By William Vyenielo
The rewards and challenges of growing, making, and selling wine can be numerous for grape growers, winery owners, and executives.
At every stage of a winery or vineyard’s business cycle—from planning and financing to improving quality and production to brand management, sales, and distribution—there are different challenges and opportunities. Taking action and creating a comprehensive plan to address these concerns can help mitigate their adverse effects. Here are some key areas to consider:
Operational Review & Strategic Planning
Winery owners and executives who are busy tackling the day-to-day details of running a winery are left with little time and few resources to devote to organizational team structure, management and personnel capabilities, operating and accounting processes and controls. However, identifying and solving organizational problems and their related causes can improve business choices and efficiency, clarify direction, increase focus, and help assess results with an eye to the future.
Benchmarking and Assessing Performance
Determining how a company’s performance stacks up against its competition—or against its own business goals—provides valuable concrete insights into where a company leads and where it falls behind. Timely, relevant data can help vineyards and wineries stay abreast of industry trends, measure key performance indicators and use that information to leverage and improve their operations’ performance.
Brand Management & Competitive Analysis
A company’s brand is its mark of distinction—and what sets it apart from competitors. Establishing and adhering to a brand management strategy that conveys commitment to delivering a great-quality product and a memorable experience is key to building a company’s reputation and a healthy, loyal base of customers and suppliers.
Improving Wine Quality and Planning Production Volume
Wine quality and production volume goals can collide when a company is trying to grow, cut costs or boost cash flow. It’s important to have wine quality and production volume goals that are in sync and—should either need adjusting—work to develop an enhancement program based on a strategic plan and long-term goals.
Systems Assessment and Integration
Technology is changing, rapidly. Many wineries and vineyards are demanding more than their current software programs can deliver. Businesses can reduce worry by breaking down what they’re looking for based on a company’s size, structure and long-term plans. Business intelligence systems, such as Adaptive Insights, can pull and integrate data from existing accounting, sales, and production systems to deliver a 360-degree view of a company’s performance and provide the ability to look forward and estimate grape and barrel requirements, financing, and personnel needs. Employing an integrated system can save costs and help wineries gain a competitive edge.
Securing Financing
To secure financing, owners and executives need to assess financing requirements and identify available sources. Then, they will have to weigh the available options with an understanding of the requirements and the information needed to apply. It’s important to compare interest rates, fees, and other associated costs to determine which financing option offers the best fit for a company’s needs.
Sustainable Business Improvements
Sustainability can drive innovation by introducing new design constraints that help optimize how key resources—energy, water, materials, and waste—are used in wine production. It can also reveal areas where innovation would pay off especially well. A suggested starting place is to assess whether there’s the potential to boost efficiency and cut costs across these resources—and whether the potential gains are worth the investment.
Production Costs and Inventory Management
Wineries and vineyards that know the true cost of growing and making wine, and that track the depletion rates of their wine into the market, are able to make better pricing, promotion, and inventory management decisions. These are all essential to managing working capital, cash flow, and debt service requirements—helping budgets stay on track.
Vineyard Development and Care
Developing and maintaining a vineyard involves an extensive commitment of time and money. Careful planning and familiarity with site assessment, regulatory hurdles and development costs, farming costs, and tax benefits are key. Developing a plan with the company’s end goal in mind—high-quality fruit and wine from a healthy, profitable vineyard—can help businesses maintain their success.
Direct-to-Consumer Sales
Direct-to-consumer (DTC) sales represent the most vital growth opportunity for many wineries. Deregulation, the internet, and evolving technologies afford a promising and sometime confusing landscape of new sales avenues and ways to directly engage prospective wine buyers. As businesses develop or expand a DTC plan, it’s important to keep in mind the scalability of the project, the systems, skills and staffing required.
Expert Editorial
by William Vyenielo, Senior Business Consultant, Wine Practice, Moss Adams
We’re Here to Help! To learn more about how to develop a plan that proactively addresses the challenges your winery faces, contact your Moss Adams professional.
William Vyenielo has worked in the wine industry for more than 25 years. He helps clients develop and manage their operations and build their brands, providing guidance on strategic business planning, sales and marketing, and winery and vineyard development. He can be reached at (707) 508-3821 or william.vyenielo@mossadams.com.
