With all of the market uncertainty this year, growing a winery or wine business in an ambiguous business environment can be tough. The number one tool businesses have at their disposal in growing their business and preventing collapse is managing cash flow. There are two (well really three, but we will get to that one in a later post…) ways to mange cash flow: Increase Income or Control Expenses. Here we’ll talk about the former, and identify several underutilized strategies and tools to grow gross revenue for a winery, vineyard, tasting room, or wine based business.
Not every strategy here is going to work for every business. Every business has certain assets in its purview that lend themselves to optimizing different strategies. The objective is to identify which strategies your business can implement that complement your current income streams, while also maximize your existing customer base.
Increasing income is simply what it is, increase the amount of gross revenue coming in every month into the business’s income account. This can be expressed in multiple ways such as getting more wine club members or increase the number of sales every day in the tasting room.
Underrated Additional Income Opportunities for Wineries, Tasting Rooms, and Vineyards
Strategy #1: Optimize your Wine Club
The easiest way to generate more revenue is always from your current customers and people coming into the tasting room everyday. If you don’t know your your conversion rate into the club and online, then make sure to check out a previous post on analytics. Sometimes simply asking wine club members if they’d like to add any wines to their shipment when they come in to pick up or by offering a free taste of a new release in their shipment can spark their curiosity about other offerings and create opportunities for them to access special wines.
Additionally, with the right incentives, your wine club offer will attract the wine club member and increase you in-tasting room conversion rate.
Strategy #2: Offer additional products and services in your tasting room
Sometimes businesses can get carried away with this one and have too much product for sale at checkout or in the tasting room, so as a general rule of thumb, if you have more merchandise for sale in your tasting room than wine, you’re probably doing it wrong. That being said, a modest amount of branded merchandise such as hats, shirts, vests, glassware and locally sourced products from some of your partners in the area can give your sales just the right amount of bump to boost revenue by 5-10%.
Always do things that are on brand when looking at merchandise and spend a good amount of time researching the right products. Source products that you believe in and weave that into your story line.
If you have a relationship with local farmers and beekeepers, offer things like locally made honey, jams, olive oil or nuts, if you think your avatar will be supportive of locally sourced products.
A lot of wine tasters are surprised by their wine tasting experience when they taste from proper glassware made from Reidel or Zweissel. Offering branded take home glassware as apart of your tasting experience or to new club members creates an opportunity to raise the value of each of those offerings and generate more revenue.
Strategy #3: Create a Rental House or Add Accommodations to your Vineyard
This strategy can be a little harder to execute but has been done numerous times by big brand wineries that have strong brand presence and wanted to add to their member experience. Take the Justin Vineyards offering of lodging and villas. They have multiple lodging options ranging from hotel rooms to your own villa or chateau on property. This create a wonderful sales funnel where people can come and not only stay on a beautiful property, but then join the wine club, buy wine, and spend additional money on other services on property.
Justin Vineyards Tasting Room and Lodging in Paso Robles, CA. On property is also a Michelin Star restaurant where guests and club members can dine at. From Instagram.
This strategy can be a little harder to pull off and will most likely take more work, but reaping the benefits is the great reward. Not only can you generate additional income on a monthly basis, you can add value to your property, generate a host of tax benefits, and offer more options to your club members to come and visit.
Strategy #4: Offer Premium Tours, Tastings, and Experiences
Building off the last strategy, premium experiences and tours can elevate your brand, create higher margins and profits, and bring in a higher caliber consumer to your tasting experience. This is something that does not take as much work to create, but can immediately generate new offerings to current and new clients.
Side by side
Food and Wine
Library Wines and Verticals
Estate Tours
Strategy #5: Offer services to other wineries and wine businesses
Are you a winemaker that knows how to work with specific varietals that not a lot of winemakers in your area work with? Do you have additional space on your crushpad or in your tanks this year? Can you make a case of shiners that someone else can sell? Collaboration goes a long way in the wine industry, and being able to help out another brand that is in an earlier business stage than your own can be rewarding. Finding ways to serve other wine businesses in your area will always provide value and it’ll come back to you one way or another.
Can you offer cellar space to other startup wineries in your area?
How to Implement these Income Strategies into your Business
In the end, only some of these strategies and others will be applicable to any given business. You need to assess which ones will best line up with your avatar, and current offerings of tastings and wine club experiences.
Some of these strategies will also require more capital upfront, but hopefully will be worth the investment once your consumers begin selecting your new offerings.
A great way to see if one of these strategies will work before investing a lot of capital or time into training staff is to just run tests to see if people are interested in the new offerings by creating the offering on your website or asking in person tasters if they would like the new experience or merchandise. This is a great way to lower risk and get customer feedback on your new offerings at the same time. Often if you just listen to your customers, they’ll tell you your next great income strategy.
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