Three of the Biggest Challenges Winery Owners Face in Growing Their Business
What do you think of when you think of a winery? If you are like most people, you might be envisioning a nice, pretty, well-ordered field of grapes. Most wineries operate small cafes where anyone can sample a large variety of wines in a classy and well-ordered environment. True as that may often be, there is a serious business behind the tidy presentation. It is a market that is known for being a little bit difficult.
We might begin by mentioning the challenges of the natural world. For the entirety of human history, agriculture has always been a gamble. This is largely due to the fickle nature of the weather. When you invest money in a wine crop, there is always the chance that mother nature will say no. While there are a great many things one can do to improve their chances of success, it will always be a roll of the dice to a certain extent.
Another serious problem is competition. In any business that is based around something that people love, there will be a lot of competition. For instance, most people do not dream of growing up to be advertising executives, just because it’s not a particularly glamorous profession. Even though an advertising executive will often make a lot of money for relatively little physical work, there is no emotional attraction. Such is not the case with a winery. Anyone who has a strong liking for wine has probably dreamt of opening a winery. As such, competition is the #1 business challenge faced by wineries.
A study done in 2011 indicates that the three top business challenges for wineries are competition, regulation, and marketing/sales, in that order. The first has already been explained, but the second one may surprise you. Apparently, there are a lot of regulations regarding the making, handling, and distribution of wine.
Because wine is, of course, an alcoholic beverage, it is subject to the same regulations that govern stronger forms of alcohol like whiskey or rum. There are very specific labeling requirements that necessitate regular testing of the alcohol content. What I mean is this; you know how every bottle of wine has a place on the label which tells you exactly how much alcohol the beverage contains? That is mandated by law. Therefore, you have to make sure you can accurately represent these numbers.
Because a winery is also an agricultural operation, it is also subject to agricultural regulations. Within the limits of a city, zoning laws can often dictate the boundaries of land use within a designated area. In other words, if the zoning laws do not agree with your plans, they win, and you lose. This forces most wineries to locate themselves in areas of low population. There certainly aren’t a large number of people coming way out to the middle nowhere unless they have a specific reason for doing so. This brings us to the third most critical challenge.
Marketing is key because, as already noted, wineries are usually located outside of major population centers. Without good marketing, your business will wither and die even if your grapes do not. It takes a lot of skill to entice people out to the country, especially since you will mainly be appealing to an upscale crowd.
Naturally, marketing is a tricky business. Trends and cultural norms can change in a relatively short time, and in any case, you don’t want the audience to get tired of the same old thing. Denis Mackenzie is one example of a winery owner that does a good job of marketing his place of business in clever and diverse ways, and of keeping up with the market trends. Denis Mackenzie’s success makes him worth examining him in greater detail.
Raised in a small town, well-regarded winery owner Denis Mackenzie was fortunate enough to travel to many parts of the world while in college. This exposure to a wide variety of peoples at an early age might presumably help him in his work as the COO (Chief Operations Officer) of a major marketing company. However, his real passion is wine, and he has parlayed that affinity into one of the most popular wineries in the nation. Not surprisingly, his passion for wine was a result of his extensive travels, mainly in Italy, a country which is well-known for the quality of its wines. After Denis Mackenzie attended a wine-tasting event there, he decided to get in the wine game himself in 2011.
No one should ever expect to gain anything without effort and innovation. This general rule applies to any business from wine to space rockets. While there may not be a lot of physical labor for the owner (little to none, most likely), that does not mean that they aren’t worth their pay. Understanding the trends of the market and keeping things fresh will help to ensure that your business doesn’t rot on the vine.