Vineyard Design & Management Services

Advice for Buying a Vineyard

Americans have overtaken the French and Italians as the world’s foremost wine consumers. As we’ve gained a taste for the fruits of the vine, grapes and wine, we have also developed an appreciation for the places where those fruits are cultivated and harvested. Vineyards, sun dappled and surrounded by ordered, green rows of vines, have grown in popularity as a business and a hobby. Now, buying a vineyard as a business venture is not for everyone, however, building a backyard vineyard and wine making has become cool as a hobby.

Vineyard Market Trends

The United States was once home to just a few hundred vineyards. In the 1970s, before American wine had gained the respect it now enjoys, there were just 400 wineries in the Unites States. Now, there are 7,000.

Many of these new vineyards are in California, nestled in the celebrated wine-producing regions of Napa and Sonoma in the north and in Santa Barbara County and the Central coast. These vineyards have seen a remarkable appreciation in value in the last few decades. Property prices in California’s wine country climbed between 100 percent and 300 percent in each of the decades between 1950 and 2008. Admittedly, these heady prices cooled somewhat during the first years of America’s current economic malaise.

During the recent recession, American consumers turned towards more economical wines, and many vineyards suffered because of this collective move away from the more expensive wines. But the wine industry is quickly rebounding. In fact, in the last year, California’s North Coast has seen its treasured vineyards surge in production and value. Since 2012, a number of wineries – collectively worth more than $300 million – have been sold to new owners.

Is Buying a Vineyard a Good Investment?

Santa Ynez Vineyard

Buying a vineyard, in aggregate, can make excellent investments. They are the indispensable nuclei of the expanding industry. But vineyards are not within the means of every individual. John C. Bergman, the founder of a real estate firm in California’s wine country, told Forbes that “The purchase of a vineyard estate is half emotion and half logic.” Bergman’s advice is intended for the majority of wanna-be vintners. Few among us have the resources to grow and produce wine purely for recreational purposes. Those who wish to own a vineyard must have a large amount of available capital if they are going to prosper.

A prospective vintner must, before making his/her purchase, assess his/her financial situation carefully. In all likelihood, if you are looking to buy a vineyard in the United States, you will be purchasing an established vineyard in California. 90 percent of American wine is produced in the state, much of it in the north: in Napa and Sonoma. Prices vary enormously, but typically it costs between $150,000 and $200,000 an acre for a vineyard planted with red varietals. For an acre planted with white grapes, you will need to spend a comparatively modest $115,000 an acre.

If you are not deterred by these sums, it’s important to remember that a vineyard, if it is to be successful, demands constant investment. It must be managed and tended to by an experienced team of grape-growing professionals.

Buying a vineyard, though the treasured aspiration of many a wine enthusiast, is feasible for only a select few. Vineyards in established wine-growing regions are costly and capital intensive. There is a reason for the popularity of the following saying in the wine business: “Do you know how to make a small fortune in the vineyard business? Start with a large one.” That said, if you have the capital and knowledge resources available, buying a vineyard can be a rewarding step into a growing, healthy market: one which can bring financial and emotional rewards.

Buying and owning a vineyard is rewarding, but one needs to remember that this business is agriculture. Agriculture results can be risky. Your harvest and profits depends on many factors such as weather, pests, fungi diseases, and many more. Good luck!

We have years of experience designing, installing and managing vineyards in Santa Barbara County. Contact us with any questions and we’ll be happy to help you.