The Hard Truth About Buying a Winery
Dreaming of owning a winery? You’re not alone. The romance of rows of vines under the sun, evenings in a tasting room full of happy customers, and bottles bearing your name on the label is a powerful vision. But before you dive in, it’s important to set aside the romance and take a clear-eyed look at the reality. At Northwest Wine Accounting, we’ve worked with dozens of winery owners at all stages, from starry-eyed founders to seasoned operators, and we’ve seen a pattern: the wine business is one of the hardest, riskiest, and most capital-intensive ventures you can take on.
Where the Value Really Lies
When buying an existing winery, most of the “value” in the deal isn’t in the wine business at all. It’s in the land and buildings. Often, real estate and property improvements are the true assets. Winery equipment has value, but it’s usually a fraction of the purchase price.
What surprises many buyers is how little the existing inventory may be worth. Unless the winery has a strong and growing customer base that is loyal to the brand (shown through rising sales and a healthy, expanding wine club) that wine may be very difficult to sell. Without that demand, cases in the cellar don’t translate into revenue, and the inventory ends up being more of a liability than an asset.
The Investment Timeline
Even after you purchase the property and equipment, you will likely need at least $2 million in additional operating capital to build up inventory and sustain the business while you grow your customer base. Wine inventory is expensive to produce and ties up cash for years before it generates revenue. During those years you’ll be covering farming and grape purchases, barrel aging and bottling, marketing, staffing, compliance, and all the other costs of keeping the operation moving while you wait for wine to be ready to sell.
At the same time, selling that wine is no small feat. Getting bottles onto store shelves or restaurant lists is harder than ever, since distributors want to see strong demand and often require steep discounts or marketing support. For many small wineries, the only realistic path in the beginning is direct-to-consumer sales through tasting rooms, wine clubs, and online channels. That makes your location, customer experience, and brand storytelling just as important as the wine itself.
The Profitability Mirage
Let’s say you get past those first few years. The tough truth is that even when you’re technically profitable, you may not see any free cash. Every dollar of profit usually needs to be reinvested back into building inventory. Without that reinvestment, growth stalls, and you risk running out of wine to sell in future years. A rough rule of thumb is that wineries start becoming sustainably profitable when they sell around 5,000 cases. At that point, you can choose whether to keep growing or plateau and finally start pulling cash out. Until then, expect to be reinvesting almost everything.
The Hidden Costs
The financial side is only part of the equation. Running a winery is not a passive investment, and that reality often takes a toll on families, partnerships, and personal finances. Owners quickly discover that the business demands both constant cash reinvestment and their own personal presence. Delayed cash flow, unexpected costs, and the relentless pace of seasonal work combine with long hours in the tasting room, weekend events, and endless travel to promote the brand. The business doesn’t stop at five o’clock, and it often requires your attention at the very times most people expect to rest.
Exit Strategy
One area many buyers overlook is the end game. If you buy a winery, how will you eventually get out? Unless you build a strong, profitable brand with a solid customer base, resale value rarely extends much beyond the land and equipment. In other words, without a brand that can stand on its own, the “business” portion of your investment may have little or no transferable value. Going in with a clear plan for how you might exit—whether that’s building to sell, creating a family legacy, or running the business for steady income—helps keep expectations realistic.
How to Think About It
If you’re evaluating a deal, try to separate the business of wine from the real estate investment. The land and buildings may be a sound investment on their own. The winery business, by contrast, is more like a high-risk startup that will demand years of capital, patience, and grit. Ask yourself whether you have both the resources and the timeline to see it through.
Building a Foundation for Success
Despite all of this, wineries can succeed, and succeed beautifully. But the ones that do have one thing in common: they build a strong financial and operational foundation early. That means solid business planning and strategy, professional accounting and compliance support, and smart financial operations and inventory management.
Our team at Northwest Wine Accounting specializes in helping wineries set up those systems so they’re not flying blind. We also handle the regulatory side—licensing, excise tax, shipping compliance—which is a heavy lift for new owners. While we can’t make the road easy, we can make it clearer, and that makes all the difference.
Final Word
If you’re thinking about buying a winery, go in with your eyes wide open. The dream is real, but so are the risks. The hard truth is that owning a winery will likely cost more, take longer, and be harder than you expect. But for those who are prepared and passionate, it can also be one of the most rewarding journeys you’ll ever take.
Thinking about a winery venture? We’re here to talk. Book a call with our team at Northwest Wine Accounting and let’s have an honest conversation about what it takes.
