Starting a Winery…

Printer Friendly, PDF & Email

There are as many reasons people wish to own a winery in British Columbia as there are wineries. Often times, the allure of “lifestyle” can drive some to invest before understanding the amount of capital, time and active work it will take not only to get your first wine released, but to continue year after year as a business.  Many find that the initial amount of capital they budgeted for runs out before the winery opens.  Many impulsively purchase a property and then seek advice on how to get started, whereas to be successful in the industry that order should be reversed. 

The information below is meant to give a better understanding of the process and its complexity, but it is not a step by step roadmap. It is not possible to explain every possible pathway a winery owner will take to get from idea to launch. Instead, this document is set up as a checklist with three stages:  Idea to Investment, Ownership to License, License to Launch. There are no definite lines between these stages, they flow into one another and overlap. They are meant to illustrate the homework that should be done before investment, the organizations that will be involved along the way and the foundation you will need to build before selling your first bottle.

Advice from wineries owners who have gone down this pathway before you includes:

  • It is going to take more money than you think
  • It is going to take more time than you think 
  • There is more paperwork than you think
  • Sales are harder than you think
  • Managing people is harder than you think
  • If you thrive on control and certainty, the wine industry may not be for you

This is not meant to scare you away. The British Columbia wine industry is always looking for new, creative-thinking, passionate people.  But we also want you to succeed, and the best way to do that is for you to better understand what you are getting into before you leap.

Stage 1: Idea to Investment

  • Have an appetite for risk. Slow sales, high competition, low margins, floods, fires and pandemics, crop diseases and sales channel barriers to entry exist and you have to be prepared for these realities.
  • Interview as many winery and vineyard owners as possible; learn about their pitfalls, capital requirements and what they wish they had known before going into the industry. 
  • Decide on a business structure—sole proprietorship, general partnership, corporation. Small Business BC can help you with choosing a structure or sign up to receive the document on business structure.
  • Develop a business plan (Business Plan Template). Be clear of what you want to do. Are you going to be a grape grower and a winery, a winery, or a winery that also sells fruit?  What size will your winery be? Are you going to purchase an existing winery, convert an existing building or build from the ground up? Are you going to be a winery with a traditional tasting room or are you going to try a less traditional model? Will your winery have other amenities like guest suites, a restaurant, event area, or host weddings? The clearer you can be about your business plan at the start, the better you will be able to forecast what you will require for funding, grapes, government regulations and staffing.
    • It is important when you are researching and writing your business plan to have initial conversations with the following organizations so that you can clarify your direction and their requirements (if applicable):
      • Agriculture Land Commission
      • Regional district
      • Local municipality 
    • Your business plan should include
      • Executive summary 
      • Market analysis
      • Company description
      • Management and organization
      • Marketing and sales management
      • Wine or wines to be made
      • Request for funding
      • Financials
  • Secure funding. Often investors in the wine industry plan for capital to fund the land purchase, planting and building a winery but forget that it generally takes 4-6 years to grow a vine, make wine and release it and another 3-5 years to gain traction as a brand. Resource: Can Your “Micro Winery” Be Profitable?
  • Do due diligence on land purchases before investing. Find out:
  • Contact Sustainable Winegrowing BC (SWBC) as a resource for planning a vineyard and building a winery in a sustainable manner.
  • Purchase the property, building or business

Stage 2: From Ownership to Licenses 

  • Choose a business name and register your business and brand name trademark
  • Register for a BC Electronic Identification (BCeID) to gain access to government services
  • Secure your online presence for social media platforms including Facebook, Instagram, Twitter and LinkedIn
  • Register for Provincial Sales Tax (PST)
  • Register for Goods and Services Tax (GST)
  • Register for Excise Tax (Form EDM2-1-1, Form EDM2-3-1, Form L63)
  • If you are going to plant a vineyard at this stage, it will take 2 years to produce a partial crop and approximately 4 years to produce a full crop.  Ordering vines from a reputable nursery, should be done the summer one year before you wish to plant in the following spring.
  • If you are going to plant your own vineyard you will pay a levy on your crop to the BC Wine and Grape Council (BCWGC)
  • Sometimes prospective wineries have the first few vintages contract manufactured while a winery building is under construction. If you are going to make wine under another winery’s license you need to enter into a contract manufacturing agreement. Contract manufacturing is when a licensed manufacturer produces bulk liquor for another licensed manufacturer.  This is permitted if the following conditions are met:
    • The manufacturer purchasing the liquor is also manufacturing liquor at its site (if you are a winery you must meet the minimum onsite production requirements)
    • The licensee that ultimately owns the product registers it with the BC Liquor Distribution Branch and keeps records showing the movement and source of bulk liquor.
    • Contract manufacturing also includes when you manufacture liquor in association with a person, who may be the owner of a liquor trademark, but does not hold a liquor license. You may manufacture liquor in this situation as long as all of the following conditions are met:
      • You own the liquor until you sell it to either the public, other establishments or to the Liquor Distribution Branch
      • You register the liquor with the BC Liquor Distribution Branch, and you conduct all sales to the public and licensees
      • You store the liquor at your establishment or at your registered offsite storage location and it is under your care and control
      • You conduct any advertising of the product (including websites)
      • You may hire the person who has requested the liquor be manufactured as a marketing representative
      • You must include your name and location on the label in a manner that clearly identifies you as the manufacturer
    • In any contracting situation, you can only manufacture the type of liquor you are licensed for (for example, breweries can only make beer). Prior to engaging in contract production agreements, you should ensure the agreements are permitted by the Liquor Distribution Branch.
  • The BC Wine Authority (BCWA) regulates certain label descriptors. If you want to use these terms on your label you will first need to have registered your vineyard before harvest with the BCWA.
  • Apply for a winery license if none exists
    • If you are building a winery, first receive approval in principal for your license from the BC Liquor and Cannabis Regulation Branch (BCLCRB) (Application).
    • If you are buying an existing building, you need approval in principal from the BCLCRB prior to modification of the building.
    • Know ahead of submitting an application for a winery license if you going to have  an site store endorsement (which also allows for selling at farmer’s markets), a lounge endorsement, a special event endorsement, or no endorsements at all. (information on endorsements). Knowing this when you apply for a new license will streamline the process which can take up to 4-6 months to approve. 
  • Apply for a winery license If you are transferring an existing winery license
  • You can make wine under your own license now.

Stage 3: From Winery license to Launch

  • If you are building or renovating, hire an architect and builder
  • Contact municipality or regional district for building permit 
  • Know your responsibilities with respect to waste discharge, composting and any specific site requirements for where you are building by contacting the British Columbia Ministry of Environment (BCMOE)
  • Construct your winery. Ensure all contractors are in good standing with their WorksafeBC premiums by asking them to provide a clearance letter
  • If you are building a tasting room that will need a septic system, contact your Regional Health Authority
  • If hiring one employee or more, you have a responsibility to know health and safety standards and employment standards in British Columbia
  • Review channels of distribution for selling your product—although this was done in your initial business plan, focus where your sales will be now that you are closer to releasing your wine. 
    • On site tasting room
    • Web sales
    • Wine club sales
    • Restaurant sales
    • Retail sales to Licensee Retail Stores (listing and locations)
    • Outside BC province sales direct to consumer (to allowable provinces)
    • Outside BC province sales through normal distribution channels 
    • Export sales 
  • Decide if you are going to hire an agency to assist in the sales your wine in British Columbia and in other provinces. As the licensee remember that you must have care and control of all sales of your product and you as the licensee are ultimately responsible for ensuring that the sales comply with the Liquor Control and Licensing Act/Regulations, Terms and Conditions Handbook and the BCLDB Agreement.
  • Decide if you will be a member of the British Columbia Wine Authority (BCWA). There are certain labelling terms that are reserved only if a winery becomes a member of the BCWA.  
  • There are regulations you must meet federally when it comes to labelling. See alcohol labeling under relevant links in the Canadian Food Inspection Agency (CFIA) website.  
  • Decide if you will be a member of Wine Growers British Columbia.
  • Decide if you will be a member of your local winery association (if applicable)
  • Make a communication and social media plan with calendars to help promote your brand before any product is released
  • Open your winery
    • If you are opening a winery that existed before:
    • Once your building receives final inspection or has completed a renovation and your main tanks and equipment have arrived:

Stage 4: Ongoing

  • Monthly, or at least quarterly, review of the difference between the actual results you achieved in that time period and the planned or budgeted results you hoped to achieve.
  • Update your business plan yearly. Your goals change from when you first opened so ensure that your plan reflects your current goals now that you are underway.  In the case of multiple owners, updating your plan can ensure that you still have a shared vision and are making decisions with that shared vision in mind. Updating your plan also allows you to adjust to changes to the marketplace, regulations and competition.
  • Recognize that as a business you are on a journey of continual improvement when it comes to:
    • grape and wine quality
    • financial analysis
    • managing employees
    • operational efficiencies
    • marketing, brand building and customer service
    • sustainability
    • innovation