As a wine lover ready to turn passion into profit, learning how to start a wine business lets you capitalize on a thriving market. At 14%, the US makes up the largest share of the global wine market, and as the baby boomers—who make up the largest share of wine consumers—age out of their peak purchasing years, the wine business faces an exciting challenge: finding innovative ways to engage younger consumers.
Read on to learn how to start a wine business—from choosing your model to securing funding, building your brand, and connecting with customers who share your enthusiasm for wine.
Types of wine businesses
You don’t have to make your own wine to get into the wine industry—but you certainly can. Here are six types of wine businesses, from pursuing the vineyard idyll to opening a trendy bottle shop, along with the ins and outs of each.
Winery
A vineyard refers to a parcel of land where you can grow grapes, and in some cases, process them into wine. It’s a good bet that when most people picture the wine business they think of rolling hills of sun-kissed grapevines and barrels aging quietly in dark cellars. Starting a vineyard from scratch requires both capital and patience: costs in high-demand, environmentally suitable areas, like California, can exceed $150,000 per acre.
The initial years of a fledgling vineyard focus on root development and overall vine structure. Initial harvests typically don’t take place for the first four years, with first vintages being ready for consumption a year later. This timeline means you’ll need sufficient capital to sustain operations before seeing returns—or you can accelerate by purchasing an existing vineyard.
For winery businesses, the greatest share of sales is driven by on-site tasting rooms, where people can sample your wine. The second biggest sales channel is the wine club, in which customers sign up to receive shipments of a selection of your wines on a regular cadence.
Private label wine
Private labeling is selling a product manufactured by another company under your company’s brand name. In the wine business, there are two ways to sell private label wine. The first way is to purchase grapes from a grower, make the wine with your own equipment, bottle it for aging, and then sell it. The second is to purchase finished wines from third-party vineyards and bottle them yourself.
The private label wine brand approach should be familiar to anyone who buys wine from large retailers. Think Costco’s Kirkland brand or the Charles Shaw (or “Two Buck Chuck”) at Trader Joe’s. Individuals looking to launch their own wine brand should prepare to spend time finding the right partner. That might mean an established winery to supply your grapes or a “custom crush” facility, which can help with the full spectrum of wine production, from sourcing grapes to bottling.
White label wine
A white label wine business involves purchasing bottled wine from a distributor or established vineyard and then selling it under your own wine label or brand name. This approach is all about branding and marketing. Instead of managing vines, harvest, and production, you’ll focus on building a brand that appeals to your target audience. But you’ll have little to no control over quality, so you’ll have to choose your partner winemakers carefully.
Wine bar
A wine bar pairs bottles and pours with a small food menu—it’s a perfect way to get into the wine and hospitality industry simultaneously. Customers consume their purchases on-site, which requires the appropriate licenses and safety certifications. These licensing requirements vary by state and typically take two to six months to secure, so factor this timeline into your launch planning. Some spaces, like New York City’s Parcelle and San Francisco’s Ruby Wine, double up as both wine bars and bottle shops.
Bottle shop
Bottle shops and wine stores sell a selection of wines for consumption off-site, though they may also occasionally host tastings or events with vintners, depending on what their licensing allows. Many bottle shops specialize in a specific niche, like natural wines or regional picks, and often feature shelves of wine bottles curated by an in-house sommelier.
Subscription service
There’s no shortage of quality online wine businesses out there—like Champagne and bubbles-centric The Sip—but many brick-and-mortar retail shops like Australia’s Alpha Box & Dice or Washington, DC’s Domestique, offer online subscription services or wine clubs too. Subscribers sign up to receive a curated box of bottles on a regular schedule, either shipped to their home or made available for pick-up at a physical shop. Boxes typically arrive with information about the featured wines, tasting notes, and winemaker profiles.
How to start a wine business
- Define your vision
- Conduct market research
- Write your business plan
- Secure funding
- Develop your brand
- Find a location
- Obtain licenses
- Find suppliers
- Build a website
- Market your wines
Opening a retail wine business, whether in-person or online, allows you to support winemakers you love and share your enthusiasm for the humble grape with fellow wine lovers.
No matter what type of wine business you want to start, these 10 tips will come in handy.
1. Define your vision
The first step in how to start a wine business is defining your vision. Clearly outline the style of retail wine business you would like to open, like a bottle shop, wine bar, or hybrid of the two. Will you have a space where customers can enjoy their purchases or stop by for a glass or two with snacks? Will you host winemakers for events? How will you engage with your community?
Decide, too, whether you’ll sell online. Will your product portfolio be available for purchase online? Will you host a subscription wine club for customers both near and far away? The online arm of your wine business may also include branded merchandise or supporting content like an editorial blog.
2. Conduct market research
Market research is a crucial early step in any entrepreneurial endeavor, and you should use it to prove the existence of a significant audience and target market for your particular long-term vision.
Wine market research includes customer and neighborhood demographic data, competitive analysis, understanding greater industry trends, and overall financial viability. Some of it might be painfully obvious—you might be the very first bottle shop in your area—and some of it might require more dialing in on what makes you different: if there are competing shops, how will you be different or excel where they’ve missed the mark?
Shopify has a free market research template to help organize this process.
3. Write your business plan
Your business plan will serve as an internal road map for you and your team, but it will also be a critical document for raising capital. A business plan will feature an executive summary, a company description, market research, a description of what you’ll sell, operational logistics, and financial projections that will inform how much external funding you’ll seek. Shopify’s business plan template can help you get started.
4. Secure funding
Wine shops require significant capital, which you can secure through several channels. Traditional small business loans from banks or credit unions can offer stable financing, while grants from local or federal programs may be available if your business serves a specific community or meets certain criteria. You could also consider crowdfunding, where supporters contribute in exchange for early perks or simply to support your vision. If you have connections, private investors or friends and family backers might also be willing to contribute in exchange for equity or repayment terms.
A solid business plan and a clear understanding of your startup costs will help increase your chances of securing the funding you need.
5. Develop your brand
With market validation in hand, define your brand identity. What will make customers come to you: A specific style of wine? Or a friendly atmosphere where they can chat about tasting notes and local happenings?
Your brand identity determines whether customers remember you or forget you the moment they leave. Without a clear brand, you’re just another bottle shop—with one, you’re a destination. Deciding on a brand name, designing your logo, and putting together the initial stages of your brand strategy are big pieces of this exercise.
6. Find a location
Your retail location is one of the most important aspects of your shop, with the power to make or break the success of your business. You’ll need to find a spot with adequate foot traffic. Space in established shopping districts can be pricey, but you can always aim to be near other hotspots, like popular restaurants, bookstores, or office buildings.
Neighborhood bottle shops and wine bars on quieter city streets can benefit from a steady residential customer base, but if you live somewhere where cars are ubiquitous, accessibility and density are key. Once you’ve landed on your dream location, decide whether you’ll need to find additional warehouse space for storage, ideally close by, and invest in a point of sale (POS) and inventory management solution that makes it easy to keep track of your stock and respond to customer purchasing patterns.
7. Obtain licences
Establishments that serve or sell alcohol must adhere to certain state and federal regulations, so check with your local business bureau on the exact business licenses and insurance you’ll need. In California, for example, bottle shops must have a Type 20 license, which allows for off-site consumption, and a general Alcoholic Beverage Control (ABC) license in addition to a business license, seller’s permit, signage permit, and more.
8. Find suppliers
The best independent wine shops walk a fine line between discovery and reliability: Your shop is a chance to highlight the producers and styles you love best, but it should also meet the needs of your customers.
Finding the right distributor is a big part of finding that balance. You might find success with a large national distributor with a more extensive, mainstream portfolio, or you may choose to seek out a distributor that specializes in a particular style or region, like Bobo Selections, which specializes in natural wines.
9. Build a website
Your shop’s website should provide all the necessary information visitors would need: location, hours, contact information, and a sense of what you sell. There’s no need to post a full bottle list, but be sure to use relevant keywords to set expectations.
If you plan on launching an ecommerce component to your brand, choose a website builder that supports online sales and can help facilitate fulfillment. If you plan to sell wine through your site, make sure you obtain the necessary licenses for shipping wine locally and across state lines. Shopify’s web builder provides business owners unlimited product listings (key if you plan on maintaining online listings of your wines), high-converting and seamless checkout through Shop Pay, shipping and fulfillment tools, robust analytics, access to thousands of apps, and 24/7 customer support.
10. Market your wines
Social media marketing is one of the strongest ways to attract and retain a passionate audience, both as a way to show off your space and provide insights around what you offer. Alpha Box & Dice uses vintage-leaning visuals to showcase its bottle club highlights and brick-and-mortar location. Your marketing strategy can and should include email marketing, too: Domestique uses wine club newsletters and an in-house magazine, Sans Soufre, to educate, celebrate, and geek out with its base about hard-to-find vintages, new releases, and insights on the wine industry through in-depth interviews and features.
Invest in high-quality visuals and aim for consistency, even during your renovation or opening process, to generate excitement for opening day and beyond.
How to start a wine business FAQ
How much does it cost to start a wine business? ?
The cost of opening a retail wine business can be quite high, depending on the cost of real estate where you plan on doing business, the size of the shop you’re looking to stock, and how much interior work is required. Inventory alone can be in the neighborhood of $50,000, so you should expect to raise anywhere from $200,000 to $500,000 to get things running.
How profitable is a wine business?
The profitability of a wine business like a bottle shop depends on many factors: location (where foot traffic and exposure will determine sales volume), mark-up percentages (30% is common), and various marketing costs. In some cases, a shop can be a profitable business, but only if margins are efficiently managed.
Is it hard to start a wine business?
Yes, it can be difficult to start a wine business, due to high space and inventory costs and the additional licensing and regulation requirements around alcohol sales. Operating your own business requires constant attention to sales and profit margins, which can be difficult to streamline.
How do I start my own wine business?
To start your own wine business, understand the market you’re in: is there a desire or overall need for a business like yours, and will it have a chance at a loyal customer base? Then, secure funding, a physical location, register your business and acquire required licensing, and find quality suppliers.
