Becoming self-employed as a winemaker

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For many, it is an attractive idea to realize a dream on the way to self-employment. Many people love a good wine as an expression of enjoyable quality of life. Why shouldn’t this passion turn into a promising start-up? The number of prominent examples has increased recently: Günther Jauch, for example, has been successfully marketing his wines. In this regard, should the following contribution the popular business idea , become self-employed as a winemaker’be examined in more detail. What are the technical and formal requirements for being able to set up a self-employed winemaker? Which topics and trends should be at the top of the planning agenda in order to be able to operate a vineyard economically? What attitude do founders need to turn a hobby into a profession?

Starting a business as a winemaker: starting your own business with selected wines

  • Context, starting position & challenges
  • Founding a winery: where and how to find a vineyard?
  • Capital requirements & investments in technology
  • possible further sources of income
  • Organization of sales
  • Growing wine commercially: requirements

     

Correctly assess the starting point for independent winemakers

In Germany, most of the vineyards are located along the Moselle, where the climatic conditions are excellent. As a rule, vineyards are cultivated by experienced winemakers, and have often done so for several generations. Many independent winemakers were practically born with this knowledge. But of course it is also open to career changers to successfully become self-employed as a winemaker, especially since it is a recognized training occupation. Apart from that, there are academic training options in the fields of viticulture, viticulture and oenology. Without training or in-depth specialist knowledge, setting up a business as a winemaker will not work, as viticulture and the production process are quite complex (more on that later). If you want to turn your passion for wine into a profession, you should plan your independence for the long term. Ideally, many years of experience can be gained in a wine-growing business, and that is the commercialand the technical management. Because only if these two factors interlock will the company be able to generate profits in the long term .
 

Assess opportunities in the market

Germans have been consuming wine at a consistently high level for years. The total annual consumption amounts to around 20 million hector liters, which corresponds to a per capita consumption of around 24 liters. In addition, German wines are very important abroad. In this regard, depending on the offer, international sales markets can also be targeted, for example with an online specialist shop for fine wines. The possible success as an independent winemaker is also increased by the variety of wines. In this country alone there are more than 140 types (the majority are white wines). Müller-Thurgau and Riesling in particular enjoy great demand in this country. In this respect, the range of cultivation can be geared towards demand or strategically target a gap in the supply: Which types of wine do people like to buy in this country, but not yet grown on a large scale? Of course, it must always be checked whether a certain grape variety is suitable for the selected location .
 

Environmental conditions in agriculture

Even if the sight of vineyards may seem idyllic, it should be clear that agriculture is a tough place. This also applies to commercial viticulture. It requires economic management and, if necessary, an expansion of business activities so that a winery generates permanent profits. And don’t forget that it is hard work, especially at harvest time. If there is a threat of frost in spring, measures must be taken immediately to prevent the vines from being affected. Not every year is a good wine year due to changing weather conditions. The entrepreneurial risk cannot be denied in this regard, so that reserves should be built up for bad times from the start. Business operations must be able to be maintained at all times, and necessary investments in wine technology should also be considered. In this respect, liquidity will play a key role in the operational business operations as an independent winemaker.
 

Growing wine commercially: using trends strategically

When shopping weekly in supermarkets or at discounters, no one should go unnoticed that a large range of German and foreign wines is now available. In recent years there has been a noticeable trend that more and more customers buy wine from discounters , and this for an average price per liter of around 3 euros. On the other hand, anyone who sells wine in specialist shops, on the Internet or at their winery as a winemaker can achieve an average price per liter of well over 6 euros, according to evaluations.

Here, prospective independent winemakers should make strategic deductions and perform arithmetic games: What liter price for specially produced wine must be achieved with an expected production quantity X in order to achieve a profit margin of% beyond the specifiable costs? If you know this, you can ultimately decide which price and sales strategy you want to pursue. The smaller the amount of wine produced, the higher the price ultimately has to be. In this case, the target group must also beand distribution channels become more exclusive. If you want to place your wines in supermarkets and discounters, you have to get hold of the list. A high level of negotiating skills is required for this, since small winemakers in particular do not have a really strong negotiating position in view of the market power. In any case, it is important to have such success-critical business aspects on the screen very early on.
 

Buying a winery: lateral entry as a winemaker?

If you want to grow wine commercially or want to set up a winery, you do not necessarily have to have an apprenticeship or even a degree. Ultimately, however, well-founded knowledge is essential, because the quality of the grape harvest and, ultimately, the wine can be subject to considerable fluctuations, even due to small details. And the use of technology also needs to be learned, not to mention operational management including bookkeeping . The following topics should be mastered with confidence. Otherwise, technical expertise would have to be ensured by staff, which can result in a fundamentally different cost or profit situation.

  • How should vines be cared for all year round?
  • Which grape variety is compatible with the location?
  • How can which fertilizers / protective agents be used?
  • How can perfect storage be guaranteed?
  • How are functional and profit-oriented sales prices determined?
  • How should the sale be organized?

Wine-growing region as a location, technology and investment

With this business idea, the location has a different, but all the greater importance. Strictly speaking, it has to be about the location of a vineyard near which a winery can also be used. Anyone who does not come to a winery through (family) relationships will have to look for it. Apart from often further personal contacts, it is important to look for appropriate offers on the Internet.

As far as the location is concerned, founders have to be flexible!An optimal location is limited to a few regions by the wine-growing areas in Germany due to the climatic conditions there. The summer months must be warm and the winter as mild and frost-free as possible. Lots of sunlight and moisture are also very important. It is no coincidence that vines always grow on a slope. This allows the water to run off, and naturally drainage is provided. An independent winemaker must therefore find his vineyard and move to it. In order to implement this business idea, it may be necessary to leave your home behind. The competitive situation does not directly play a decisive role, since wines can be sold in Germany or worldwide. There is also the possibility To stand out from the direct competition with other grape varieties / wines. The range of services or experiences offered by the affiliated winery can also differ significantly from the competition in this regard.
 

Realistically state capital requirements in the business plan

It goes without saying that the production of wine involves high investment costs for technology and agricultural equipment. In order to achieve a high level of quality, we will also need to invest in reliable technology for further processing of the must and storage. The same applies to filling systems in order to be able to bring large quantities onto the market quickly when there is high demand. In view of this, the business plan will have to be used as a business card to convince banks or other lenders. The numbers and expected forecasts must be correct and cast as positive a light as possible on the profitability of business operations.

In order to reduce the initial costs and risks, investments can be made in used agricultural equipment for viticulture. It is also conceivable to take over the entire operation of a winery, provided that a look at the books makes this seem worthwhile in the long term. It should be borne in mind that modern and efficient technology for viticulture will have a direct influence on the earnings situation and ultimately also the profit situation. In addition, it should be clear that a winery generates little or no profits in the first few years, after all, business has to start up first. In this respect, the business plan must clarify, based on numbers, the capital requirements with which liquidity is guaranteed at all times. Investors know, of course, that an independent winemaker cannot generate the same profits from now on.
 

Organize sales as an independent winemaker

It was already indicated above that sales are the key to success as an independent winemaker. What use is the best harvest and the finest wines if there are no buyers for them? In this respect, sales, including distribution channels, must be organized before the first bottle of wine has been filled. It is important to check other distribution channels in addition to list places in retail.
 

Growing wine: defining and designing distribution channels

Anyone who wants to reach a large target group nationally and internationally can set up an online wine trade. Efficient and, above all, cost-effective logistics structures must then be created on the winery. Regional sales strategies should also be checked,especially since most of the wine-growing regions are also very busy with tourism. It would be conceivable to supply drinks dealers, hotels or restaurants directly. Of course, a shop for sales can be organized on the winery in order to use several pillars for sales. In this respect, guided tours through the vineyard or the production facilities can ensure that as many walk-in customers as possible are drawn in every day. Events or tastings for passionate wine drinkers are another option to increase the income base as an independent winemaker. Overall, it makes sense to systematically minimize risks, since a bad harvest naturally also reduces potential sales. The broader a winery is,
 

Formal: business registration as an independent winemaker

Anyone who wants to become self-employed as a winemaker primarily needs a vineyard that is permitted or suitable. Before commencing business operations, a trade must be registered. With regard to the formal framework, it should be noted that viticulture is subject to extensive national and European guidelines . In this respect, a permit for vine planting must be obtained when registering the business.This can be done by applying to the Federal Office for Agriculture and Food. In addition, numerous documentation requirements must be observed during ongoing business operations. In the course of processing the vines, the highest hygiene standards must be observed. In this regard, winemakers should be prepared at all times for unannounced inspections by food inspectors. Hobby winemakers who produce only a few liters of wine a year for private household use are not affected by these commercial framework conditions. Regional peculiarities must also be taken into account at an early stage with a view to the business registration or, if necessary, found out.
 

Occupation with the complex subject of wine law

The German wine law must also be observed with a view to the formal framework conditions and quality requirements to be complied with. This regulates, among other things, the different types of wine, which plays a not unimportant role for marketing. How can a certain product be officially named? Which quality requirements have to be met? In this regard, wine law also regulates quality classes. It also contains formal framework conditions for the following topics, which are central to all processes at the winery:

  • Yield regulation per hectare
  • Blending regulations
  • Designation right
  • Official quality wine test
  • Cellar technology

All of these subject areas sometimes contain crucial details for success as an independent winemaker. If you want to shine with your specialist knowledge, you should bring these formal framework conditions to the point in a potential-oriented manner in relation to your own business idea .

If wine is consumed in the course of on-site samples, a license must also be obtained for a fee when registering a business. The regulations on the protection of minors in this context must be strictly observed.
 

Short summary for the business idea 'start your own business as a winemaker'

  1. The long-term chances of success in this area are good, because wine enjoys constant high demand, also internationally
  2. Anyone who does not come from the wine-growing tradition will have to find a suitable vineyard as the basis for implementing the business idea
  3. Investments in the necessary technology for viticulture can be very high at the beginning, so that the business plan must be able to convince financiers
  4. Success stands or falls with sales, which should be based on the broadest possible basis depending on the target group and price range
  5. Commercial viticulture is subject to authorization and numerous rules (see German wine law). In any case, a business must be registered.