Feel the Heat
Opportunity: Wine
Whether sealed with a cork or a screw cap, consumers can't get the tops off wine bottles fast enough. Continuing in its popularity, wine has gone mainstream and is being sipped, savored and outright guzzled at such a rate that by 2010, the U.S. could actually uproot France from its perennial seat as the world's largest wine consumer, according to the Wine Market Council.
The explosion of the culinary category and the employment of more effective marketing strategies have made the wine market fruitful and the opportunities ripe, says wine consultant Michael Green. And the rise in direct-to-consumer wine sales and online sales is also creating buzz. Says Deborah Brenner, author of Women of the Vine, "There are many opportunities for entrepreneurs to get involved by providing necessary tools for wineries, such as shipping and fulfillment centers, software tools, e-commerce tools, etc."
Cameron Hughes, 36, founded San Francisco-based wine-trading company Cameron Hughes Wine in 2001. By buying small lots of wine in bulk from high-end producers, eliminating middlemen, cutting his own costs (he doesn't own a single tank or barrel) and selling to Costco Wholesale Corp., Hughes has been able to stake his spot in the flourishing $10 to $15 bottle category and will grow sales to a projected $20 million by this June. Wine might be enticing enough to draw customers on its own, but to ensure your business gets off to a smooth start, check out these pointers:
- Evaluate your startup capital. How much you're starting with will determine your game plan, according to Hughes. If you're not well capitalized, set your sights on higher price-point wines where you can command a higher profit margin and build a niche for yourself.
- Tap into the available resources. If you lack extensive startup capital, try turning to microcrush facilities like Crushpad and Judd's Hill, Hughes advises. "They set you up on their licensing and you can pick your vineyard, your varietal and the style of wine that you want to make," he says. "You basically come up with a recipe. They execute it, and you can help out to whatever degree you want."
- Arm yourself with experience by working in a wine shop. "Whether you do it just for a Christmas season or a few hours each week, there will not be a better way to experience a wide range of wine selections in a short period of time," says Green. "Perhaps equally, if not more, important is [the opportunity] to get to the end user. What are their questions? What are their concerns? Why is the average consumer still completely intimidated by wine?"
- Get educated. It doesn't take a lot of effort to start learning about the industry. Green recommends subscribing to monthly wine magazines. This will give you insight into the trends in wine and might even open the door to a new entrepreneurial opportunity, he says.
- Learn by taste. "Grab a bottle and a corkscrew," says Green. "There's no better way to really learn about wine and its possibilities than to pour yourself a glass."
Wine Franchises:
Borvin Beverage Franchise Corp.
borvinbeverage.com
Water 2 Wine
water2wine.us
WineStyles Inc.
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