too Matters
Another decision to consider is where your business will be located. When choosing where to site your business you will have to think of the climatic condition as grapes thrive in dry climates, cool days and hot nights. This is why places like Arizona and California are regarded as top wine growing and producing regions in United States of America because they have climatic conditions that suit the growth, cultivation and harvesting of grapes.
One good thing about winery business is that it is not location bound; you can start the business in the outskirts of town, in the middle of town or any location as long as you can secure a facility with government approval for the kind of production business that you want to start.
All you need to do is to ensure that you choose a good location that can give you easy access to raw materials and available market; you will do pretty well in this line of business if you locate the business in a centralized location with good distribution network and access to cheap grapes and vines et al.
You can produce your bottled wine in the outskirts of town and still maximize sales. This is possible because all you should be concerned about is how to ensure that your bottled wine is distributed nationally and of course internationally.
In essence, you should ensure that you strike a balance between securing an affordable facility in a good location and easy access to raw materials, labor and available market.
Have it in mind that turning ripe fruit into wine will need very costly machinery, science, and labor. Your winery will need equipment like crushers, stemmers, fermentation tanks, and filtration systems.
Putting money into quality machines will eat up a massive part of your budget. Howbeit, don’t forget that these types of expenditures will pay dividends in the future because they guarantee optimized efficiency. Wine production hardware for a 20-acre vineyard will cost more than $200,000 on the lower end, and can even touch $1,000,000 depending on the equipment and its qualities.
Licensing And Permits
To open a functional winery, you will be expected to obtain certain necessary business permits, a food production license, and a liquor license.
However, these permits are not that expensive. Ideally, at the federal level your permit does not warrant any payment at all. Have it in mind that numerous states possess liquor license permits. There are the most expensive of all the licenses you need and will most often be evaluated on a sliding scale depending on the volume the winery does.
Note that for small-production vineyards, these permits will cost around $100 to $200. Nevertheless, for bigger operations, the annual fees can reach $1,000 and above.
Immediately your winery becomes fully operational, you have to take into account your operational expenses. To ensure success, you have to steadily monitor pest control and weeding. At that point when the grapes are ready to be picked, you will need cutters and sorters who are willing to harvest your grapes.
Also, remember the cost that comes with recruiting staff. When it comes to starting a standard winery company on a large scale, you would need the services of the following professionals;
- Chief Executive Officer (Owner)
- Winery/Plant Manager
- Human Resources and Admin Manager
- Wine Operations Associate
- Grower Relations Representative
- Tasting Room Rep
- Sales and Marketing Team
- Distribution Truck Drivers
Vineyard Development And Cultivation Infrastructure
This is without a doubt one of the biggest costs that comes with building a winery. For those who want to run a vineyard, it is imperative to outfit the land with the requisite grape-growing infrastructure. For one, you will need trellises (the wooden structures that hold up the plants).
Aside from that, you will need to buy and plant the vines. The vines will need to be protected with fencing to ensure that hungry mammals don’t tamper with the fruit.
You will also want to consider your labor cost since it can be quite massive. According to experts, the cost of building out your cultivation infrastructure will fall around $22,000 an acre. Also note that even at the lower end of the scale, this will cost around $500,000 for a 20-acre vineyard.
Consulting and Legal Fees
Building and opening a winery can be quite challenging and costly. Consulting services will ensure you have insights on virtually every aspect of the winery from logistical set-up to marketing, while legal services can provide guidance and protection from the legalities that come with operating your business.
According to reports, consulting fees for the setup of a winery tends to depend on the consulting firm and the services provided.
Most often, the fees will fall around $2,500 and $20,000, depending on the extent of engineering and installation services necessary. Based on the services required, legal fees can fall between $5,000 and $50,000 USD, or even more, depending on your unique situation.
Marketing And Promotions
Truth be told, making great wine remains the bedrock of a successful winery. Howbeit, it is imperative you seek ways to promote your business via multiple channels to ensure that people are aware of your presence. One very valid way to achieve this is to work on your local SEO, such as Google Maps and Google Businesses Profile, to ensure that you are searchable online.
Aside from that, take into account marketing on social media. Note that a good percentage of this work can be carried out in-house, while larger operations can outsource to a marketing agency.
How Much Does It Cost to Buy a Winery Franchise?
In the United States of America, the Average Cost of Purchasing a Winery Franchise is $219,000 + Minimum Liquid Capital: $75,000. Examples of 3 Well – Known Winery Franchising Companies in the United States of America are;
- Divine Wine USA (D’Vine Wine)
- The Wine Tailor
- WineStyles Tasting Station