GARAGE VINO

Every great communist regime announces a five-year plan upon taking office – I fail to see why my capitalist winery shouldn’t employ the same principles. After much research, experimentation, deliberation, and acceptance of the goddamn time it just takes, the five-year plan for the Staeger Wine Company’s path to success goes something like this.

Year 1: Get wine, and I mean any wine, made professionally. Done – 60 cases of Nebbiolo. Permitting process begun. (2008)

Year 2: Establish winery permits and bond. Secure fruit from best vineyards/regions for your desired varieties. Make 500+ cases of wine (equivalent of $150K of sales at $300/case or $25/bottle). All underway. (2009)

Year 3: Establish winery location (downtown Santa Barbara leased facility) that will also function as tasting room on wine trail. Purchase/lease winemaking equipment, hire necessary p/t help. Make approximately 1,000 cases of wine, spread across numerous small lots of different varieties so you will be able to accommodate a wine club membership. (2010)

Year 4: Same as Year 3 but with additional caseload increase. Begin selling wine crafted in Years 2 & 3 (goal: 50% of full year of Year 2 inventory, i.e. $75K of sales, effectively paying for most of Year 4 harvest/processing costs). (2011)

Year 5: $300K of revenue, full year of sales of Year 2/Year 3 product. (2012)

Of course there are marketing schemes, wine club recruitment and hospitality, internet strategy, varietal selection, and various other details along the way. This, however, is a nice, Soviet-grade 5-year plan that ought to put this business of mine into the making-a-living range by the sixth year from launch. Thanks to a modicum of perseverance and determination, I’m already in Year 2 on the five-year arc.

I read somewhere recently that there’s a great divide between those who have the ability to afford large plots of arable land, and those with the desire to farm. Makes sense the more you think about it: it’s the rare trust fund baby or other instant-wealth type who, upon receiving said instant wealth, is simultaneously struck by the desire to farm. Sure, there are some retired businesspeople out there too who, presuming they’ve got the energy left, prefer to farm ten acres of grapes, strawberries, or almonds to tinkering with some bulbs in the flower garden out back.

But mostly – especially in wine country — you’ve got landowners who, either by necessity or habit, are busy working their tails off at a white collar gig somewhere – running companies, taking them public, whatever – and who possess neither the desire nor the time to plant their asses on a John Deere seat and rip the cover crops in the rows between 20 acres of vines. Back and forth. Sulfur and maybe some copper or fungicide sprays the next day. Done before the winds pick up or the neighbors wake up to face facts on the semitoxic nature of modern agriculture. Back and forth. Pruning for days on end just to get through an acre or two in the month of February while the vines are in hibernation. And organic fertilizer, AKA chicken manure? Forget about it.

No, for most landowners, the boardroom beckons, either because, as most people in their right mind would see things, it’s cleaner . . . or because there exists the need to keep showing up to work in order to afford the $20,000 a month mortgage on the 400-acre ranch.

Those who prefer the tractor seat, the shears in hand, the hoe to till one’s way toward organic weed control – well, suffice to say that the margins on farming ain’t great even if you have the land, and unless you find yourself in the boardroom of Dole, Del Monte, or Constellation, a desire to work in the farming industry overall is kind of the blue-collar equivalent of the graduate degree in English Lit – probably not the best route to wealth.

No, if you’re a farmer it’s usually going to be because you identify, in the soul, with soil, and leaves, and fruit, or vegetables – with the seasons – with nature, both the good and the bad it brings. These soulful types aren’t usually loaded with a few mill to throw down on that vineyard ranch in Santa Ynez Valley.

So what happens is people find their way to what they like or need, right? The wealthy landowner with a penchant for wine hires a vineyard management company to plant 40 acres of Cabernet. An onsite or offsite caretaking team manages the vines, aided by waves of Mexican immigrants eager for and expert at farming work. The same landowner might hire a winemaker and staff – who, usually, will have studied enology, worked in low-wage jobs as a cellar worker, assistant winemaker, and so on, barely able to pay the bills but happy doing it – yet still, far from capable of affording that vineyard estate herself. It’s magic in its own way: the landowner has a pretty vineyard and enjoys fine wines made from his land; the farming types farm, the winemaking types make wine, and there you have it, a microsociety functioning smoothly in its little circle of life.

What happened to me in this confluence of worlds was, first, a flash of inspiration on seeing Sonoma vineyard properties, a subsequent pursuit of the purchase of such lands, then later, a frustration at the affordability of such lands and a “side hobby” of farming vines and making wine, and finally, and only recently, the realization that while I do want to earn a living doing these things, it is, in fact, the function of the farming and winemaking that interest me. That I’m compatible with. That hook into my soul.

Which begs the question: Why be in real estate?

In other words, my conclusion, reached, perhaps, by necessity, was that I enjoy winemaking and farming. I’d like to start a business directly involving me in these pursuits. This costs money, like any business one launches. But why in the world would you need to buy a multimillion-dollar property to launch or run such a business?

Remember, at the outset of this garagevino journey, I stated that part of my end goal in following the business model I’d devised was to eventually own that rolling vineyard ranch. But as I get closer to pulling off the launch of a winery business, I’ve realized the wisdom of the cheapest-possible business model for getting started is actually superior to that supposed end goal.

Here’s how it works: if there’s no need to buy the vineyard to get the grapes for your wine, why be in real estate? If there’s no need to buy the storefront or warehouse at which you crush your grapes and barrel-age your wine, why be in real estate that way either? If you want to farm, to spend time on that John Deere seat, here’s the thing:

Because of that great divide between landowners and those who desire to farm, you can lease the land from the wealthy landowner, and farm the land to source your grapes.

Because of a similar divide between wealthy owners of downtown warehouse and retail space, you can also lease a facility where you can make the wine and sell it to visiting tourists and locals alike in a retail tasting room.

Take this a step further and you can even lease the equipment that normally would cost a fortune as capital outlay in order to crush, press, and transport your wine.

You can even rent the services of a bottling truck to get your wine in the bottle, in the case, and on the pallet to be kept in the climate-controlled space you rent by the month.

In the end, here is the American fallacy of the value of ownership exposed for what it is: ownership is fine if it gives you something you want on a more or less permanent basis, but this begs the question, What is it you truly want?

And in my case, it’s the function of farming the grapes and making the wine.

So if I can lease a space in which to make the wine and find such a place in the vicinity of a “wine trail” or tourist destination where people might buy wine – for example, Santa Barbara – then for the lowest possible cost, I can operate a business that matches the function of what I care about doing.

If I can also lease vineyards on which to farm the grapes I use to make the wine, then I’m performing the function of farming for the least possible cost within the framework of the overall winery business that empowers the farming and winemaking functions as ways of making a living.

This writerly, convoluted essay can ultimately be summed up a little more simply: I realized I can farm vineyards and make wine without ever buying anything immensely expensive. And since those are the functions I like performing, well, that’s what I plan to do. Do I need some money to get going? Sure. Are there ways of making wine and selling it at someone else’s winery, where you work in your day job, and therefore the business model gets even cheaper to launch? Yes. Can you, in that scenario, trade labor for grapes or barrel space or tasting room shelfspace? Yes. Do I personally have an opportunity for enough moolah to be made in a “day job” out of the wine industry that allows me to launch this business along these lines, while I spend what is the appropriate amount of “learning launch” time at night and on weekends to make first a modest amount of wine, then a more commercially functionable amount, buying the grapes then leasing and farming the vineyards from which I source them, until at the point it is a living, and I am not yet of retirement age, I will then have transitioned to adopting the functions that tie into my soul?

Hell, yes.

So that’s what I’m up to between now and either harvest 2009 or 2010. Smart strategy or no, these things take time to find, to lease, and to get permitted.

Little help from some fellow farm-and-winery “functioners,” and with any luck I can pull it off.

Trawling the Web for wine business knowledge as is my usual late-night habit, I stumbled across an article on a guy who may as well be my twin. Not in appearance, mind you (though another handsome devil be he), but in regard to the obsession with winery-startup aspirations Ira Kreft is his name and he’s taken UC Davis online classes, worked as a harvest slave, and made a little wine in his garage. All that’s missing for full twinship status is a two-year debate on whether to relocate from back east (he’s in Michigan, I was in Connecticut) to California for easier access to grapes and wine-tasting-trail buyers:

Wines & Vines Article

Best of luck, Ira – I can certainly confirm you’re doing all the right things, or at least I can confirm that you’re doing it about the way I am, which had better be the right way!

My only suggestion based on what’s covered in the story is that Ira’s notion of needing $750K in investment capital is potentially on the high side, depending on the business model he’s looking to pursue for that 5,000-case winery he mentions. Probably only need that much if you are in fact buying the vineyard…in which case you’d need more than that to buy the appropriate land in California. Perhaps in Michigan that would do the trick, and perhaps he’ll need to plant some grapes to assure himself of high-quality fruit in an emerging winegrowing state.

I believe I’ve settled my internal debate on whether to “go pro” for the 2008 harvest season. My musings conclude with a question: Why must the hobby and profession of winemaking be mutually exclusive?

It seems I have been caught in a false debate. Outside of the issue of cost, what’s the problem with doing both? Why drum up a false conflict? As the James Bond philosophy goes, you only live twice, so why not do what you can while you can? Why not start a winemaking & wineselling business — or as defined in my opening blog of this website, a winery, since a winery is a real, whether virtual or not, right? — why not get a winery launched now for a six thousand bucks when, in the course of your adventure, you’ve determined it to be all but impossible to start a regular old winery for less than $6 million?

Living in a coastal community in California, I see all of my neighbors spending a thousand bucks or more on a regular basis on recreation equipment. Surfboards, specialized paddle surfboards, high-end mountain bikes, kite-surfing gear, hang gliders. After learning all I’ve learned it in a mere eight months of the garagevino trek, why not drop a few grand into a business, most of which will just come off my taxes as a loss anyway, and throw in some hobby money to upgrade my home winemaking effort to continue that as well?

The answer to these questions is obvious. I suppose I merely had to allow time to have its effect — for the idea of “going pro” to feel like a natural move. When I conceived of the idea of launching a fully-licensed operation this fall it was a kind of declaration and maybe didn’t feel organic; now it does. And in a pursuit that requires two to three years to make the product, let alone grow the source that goes into the making of it – why not get started if you can afford to do it?

You only live twice.

Being a contrarian as well as a fan of superbly made single varietal Merlot, I am hoping that the owner of an organically farmed Merlot vineyard in Sonoma Valley, which I encountered by chance (and Google) will still extend to me the opportunity to procure a ton of his fruit this fall. With that Merlot I can enter into an alternating proprietorship business with the Terravant facility in the Santa Ynez Valley. Following the logic I’ve described in prior entries, for 1200 bucks or so — really no more than it would cost me to obtain a custom crush permit — I can become a retail winery. Albeit virtually or cohabitationally located.

I can then enjoy the decision on what grapes to use for crafting the 2008 garage vintage. I have the Zinfandel tradition going already and have the opportunity, if all goes as planned, to get some Sonoma Valley old-vine Zinfandel along with my Merlot. Or I might continue with some Paso Robles Zin, which is coming along nicely in my garage as we speak. But whether or not I do the Zinfandel thing, I’m certainly going to want to try something else, so maybe Sangiovese, or perhaps there’s a Syrah waiting for me in Santa Barbara County…although ideally, and this is really what I should do because it’s my passion along with Merlot, is Nebbiolo.

That’s the plan for now: commercial vineyard-designate 100% Sonoma Valley Merlot, maybe some more Zin, and hopefully my first batch of Nebbiolo in the garage.

So if you’re following along you know I’ve decided to “go pro” for the 2008 harvest — one way or the other I’ve set out to make wine commercially by the end of this year.

The options as I see them for “going pro” include the following “training camps” on the way to my “rookie season”: 1) Custom Crush; 2) Alternating Proprietorship; 3) Lease/Purchase of a Winery without Vineyards; 4) Acquisition of an Existing Winery Estate and Brand. I spelled out the merits and drawbacks of each of these scenarios in my last post. Got some input from a wise winemaker friend on these points too (see the comments section at the end of the last post), including some sage advice on the topic of bringing partners to the table. This kind of echoes my own natural inclinations: I prefer not to answer to anybody but myself, being the bullheaded, stubborn, cynical writer type that I be. Which may speak to the merits of the update below, as I forge ahead as an aspiring professional wine dude.

THE DUAL CALL

My ideal choice in this set of options is my usual ambitious leap. Ideally, I assemble the bucks and acquire an existing winery I can immediately step in and run, top to bottom, bringing to bear my business experience and budding (though very young) winemaking and viticulture skills to the table as I turn a semisuccesful, 1,000-to-2,000-case operation into a full-fledged estate winery success story with a nice 5,000+ case clientele. This is where I want to be anyway, in that 2,000-5,000 case realm, and to be in the winery and out on the vineyard doing it all, with help from expert consultants and the appropriate staff, of course, as needed. I confessed from the outset that I’m not beginning with the industry-standard “large fortune,” but that I do in fact aspire to owning the whole package as my playground (and successful business enterprise) — winery, vineyard, tasting room, maybe a bed & breakfast on the property, a place people come to as a destination, where they pull in the flavors of the wine country life and remember their time there with the case of wine they bring home and keep in the cellar. Pulling a bottle out from time to time, of course.

I’ve even found the winery I’d like to acquire — in Paso Robles, a two-hour jaunt up U.S. 101 from my home, making for various possibilities on commuting, spending part of each week up at the winery, etc.

There are, however, a number of considerations involved with this ideal. Just to drag the analogy out, this concept doesn’t just involve “going pro” — it involves buying the franchise and installing myself in the starting lineup as point guard. (As a 5’-10” hoops junkie my fantasy was always to buy an NBA team and start myself for one game just to say I’d played pro ball…so I guess I’ve taken the fantasy and turned it into a business model for getting into the winery business right at the top.)

Anyway, the considerations are many: determining the value of the winery and a wise purchase price; determining the dedication of the wine club clientele and how loyal they’d remain under a change of ownership; how much more costly the winemaking effort would be for a rookie like me in that I’d need to bring in a winemaking consultant or advisor; what the real potential and strategy would be for growth; and of course the issue of investor partners. Unless I decide against buying a nice home in which to live, I’m not going to finance the whole purchase of an existing, profitable winery on my own. A vineyard maybe; a winery building and site; but when you start tacking on the winery business, an existing wine club or distribution channels, and so on, the pricetag becomes high enough to require some investors be brought to my winemaking table.

So here’s where I come out.

I would like to pursue the winery-acquisition option. I become a winery owner and vigneron immediately by going this route. And I am never one to shy away from coming in confident and up toward the top of the heap. The challenges and pressure are greater, but if you believe in your passion and skill and work ethic, you know you’ll make it work.

However, it is a long road to reach the point of closing the deal…particularly when fund-raising is required. Among the tasks at hand? Writing a business plan (I’ve got a draft but it could use some more glitz), sorting through acquisition terms, due diligence on the books, business, and property, approaching investors, nailing down their investment dollars, lawyers for the private-placement fund-raising technicalities, the recruiting of advisors, consultants, staff, and so on, and so on. At any stage in this process, I may decide I don’t like the deal, I don’t like an investor, not enough money might be raised, a competing buyer might step in — you name it.

So the last thing I want is to wind up investing nine months of my life in the potential deal, deciding against it, and looking at another harvest where I’m left with only the home/garage winemaking option since the permits and so on were not in place.

Therefore the first thing I’ve decided to do is to launch OPTION ONE:

THE CUSTOM CRUSH.

See, regardless of whatever else happens, if I get my federal, state, and county/local “wholesale wine/beer sales” permits in place, I will be street-legal when it comes to purchasing some grapes and entering into a custom-crush winemaking contract with a winery facility in the area. If I get the approvals nailed down, I will guarantee that I “go pro” this coming harvest season — I’ll have the chance to make wine professionally no matter what else comes to fruition, or falls through.

Not that the Custom Crush option isn’t a great one in its own right, but by deploying that option as my first and main step in “going pro,” I leave myself open to all the other possibilities as well. For instance, I may find an opportunity, at the right custom-crush facility, to accelerate the plan and advance to the Alternating Proprietorship business model even before buying my grapes and making my 2008 vintage. Or perhaps the acquisition deal moves along and goes through, and my wholesale permits become unnecessary.

By my understanding of things, four main tiers of permitting are required as part of any commercial custom-crush contract with a winery facility.

Tier One: First, there’s the federal license, called the “Basic Permit,” a permit granted by the TTB (the Alcohol and Tobbaco Tax and Trade Bureau) allowing you to purchase domestic or imported wine and/or beer at wholesale for reselling, also at wholesale. From a custom crush standpoint, the way this works, technically speaking, is that you are obtaining a wholesaler’s permit so that you can buy the finished wine from the custom crush winery, then resell it to retailers or wholesalers (under your label if you wish, and if you get your label approved) but not directly to the consumer.

Tier One Progress: This week, I filled my application out (you can find instructions, contact info, and forms at the TTB Website) and mailed it in. I had previously spoken with the very helpful folks at the TTB offices, in Cincinnati; they basically have a package of forms and instructions geared toward the custom-crush crowd. It’s all pretty self-explanatory. Things begin to get a little more complicated when you want to sell your wine at the retail level; not sure that you absolutely need to own a winery bond or the equivalent of a liquor or “package” store, but that’s pretty much the requirement. I figure I can cross the retail-sales bridge when I come to it — getting set up to make the wine commercially and be allowed to sell it wholesale is a great first step.

Tier Two: The second main tier of licensing is at the state level — in my case, it’s with the California Department of Alcoholic Beverage Control, also known as ABC. The paperwork is a bit more intense for this tier. But once again I’ve found the staff in the permitting offices to be highly helpful, and with a couple of calls I pretty much figured out where I need to be. In my case — lacking any retail/tasting room storefront and seeking only to get papered up at the wholesaler’s level to start with — I was told today by the Ventura office of ABC (handling Ventura and South Santa Barbara Counties) that what I need is a “17/20 Combination” permit. This refers to the sole-owner, non-warehousing, “off-sale” (e.g., non-retail) wine and/or beer sales permit boxes checked off during the overall ABC application process. There is also the “14,” or warehousing-location piece of the permit, dictating and licensing where the wine will be stored, which is generally a permit held by the custom crush facility you are contracting with (if that’s where you’re storing your wine, and possibly shipping it from, once it’s made). So I will need to submit a combination of forms relating to my office address (read: home) (read: garage), sources of funding, personal information, bank accounts, and so on.

While alcohol is, technically, a controlled substance, one begins to wonder how anyone with less than a PhD in form-filling-out has ever started a business around here. I think a great deal of the complicating factors are simply remnants of Prohibition policies — back then, at the point spirits, wine and beer became legal, the government wanted to keep any criminal element out of the industry…they probably still do, but I think the point back then was to keep anyone who’d been bootlegging out of the legitimate alcohol industry.

Tier Two Progress: I filled out the relevant forms in pencil and learned that the permit issued actually includes a license for the addresses of your office, bonded winery facility, and storage location — meaning I need to determine which custom crush facility I am using and place their address and related information on my permit application. Haven’t decided that yet — but this will prompt me to nail down that decision in the next month or so. Want to make sure I’m way out ahead with my permits and can focus instead on the important thing: the fruit I’m going to use for the wine. This brings me to…

Tier Three: Entering into a contract with a custom crush facility. This involves, technically speaking again, your entity entering into a wholesale wine-purchase contract involving “custom” crush/winemaking choices, with their grapes or yours. Once the crush takes place and the wine is made, you take possession of it and generally utilize the custom crush facility’s (or another facility’s) storage for your barrels/tanks/cases of wine (under their “14” wine-storage location permit, I assume).

Making the Custom-Crusher Call: Because of all the help he’s given me, I would like to use Nicholas Miller’s Central Coast Wine Services in Santa Maria, but they have a 2-ton or 3-ton minimum, depending, and it’s apparently their Paso Robles Wine Services facility that handles the smaller lots more effectively anyway. My intention is to start small and keep all costs to a total of $10k or so for at least 100 cases of wine, made in smaller lots than that. So tops on my list, if they are operational in time, is Terravant, where the orientation will be toward small-lot winemakers such as myself. Plus it is located in Buellton, a mere 40 minutes from here. Maybe Nick Miller will be able to be flexible for my small lots — and there is also the possibility of working with a Santa Barbara County winery where the owners do a bit of custom-crushing business on the side as well. I understand there are a few of these in Lompoc.

Tier Four: Ultimately you’ll need brand and label approval — another bridge I will cross when I get to it, unless ABC or TTB require submission of brand names and/or labels as part of the initial permit process, which I do not think they do. I intend to come up with some ideas, float them out to the readers of Garagevino.com, and solicit ideas as well, maybe hold a “win a case of my first professional wine” kind of contest to anyone who devises a name that I wind up going with. At this point my company name is The Staeger Wine Company and I’ve got a couple ideas for the wine-brand name and will hit that later.

THE WINE ITSELF (AKA THE GRAPES TO BE CRUSHED)

My notion, at this point, is to make two or three 50-case lots of wine. First would be Zinfandel. I am hoping, after our cool bit of correspondence, to shoot for some awesome fruit from Sonoma Valley via Morgan Twain-Peterson and his Bedrock Vineyard; depending on how the 2007 vintage continues to come along in my garage, I may also make some from Mike Prowse’s Creston Hills Vineyard, in Paso Robles, again.

Second, I would love to make what I love to drink, and two of the three wines I’ve enjoyed the most were the Matanzas Creek and Freemark Abbey Merlots. I’d like to make a supremely rich, complex, edgy, almost Santa Barbara County Syrah-ish Merlot, and possibly blend it with a bit of Cabernet…my own version of a Bordeaux, minus the Cab Franc. Perhaps, in the spirit of the havoc Sideways wreaked on the Merlot marketplace, I can unofficially call this lot of wine “Fuck Miles Merlot.” Be cool to call it that officially. Yeah right, says the TTB. I wonder though… could F#&! Miles Merlot work? We’ll see.

Third would be my other favorite wine — that being a 2000 Pia Cesaro Barolo (I think I have the name right). Anyway I enjoyed it in 2005 and it was something — complex and sharp and crisp and, by then, already quite drinkable. Nebbiolo is the fruit behind Barolo, and it hasn’t been done particularly well, and certainly not on a widescale basis here. I intend to try it and make it well.

The fourth possibility is a Sangiovese — I love a great Chianti; Chianti is actually a blend of Sangiovese and, depending on your moment in history, differing percentages of a couple different other grapes. I just read that some Chiantis are now made of a Sangiovese and Cabernet Sauvignon blend, up to 10-15% Cab — something like that is the way I’d like to make my Sangiovese in the long run; first “pro” year out, maybe I’ll just stick to the 100% Sangiovese.

Thus ends my lengthy essay on the garagevino strategy focus in the quest to “go pro” this year. More ramblings soon, including the update on my idea for the winery acquisition — but, for now, I’ve got the permit-application process underway for the licenses I’ll need in order to custom-crush as much as a hundred and fifty cases of wine this fall…as a legitimate (or, more accurately put, illegitimate) wine pro!

You know that sensation that strikes while you’re on vacation, when you reach, with fierce solidity, some sort of realization? Maybe it’s the idle time; or, in my case with vacations, the 24-hour-a-day immersion in the lives of 6-, 4-, and 1-year-olds. In fact I have known some people who experience the same sort of crystal-clear realization while in prison — so maybe it’s just the isolation factor.

But one way or another, I seem to have drawn a number of my “life conclusions” while on the beach, on a jog in some tropical clime, or while otherwise escaping from the routine of everyday life.

And this holiday vacation was no different.

This time, I realized with a concreteness that the time has come for me to just do it: it’s time to proceed with my quest to own and run a winery and vineyard.

See, over the past few months, while expanding my experience as harvest slave and garage Zin-maker (and simultaneously revising a highly challenging third novel), I’ve been considering the numerous means by which I might accomplish my goal of “going pro” as a winemaker (and, ideally and eventually, vigneron, i.e., winegrape grower and winemaker in one). Each angle has its merits; each, its pitfalls. I’ve also held an internal debate, which I assume to be common among people pushing into a new field at my age: Do I keep this passion relegated to amateur, “hobby” status? Am I too entrenched in my other career(s) to “go pro”? And even if I pursue this passion as a small business owner, do I focus primarily on another, “A” career to pay the bills until the business gets rolling?

What happened in my moment of Vacation Enlightenment was that I figured out the answer to these things. The way I see it now, like that ex-con who’s seen Allah before his release, is that there’s no more debate — only strategy. It’s kind of like a candidate accepting the nomination from his party: with all those issues raised during the debates in mind, it’s time to move ahead with the chosen platform.

It’s time to get this winery of mine out of R&D and onto the production line.

With that decided, allow me to set the table. Here are the strategies under review — the ideas subject to my internal debate these past few months. Wrapped within these options are various money-making and cost-factor components — whether a living can be made, how long it will take to get there if so, how my other money-making pursuits can or will need to figure into the equation of each option.

By the way, I am accepting all votes and advice — send me a comment or drop me an email or phone call if you’ve got opinions (yes, Mom, even you). Here are the strategies I’ve been considering for “going pro”…One way or the other, it is time to get moving, so it’s time to pick, and here are the choices as I see them.

GOING PRO, OPTION 1A: CUSTOM CRUSH

This is of course the strategy I set out to attempt in September but didn’t yet have the paperwork, permits, or grower relationships in place as harvest arrived.

Short version: obtain a wholesale wineselling license, then contract with a winery to “borrow/lease” that winery’s winemaking bond to make your wine at their facility for a fee.

Merits: From an overall cost perspective, this is the cheapest model. No real estate costs, no capital equipment costs, no employees, and less paperwork to worry about than any other option. Through the custom crush facility, you can often get access to better grapes than you might find, going cold turkey, trying to buy fruit on your own as a new winemaker.

Drawbacks: Technically you’re a wholesale distributor under this plan, with no right or facilities to sell your wine at the retail level, even online. So you’re selling to restaurants and stores rather than the consumer (unless you enter into some creative form of partnership with a retailer). You have less control over the winemaking process than with the other options below. Per-bottle, your production costs are very high if you’re making small lots of wine.

Notes on “Going Pro”: No way of turning a profit for at least 2-3 years (since I’ll be making red wine that needs sufficient aging time), so “going pro” in this case requires a “day job” for at least 5 years to fund the business; theoretically, the more wine you custom-crush, the faster you could profit from it (provided you can sell the wine), but the more you make under this model, the less sense it makes from a per-bottle cost-effectiveness standpoint.

Bottom line: This is a way to start making and selling wine professionally but does not yield a career or living to begin with.

GOING PRO, OPTION 1B: ALTERNATING PROPRIETORSHIP

Short version: An evolved version of the custom crush. Instead of obtaining a wholesale wineselling license and “leasing” the winery bond from a custom-crush winery, you actually own a percentage of a winery bond at an existing winemaking facility. A number of such “proprietors” make their wine alongside each other in a facility- and equipment-sharing arrangement.

Merits: You’re actually a winery in this equation, so depending on state and local regulations in the region you’re operating, you are permitted to sell your wine at both the wholesale and retail level. You are the winemaker, so while you’re using someone else’s facilities, you have more control, since you’re making the wine yourself rather than providing instructions to the custom crush winery on how to make the wine for you. Costs are still relatively low since you are not purchasing land or an entire winery. Good relationships develop between the winemakers in the rotation so often you’re gaining great wisdom by way of proximity.

Drawbacks: The overall cost is higher and the licensing and reporting processes are more intense. Despite the increased cost you do not have an opportunity to set up a tasting room without a separate purchase or lease because you do not own any real estate allowing for the tasting room.

Notes on “Going Pro”: I could make better wine this way (vs. the custom crush model) and have a greater opportunity to sell the wine for more money (because of the retail allowance via ownership of a winery bond). However, the timetable is the same as under the custom crush model and the costs, overall, are higher. So it requires both more money from a “day job” and more time since you are overseeing more facets of the operation you’re doing “on the side” as compared to the custom crush model.

Bottom line: Probably a smarter, more sound strategy for making wine professionally and for-a-profit than the custom-crush model, but possibly overwhelming top-to-bottom, since it isn’t and can’t be a career change until a profit is realized — and to run a winemaking operation at this level while working a “day job” that would fund its higher operating costs might become onerous on both sides of the equation.

GOING PRO, OPTION 2: LEASE OR BUY A WINERY/TASTING ROOM FACILITY (BUT NO VINEYARDS)

Short version: Jaffurs Wine Cellars, Whitcraft Winery, a half-dozen others in Santa Barbara, and countless other wine labels elsewhere operate in this manner. Whether in an urban setting or out in a winegrowing valley somewhere, the idea is to buy or lease a tasting room, crush pad, and winery building in which you can make, store, and sell your wine. You source the grapes from elsewhere, buying from growers and regions of your choice.

Merits: While its costs resemble that of any production-based business, this is ultimately the most cost-efficient model since it entails obtaining a winery bond, full control of the winemaking at your own facility, and a retail sales location all in one — without the mortgage expense of many acres of land in a premium wine region. Another plus is that you are not restricted to any particular varietal, vineyard, or region: you can choose the best fruit your relationships, money, or luck can find, and change plans whenever you need to (for instance, you’re making Syrah for two years and the market for Merlot picks up while Syrah’s sales turn to shit — no problem; start buying Merlot and cancel your Syrah contracts).

Drawbacks: Expensive — to the tune of a $2 million investment in any place where you’ve got retail wine-buying traffic. Access to fruit will depend on relationships and luck; it can be very competitive and expensive to get your hands on the best Syrah or Pinot Noir, for instance, from Santa Barbara county.

Notes on “Going Pro”: Basically a step beyond the alternating-proprietorship model in both potential as well as cost — and time commitment. To the point where I’d say that I’d need to raise the funding. The question then arises as to whether raising the money to fund a $2 million new-business launch is feasible when that same timetable of 2-3 years at a minimum exists before revenues flow in.

Bottom line: A good business model, but, out of the gates, if I am going to raise the money from a pool of investors, it would be more responsible and attractive to recommend a business to my investors where there is existing cash flow or a forecast of profits within a shorter window of time. If I am going to fund and own my winery business entirely on my own, this option feels like the sort I would set up only after establishing a brand, and sales numbers, through either the custom-crush or alternating-proprietor options. (Precisely the chronology followed successfully by Craig Jaffurs, as well as a few other wineries operating under this business model.)

GOING PRO, OPTION 3: ACQUIRING AN EXISTING WINERY

Short version: Just like it sounds.

Merits: Depending on the winery, there would be an existing brand, distribution channels (tasting room, wine club, wholesale distributor, etc.), all winemaking equipment and facilities. Theoretically, the business would be capable of functioning on a turnkey basis and generating a profit right out of the gates. Depending on the winery and its numbers, there could be considerable appeal to investors.

Drawbacks: Entry cost requires investors. Existing brand could be great, or could be problematic. Depending on winery, its property/facilities, and cost, this model might be less cost-effective than the eventual version of the winery-without-vineyards scenario.

Notes on “Going Pro”: Find the right winery property with existing or potential profits, raise the funds from investors, and you’ve got the opportunity to run the business and winemaking efforts of a winery, either as a salaried employee or shareholder or both.

Bottom line: Great move if the right opportunity exists and I can find investors ready to jump into the wine industry on my shoulders.

GOING PRO, OPTION 4: ASSISTANT WINEMAKER BY DAY, NOVELIST AND SMALL-LOT WINEMAKER BY NIGHT

Short version: Utilize my out-of-industry business talents, emerging-winemaker skills, and highly compelling charm and charisma to land an apprentice- or assistant-winemaker position with a small to medium-sized winery. I continue to write and make wine under one of the above scenarios (probably a version of the custom-crush scenario) by night…or by early-morning, or occasional free weekend day…

Merits: Provides a means of continuing to do something I love while contributing to earning a living, and potentially facilitating some of the custom-crush sort of options above. While it might take longer to get to Robert Mondavi status this way than through one of the other options, I would be learning on someone else’s dime, and the access to the industry a “real” position like this would provide could cut costs and corners in my quest to get to vigneron-entrepreneur status.

Drawbacks: Writing novels and making small lots of wine professionally on the side while working full time for another winery could be spiritually rewarding but might be taxing, time-commitment-wise. Whereas raising the funds to acquire an existing winery and combining two of my three career tracks into one might be more realistic…or continuing to focus my money-making efforts in the fields where I already do pretty well while launching a small-lot winery business on the side, via one of the custom-crush-type options.

Notes on “Going Pro”: This would probably be a do-what-you-like kind of decision rather than a get-paid-enough choice. Not every employer is ready to take a leap of faith in the six-figures salary range on somebody with a great track record in another industry, so I’d probably be faced with opportunity cost here: I would most likely make one-quarter or less of what I’d make by continuing to do the things I already do “by day.” Would I enjoy it enough so I wouldn’t care, on the path to earning what I hope to before long as a vigneron-entrepreneur? That is the question if this option is on the table. Of course I don’t want to work for “every employer” anyway — perhaps the right winery owner would see the benefit of bringing an entertainment-industry exec with a fledgling winemaking pedigree and a few published novels to his name aboard as a strategic member of his staff, and reward him accordingly, after all.

And thus sums up the options I’ve had under consideration. There are, of course, variations, such as making my own label of wine under the bond of another winery owner, who then sells my label alongside his in his own tasting room, handing me a cut of the sales of my wine (allowing for retail sales under the custom-crush scenario). And a few other notions as well, either as alternatives unto themselves, or means of bridging the gap between options.

So, to the point:

AND THE WINNER IS…

Well…I’ll get to that in my next post.

Taking a quick break from the saga of my 2007 home-vintage Zinfandel, I thought it prudent to post a couple of great photos Craig Jaffurs sent at the tail end of harvest at his winery.

This first was taken of me during some intense destemming work at Jaffurs on a heavy Syrah-delivery day…a photo that pretty much encapsulates all that my apprenticeship has been about: grape skins, juice, fatigue, thrill, and grins.

The second is a suitable replacement for the utter-crap, out-of-focus shot I snapped of Craig, Dave, and Matt inside the winery (no need for you to scroll down if you haven’t seen my bad picture). It was all I had, so I posted it. This, however, is more of an official shot of the Jaffurs Wine Cellars 2007 Harvest Crew.

From left to right, Nick, Dave, Matt, Chris, Craig, Larry, and yours truly.

Next: back to the Zin-making adventure, with inoculation and fermentation on deck.