The United States boasts as fourth largest wine-producing countries in the world. In fact, all 50 states each has their own share of fine wineries, though the bulk of the produce comes from the state-of-the-art winemaking vineyards of California. Not known to many, the country has been producing and perfecting winemaking for over 300 years and counting.
But as grandiose as it may seem, the industry as it is today didn’t just blossom out of nothing. It took centuries of trade and hard work to become what it is today. Today’s generation of vineyard operators and viticulturists came from families whose been in the business for a very long time. But that does mean it’s too late for you to start and manage a vineyard of your own.
Winemaking then and now
At the turn of the century, American winery flourished, capitalizing on the misfortune of Europe. But this did not last long, when the US enacted the Prohibition in the 30’s when alcohol consumption, production, and importation became widely prohibited in the states. The then booming industry was thwarted, surviving solely by producing non-alcoholic beverages juices and sacramental wines. When it was on the verge of extinction, the Prohibition was then repealed, and the industry eventually recovered. Albeit slowly, the 1976 international wine competition in Paris established American wines as a worthy rival of European wines and the industry boomed once more.
This remains true today and this continues to encourage many entrepreneurs to explore the profit potential in vineyard cultivation and winemaking. But some inconsistencies in statutory laws among the states is hindering the stride of viticulture forward. Despite this, many financing institutions still seek to provide opportunities for those who are brave enough to enter the industry.
Evaluating a Vineyard
Private and government institutions alike evaluate vineyards based on the health of the wine market. Its characteristics are a major point of appraisal. Evaluators look for demand from a certain variety of grape in a region, for example. Climate, soil, and location are also deemed critical factors.
These elements are used for comparing vineyards for financing. But these are not all.
Appraisers may also look at price factors such as sales, costs needed for improvement, and an estimate of potential income. As a result, vineyards, despite being similar in sizes, may differ in their prices in Location A and Location B. Expect to find vineyards priced $400,000 to $25 million in the US.
As stated, vineyard prices vary widely. But there are financing programs depending on the acreage demanded and the collateral you put forward. The high price allows lenders to finance even plots as small as 5 acres.
With the increased interest in the vineyard business, with many young entrepreneurs looking into the potential of going in the winery and alcohol business, financing opportunities always soon follow – and we hope, the legislations as well.
Shop around for rates to find the best financing option for your vineyard and winemaking business.