Written by Leonid Fadeev

Very often I had to observe the situation when investors started the creation of a winery without calculating the project budget. Investors simply started laying out a vineyard and designing a winery, without trying to calculate all possible costs.

As a rule, in such situations, everyone appeals by the fact that this is an image project, and not a business. But then, after a lapse of time, when the project is launched, everyone forgets about the image component, they begin to count money and save hard on everything, trying to reach at least an operational payback. And all of this because at the beginning of the project, the investor did not see the whole picture of what was happening, did not assume the high costs of creating a winery and its operational activities. I know lots of such stories.

Another scenario is also possible. The money may run out before the end of the project. The situation is worse than you can imagine. In order to understand at the start of the project how much it will cost to create and operate a winery, an important document called the “project budget” is being developed.

Just yesterday, we finished working on the creation of the budget for Marival winery (Krasnodar region, Russia), calculated until 2030 inclusive, that is, for 10 years. The period of 10 years is associated with the stages of creation and development of the Marival winery. It took us exactly 5 months to develop this document.

The long term of work on the project budget is associated with the need to obtain fundamental input data. Therefore, before calculating the budget, preparatory work is carried out in key areas: viticulture, winemaking, operational activity and marketing.

In particular, within the framework of the Marival project, the following was done: development of a wine range and defining varietal composition of the vineyard, including clones and rootstocks; development of a master plan for a land plot; defining the area of ​​the vineyard and the stages of its laying; calculation of technological operations in the vineyard; calculation of the required agricultural equipment; calculation of the creation of a vineyard base; calculation of the winery production capacity; development of wine production technology and a list of necessary technological equipment; calculation of the list of premises and areas of the winery; formation of the staffing of the winery by years, in accordance with the stages of its development; development of a marketing plan and other activities.

After receiving all the necessary data (what we produce, from what we produce it, how we produce it, where we produce it, how we market it and how we sell it), a market analysis is carried out, prices are requested for all positions, the information received is systematized and distributed in the form of expenses over the years. Without working out the issues described above, it is impossible to calculate the project budget.

The overall budget for a winery project consists of vineyard capital costs, winery capital costs, payroll, third party services, direct vineyard and wine production costs, promotion costs, depreciation, environmental safety and taxes.

The winery project budget is a voluminous and most important document, the data of which will be used to draw up a business plan, including for calculating the payback period of the project.

LEONID FADEEV, Stage 2 MW Student, WSET / IWSC “The Future 50” winner, Weinakademiker, DipWSET, WorldSom Magister Sommelier, founder of Vine and Wine Consulting