Step-by-Step Guide to Starting Your Own Wine Business
Our team of experts has packed this revolutionary eGuide with resources that are essentail to launching and growing a successful wine business.
Table of Contents
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Preface
For millennia, wine lovers have been enchanted by the history, culture, and captivating imagery of rolling vineyards, stone-built French chateaus, and the illustrious scent of aging oak barrels. Many are inspired by their affection for wine to embark on the journey of creating their own brand. However, the wine industry presents them with numerous challenges such as complex regulations, high startup costs, unexpected technical difficulties, and limited educational resources. Overwhelmed by these obstacles, most enthusiasts abandon their dreams and settle for mass-produced store-bought wines.
In an effort to breathe new life into struggling wine startups and provide guidance to aspiring brand developers, our team of experienced industry professionals has created a step-by-step eGuide. We've carefully curated this resource, including vendor contacts, tips to avoid common pitfalls, helpful cheat sheets, and comprehensive answers to frequently asked questions.
We hope you find these resources valuable as we delve into the world of wine, covering topics like grape and bulk wine sourcing, custom crush solutions, permits and licensing, packaging and branding ideas, as well as logistics and fulfillment practices. Armed with this wealth of information, we aim to inspire new wine brands and assist them in realizing the incredible satisfaction of pouring a glass of their own creation.
Over the years, our team of industry experts has collaborated with numerous entrepreneurs to assist in the development and launch of their wine brands. Through these partnerships, we've encountered the various challenges that all new brands commonly confront. We've distilled our extensive experience into this comprehensive guide, aiming to provide you with a valuable reference for essential phrases and terminology, financial projections, pitfalls to steer clear of, compliance regulations, and effective market entry strategies.
Additionally, many emerging brands find great value in utilizing our team as consultants at the outset of their journey. If you're interested in learning more about our consulting services, please don't hesitate to get in touch with us by emailing info@vinolaunch.com. We look forward to supporting your wine brand aspirations.
Target Market
Wine is a multi-billion-dollar industry in the United States, with certain varietals far outpacing others in popularity and sales. As evidenced by the top-selling grape varietals, Cabernet Sauvignon and Chardonnay dominate the market. Though hugely popular, the crowded Cabernet and Chardonnay markets present challenges for differentiation. Lesser-known varietals have their own obstacles around consumer awareness and trial.
When bringing a new wine brand to market, it's crucial to leverage consumer knowledge and tap into current trends. Though targeting a broad national market may seem appealing, an effective approach for new brands is concentrating on a specific region or demographic. For example, leverage your location and specialize in wines suited to the tastes of your local area. Get your brand in front of local restaurants and shops who will provide key exposure and buzz within the community. Offer unique varietals and blends catered to that geography and consumers.
Beyond geography, identify a lifestyle demographic not heavily targeted by major brands. For instance, environmentally conscious or health focused consumers who will connect with sustainability practices or lower alcohol approaches. Or target younger drinkers open to discovery of new varietals but with limited wine knowledge so far. The key is to intimately understand the target and fill an unmet need through product and branding.
Preselling wine locally to finance production is a proven success tactic. It provides cashflow, guaranteed buyers, and minimized fulfillment costs. Engage local wine buyers and trusted contacts to gather feedback on tastes and preferences. This market research directly fuels development of the ideal, locally tailored offering. With a refined and differentiated brand catering specifically to an identifiable demographic or geography, new wine ventures can gain traction despite stiff competition.
Listed below are the most popular grape varietals based on total sales in the United States:
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Cabernet Sauvignon, $2.575 million
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Chardonnay, $2.549 million
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Pinot Gris (aka Pinot Grigio), $1.299 million
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Pinot Nior, $1,055 million
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Sauvignon Blanc, $915 million
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Merlot, $763 million
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White Zinfandel, $290 million
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Malbec, $273 million
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Riesling, $252 million
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Shiraz (aka Syrah), $156 million
As you can tell by this list, marketing a Cabernet Sauvignon will be far easier then selling a Syrah since most consumers are familiar with the varietal and have likely tried it before. This is important since many new wine brands face the daunting task of selling into local restaurants and liquor stores who care far less about promoting a lesser-known varietal then moving profitable inventory.
With this being said, it’s important to differentiate your brand from the countless wine labels on crowded store shelves. The good news is that the wine market is uniquely tailored to seek out new trends, support local entrepreneurs and rely on word-of-mouth recommendations as opposed to TV commercials and billboards. It’s very important that you tap into your local grass roots wine scene and begin developing a loyal fan base. This can be achieved in a number of ways:
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Capitalize on new trends: The wine industry is filled with trends and changing consumer appetites. New wine blends are consistently being introduced and marketed to new demographics. Learn about your local market and talk with local shops to gauge the consumer interests and appetites. Base your varietal selection of what’s gaining in popularity.
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Involve fans in decision making: Tell your friends and family about your passion to create a new wine brand. Conduct group tastings of samples with neighbors and restaurant owners who are in the market to retailer your wine. Get their feedback and utilize it in determining your taste profile.
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Presale your wine: Some of the most successful brands we’ve worked with have sold the entirety of their first production before it was in bottle. Offering early bird discounts in your local area is crucial to your brands success. Not only do these orders help fund your business investment, but they also eliminate the need to store your wine once its bottled. Furthermore, selling wine in a concentrated region dramatically reduces your fulfillment burden and reduces shipping costs.
Consumer Research & Analytics
A key step for any new wine startup is researching consumer analytics, especially local market data. For example, a new brand in the Dallas/Fort Worth area could schedule meetings with a diverse set of wine shops throughout the city and surrounding towns. Come armed with specific questions around best-selling wine styles, price points, and emerging preferences. Request aggregated sales data on varietal volume and growth if the store is willing to share. Ask for a tour of the store to view product placement and signage for top brands. This field research will provide tangible insights to guide new product development. Beyond retail, also connect with restaurants and bars carrying Texas wines to get their insider perspective.
With consumer knowledge in hand, use it to innovate on blends and styles. A new Texas red blend could incorporate 75% Cabernet Sauvignon as the primary varietal since it sells well locally. The remaining 25% could experiment with small amounts of lesser-known varieties like Tempranillo or Sangiovese to create a unique blend differentiated from mainstream Cabernet labels. The 75%-25% blend ratio enables new brands to lead with familiarity while tweaking convention. For a white wine, consumer data may show regional popularity of unoaked Chardonnay. The startup could make an unoaked 75% Chardonnay, blended with 25% Viognier to deliver a fresh spin on prevailing local preferences. Conducting diligent local market research enables creative product innovations rooted in Texas consumer analytics.
Go to Market Strategy
A new wine startup should initially seek to sell to local shops on a small deposit basis. For example, requesting a 10-20% deposit on an initial order of a few cases of wine. If the shop owner is unable to buy on deposit terms, the startup could offer to sell on full consignment as a secondary option. Selling on deposit enables the startup to build critical seed capital by receiving most of the wholesale cost upfront, while still reducing risk for the retailer since their upfront payment is a fraction of the total order value. The relationships built through sharing local market insights and product plans with store owners will help secure advantageous payment terms like deposits for initial orders. This thoughtful local approach allows the new brand to gain that all-important initial presence on shelves while prudently managing cash flow and risk.
Beyond retail placement, partnerships with sommeliers and managers of local restaurants and wine bars are invaluable for gathering feedback. Provide samples to these pros to get input on taste profiles and blend adjustments that would appeal to their patrons. Bring prototype bottle and label designs for critique as well, since their consumer interaction lends important perspective. Consider partnering with a restaurant or wine club on a custom private label wine which amplifies a new brand's credibility and exposure.
The relationships nurtured through local outreach and market research form the backbone of a solid go-to-market strategy for new wine brands. A hyper-focused approach on a specific region allows tight alignment with consumer preferences and cost-effective market entry. While the national wine market is highly fragmented, a deep understanding of a particular area coupled with a collaborative local network enables new entrants to gain valuable traction.
Federal & State Law Compliance
Properly understanding and executing wine compliance standards, tax reports, licensing and label design regulations is a vital component of developing your own brand. When starting out, it’s important to note there are two main regulatory agencies that monitor the wine industry. They are the federal Alcohol Tobacco Tax and Trade Bureau (TTB), and individual state regulatory departments that are often referred to as Alcohol Beverage Control (ABC).
All new wine brands have different characteristics that include entity type, location, business goals, target customer, alcohol level variations and fulfilment strategies. These differences require customizable solutions that need to be handled by qualified compliance experts starting on day one. Luckily, we’ve created a list of vetted compliance professionals that can guide you every step of the way.
To help you put your best foot forward, we’ve developed an overview of the most common legal concepts pertaining to the wine industry. We recommend you read this overview before contacting the vendor’s listed below. This review will help you cover the knowledge gap many face when first venturing into alcohol law.
Let’s start with the TTB and ABC. In short, the TTB is in charge of regulating where and how alcohol is produced and labeled. The ABC is in charge of regulating how and where alcohol is sold.
State Permits: After prohibition, the federal government let each state determine their own alcohol laws. Unfortunately, this unleashed a myriad of regulations that were codified into 50 different alcohol statutes. Some states have taken a relaxed stance on alcohol regulation while others have taken a harsh stance. It is important to understand your home-states alcohol laws and formulate a fulfillment strategy that abides by their regulations.
All states craft their regulatory environment through developing laws that pertain to three industry practices. These three practices include direct-to-consumer permitting, volume limits and reporting requirements.
Tied House Laws: The concept of a tied house originates long before prohibition when saloons and pubs were incentivized by alcohol beverage manufacturers to sell their product. Many manufactures would provide low interest loans to these bars or even direct cash payments in exchange for heavily promoting and selling their brand. Some bars were even established directly by liquor manufacturers who only sold their products making the bar “tied” to the beverage maker. This led to a decrease in competition and consumer choice. It also increased alcohol consumption since bars were rewarded for selling as many units as possible.
Three-Tiered System: After prohibition ended, many states combated the issues surrounding tied houses by instituting a three-tiered system. These three tiers are the manufacturer, wholesaler and retailer. To prevent monopolization, every state, except for Washington, enacted a provision whereby each tier cannot have an ownership claim or business interest in the other. For example, an alcoholic beverage manufacturer cannot have an ownership interest in a distributor, or a distributor cannot have a business interest in a retailer.
Volume Limits: Volume limits refer to the total amount of gallons a winery can send to a consumer. A few states including Florida don’t have a limit while others like Texas institute limits on a monthly, annual and aggregate basis. In the example of Texas, wineries can only send 9 gallons per person per month, 36 gallons per person annually, or a total aggregate of 35,000 gallons to all DTC consumers in a calendar year.
Reporting: Similar to volume limits, each state has reporting requirements. These reports require wineries to detail sales tax and excise tax totals that originate from the sale of DTC transactions. As an example, the state of Colorado requires excise tax reports to be filed before the 20th day of each month. They also require wineries to retain these reports for at least 3 years.
When devising a marketing strategy for your new brand, its important to realize how much wine each state consumes. These statistics give you insights into the consumption habits of potential buyers and let you devise marketing efforts that support investments in state DTC permits. Below we have listed the top ten wine consuming states:
Top 10 Wine Consuming States: Gallons Overall
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California: 155.6M
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Florida: 72.7M
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New York: 65.8M
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Texas: 60.3M
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Illinois: 37M
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New Jersey: 33M
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North Carolina: 30.2M
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Massachusetts: 28.9M
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Pennsylvania: 27.7M
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Virginia: 27M
New Brand Tip
In 2021, 81% of all US wine was produced in California. Given this statistic, and the states extensive winemaking infrastructure, most new brands start by contracting with a California winery to make their first production run. During the time it takes to develop their first batch, these new brands obtain three different permits that enable them to sell to three difference consumer personas:
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Consumers in their home state,
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Consumers in the state of California
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Consumers living in DTC open states.
These three permits required to sell all three personas include:
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Type 85 – California ABC issued Limited Off-Sale Retail License.
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TTB Basic Wholesaler Permit
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Home state wholesaler permit.
For clarity, lets imagine a wine entrepreneur name Samantha living in the state of Georgia. Samantha calls several of the custom crush facilities we’ve listed later in the guide and finds one she likes. While she works on developing the taste profile and label design for her new brand, Samantha works with a compliance expert to acquire all three permits listed above. Once the permits are granted, Samantha is able to sell her wine to consumers living in her home state of Georgia, California, Florida and every other open DTC state. This allows Samantha’s to market her wine to 28% of the entire US market!
It’s important to speak directly with a compliance expert to ensure your home state isn’t an alcohol prohibitive state: Utah, Mississippi, Arkansas, Rhode Island and Delaware. You must also ensure that you abide by the rules and regulations of your local city and or municipality.
Federal Permits: These permits are granted by the TTB and are required in addition to the state level permits. We’ve listed each of the four options below:
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Producer Blender: This is the highest level of permit available and allows wineries to produce and blend wine.
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Wholesaler Federal Basic Permit: This permit allows businesses to purchase and sell wine at the wholesale level. Most of these permit holders work with custom crush facilities and let a trusted winemaker handle the physical winemaking process. Once the wine has been fermented and aged, these businesses take possession of the wine as “tax paid.” This signifies all excise tax payments have been satisfied.
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Bonded Wine Cellar: Bonded wine cellars, often referred to as BWC’s, are permitted facilities that are allowed to store “in-bond” and “tax-paid” case goods, full wine barrels, kegs and totes. These facilities are also allowed to practice a limited number of wine-blending activities including barrel topping and bottling.
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Importers Permit: This permit allows for businesses to import wine from outside of the United States and sell directly to US-based retailers and wholesalers.
COLA: The term COLA is an acronym that stands for Certificate of Label Approval. The TTB has very specific regulations that determine how brands can label their wine. This includes distinctions relating to vintage, volume, alcohol percentage, varietal and appellation. All labels that are intended for retail sale must submit their labels to the TTB for review. Once the TTB confirms a label meets their government requirements, they will grant a COLA.
Periodic Reporting: To ensure taxes and licenses are maintained, wineries are required to file periodic reports. These reports are usually submitted to the TTB, state ABC department and/or local cities and regional municipalities. In addition, brands are often required to complete reporting for all the states they operate within. For example, if a wine brand sells their products in 5 different states, they will be required to file tax reports and licensing renewals within all 5 states.
PATH Act: In 2017, the Internal Revenue Code titled Protecting Americans from Tax Hikes Act (PATH) made two key changes to TTB federal bond requirements***:
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Taxpayers who reasonably expect to be liable for no more than $1,000 in taxes imposed with respect to distilled spirits, wines, and beer for the calendar year (and who were liable for not more than $1,000 in such taxes in the preceding calendar year) can pay those taxes annually, rather than quarterly.
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Taxpayers are exempt from bond requirements if they reasonably expect to be liable for no more than $50,000 in taxes imposed on distilled spirits, wine, and beer for the calendar year, were liable for no more than $50,000 in such taxes in the preceding calendar year, and pay taxes on a semi-monthly, quarterly, or annual basis. Such taxpayers are exempt from bond requirements with respect to distilled spirits and wine only to the extent those products are for nonindustrial use.
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***Sourced from - www.ttb.gov/news/path-act-bond-requirements-for-alcohol-industries
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Online Resources:
There are several useful resources online that detail compliance answers and help new wine brands better understand state-by-state regulations. Please see them listed below:
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SOVOS ShipCompliant - www.sovos.com/shipcompliant/resources/wine-distribution-rules-by-state/
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Wine Institute: www.wineinstitute.compliancerules.org/state-map
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TTB Prospective Business Owners Guide - www.ttb.gov/main-pages/start-a-business
We have also detailed a list of verified wine compliance experts that can provide clarity about particular laws and help new wine brands file and maintain permits, licenses, periodic reports and TTB COLA submissions:
Compliance Vendors
Wine Compliance Alliance
Address: 1443 Main Street, Suite 230, Napa. CA 94559
Phone: 707-266-1946
Website: www.winecompliancealliance.com
West Coast Wine Compliance
Address: Contact Diane Bergeon – PO Box 3862 Yountville, CA 94599
Phone: 707-947-7276
Website: www.westcoastwinecompliance.com
Avalara Wine Compliance
Address: 255 South King St. Suite 1800 Seattle WA 98104
Phone: 877-855-9956
Website: www.avalara.com/us/en/products/beverage-alcohol.html
Allen Group
Address: 120 Stony Point Road, Suite 230 Santa Rosa, CA 95401
Phone: 707-307-5864
Pitfall Alert
Far too often, eager wine entrepreneurs delve headfirst into the romantic facets of wine including grape analysis and label design. Unfortunately, these new brands quickly realize the need for government licenses and permits. In fact, most wine growers and wholesalers won’t even talk to new brands until they become licensed. What’s worse, several states including Utah, Delaware and Mississippi have prohibitive state laws that make residents close their wine businesses shortly after starting.
Direct to Consumer Practice and Laws: Before the COVID pandemic, most small to mid-sized wineries sold their products through their tasting room. Unfortunately, the lockdowns closed these facilities and forced brands to adopt new sales strategies. One of these strategies was the advent of virtual tastings and direct-to-consumer wine club shipments. Unlike before, brands would take online orders from their wine club members and ship bottles directly to their homes. Once received, these brands would host virtual tastings that involved the winemaker describing each selection and taking questions and observations from people following on a live video stream. This unique strategy was a huge success and opened the door to the concept of virtual wineries.
Despite the success of DTC, state regulators were slow to keep up with the trend and many still ban wine shipments from out-of-state wineries. The states that ban these shipments are Utah, Mississippi, Arkansas, Delaware and Rhode Island. Luckily, several states allow wineries to ship bottles directly to their consumers. Some don’t even require a permit. These open states include Alaska, Florida, Minnesota and Washington DC.
While these open and prohibitive states fall on opposite sides of the state compliance spectrum, the vast majority of states allow for direct-to-consumer shipments but require a permit. These permits range from $50 to $500.
Pitfall Alert
Most new wine brands spend thousands of dollars consulting with lawyers to obtain licensing in all 50 states. Unfortunately, this large capital expense fails to consider wine consumption by state and other demand factors. We recommend new brands primarily focus their sales activities within their home-state and secondarily on direct-to-consumer open states. This strategy dramatically reduces fulfillment and shipping costs.
Pitfall Alert
Pitfall Alert: Our team has seen many instances where new wine brands are eager to take part in the physical act of winemaking. With this goal in mind, they apply for a producer blender permit and become a bonded winery. Unfortunately, these new “producer brands” are immediately excluded from applying for a wholesaler or retailer permit in that state due to tied house laws. This forces new producers to seek the help of national distributors who make the lion’s share of profits and are notoriously difficult to work with. As stated earlier, we highly recommend new brands first work with custom crush facilities who handle the physical process of making wine.
During the time it takes for the wine to be developed, we recommend new brands obtain their wholesaler permit. Once the finished wine has been bottled, it can be removed from the custom crush facility as “tax-paid” and immediately wholesaled to restaurants and local liquor stores. After a few months, most small brands have developed a healthy amount of repeat business which feeds the expansion of their brand. After a few years of growth, brands are able to produce more and more wine which allows them to leverage economies of scale. This scale reduces the per-unit cost of each bottle and improves profitability. It’s about this time that brands will start receiving attention from national distributors.
Grape & Bulk Wine Sourcing
Now that you’ve established a firm compliance framework, the fun can begin! Long before a wine reaches the bottle, it begins its journey in the vineyard. The expense and time investment to plant a new vineyard is far too costly for most new wine brands. Instead, many source their raw materials via sourcing grapes or purchasing bulk wine.
The quickest method of starting your own brand is by procuring finished “bulk” wine, however many brands decide to source grapes since it provides a greater level of quality and taste control. Traditionally, these brands will contact a vineyard owner and place a cash deposit for a specific number of tons to be used for processing during the upcoming harvest.
The price of grapes varies extensively based on location, type of wine (known as a varietal), vineyard heritage or fame and several other factors. We’ve listed several considerations all new wine brands should account for when shopping for grapes.
Varietal Type: The term “varietal” is industry speak for type of grape. Some popular varietals include: Cabernet Sauvignon, Merlot, Chardonnay, Pinot Nior, Syrah and Pinot Grigio. Historically, our team has found that most new wine brands either know very little about varietals or hold an extensive amount of knowledge on the topic. If you belong to the latter crowd, choosing the right varietal should be dependent on your target marketing.
Listed below are the most popular grape varietals based on total sales in the United States:
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Cabernet Sauvignon, $2.575 million
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Chardonnay, $2.549 million
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Pinot Gris (aka Pinot Grigio), $1.299 million
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Pinot Nior, $1,055 million
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Sauvignon Blanc, $915 million
-
Merlot, $763 million
-
White Zinfandel, $290 million
-
Malbec, $273 million
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Riesling, $252 million
-
Shiraz (aka Syrah), $156 million
As you can tell by this list, marketing a Cabernet Sauvignon will be far easier then selling a Syrah since most consumers are familiar with the varietal and have likely tried it before. This is important since many new wine brands face the daunting task of selling into local restaurants and liquor stores who care far less about promoting a lesser-known varietal then moving profitable inventory.
With this being said, it’s important to differentiate your brand from the countless wine labels on crowded store shelves. The good news is that the wine market is uniquely tailored to seek out new trends, support local entrepreneurs and rely on word-of-mouth recommendations as opposed to TV commercials and billboards. It’s very important that you tap into your local grass roots wine scene and begin developing a loyal fan base. This can be achieved in a number of ways:
-
Capitalize on new trends: The wine industry is filled with trends and changing consumer appetites. New wine blends are consistently being introduced and marketed to new demographics. Learn about your local market and talk with local shops to gauge the consumer interests and appetites. Base your varietal selection of what’s gaining in popularity.
-
Involve fans in decision making: Tell your friends and family about your passion to create a new wine brand. Conduct group tastings of samples with neighbors and restaurant owners who are in the market to retailer your wine. Get their feedback and utilize it in determining your taste profile.
-
Presale your wine: Some of the most successful brands we’ve worked with have sold the entirety of their first production before it was in bottle. Offering early bird discounts in your local area is crucial to your brands success. Not only do these orders help fund your business investment, but they also eliminate the need to store your wine once its bottled. Furthermore, selling wine in a concentrated region dramatically reduces your fulfillment burden and reduces shipping costs.
Sourcing Region
After you’ve identified the varietal that comprises the taste profile your targeting, start researching the best areas to source those grapes. For example, if you are sourcing a lower alcohol wine, chances are your grapes will come from a colder growing region. This is due to the fact that colder regions often receive less sunlight which limits the grapes ability to produce sugar. During fermentation yeast works to convert sugar into alcohol but can only convert what’s naturally produced by the grape. This is why grapes with lower sugar levels produce less alcoholic wines.
Also, remember that many varietals feature different taste characteristics depending on their growing region or AVA (American Viticultural Area). Take Pinot Noir for example, there is a historic debate about the popularity between warm climate pinot, characterized by higher alcohol and deeper body, and cold climate pinot which is characterized as slightly more crisp and tart.
Below we’ve listed some important wine growing factors that each new brand should consider when procuring grapes. The vast majority of high-profile winemakers prefer to shape the taste of wine before it ever leaves the vine. This can be achieved in a number of ways including the vineyards location, growing style, vineyard spacing, pre-harvesting practices and harvesting method:
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Pre-Harvesting Practices: Many vineyard owners take extremely measures to maintain their crop. This includes proper irrigation, bird netting, and even “dropping” fruit which involves cutting and disposing of specific grape clusters to reduce overall vineyard yield. By dropping fruit, the vine is able to focus its energy on the remaining grape cluster and produce a wine that features greater intensity and flavor.
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Harvesting Method: There are two harvesting methods, hand-picking and machine picking. Hand-pinking is the preferred method for higher-end wineries since it provides greater control and precision. Machine harvesting is used for large producers that require the harvesting of many acres. Recently, advanced harvesters like Pellenc have dramatically improved machine picking’s capabilities and often harvest fruit with the same quality as hand harvesters.
Once a vineyard has been planted, it takes approximately 4 years till its first harvest. In north American, vines will start to form buds around the end of March. This first growth phase is called “bud break” and eventually leads to “flowering” which refers to the blooming of small flowers that eventually become grapes. Flowering occurs in late spring and proceeds the next phase called “variation”. At the start of variation, red grapes are light green and don’t start to receive their color until mid-summer. White grapes will turn from the same light green into a yellowish translucent hue. During early fall, vineyards owners will start to prepare for harvest by measuring the grapes sugar content. The official term for this measurement is called Brix. Once a wine reaches the optimal Brix level, the vineyard is harvested. Below are some common harvesting terms:
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Racking: When a wine has finished fermentation, it is left inside a stainless-steel tank to rest of its lees. Lees are small particles of grape that include skins, seeds and pulp. Lees also comprise dead yeast cells that are left over from fermentation. These lees are very important to the development of the wine and provide tannin and savory notes. Racking is the process of removing wine from its lees. This often occurs at the first barreling, referred to as “barrel down,” and a second time during spring racking. Winemakers determine the total amount of lees that remain in barrel at each racking.
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Topping: During the aging process, all barreled wine experiences evaporation. This evaporation is called the Angel’s share and needs to be replaced with additional wine. This additional wine is referred to as topping wine and is typically stored in metal beer kegs. If a barrel is not “topped” frequently it will begin to develop “head space” which is denoted by a small layer of air within the barrel. If a barrel has too much air, it will turn into vinegar. Approximately 10% of all barreled wine is lost to evaporation during the entire aging process. Toppings should occur approximately every 30 days.
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Filtration: All wine is filtered to some degree before it is bottled. The most common forms of filtration are gravity-feed filtration, membrane filtration, and crossflow filtration. Larger winery operations utilize crossflow filtration to achieve sterile wine. Some also include a chemical called Velcorin that sterilizes the wine chemically and kills all active yeast cells. If active yeast cells remain in the bottle, there is a good chance that it will continue fermentation and develop an excessive amount of carbon dioxide. If a bottle has too much carbon dioxide, the pressure forces the cork out of place and can even cause the bottle to pop!
Useful Metrics
When purchasing wine grapes, there are several rules of thumb that all new brand owners should know. We have listed a handy guide below for your reference:
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The average vineyard produces 3 to 5 tons of fruit per acre
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1 Ton of grapes produces 160-150 gallons of wine
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1 Ton of grapes produces and average of 2.4 barrels of wine.
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A portion of this wine is set aside for topping.
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1 barrel produces 21-23 cases of wine after filtration
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1 case of wine holds 12 (750mL) bottles
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10% of all wine is lost to evaporation during the aging process
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Filtration loss accounts for 0.5% to 5% of gallonage yield. The total loss depends on the number of lees remaining in barrel and previous racking protocols.
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Wine should be stored at 55 degrees for long-term storage.
Our team has noted great success from wine brands that start their labels with bulk wine. Unlike sourcing grapes, bulk wine is finished wine that immediately ready to bottle. New brands often find bulk wine on open marketplaces or by contacting their favorite winery. Many wineries store bulk topping wine or have left over lots from previous years which will be later used for blending. Instead of using the wine in blending, these wineries will sell the wine to new brands for a higher profit margin.
The official definition of bulk wine is wine that has previously been fermented, barrel aged and immediately ready for bottling. Despite the majority of winemaking decisions have already been made, it’s still possible to alter the taste of bulk wine by using the following additives:
Tannin: Tannin is often referred to as wine grip, or the texture wine provides during tasting. One useful exercise is making a cup of tea and then place the wet tea bag on your tongue. Tea is essentially 100% tannin and leaves a distinctive gritty texture in your mouth. Red wine specifically benefits from tannin as it provides a slight bitterness, astringency and complexity to the wine. Despite being finished, many winemakers can add powdered tannin to bulk wine improving its complexity.
Acidity: Much like tannin, acidity can be added to wine after it has been fermented and aged. Almost all wines, including crisp rosé, benefit from acidity. Winemakers will increase a wines acidity using tartaric acid which is an organic compound.
Sugar Content: Most winemakers increase the sugar content of wine by adding concentrate. Concentrate is dehydrated wine that comes in a syrup form. By adding concentrate to bulk wine, the glucose and fructose levels increase resulting in sweeter wine. Concentrate can also alter the wines color to produce a deeper, more vibrant hue. Visit - California Concentrate Company to learn more: www.californiaconcentrate.com
Alcohol Content: Increasing a wine’s alcohol content is relatively straight-forward. The process involves adding 100-proof alcohol to bulk wine. This proof is often distilled from a wine base and is produced by large commercial wineries. Winemakers can target a specific alcohol content for a base wine by adding a proportionately measured amount of 100-proof alcohol. Visit Monterey Wine Company to learn more about high proof additives: www.montereywinecompany.com
Bottled Wine (i.e., Shiners): It’s also possible to source bottled wine. This bottled wine has already been fermented and bottled but sold without a label. These label-less bottles are often referred to as shiners since the unlabeled bottles shine in the daylight.
Popular Bulk Wine Vendors
Harvest & Common Terms
Bulk Wine Soucing
Agajanian Vineyards and Wine Company
Phone: 707-252-4800
Website URL: www.agajanian.com
Website Summary: “Agajanian Vineyards and Wine Company is a local winery in Madera, founded by Gary Agajanian. Gary’s father and grandfather have rich Armenian roots in Fresno that date back to the Armenian genocide and tell a tale of a family separated by war and reunited in Madera, California. 100 years later, Gary carries on the family tradition of farming and produces premium wines from wine grapes across the state of California.
Turrentine Wine Brokerage
Phone: 415-209-9463
Website URL: http://www.turrentinebrokerage.com/
Website Summary: “After 36 years of wine business experience with Wine Institute and as the head of the California Wine Advisory Board, Dan C. Turrentine founded Turrentine Brokerage in 1973. The company was started to assist grower and winery clients with supply challenges and opportunities and to provide the best, data-driven information and analysis to help clients avoid supply problems and make the most profitable choices in a complex and constantly changing business. For more than four decades, Turrentine Brokerage has stayed true to this goal, developing a team of grape and wine brokers who lead the wine business not only in sales volume but also in understanding supply cycles and evolving market conditions.”
The key weakness between developing a wine from the grape verses using bulk wine is the ability for customization. Despite this shortcoming, bulk wine takes far less time to bottle since it has already been fermented and aged in barrel. In addition, new wine brands can gauge customer demand with small-run bulk wine bottlings and tailor their offering based on real time sales forecasts.
Given these benefits, we often recommend new brands start their first bottling with bulk wine that has been tailored to match the taste profile they’re targeting. Later, the sales received from the first production can be used to purchase grapes for the subsequent vintage and help provide more confidence in overall marketability.
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Vineyard Location: Many world acclaimed wines are planted on hillsides since they offer excellent drainage, precise sunlight, and relatively infertile soil. This infertile characteristic reduces the wines total crop load and produces small grapes that feature extremely intense flavors.
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Growing Style: There are a variety of growing styles including free cordon, head training and Geneva double curtain. Each vineyard style has positive and negative attributes and often vary based on the varietal being grown.
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Vineyard Spacing: Vineyards are often spaced in accordance with the harvesting method. For example, if a vineyard is harvested by machine, the spacing between rows is planted in accordance with the width of the tractor. Winemakers also have specific preferences about spacing to help determine vineyards yield and sunlight exposure. See figure below.
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Brix Measurement and Pick Time: Brix is a metric that is used to determine a grape’s sugar content. Brix measurements determine the timing of harvest and can vary depending on the style and varietal of the wine being produced. For example, California Cabernet Sauvignon is often picked between 24-25 Brix.
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Fermentation & Yeast Selection: Once a wine is picked, it is received by the winery where winemakers begin processing the grapes into wine. There are thousands of variables associated with this process including sorting method, destemming, yeast type, pump over v. punch down, fermentation temperature controls and inclusion of additives such as Go-Ferm and Potassium Metabisulfite.
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Barrel Selection: In addition to providing a vessel for aging and instilling wooden characteristics, wine barrels can be considered a seasoning method for wine. In the United States, the two most popular barrel types are American oak and French oak. American oak produces strong aromatics, slow phenolic extraction (chemical compounds that determine color, taste and originate in the grapes skins, pulp and seeds) and subtle mouthfeel. French oak provides a subtle nose, easy and quick phenolic extraction, vanilla flavoring, and development of mid palette. The grain and toasting of barrels also dictate the wine’s characteristics.
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Cooperage: Cooperages are the factories that make wine barrels. There more than 40 cooperages in France alone!
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Custom Crush
Since the advent of commercial winemaking there have been far more physical brick and mortar wineries than wine brands. These wine brands often buy fruit from vineyards they don’t own, process the fruit into wine in facilities they don’t own, and then sell the wine in rented tasting rooms. Originating back to the earliest days of Bordeaux France, these “homeless” wine brands were referred to as Garagistes which was slang for people making wine in their garage.
The same proportion of wine brands to physical wineries still exists today. Fortunately, wine entrepreneurs have created wineries with the specific mission of accommodating homeless winemakers. These wineries are referred to as custom-crush facilities. These facilities are able to accept fruit during harvest, process it into wine, providing barrel storage and topping services and even bottle the wine on-site. Today, the custom-crush business model has expanded across the country. In addition, it is not uncommon for standard wineries to offer custom crush services to smaller wine brands creating an additional source of revenue. Below we have listed several custom-crush facilities by location:
Custom Crush Directory
Pacific Wine Services
Address: Address: 2550 Dry Creek Road, Paso Robles, California 93446
Phone: 805-226-0640
Website: www.pacificwineservices.com
Camarillo Custom Crush Winery
Address: 300 S Lewis Rd, Camarillo, CA 93012
Phone: 805-484-0597
Website: www.camarillocustomcrush.com
Monterey Wine Company
Address: 1010 Industrial Way, King City, CA 92930
Phone: 831-386-1100
Website: www.montereywinecompany.com
Napa Wine Company
Address: 7830 St Helena Hwy, Oakville, CA 94562
Phone: 707-944-8669
Website: www.napawineco.com
Bin to Bottle
Address: 110 Camino Oruga, Napa, CA 94558
Phone: 707-307-4510
Website: www.bintobottle.com
Castoro Cellars
Address: 6465 Von Dollen Rd, San Miguel, CA 93451
Phone: 805-467-2002
Website: www.castorocellars.com
KrushWerks
Address: 59020 Paris Valley Rd, San Lucas, CA 93954
Phone: 805-441-1779
Website: www.krushwerks.com
Rack & Riddle Custom Wine Services (Sparkling Wine)
Address: 4001 CA-128, Geyserville CA 95441
Phone: 707-433-8400
Website: www.rackandriddle.com
Label Design
Designing a compelling wine label is often considered the most important component of a new brand’s sales and marketing efforts. There are several elements that create a compelling wine label include typography, color, imagery, and paper texture. Many new wine brands elect to print their designs directly onto the bottle with newer age screen-printing technology.
To ensure your brands success, make sure you get feedback from potential customers about your label design. Their insights are often invaluable and help strength your rapport.
In addition, utilize the statistics below compiled by Nielson research. Their team released a study that monitored 2,700 US-Based customers and revealed several key findings:
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Highly visible wine bottles were noticed by 77% more consumers. These highly visible bottles also caught the attention of shoppers 2.5 times longer.
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Consumers gravitated towards brightly colored bottles including designs that featured red, orange and gold.
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For wine priced over $20, consumers preferred traditional designs that featured bold typography and heavier bottles.
Wine labels come in all shapes and sizes. Unfortunately, this creative freedom has caused many new brands to produce labels that don’t fit their bottles. Before designing your label, first determine the bottle shape you want to use. For convenience, we’ve detailed more information about wine bottles shapes and their corresponding varietals later in this guide. After you’ve selected the wine bottle that you want to use, make sure you download the specification sheet from the manufacture which provides the bottles measurements. Most new brands hand these spec sheets to their label designers who are able to work within the bottle’s size requirements.
Lastly, we don’t recommend new brands use bottles that feature a profile. A profile is characterized by a gradual thinning of the bottle’s circumference. Since the top of the label needs to reduce in accordance with the profile, the finished result often features creases and bubbles in the label.
Label Vendors:
Screen-Printed and Etched Bottles:
Peltier Glassworks:
Address: 3500 Dry Creek Rd #12, Paso Robles, CA 93446
Phone: 805-704-9218
Website: www.peltierglassworks.com
Bergin Screen Printing & Etching:
Address: 451 Technology Way, Napa, CA 94558
Phone: 707-224-0111
Website: www.berginglass.com
G3 Enterprises – Bottle Etching Division:
Address: 572 Gateway Dr, Napa, CA 94558
Phone: 800-321-8747
Paper Printing
Digital Dogma:
Address: 2125 Vanderlip Court, Paso Robles, CA 93446
Phone: 888-804-8050
Website: www.digital-dogma.com
Labeltronix:
Address: 2419 E Winston Rd, Anaheim, CA 92806
Phone: 800-429-4321
Website: www.labeltronix.com
MCC Napa, California:
Address: 21 Executive Way #6271, Napa, CA 94558
Phone: 707-603-2500
Website: www.mcclabel.com/en/wine-spirits
ASL Print FX:
Address: 871 Latour Ct Suite A, Napa, CA 94558
Phone: 707-927-3096
Website: www.aslprintfx.com
There are several legally required pieces of information that must be displayed on a wine label. These include the alcohol warning, sulfites declaration, alcohol percentage, bottle size measurement, appellation or AVA, vintage and varietal. You can learn more about these requirements using the following link: TTB WINE LABEL PDF
Alcohol Warning: All wine labels must contain the following verbiage: “GOVERNMENT WARNING: (1) According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects. (2) Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery and may cause health problems.”
Sulfite Declaration: All traditional wines require a sulfite declaration on the label. This is normally placed under the government warning. The declaration is simply – Contains Sulfites
Alcohol Percentage & Bottle Sizes: All wine labels must include the alcohol percentage and size of bottle on the label. Given differences in measuring devices, the alcohol percentage can vary be 1 percentage point. For example, if the alcohol level of a Cabernet Sauvignon measures 14.8%, the label can declare 15% or 14%. All wine bottles must also include the size of the bottle. All standard wine bottles hold 750mL.
Appellation or AVA: Appellation known in the United States as AVA (American Viticultural Area) refers to the location where a wine’s grapes are grown. In order for a wine to use an AVA, 85% must originate from that location. For example, if 90% of a Syrah is grown in Paso Robles, the marking “Paso Robles, CA” can be placed on the wine label.
Vintage: Similar to appellation requirements, wine can only be identified by its vintage if 95% of the wine was produced in that year. If a bottle contains wine that is less than 95% from a specific vintage, the year is not allowed to be declared.
Varietal: One of the last classifications of wine is the varietal or type of grape. Some popular varietals are chardonnay, merlot and pinot noir. In order for a bottle to list its varietal, 75% of the bottle must contain that specific variety. Furthermore, if one varietal comprises more than 5% of the blend, it must also be declared on the label.
TTB & COLA's
All wine that is publicly available for sale must obtain a COLA or Certificate of Label Approval from the TTB (Alcohol and Tobacco Tax and Trade Bureau). Only permitted wineries can obtain a COLA. Becoming a customer of a custom crush facility and registering as an Alternating Proprietor (AP) grants new wine brands their own federal basic permit and enables them access to this portal. You can learn more about creating your own account and the TTB requirements using this link - https://www.ttb.gov/myttb/reg-new-fonl-cola
Wine Label Requirements
Packaging Materials
There are countless packaging variations wine entrepreneurs can choose from to help differentiate their wine brand. These include the bottle shape, color, and closure type.
Wine Bottles
Bordeaux
Wine bottles are general segmented into two categories – Bordeaux and Burgundy.
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Bordeaux bottles (also referred to as claret bottles) originate from the Bordeaux region of France. These bottles feature distinctive shoulders that begin shortly after the top of the bottle and finish with a flat profile that runs for the remainder of the bottle. Several wines including Cabernet Sauvignon, Merlot, Zinfandel and Pinot Grigio traditionally utilize this bottle shape.
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Burgundy bottles also originate from France and features gradually sloped shoulders that run the majority of the bottle. Wines like Pinot Noir, Syrah, and Chardonnay often utilize burgundy bottles.
Wine bottles come in many different colors with the most popular being antique green, flint or clear, dead leaf green and classic green. Traditionally, red wines are bottled in darker bottles and white wines are bottled in clear or lighter bottles. Most bottle makers also inventory several weight options with more expensive wines being housed in heavier bottles.
Burgundy
Wine Bottle Vendors
All American Containers
Address: 2390 B, Ward Ave, Simi Valley, CA 93065
Phone: 805-416-5971
Website: www.allamericancontainers.com
Tricor Braun - WinePak
Address: 6 Place Drive, 1000 St. Louis, MO 63141
Phone: 800-325-7782
Website: www.tricorbraun.com/products/wine-bottles
Encore Glass
Address: 2925 Cordelia Road, Fairfield, California 94534
Phone: 707-745-4444
Website: www.encoreglass.com/contact
Saxco
Address: 1855 Gateway Blvd, Suite 400, Concord, CA 94520
Phone: 877-641-4003
Website: www.saxco.com/product-category/bottles/glass-bottles/glass-wine-bottles
Cork and Screw Caps
Cork and Screw Caps are wine “closure” types. Despite the public perception of screw cap bottles containing cheaper wine and corked bottles containing more expensive wine, screw caps better preserve wine, can be opened without a corkscrew, and remove the risk of “cork taint” (otherwise referred to as TCA or its complete bacterial name of 2,4,6-trichloroanisole).
Cork & Screw Cap Vendors
ACIC – Cork and Capsule Supplies
Address: 360 Devlin Road, Napa CA 94558
Phone: 707-603-1380
Website: www.acicclosures.com
Janson Capsules
Address: 840 Latour Ct, Suite A, Napa CA 94558
Phone: 707-256-3957
Website: www.jansonbyramondinusa.com
Berlin Packaging
Address: Headquarters – 525 West Monroe Street, Chicago, IL 60661
Phone: 800-363-9822
Website: www.berlinpackaging.com
Scott Laboratories
Address: 3320 Ramada Dr Suite B, Paso Robles, CA 93446
Phone: 707-765-6666
Website: www.scottlab.com
Fulfillment
There are many fulfillment centers that provide comprehensive solutions including temperature-controlled storage centers, order fulfillment, and EDI interfaces that connect directly to your eCommerce website. All fulfillment centers require a specific case threshold and most only provide service for large wineries. In addition, these companies don’t hold permits or licenses, but instead act as an extension of your brand and use your permits when shipping to consumers and retailers.
New Brand Tip
As stated before, we recommend new brands focus the majority of their sales activities within their local market. In addition, it’s important to involve your regional community in the evolution of your brand. Connecting with local restaurants and liquor stores is vital to generating interest in your brand and incorporating their feedback and suggestions into your product will solidify rapport. By collaborating with your future customers on day one, it will be far easier for you to pre-sale product and ensure the continued success of your brand.
Perhaps the greatest benefit of preselling your product locally is how easy it then becomes to distribute orders. Unlike most new brands who don’t market their product until it’s in bottle, entrepreneurs with presod inventory can receive full pallets of their wine, and store in temperature controlled self-storage facilities or bonded regional warehouses. Once the wine is stored locally, you can hand deliver the product to the end user. This bootstrapping form of fulfillment dramatically reduces your upfront investment and eliminates shipping costs which makes people far more likely to buy in the first place.
Temperature Controlled Storage Facilities:
CubeSmart Self Storage
States Serviced: Arizona, Florida, Illinois, North Carolina, South Carolina, Tennessee, Texas, Washington
Phone: 866-411-4033
Life Storage
States Serviced: Arizona, California, Florida, Georgia, Illinois, Massachusetts, New Jersey, Ohio, Texas
Phone: 855-829-5160
Fulfillment Vendors
Wine Direct
Address: 450 Green Island Road, American Canyon, CA 94503
Phone: 800-819-0325
Website: www.winedirect.com
WineShipping
Address: 50 Technology Court, Napa, CA 94558
Phone: 707-933-9063
Website: www.wineshipping.com/contact-us
VinFillment
Address: 644 Hanna Drive, Suite A, American Canyon, CA 94503
Phone: 707-656-4467
Website: www.vinfillment.com
Wine Fulfillment
Address: Locations in California, Illinois and New York
Phone: 815-363-1826
Website: www.winefulfillment.com/services
In conclusion, we’ve listed several key mistakes most new wine brands make that should be avoided:
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Filtration Loss: For new wine brands, filtration loss can be an unexpected loss that results from the filtration process. Depending on the wine being bottled, wine can experience a significant loss in gallonage since the filter removes lees and other particles reducing the overall yield. Red wines experience more filtration loss than white wines. Expect to lose 2-3 cases of wine per barrel for reds and 1-2 cases of wine for white wines.
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Bottle Shock: After wine is bottled, it experiences a unique phenomenon called “Bottle Shock.” This effect distorts the wine’s taste and aroma resulting in a lackluster, muted flavor. Bottle shock typically resolves itself within 4-5 weeks. Reds tend to experience longer effects than white wines.
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Bottle & Case Specifics: Wine is always stored in cases which are cardboard boxes that hold twelve bottles. We have listed some industry standard dimensions below for your reference -
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Average Case Weight – 30 to 40 pounds
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Case Dimensions:
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Average Length: 12.5 inches
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Average Height: 13.0 inches
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Average Width: 9.5 inches
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Average Bottle Diameter: 3.0 inches
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Average Bottle Height: 11.8 inches
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Pallet Configuration: 56 bottles per pallet, 14 cases per layer, 4 layers high
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Storage Temperature: Ideal storage temperature is 55 degrees
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Brand URL and Trademark Search: When choosing your wine brand name, make sure to check the availability of the URL and trademark.
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You can check the trademark status on - www.trademarkia.com
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You can check the URL status on most website design platforms including GoDaddy, Shopify and WiX.
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Packaging Quantities: It’s important to order slightly more bottles, corks, foils and labels than required. Most bottling lines need several test labels to ensure the line is applying the label properly. Furthermore, it’s a good idea to affix a label onto your cases to aid in organization. We recommend ordering 300 labels per barrel. The same quantity is true for corks, foils and related materials.
If you’re reading this finishing paragraph, its apparent that you have the passion and determination to make your brand a success. You’ve taken the first step towards making your dream a reality and our team would like to offer the warmest congratulations. The road to developing a successful wine business will undoubtedly hold setbacks, but our team has found the most passionate wine enthusiasts often enjoy the greatest success.
In the end, any problems or roadblocks you face will only add to the satisfaction that occurs when you first see your brand on a store self, or overhear people complimenting your wine at a local restaurant. Creating something from scratch is difficult, time consuming, and daunting, but once you achieve success, you’ll know that the grape was worth the squeeze!
Conclusion
