Question:
– Hide quoted text — Show quoted text – Excuse the intrusion and I apologize if I’m repeating something already said. My news server is acting up and many of the post are not making it to my computer. I’m a bit tight on time right now, but I can set out some of the finances of our winery after crush is over. I know there’s several people in the ng that are looking quite seriously at starting wineries in this area, and I had many people provide an idea for what to expect, as far as finances go, when we took the leap of faith. It’s only right that I pass on the favor. It will be necessary to use a conversion factor for other areas as there are many variables involved. That being said, here’s a bit of info off the top of my head, while I take a breather from crushing grapes.
get back to work you slacker.. hehehe We are on route to being just fine with the cash flow from 2400
gallons, Well that is encouraging, and congrats on the hard work paying off. It looks like maybe, just maybe, I might be migrating back down to KC. I better stop bashing MO. wines eh? hehehe While working down there if I go, I will definitely continue my learning and wine making, and maybe look for a good location location location to start my own brave adventure. Any guesses who might be one of my consultants? hehehe seriously though, get back to work!!!, Zinful — Fine wine & a good woman, who needs anything more? Before you buy.
Response:
Excuse the intrusion and I apologize if I’m repeating something already said. My news server is acting up and many of the post are not making it to my computer. I’m a bit tight on time right now, but I can set out some of the finances of our winery after crush is over. I know there’s several people in the ng that are looking quite seriously at starting wineries in this area, and I had many people provide an idea for what to expect, as far as finances go, when we took the leap of faith. It’s only right that I pass on the favor. It will be necessary to use a conversion factor for other areas as there are many variables involved. That being said, here’s a bit of info off the top of my head, while I take a breather from crushing grapes. We are on route to being just fine with the cash flow from 2400 gallons, which is almost entirely retail (which makes a big difference). Our projection is to eventually make 9999 gallons annual in abot 10 years, because at 10,000 gallons the taxes increase dramatically, and this volume is plenty to get us to retirement and my daughter through college (not necessarily in that order). I also make bulk wine for other wineries which is a great way to generate fast cash, although the profit is considerably less. It’s an excellent way to obtain and finance quality grapes too. The deal, much like life, is what you make it. Licenses are not all that expensive for wineries in this area, at least relative to some other businesses. A buddy of mine started a collection agency and he pays close to double the excise taxes that we do. The BATF permit and state license cost nothing at all for the rag itself (if you don’t include the $1k bond). For wineries producing under 10k gallons annual, the fed excise tax is $500. Our county merchants license runs about $25 annual and we’re not in a city so there’s no city tax here. The per gallon tax from both fed and state are somewhat nominal. Merchant tax is added to the sale so that comes out of the customers pocket. Our license here in MO is one of the most versatile available. For the listed fees we can produce, bottle, retail, distribute and wholesale, and just recently it bill was passed to allow distillations, but I’m sure there are more fees with that process. I need to get a handle on the wine before going into other projects. We had to post bonds for the feds, state liquor and state merchants ($1k each) but the state has already given back their $2k (after 2 years). This can be a bite when trying to open a business, but was a real boon this month when the CD’s were released (baby needs new shoes!) The state ag dept. here in MO is very wine friendly and provides unsecured loans at extremely decent rates. We’ve used them to finance bottling materials this year and have been quite happy with the dealings. They also do great promotions for us including hosting gala events showcasing MO wines. It’s taken two years to get cash flow up to projections, but we were handling someone else’s wine for the first year and a half, and quite frankly it was less than premium. Now that we have all of our wine on the shelf, sales and attitudes are much, MUCH better. One of the big factors for our success, albeit limited so far, is that we hire no employees and kT and I are rather cheap labor. Basically, we work for wine. (On second thought, maybe we’re not as cheap of labor as I had thought!) Also the expenses here in MO are considerably cheaper than most parts of the country and this winery was quite the steal. Virtually everything we needed to get started was here already and there have been an abundance of grapes available to us. We are a special case though, (said like the "Church Lady") since most of the people in the industry already new us and have been providing quite a lending hand. Helps to have someone as cute as kT to offset my stinky personality too! Our guest cottage has been a big help also. Nice, steady income with very little expense (once again, maintenance labor is negligible). BTW, just crushed 750 #s of Landot. Brix 21.5 pH 3.6 TA 6.1 65 gallons total added 65 grams of tartaric and pH is down to 3.44, TA is 7.5 SO2 at 25 ppm inoculated with Premier Cuvee Lots of color and low on tannins. distinct raspberry/ cherry taste and aroma. slight rot and subsequent VA that went away after crushing (what’s with that anyway?) I’m thrilled that it’s enough to fill a barrel. Going for a lighter, Pinot Noir style with just a few days maceration. Well breaks over; back to the grind! latron clyde – Hide quoted text — Show quoted text – I wasn’t meaning to discourage him, or you, but am just generally interested in the economics of small wineries. Around here the smallest winery I know of, and I’m not sure if it’s profitable or not, is about 2000 cases. So that’s almost 5000 gallons, which would require about 30 tons, give or take. BUT, that’s in upstate NY. We have high taxes in most areas, and incredibly high energy costs, and what I assume (though I don’t know, does anyone else–Clyde?) are high licensing costs. Actually, a guy up the road from us just opened a winery which might be smaller, and buys all his grapes and juices, so it must be possible. You’d think it would be, on the whole. My final cost per bottle making wine at home, not including energy costs and with used bottles, minimal labels, and lots of hand labor, is around $3.50 a bottle on average, averaged over vinfera and hybrid. Even if I were to be a VERY SMALL winery, making enough to spread the licensing costs over 100 cases, I bet I could still produce wine at around $6 a bottle. So long as I didn’t have to get too big a loan, hire anyone, quit my jobs, or ever sell at wholesale, it seems like it’d be possible. But I don’t know anything about business plans, and am much happier working for someone else than launching into entrepeneurship (sorry about the spelling). Dave ** Dave Breeden
Response:
- Hide quoted text — Show quoted text – You’d think it would be, on the whole. My final cost per bottle making wine at home, not including energy costs and with used bottles, minimal labels, and lots of hand labor, is around $3.50 a bottle on average, averaged over vinfera and hybrid. Even if I were to be a VERY SMALL winery, making enough to spread the licensing costs over 100 cases, I bet I could still produce wine at around $6 a bottle. So long as I didn’t have to get too big a loan, hire anyone, quit my jobs, or ever sell at wholesale, it seems like it’d be possible. I still wonder how some wineries are making drinkable wine and selling it for $6.00 a bottle? they msut be making a hell of a lot of wine, and you know that means a lot of labor, thus increased cost per bottle.
Yep. The wine that was rated as "Best of Show" at the San Fancisco International Wine Competition was an Australian 1998 Shiraz from Stonehaven Vineyards which retails for $8/bottle. I figure that means it must wholesale around $3 or $4, so presumably their production cost, and their cost to ship half way around the world from Australia to rural upstate NY, has got to be less than $3/bottle. I doubt that I could fill wine bottles with tap water for that price. I don’t really get it. Dave
Response:
Wasn’t this a practice from the Bible; drop the fruit every seven years? There’s a fruit farm in Perryville MO that practices this. They have a variety of berries and rotate the de-fruiting so there’s always a crop of some kind. The farm is quite prolific but I have no proof that there’s any correlation. I don’t get why Bill is waiting to be bonded to discontinue dropping fruit!?! Sorry for your loss Zin; you might have to resort to settling for Missouri fruit this year. latron clyde – Hide quoted text — Show quoted text – Hello all, This was supposed to be a harvest report on Iowa Cynthiana, but Bill has decided to pull the fruit this year and give the vines a rest, letting the energy go to the roots and stocks. I guess he has done this a couple of times and he believes it is making a difference in fruit quality (witnessesd by last year’s batch). This makes me sad as I was looking forward to not only another year of Iowa Cynthiana stories to report, but also, a free batch of grapes 
He says this a French practice, would Ed or anyone else care to elaborate? Bill says when he gets bonded he will start harvesting annually. cheers, Zinful — Fine wine & a good woman, who needs anything more? Before you buy.
Response:
– Hide quoted text — Show quoted text – Wasn’t this a practice from the Bible; drop the fruit every seven years? There’s a fruit farm in Perryville MO that practices this. They have a variety of berries and rotate the de-fruiting so there’s always a crop of some kind. The farm is quite prolific but I have no proof that there’s any correlation. I don’t get why Bill is waiting to be bonded to discontinue dropping fruit!?! Sorry for your loss Zin; you might have to resort to settling for Missouri fruit this year. latron clyde
Hello Clyde, he will discontinue dropping fruit becasue he only has an acre, so if he wants to sell annually he will need to harvest annually obviously. he has a great small scale winery built under his house so- to-speak. He isn’t going into it to make money, I think he just wants to make a small batch annually and sell it to locals and friends. He gets a lot of his grapes from the same place I do in California. His idea was to have a winery, but not a tasting room. He doesn’t want a bunch of people coming to his house all the time. He had other vineyards which he tried producing vinifera, but obviously wasn’t getting the varietal characteristics from it. I don’t know if he plans on putting in hybrids or more Cynthiana or nothing at all? As far as "settling" for MO grapes, I think I have given you the wrong impression. MO has been growing grapes since the death prohibition, and well before it. I know there is wonderful fruit down there, I have tasted some great wines and was impressed by wines at the Mid Western Wine & Grape Conference, especially some of the Seyval Blancs. all I was stating is that, my friend had an exceptional vineyard of Cynthiana, and due to it’s terrior, it produces some *awesome* Cynthiana. This doesn’t mean that all Iowan planted Cynthiana will be anywhere near as good, "obviously"! You know all too well that even a couple of miles up here can mean a huge difference in crop quality. I will be making Talmage,CA – Petite Sirah this year. cheers, Zinful — Fine wine & a good woman, who needs anything more? Before you buy.
Response:
Hello Clyde, he will discontinue dropping fruit becasue he only has an acre, so if he wants to sell annually he will need to harvest annually obviously. he has a great small scale winery built under his house so- to-speak. He isn’t going into it to make money, I think he just wants to make a small batch annually and sell it to locals and friends. He gets a lot of his grapes from the same place I do in California. His idea was to have a winery, but not a tasting room. He doesn’t want a bunch of people coming to his house all the time. He had other vineyards which he tried producing vinifera, but obviously wasn’t getting the varietal characteristics from it. I don’t know if he plans on putting in hybrids or more Cynthiana or nothing at all?
<Snip cheers, Zinful
Hi Zin, So can he make enough wine to justify the licensing costs? Around here (NY state), it costs $1200 to operate a winery and sell retail out of the winery, and another couple of hundred if you want to sell wholesale as well. And that doesn’t include the costs of the lawyers you needed to fill out all that paperwork. And you need a different set of licenses if you want to use out-of-state grapes. Just wondering . . . Dave
Response:
You’d think it would be, on the whole. My final cost per bottle making wine at home, not including energy costs and with used bottles, minimal labels, and lots of hand labor, is around $3.50 a bottle on average, averaged over vinfera and hybrid. Even if I were to be a VERY SMALL winery, making enough to spread the licensing costs over 100 cases, I bet I could still produce wine at around $6 a bottle. So long as I didn’t have to get too big a loan, hire anyone, quit my jobs, or ever sell at wholesale, it seems like it’d be possible. I still wonder how some wineries are making drinkable wine and selling it for $6.00 a bottle? they msut be making a hell of a lot of wine, and you know that means a lot of labor, thus increased cost per bottle.
The above seems very expensive. Wine prices here in Austria are very much lower. At the bottom end one can get a 2 litre bottle of Italian table wine for under $2. Quite drinkable Bordeaux wines from France start at around $1.50 for 0.75 litre bottles although naturally one would expect to pay more for a better wine. Likewise beer is available at about $0.50 for a half litre. It seems that someone must be adding quite a bit to the U.S. cost somewhere? — Ralph Hilton http://www.fzint.org/rhilton Freezone International: http://www.fzint.org C-Meter: http://www.inquisitive-instruments.co.uk/ Memorabilia http://mp3.cafepress.com/fzint/
Response:
Hi Zin, I wasn’t meaning to discourage him, or you, but am just generally interested in the economics of small wineries. Around here the smallest winery I know of, and I’m not sure if it’s profitable or not, is about 2000 cases. So that’s almost 5000 gallons, which would require about 30 tons, give or take.
Yep, I figured if I started a winery, I would have to start at a minimum of 2,000 cases a year as well, in order to be somewhat profitable. BUT, that’s in upstate NY. We have high taxes in most areas, and incredibly high energy costs, and what I assume (though I don’t know, does anyone else–Clyde?) are high licensing costs. Actually, a guy up the road from us just opened a winery which might be smaller, and buys all his grapes and juices, so it must be possible.
Either that or he doesn’t yet know what he’s getting into yet. I have been been all but discouraged by fellow winery owners to make the plunge. they say in the business, it takes a lot of money to make a little money. You’d think it would be, on the whole. My final cost per bottle making wine at home, not including energy costs and with used bottles, minimal labels, and lots of hand labor, is around $3.50 a bottle on average, averaged over vinfera and hybrid. Even if I were to be a VERY SMALL winery, making enough to spread the licensing costs over 100 cases, I bet I could still produce wine at around $6 a bottle. So long as I didn’t have to get too big a loan, hire anyone, quit my jobs, or ever sell at wholesale, it seems like it’d be possible.
I still wonder how some wineries are making drinkable wine and selling it for $6.00 a bottle? they msut be making a hell of a lot of wine, and you know that means a lot of labor, thus increased cost per bottle. But I don’t know anything about business plans, and am much happier working for someone else than launching into entrepeneurship (sorry about the spelling). Dave
Dave, I am like you, although due to "Big Money" on one side of my family, I am being pressured?, no, pushed?, no, steered (that would be the definition) towards going into business for myself. I almost just made a leap into a franchise, and still am thinking about it, but if I were to own my own business, it would have to be something I am passionate about. That leaves music (musician), my wife, creative arts, Martial Arts, and wine. I could open a Dojo, but it’s my own journey that I am passionate about, not teaching others. That pretty much leaves wine, I decided not to be a rock star a long time ago, not my choice of life- style. With that said, I would love to die either in my vineyard with a handful of grapes, or at the tasting room bar with a Cabernet mustache. It just sounds like such a hard business to actually make money at… so many people are doing it though, either they are making it, or they didn’t get the first hand "There are wiser things to do with your money" discussions I did, and will end up "belly up" soon. cheers, Zinful — Fine wine & a good woman, who needs anything more? Before you buy.
Response:
- Hide quoted text — Show quoted text – So can he make enough wine to justify the licensing costs? Around here (NY state), it costs $1200 to operate a winery and sell retail out of the winery, and another couple of hundred if you want to sell wholesale as well. And that doesn’t include the costs of the lawyers you needed to fill out all that paperwork. And you need a different set of licenses if you want to use out-of-state grapes. Just wondering . . . Dave **** Dave Breeden Dave, I amnot his accountant, so I don’t know his estate holdings? I am sure he has thought very carefully through all of this. He is a doctor, well dentist, so he does very well here in Iowa. I figure he should be able to produce enough wine annually to at least break even. he gets 2 ton per acre,(only 1 acre)on a normal season and whatever he will get from his other vineyards if he puts them into production, which I’m sure he will since he is going forward with this and actually getting bonded. He makes about 150 gallons of California wine each year as well. He has a pretty big stock of wine as it is. His neighbor across the way is selling a big barn building with some property for cheap, I am tempted to make my plunge, but I think I still have a couple of years of planning and learning to do. I would love the land though, I should be able to produce equally good Cynthiana there. And the drive for people to start wineries is definitely there. cheers, Zinful
Hi Zin, I wasn’t meaning to discourage him, or you, but am just generally interested in the economics of small wineries. Around here the smallest winery I know of, and I’m not sure if it’s profitable or not, is about 2000 cases. So that’s almost 5000 gallons, which would require about 30 tons, give or take. BUT, that’s in upstate NY. We have high taxes in most areas, and incredibly high energy costs, and what I assume (though I don’t know, does anyone else–Clyde?) are high licensing costs. Actually, a guy up the road from us just opened a winery which might be smaller, and buys all his grapes and juices, so it must be possible. You’d think it would be, on the whole. My final cost per bottle making wine at home, not including energy costs and with used bottles, minimal labels, and lots of hand labor, is around $3.50 a bottle on average, averaged over vinfera and hybrid. Even if I were to be a VERY SMALL winery, making enough to spread the licensing costs over 100 cases, I bet I could still produce wine at around $6 a bottle. So long as I didn’t have to get too big a loan, hire anyone, quit my jobs, or ever sell at wholesale, it seems like it’d be possible. But I don’t know anything about business plans, and am much happier working for someone else than launching into entrepeneurship (sorry about the spelling). Dave
Response:
– Hide quoted text — Show quoted text – Hello Clyde, he will discontinue dropping fruit becasue he only has an acre, so if he wants to sell annually he will need to harvest annually obviously. he has a great small scale winery built under his house so- to-speak. He isn’t going into it to make money, I think he just wants to make a small batch annually and sell it to locals and friends. He gets a lot of his grapes from the same place I do in California. His idea was to have a winery, but not a tasting room. He doesn’t want a bunch of people coming to his house all the time. He had other vineyards which he tried producing vinifera, but obviously wasn’t getting the varietal characteristics from it. I don’t know if he plans on putting in hybrids or more Cynthiana or nothing at all? <Snip cheers, Zinful Hi Zin, So can he make enough wine to justify the licensing costs? Around here (NY state), it costs $1200 to operate a winery and sell retail out of the winery, and another couple of hundred if you want to sell wholesale as well. And that doesn’t include the costs of the lawyers you needed to fill out all that paperwork. And you need a different set of licenses if you want to use out-of-state grapes. Just wondering . . . Dave
**** Dave Breeden
Dave, I amnot his accountant, so I don’t know his estate holdings? I am sure he has thought very carefully through all of this. He is a doctor, well dentist, so he does very well here in Iowa. I figure he should be able to produce enough wine annually to at least break even. he gets 2 ton per acre,(only 1 acre)on a normal season and whatever he will get from his other vineyards if he puts them into production, which I’m sure he will since he is going forward with this and actually getting bonded. He makes about 150 gallons of California wine each year as well. He has a pretty big stock of wine as it is. His neighbor across the way is selling a big barn building with some property for cheap, I am tempted to make my plunge, but I think I still have a couple of years of planning and learning to do. I would love the land though, I should be able to produce equally good Cynthiana there. And the drive for people to start wineries is definitely there. cheers, Zinful — Fine wine & a good woman, who needs anything more? Before you buy.
Response:
Hello all, This was supposed to be a harvest report on Iowa Cynthiana, but Bill has decided to pull the fruit this year and give the vines a rest, letting the energy go to the roots and stocks. I guess he has done this a couple of times and he believes it is making a difference in fruit quality (witnessesd by last year’s batch). This makes me sad as I was looking forward to not only another year of Iowa Cynthiana stories to report, but also, a free batch of grapes He says this a French practice, would Ed or anyone else care to elaborate? Bill says when he gets bonded he will start harvesting annually. cheers, Zinful
Hi Zinful: This is an ancient Burgundian technique called "Rognage". It was usually done to the vineyard in 1/4th and it amounted to total removal of flower clusters in late June. It was believed that this technique allowed the vigneron (wine grower) to enhance & maintain the vigor of the vineyard by creating a cycle of balance between green growth & berry production. In a very high density vineyard, in which each vine was allowed to grow only a few shoots annually, the vines could become carbohydrate starved as the volume of perennial wood increased & the relative amount of green growth remained the same. In old Burgundy, this
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