There is a joke in the wine industry that goes like this: How do you make a small fortune in the wine industry? You start with a big one.
It may take a while for audiences to get the joke, but once they do, you get a laugh. The implication is that the wine industry is a hobby for the rich. That you need a lot of money to open a winery, and that you will lose much of that money supporting a business that is not profitable.
There is a bit of truth in the statement. Outfitting a winery can be an expensive proposition. Trent Ball at Yakima Valley Community College has looked at the cost of establishing small wineries in Washington for over 10 years. He estimates that the smallest commercial winery (2,000 cases of annual production) would cost about $795,000 to establish, building and equipment included. For most of us, this is a large fortune.
And 2,000 cases of wine may seem like a large quantity, but from the perspective of the U.S. wine market, this is a small winery. Wines Vines Analytics, a market research firm from California, released a study that showed the number of wineries in the U.S. was 7,762 as of January 2014. Most of these were in California, with Washington in second place and Oregon a close third place.
Wineries in this study were ranked by size of production. There was an interesting revelation — 41 percent (3,189) of all wineries in the nation were ranked as very small (1,000- 4,999 cases). Only 1 percent (56 wineries) were ranked as large (500,000-plus cases). The bottom line is that a majority of the U.S. wine industry comprises small, family-run wineries.
Did all of these families spend up to $795,000 to build their wineries? Probably not, if they are anything like the families that have established wineries in the Umpqua. I come in contact with many winery owners in the Umpqua, and they tell stories of their humble beginnings. Charlie Becker of Roseburg’s Becker Vineyard was a commercial house painter. Terry Brandborg of Brandborg Vineyard and Winery in Elkton was a longshore worker in San Francisco. Jim Delfino of Delfino Vineyard of Roseburg managed rental properties. Melrose Vineyards co-owners the late Deedy Parker and Wayne Parker respectively sold real estate and worked as a butcher before taking on the winery west of Roseburg.
What they do have in common is that they are all entrepreneurs. People who, against the odds, took on risk and started businesses that may one day make a small fortune.
You may be wondering: How does someone get started in the wine business? It is my suggestion that you go and visit with some of the entrepreneurs in local wineries and ask them how they did it. You will be amazed at the stories you hear. I believe this type of entrepreneurship is one of the strengths of our community. Let’s hope the small fortunes grow in our town.
Chris Lake is the director of the Southern Oregon Wine Institute at Umpqua Community College. He can be reached at Chris.Lake@umpqua.edu.