investment will vary, but assuming that a quality—not high end—facility is built and outfitted with commensurate equipment, here are some cost estimates:
*Purchasing land suitable for grape farming can run from $10,000 to $15,000 an acre, well above the price of average farmland. High quality vineyard land is not found in abundance; some experts estimate less than 10 percent of the state’s rural land is suitable for growing delicate wine grapes. In addition to agricultural considerations, land that possesses scenic views is important in attracting paying guests. Overall, to provide for expansion, purchasing a 25-acre site is a sound decision. Cost: up to $375,000.
*Planting a 10-acre vineyard with six varietals and installing trellising, well, irrigation system and purchasing a tractor and sprayer. Cost: $275,000.
*Building a 6,000-square foot winery with crush pad, cellar, tasting room, point-of- sale software and computers, crusher-de- stemmer, press, pumps, hoses, stainless steel tanks, oak barrels, forklift, lab equipment, office furniture, wine glasses, and various additional supplies. Cost: $900,000.
*A newly planted vineyard does not produce sufficient fruit to make wine for three to five years. In the interim, the winery will need to invest in grapes, bulk wine and bottling operations to build its inventory annually until wine can be made from the owner’s vineyard. If an owner wants to maintain an inventory of 5,000 cases of finished wine and
an equal amount of bulk wine, prices can leap dramatically until the vineyard is supplying the needed fruit. Cost: $75,000 to $500,000.
*After the initial investment on infrastructure and wine, an operating fund of $100,000 should be available to sustain operations through the first five years. Typically, small to medium size wineries can take up to seven years or more to show a profit.
Tallying up the capital required for the basic operations comes to around $2 million. True enough, a much smaller winery will cost significantly less but also likely run in the red for an extended period of time. Building sales quickly to 5,000 cases annually is the shortest path to profitably.
One vintner states for a bit less than $2 million a winery can open its doors. But, truthfully, a serious entrant to marshal its resources and commit to a $3 to 5 million investment to do it right.
So how can a newly smitten winery owner lower the cost of his personal investment? Sweat equity and investors. Performing more of the work, hiring fewer employees, and attracting capital from friends and business associates are proven ways to control expenses.
Unless an owner acts as both vineyard manager and winemaker, it can add an additional $100,000 or more annually to operating expenses to hire talented wine professionals. One viable approach for smaller operations is to perform these
56 TEXAS LONGHORN JOURNAL i SEPTEMBER 2017
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