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August 30, 2022 | News | New Blog

What to Know About Vineyard Ownership: Do You Have What it Takes?

40 Knots, Vineyard Ownership

You've probably dreamed about owning a vineyard. Who hasn't? The romantic notions of tending to grapevines, making wine, and hosting visitors from all over the world are hard to resist. When you live in wine country, the temptation can pull even more strongly. But before you take the plunge into vineyard ownership, you must understand what you're getting yourself into.

Choosing a Location

Finding the perfect place to put a vineyard isn't only a matter of acreage and zoning—prospective buyers need to consider everything from the orientation toward the sun to the soil's acidity. Buyers should also consider the land's topography, as hillsides can affect everything from maintaining the temperature (cool air sinks and can "roll" down a slope) to the timing of the grapes' life cycle. Other essential factors include proximity to markets and infrastructure and the overall cost of the agriculture property.

By considering as many factors as possible, buyers can choose a location that will give them the best chance for success.

Soil Quality & pH Balance

A vineyard's soil is critical because it affects the drainage and nutrient levels available to the vines. Vines do best in well-drained soils, and grapes planted in such an environment tend to deliver more concentrated flavours and aromas. "Loamy" is often used as a descriptor for the ideal grape-growing soil, typically a crumbly mix of sand, silt, and clay blended with the rest of the soil. Gravelly soils tend to drain well.

However, there's definitely such a thing as too much of a good thing. Soil that's heavy in clay can trap water around the roots. Look for soil that's highly porous and retains heat.

While grape varietals have different pH requirements, grapes prefer slightly acidic soil, with a pH balance of 5.5–6.0. It's possible to ameliorate the soil if it's too acidic by raising the pH balance with limestone, but finding land that naturally has the proper pH balance is less hassle.

Selecting the Right Grape Varietals

The climate is one of the most important factors determining a vineyard's ideal grape varieties, as it will directly impact the types of grapes that can be grown. Grapes need warm summers and cool winters to thrive. Some varietals are more vulnerable to unexpected frosts; others have higher sun requirements. Working with a professional viticulturist is a good idea.

Vineyard owners don't have to limit themselves to just one type of grape—many vineyards with wineries will plant multiple species to blend into their final product.

There's good news for grape growers, however. While location and climate are essential factors in deciding which grapes to plant, don't expect to be "trapped" into any particular variety. Vineyard owners in Canada, for example, have found success in growing over 60 grape varieties in the Okanagan Valley. There's plenty of room to create unique wines.

Other Location Factors For Your Vineyard

There's more to a vineyard than the grapes it grows, so expect to do a lot of research before buying a parcel of land. Prospective growers will want to consider every angle, such as utilities, infrastructure, and more. It also wouldn't go amiss to ask potential neighbours if there's anything you should know about the area. Winemakers can run into unexpected challenges.

"Water rights," says Keith Wallace, a winemaker, professor, and founding member of the National Wine School. "When working in Napa, this became a growing issue. The other major challenge was getting top-tier labour for harvest."

Vineyards also don't exist in a vacuum. Therefore, prospective growers need to consider where they'll be able to buy needed materials and eventually sell their products.

Upfront Prices: How Much Does it Cost to Buy a Vineyard?

40 Knots, buying a vineyard

The cost of buying a vineyard can vary widely, depending on the property's location, size, and amenities. It can also vary depending on how developed the property is. When someone says they're "buying a vineyard," they can mean several things, including:

Buying undeveloped agricultural land
Buying an already-planted vineyard
Buying a producing vineyard complete with winery equipment

Naturally, the prices will reflect how much work the new owner will have to do to start their business. Owners should also consider their end goals. For example, if a grower plans on selling grapes rather than wine, they can skip some of the upfront equipment costs.

Cost of Vineyard Land

Vineyards in well-established wine regions like Napa Valley or Kelowna will typically cost more than properties in less developed areas. However, there's a good reason "wine countries" are where they are – they have fantastic climate and soil conditions for growing wine-worthy grapes.

A general rule of thumb for the size of a profitable vineyard is a minimum of five acres if you plan to sell directly to the consumer and a minimum of 10 acres if you plan to sell wine to wholesale markets.

In the Okanagan Valley, a producing five- to 10-acre vineyard with existing structures on the property (such as homes and warehouses) will typically list from the high $800s to around $4 million CAD. In California's Napa Valley, prices for planted vineyards run from around $350,000 to $1 million USD per acre.

Cost of Planting a Vineyard

If your vineyard isn't already planted, you'll have to factor in the cost of the grapevine seedlings, the labour involved in the planting, and equipment such as trellises, irrigation systems, and more. When calculating how much it costs to plant your vineyard, you also need to consider the terrain—a steeply sloped vineyard that needs infrastructure installed can cost tens of thousands more to plant than a flat field.

Vineyard owners will often apply extra nutrients to amend the soil, so they'll also need to factor that in. They'll also want to budget for annual vineyard maintenance, which can amount to several thousand dollars per acre.

Equipment Required for Maintaining a Winery

To successfully maintain a winery, you'll need the following items:

Crusher Destemmer: Detaches the grapes from the stalks and crushes to allow the juice to flow out, aiding fermentation.
Wine Press: Separates the grape juice/fermented wine from the skins, seeds, and pulp. Bladder presses are the favoured option but are more expensive than basket presses. The difference is in how the grapes are squeezed, which affects the quality and quantity of the resulting juice.

Wine Tanks: Also called amphora tanks and typically made of stainless steel, but also can be made from concrete, plastic, or oak wood. These are used for storage, fermentation, blending, and bottling.

Must and Wine Pumps: A must pump can accommodate and move entire crushed grapes. Wine pumps transfer fermented wine and aren't meant to accommodate solids.

Safety Equipment: Proper safety gear and equipment is essential for keeping employees safe while working with equipment and machinery.

Lab Equipment: Proper testing equipment in a wine lab is vital for quality control beyond taste and smell.
Bottling Equipment: A wine bottling line includes bottle rinsers, fillers, corkers, cappers, labellers, and other accessories.

Vineyard Operational Costs

40 Knots, buying vineyard

Once the foundation is in place, vineyard owners can move on to operational costs. Here are some of the most common operational costs for vineyards:

Vineyard Maintenance: How Many Employees Does a Vineyard Need?

Growing grapes is a year-round activity that includes pruning, trellising, pest control, canopy management, and more. If you don't have a large enough staff to complete all the required tasks, you may need to outsource or hire seasonal workers. You'll need to find workers with the skill to evaluate and prune dormant vines, specialists to maintain equipment, managers if the operation is large enough, etc.

Fuel, Utilities, and Materials

Not only do you need to power the pumps and other equipment, but the wine needs to be kept at a specific optimum temperature throughout fermentation. Wine bottles awaiting sale will need to be stored in a climate-controlled space. Irrigation will need to be managed according to the weather.

Grapes or wine need to be adequately packaged for storage or transport—not to mention purchasing bottles, producing labels, and other material requirements.

If the wine is being shipped rather than sold on-site, you must factor in shipping prices, vehicle fuel and maintenance, and other applicable costs.

Insurance is important to protect your investment, employees, and customers. Also, don't forget to keep your liquor license up-to-date.

Marketing & Tasting Room Costs

Once you've made the perfect bottle, you need a way to tell the world about it! In addition to physical marketing materials, creating and maintaining a website, social media accounts, and a Google My Business profile is a good idea so your customers can easily find you.

Many vineyards have tasting rooms where visitors can pay to sample the wine. If you plan to open a tasting room on your vineyard property, you'll need to factor in construction costs, supplies, staff, and marketing.

As you can see, there are many factors to consider when determining how much it costs to start a vineyard.

The Grape Lifecycle: How Much Time it Takes to Make Wine

40 Knots, buying vineyard

Buying a vineyard is a long-term investment—it's generally at least four or five years before owners start seeing income from selling wine. To put things into perspective, here's a quick overview of everything that needs to happen before the wine ends up in the bottle.

  • Planting: Assuming you're doing the first planting yourself, it will generally take a young vine about three years of care to be ready to produce grapes.
  • Dormancy: Before each season, the vines will lack foliage, and winter pruning takes place. This is a skill-intensive process, as the pruning determines the balance of shoots and buds (leaves and grapes) and will affect how well the grapes grow and ripen
  • Bud Break & Flowering: In the spring—generally in April in the Okanagan Valley—the new flower buds and shoots emerge from the dormant vines. Flowering typically happens in June. Growers can start estimating the eventual yield by the number of flower clusters.
  • Fruit Set: Grapevines are self-pollinating plants, so young green berries quickly begin to form. Growers manage the canopy of leaves throughout the process to control heat, sun exposure, and the amount of energy the vine expends, producing leaves and lower-quality grapes, thus intensifying the remaining grapes. Pruning out the lower-quality grapes is called "green thinning" or "green harvesting."
  • Veraison: During this growth phase, the grapes begin to ripen and develop colour and sugar content. Veraison typically occurs in late August in Okanagan vineyards.
  • Harvest: The grape harvest in British Columbia typically begins in September and runs through late October. Some late-harvest wines will even be harvested into November as the vines go into dormancy and the grapes start to wither on the vine from lost water content, concentrating their sugars and flavours. For icewines, harvest continues into December, as icewine grapes need to be frozen at -8° Celcius for at least three days. Grapes can be harvested either by hand or by machine.
  • Pressing/Crushing: White wine grapes are pressed out of their skins before fermentation. On the other hand, reds are fermented with their skins to extract tannins and colour. The grapes are then run through a crusher/destemmer to release the juice.
  • Fermentation: Yeast is added to the resulting barrels to begin fermentation. Depending on the characteristics the grower is seeking in the final wine, fermentation can take several months or years. Some wines go through a secondary fermentation process with added bacteria for malolactic fermentation, which "softens" the wine by converting malic acid into smoother lactic acid.
  • Aging: White wines can be released soon after bottling, but reds are usually held back for months or years to continue development before sale.

Selling Your Wine

40 Knots, buying vineyard

After all that time and effort, you're finally ready to sell your wine. You may also consider hiring a sales team or working with a wine distributor to get your product into stores. You can also open a tasting room on-site at your vineyard, which can be a great way to connect with customers and build a following.

Where to Sell Wine

There are a few different ways to sell wine. You can sell it online, through a wine club, or directly to customers through a tasting room or vineyard events. You can sell to restaurants, grocery stores, and farmers' markets. You can also distribute your wine through a wine wholesaler. The best way to sell wine is the way that works best for you and your vineyard.

If you're a small operation, selling directly to customers through a tasting room or online might be the best way. However, working with a distributor or wholesaler might be a better option if you want to reach a larger audience.

Pricing Wine

The easy answer for how to price your wine is "however much people are willing to pay." Many factors go into this price, ranging from brand image and perceived value to the operational costs of the vineyard. Wines with a longer fermentation period are priced higher due to the time investment. Small wineries calculate prices differently than large operations because they invest their time and costs differently.

The three major costs that should be factored in are the vineyard, the production costs (such as picking and hand-sorting grapes), and sales and marketing.

Make Connections in the Industry

One of the best ways to get started in the wine industry is to connect with people already involved in it. Go to industry events, join trade organizations, and network with other growers and winemakers. You can also learn a lot by working at another vineyard or local winery, so don't be afraid to get your hands dirty and start at the bottom. The more you know about the industry, the better equipped you'll be to create a vineyard.

Owning a Winery Without Owning a Vineyard

40 Knots, buying a vineyard

Wineries and vineyards are two sides of the same coin. Just as there are vineyards that sell grapes rather than wine, there are wineries that buy their grapes rather than grow them.

Depending on which parts of winemaking spark your passion, you may find that investing in a winery only rather than a whole vineyard is more appealing.

However, that's not to say that winery ownership doesn't experience challenges. Lydia Martin, the founder of Liquor Laboratory, has this to say:

"The unexpected challenges that I faced upon starting a winemaking journey is that although there is an abundance of crop sources, there are seasons that these sources will become limited. My team and I actually started to experience this in the first year of our winemaking journey. It was a hard obstacle to overcome, but since this is a passion of ours and not just a business, we powered through this together and worked to find more crop sources for our wines. That's the thing about the wine business, I guess – you cannot stick to just one or two suppliers. On our end, we had diversified from local crops to actually importing an ample amount to keep the ball rolling and it has helped us through!"

It's Not All Challenges—There Are Many Rewards of Vineyard Ownership

40 Knots, buying a vineyard

Buying and running a successful vineyard is often more complicated than most people think. But if you're up for the challenge, it can be an immensely rewarding experience. There's nothing quite like making a product from scratch and being able to share it with others who appreciate it.

Many winemakers find the process itself can be unexpectedly enriching, too.

"Sometimes during crush, I didn't have time or the energy to go home, so I pitched a cot in the vineyard," says Wallace. "Best sleep I have ever gotten! Another unexpected but whole rewarding aspect of winemaking is the camaraderie, it didn't matter who you worked for or what your job was. It felt like family. And still does."

"This is not a journey that ends when business ends," says Martin. "If there ever comes a time that I will have to close down the business, I can keep the winemaking journey going by making personalized or customized bottles for loved ones and friends. Plus, winemaking is not really something that ends because when the time comes that I will be too old to go on, I'm sure my family will keep the winemaking journey going!"

Are You Ready to Take the Plunge?

There are many factors to consider when starting a vineyard, from the cost of land and grapes to the time commitment required for proper care. But if you're passionate about wine and willing to put in the work, vineyard ownership can be a hugely rewarding experience. Do you think you have what it takes to run a vineyard?

Dave Kotler

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