TO INCUBATE, OR NOT BY WADE WOLFE THURSTON WOLFE WINERY

Why are you starting a winery? Primary occupation – professional winemaker? Second vocation (midlife crisis)? Lifestyle change? Retirement? Grower going for the profit (or recognition)

Previous winemaking experience? None Home winemaking Interned at a winery Course work and/or degree in fermentation science Professional winemaker

More considerations: winery staffing Who will be the winemaker? Who will be the viticulturist? Who will be sales person? Retail Wholesale Who will do the accounting and reports?

Grape Sourcing Estate Vineyard? Purchased grapes? What appellation(s)? Grape contracts?

So do you really want to start a winery?

What is a winery incubator? Assume leased bonded production and warehouse facility with or w/o retail Rent a suite/building not designed to be a winery From a private business From a Port district Rent space/suite/building designed to be a winery Single bonded entity Multiple bonded entity – alternating premise (AP)

Potential advantages of incubator - 1 Lower capital investment for building – expense costs Low(er) rent costs Port lease Warehouse lease Winery incubator lease

Potential advantages of incubator - 2 Lower capital investment for equipment Purchased equipment Purchase used Purchase small and scale up with production Shared equipment – winery incubator Alternating premise Share or borrow communal equipment as need

Potential advantages of incubator - 3 Retail benefits if in winery ‘cluster’ Better access to public Metropolitan area Near freeway exits Build brand with low(er) overhead

Potential advantages of incubator - 4 Avoid need to custom crush to reduce overhead Invest in building & equipment after positive cash flow More regulatory flexibility than: Virtual winery Alternating premise

Potential disadvantages of non- winery incubator - 1 Not designed as winery - mechanical Drainage problems Floors not sloped Inadequate or no drains Poor forklift accessibility Small doorways Wrong exterior pavement or interior flooring Inadequate turnaround space or clearance

Potential disadvantages of non- winery incubator - 2 Solid waste disposal issues Garbage service or truck out to vineyard Low ceilings (tanks and storage) Inadequate CO2 ventilation

Potential disadvantages of non- winery incubator - 3 Inadequate weight bearing floors Inadequate AC and/or humidity control Inadequate refrigeration Inadequate space Costs to remodel to improve above

Potential disadvantages of incubator - 4 Not designed as winery – esthetics Not inviting – Exterior: Looks like a strip mall or warehouse or barracks Interior: Retail space not inviting Costs to improve both Inadequate access and/or parking Not in country or near vineyards

Potential disadvantages of incubator - 5 Legal Must bond with Feds and State Lease agreement & duration

Thank you. Questions?