FORTUNE Small Business:

Winning in the wine world

An aspiring winemaker checks with Ask FSB about the success rate for small-town wineries.

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Get small-business intelligence from the experts. Here's a chance for YOU to ask your pressing small-business questions, and FSB editors will help you get answers from the appropriate experts.
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(FORTUNE Small Business) -- Dear FSB: What is the success rate for a small local winery in an area of between 40,000 to 60,000 people?

- David Poland, Galesburg, Ill.

Dear David: In the wine world, it's not size of your hometown, but the measure of your patience and perseverance that determines success.

Boutique wineries in tiny villages - such as the historic Brotherhood Winery in Washingtonville, N.Y., population about 6,000 - can have as much success as one founded amid hundreds of acres of vines in the famed Napa Valley of California.

Enormous changes in the way grapes are grown, and how wine is made and distributed, have made it possible for anyone to begin a label - whether they live in midtown Manhattan or mid-state Illinois.

But that's not to say it will be easy.

If you decide to start from scratch and grow your own grapes, "you have to be in it for the long run," said Cyril Penn, editor of Wine Business Monthly magazine.

It could take three years to have a fruit-bearing crop. Then a winemaker must factor in the time it takes to ferment and age the wine. "By the time that wine makes it to market, it will be four of five years," Penn said.

While there's no data out there on success rates, Penn said, the number of U.S. wineries has boomed, growing 25% since 2004.

Today, there are more than 6,000 wineries, up from 4,740 in 2004, he said.

Today there are as many ways to make your mark in the industry as there are grape varieties - from establishing a "virtual winery" to bottling wine via "custom-crush." Either way, much of the growing and production is outsourced to larger, established operations, but a winemaker is still able to keep control of aspects of the business such as bottling, distributing and marketing.

For example, the owners of one virtual winery outside San Francisco blend their wines at their kitchen table.

And don't fret about basing a label on Illinois grapes. A full 90% of wine sold in the U.S. comes out of California - home to the kind of coastal Mediterranean climate grapes like best - but plenty of well-regarded wines are grown or shaped elsewhere, even in Alaska and Hawaii, Penn said. Illinois boasted 97 wineries as of November, including 14 virtual ones.

A wealth of local information can be found through the Illinois Grape Growers and Vintners Association.

Robert Mazza, who founded Mazza Vineyards in North East, Pa. with his brother, has been in the business since 1972. He said he has done great business with Illinois wineries. The state, he said, "has a very strong and viable wine industry."

One thing he recommends is that anyone looking to join the business do their homework. The Mazzas hired a German winemaker to guide them in the early years of their business..

"It's not something you do by the seat of your pants," Mazza said. But for those who persevere - and have a passion for the business - nothing is impossible.

"I tell people wine is in my blood," Mazza said. To top of page

How can David ensure his wine business is successful? Share your tips with us.

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