Starting a winery requires more than just grapes and a facility in which to ferment them. You need a good name, and one that hasn’t already been snagged. If you want to have your wine labels even considered, let alone approved by the Alcohol and Tobacco Tax and Trade Bureau, you need the proper licensing and permits in order to comply with local and federal regulations. You need capital, and a lot of it. An understanding of winemaking and a bit of ingenuity doesn’t hurt, either.
“For a lot of people, it’s really scary to start a business,” says Kelsey Albro Itämeri, who launched her Walla Walla Valley winery itä Wines in 2019. “It’s financially really scary and if you’re not someone who has super deep pockets to begin with, that’s terrifying.”
It can cost anywhere between several thousands to millions of dollars to open a winery, depending on a multitude of factors, such as the location, whether you also purchase a vineyard or facility, and if you plan to open a tasting room. This cost of entry keeps many could-be and would-be winemakers and winery owners from getting into the business. But across the U.S., winery incubator programs are working to change that.
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Fostering New Wineries
Like any business incubator, winery incubators are designed to nurture new wineries and help them grow and succeed, typically by providing low-cost workspace and mentorship. They sometimes operate in partnership with colleges and viticulture programs. Some also provide access to presses, tanks, and laboratory equipment as part of the lease agreement. In all cases, however, the goal is to give new winemakers a way into an often exclusive and elusive industry.
“Building a facility is capital-consuming, no matter how much money you have,” says Joel Goodwillie, the winery manager at the Southern Oregon Wine Institute at Umpqua Community College, which launched in 2010. Having an incubator space takes that out of the startup budget, and makes opening a new winery more palatable to entrepreneurs. “Another advantage of the incubator program is that you can kind of dial in your winemaking style, giving you a focus on what direction you want to go in.”
After working as a harvest intern and cellar hand at local wineries while enrolled in Walla Walla Community College’s Institute of Viticulture and Enology, Albro Itämeri was eager to open her own winery. But launching a new business so shortly after graduating came with a lot of risks. According to a study conducted in 2005 by the Washington State University Extension, total investment costs for small wineries in the state ranged from $560,894 for a 2,000-case winery to $2,339,108 for a 20,000-case winery—those costs are likely exponentially higher today. It was a big investment for the recent grad.
When Albro Itämeri learned of a vacancy opening up in one of the five buildings leased through the Port of Walla Walla’s winery incubator program, she put a business plan and proposal together. A municipal corporation responsible for fostering economic development, the Port of Walla Walla is invested in more than just the airport; they want to see the local wine industry grow as well. These standalone winery shell buildings, built near the airport between 2006 and 2008 with the help of Washington State Department of Commerce grants, are recent developments for the incubator program, which has been in operation since 2000. They’re only open to new, first-time, startup wineries and include an outside crush pad, HVAC system, bathroom, small production area, and space for a tasting room. Accepted applicants are charged below-market rent that gradually increases over a six-year period, starting at $900 per month in the first year and ending at $1,806 per month in the last.
“The design of the buildings, they are small, but that was done deliberately,” says Jennifer Skoglund, the airport manager at Port of Walla Walla. “There is a time frame. [Tenants] need to graduate within a certain time period. The goal is to get them started so they can be financially sufficient, grow their winery, and then move out into the public sector, to move to another property and grow their facility.”
Including the current tenants, there have been 17 wineries to move through the Port of Walla Walla’s incubator buildings, including successful alumni like CAVU Cellars, Adamant Cellars, Dillon Cellars, and Kontos Cellars. Only two of the tenant wineries have closed. “It has really served a need,” says Skoglund.
Similar winery incubator programs exist in California, Oregon, Idaho, Texas, and Kansas. Some, like the RD Winery incubator space in Napa, are born out of necessity. When the winery moved their operations into a 25,000-square-foot winemaking facility in 2019, they realized they had more space than they knew what to do with. “The facility is way too big for everything we need,” says Mailynh Phan, the CEO of RD Winery.
So they decided to open it up to other small wineries, cideries, and breweries. Not only has that fostered a supportive and collaborative community of producers all working to launch their own projects, but it’s helped RD Winery stay in business. “At the end of the day, it’s still very expensive to be in Napa,” says Phan. “Having these other avenues of revenue has helped us stay afloat.”
Creating Wine Communities Where They Didn’t Exist Before
Winery incubators can also play an important role in establishing new businesses in up-and-coming regions. When Tim Harless, the founder of Hat Ranch Winery, signed his lease at the University of Idaho Agribusiness Incubator in 2014, there were around 40 wineries in the state. Now there’s close to 70, several of which have gotten their start at the incubator facility.
“The quality of wines coming out of here, with multiple brands winning awards, is a testament to the importance of having this location,” says Will Wetmore, the assistant winemaker at Hat Ranch.
In Kansas, Scott Kohl, the director of the Highland Community College (HCC) Viticulture and Enology program, has watched as a local wine movement has blossomed. In 2007, HCC taught its first class on grape growing and winemaking. The interest was so great that the college then decided to begin offering degree and certification programs in 2010, which has served 162 students to date.
By 2015, they saw potential for even more growth. “We were teaching students; we were serving the industry. No one else in Kansas teaches this stuff,” says Kohl. “But we kept thinking: What can we do next? How can we help make it easier for people to start a vineyard, to start their winery?’”
At first, the idea to launch a winery incubator was a “pie in the sky” dream. Then, in 2016, the college received grants from the USDA and Kansas Department of Agriculture to purchase winery equipment that would be necessary to open the incubator one day. A few months later, the college found the perfect facility. “All of a sudden, the 20-year plan became the 20-month plan,” says Kohl. Just before the 2019 harvest, 456 Wineries opened its doors to entrepreneurs, becoming the first winery incubator to open east of the Rocky Mountains.
456 Wineries has space for up to six individual wineries, and provides up to 5,000 liters of tank space to each client, as well as winemaking equipment, a shared tasting room, and guidance during the permit application process. Two prior clients have already moved out of the incubator space to continue running wineries at their own farms.
“When starting a winery, it’s obviously important to have someone that knows how to make wine. Beyond that, the hardest part is writing a big check,” says Kohl. “You’ve got to have the building and the equipment and all the marketing that goes into it. If you don’t do the marketing, it doesn’t matter how good your wine is, because nobody knows about it. Essentially what we’re trying to do is take some of the risk out of [starting a wine business]. If it works out, great. If it doesn’t, then they haven’t spent their life savings and mortgaged the farm.”
Saving people from dumping their life savings into a business they ultimately decide isn’t one they want to run, says Goodwillie, is one of the more rewarding aspects of running the Southern Oregon incubator program. “We do have people that have success stories, who move out and run their winery in their own brick-and-mortar,” he says. “But I like the success stories where people go through and say, ‘That’s a hell of a lot of work. I don’t want to do that for the rest of my life; we dodged a bullet there.’”
For the winemakers and owners who do stay in the business, coming up through a winery incubator can play a pivotal role. If Albro Itämeri hadn’t heard about the opening in the Port of Walla Walla incubator, she says “it would have taken me a long time to get the courage to even start.”
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Shelby Vittek has written for Wine Enthusiast, Food & Wine, Bon Appétit, the Washington Post, Modern Farmer, National Geographic, Liquor.com, and Plate Magazine, among other publications. Follow her on Twitter and Instagram: @bigboldreds.