Starting a wine brand without a winery

Two ways to make wine without owning a cellar

In a contract arrangement, an established winery makes wine to your specification and often supplies the fruit, the winemaker and the bottling. You supply the brand, the label and the market. In custom crush, you bring or buy the fruit and rent space, equipment and sometimes labour to make your own wine on another winery's site.

Both let you start with little equipment and a small first run. The trade is control. You rely on someone else's cellar, schedule and standards.

What you still own and must do

Owning a brand is more than a name. You choose the style, the fruit, the price, the label and the story. You also carry the licence responsibilities that apply to your label, the sales effort and the cash risk of unsold stock. Rules on who may hold which licence differ by country and by Indian state and they change. Ask the regulator or a licensing adviser who must be named on the label and who holds the permit.

What to put in the agreement

Put the arrangement in writing. Cover at least these points:

• Specification of the wine: fruit, style, target analysis and the sensory profile you approved.
• Quantity, price and payment dates.
• Who buys the fruit and who carries the risk of a poor vintage.
• Who owns the wine at each stage and where it is stored.
• Your right to taste, test and visit during production.
• Quality standards and what happens if a batch fails them.
• Labelling and bottling responsibilities.
• Confidentiality of your recipe and brand.
• Ending the arrangement and moving your wine or recipe to another producer.

A lawyer who knows drinks contracts is worth the fee here. A handshake is not enough when a batch holds this much of your cash.

The risks to plan for

Quality is the main one. If the winery is busy with its own wine at harvest, yours may get less attention. Visit often, taste at stages and keep samples of every lot. Another risk is dependence: if the partner changes terms or closes, your supply stops.

There is also a brand risk. If the same cellar makes similar wine for a rival, customers may not tell the difference. Make your style distinct by specifying fruit lots and a recipe that you own.

Plan an exit as well. If you need to move your wine to another producer, who owns the base wine, the fruit lots and the label files? Write the answer into the agreement before there is any dispute.

Money and cash

A contract brand carries less equipment cost than a full winery but the same cash cycle for stock. You pay for production and bottling, then wait to sell. See why ageing ties up cash. Work out your cost per bottle with the contract price, glass, closure, label, carton and freight. Our guide on cost per bottle gives the method.

Keep the minimum run realistic. A first batch that is too large for your sales will sit for months.

Building the brand itself

Without a winery to visit, the brand has to carry the story. Be honest about it. Say that the wine is made with a partner winery and name the fruit source if you can. Customers value clear facts more than a vague picture of a vineyard that does not exist.

Plan the label and name with trademark advice. Check that the name is free to use before you print. Responsible marketing rules apply to alcohol: do not aim promotion at minors and follow local advertising rules.

Think about your first customers. They may be restaurants, a club or a shop that likes small labels. A strong first ten customers teach you more than a large launch. Use them to refine the wine and the price.

When to move to your own winery

A contract brand is a good test. If sales prove demand and the partner relationship works, you can keep growing that way. If you find that your needs outgrow the partner, you can use the sales history and cash flow you have built to plan your own cellar. See starting a winery for the next questions.

Common questions

Can I sell wine under my own label without a winery?

In many places yes, through contract production, but who holds the licence and what must appear on the label varies by country and Indian state. Check with the regulator.

What is custom crush?

Renting space, equipment and often labour at another winery to make your own wine.

How do I protect my recipe?

Specify it in the contract, add a confidentiality clause and keep your own records and samples.

Is it cheaper than building a winery?

The up-front cost is usually lower. The cost per bottle may be higher. You also give up some control.