by Craig Winchell » Sun Jul 22, 2012 3:10 pm
Adam M, I think you misunderstood me. I am not in a position to start a kosher wine company at substantial volume production- rather, I was, at the time, in a position to hire on in volume production nonkosher wineries in positions of responsibility. At the time I first wrote, I was just about ready to sign on the dotted line. However, I really do have an emotional propensity towards continuing kosher, as it's what I drink, and of course, the production calendar factors in Shabbos and Yom Tov, whereas it would require special dispensation to take that time off during crush in a nonkosher winery. That means, of course, that I would need to be high on the totem pole of a nonkosher winery, with enough people under me to implement my winemaking decisions in my absence. Such positions became available. Whether they are still available to me is questionable, and in any case, I would not make a decision during the 9 days. I am heartened, in any case, because other positions will no doubt come along. Producers cannot wait for decisions at this point, because of the proximity to crush-- they must have their houses in order.
I ran many numbers in my efforts to develop a realistic business plan capable of establishing a sustainable winery which could provide me the income I desire, a growing piece of the action, and make a good return for investors. The sweet spot seems to be at about 14,000 cases at an average price of $25/bottle retail, based upon the 3-tier system of distribution (which means approx. $12/bottle return to the winery). That would give me my salary, decent salaries to employees, what I believe to be enough marketing dollars to do the trick (about $200,000), and provide enviable returns on investment for investors. Nevertheless, 3 years of capitalization would require investment of 5-6 million bucks, and I don't have access to that, and wouldn't even with a fully developed business plan. In the end, it is still a risky business at a time when most are understandably risk-averse. Personally, I'm still waiting for the financial meltdown I am convinced will occurr, to make an already bad situation worse.
But even a tiny operation would require well in excess of your estimate of marketing dollars. When I used to go on the road with the Sonoma County Wineries Association tour, for several weeks thoughout the year, plus 2 or 3 tastings with Family Winemakers of California, our costs easily exceeded $50,000 per year. The costs are pretty much the same for a large or small winery. The per-case amortization, of course, is decreased with higher production volume.