AMA - Winery/Vineyards, Agriculture, Environmental Issues
Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes
AMA - Winery/Vineyards, Agriculture, Environmental Issues
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesits so nice to talk on BP about something other than my tenant is a turd or how do I buy this property with no money LOL.
talk about appreciation.. when i lived in the napa valley prime Rutherford step cab land up and running was about 200k an acre then it went to 400k then up from there not sure today but I suspect its up there..
62 Replies
- Investor · Montgomery County, PA · Member since 2020 · 255 posts · 238 votes5y
Hey @Mason Moreland, my long term retirement goal is to start a small vineyard/winery when I'm done working. What would you say is the largest difficulty in vineyard management. Not looking to start a wine empire, more so just a late life passion project.
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
Originally posted by @Alex Uman:
Hey @Mason Moreland, my long term retirement goal is to start a small vineyard/winery when I'm done working. What would you say is the largest difficulty in vineyard management. Not looking to start a wine empire, more so just a late life passion project.
Afternoon, @Alex Uman!
That's a great goal for retirement! Part of why I got into this is the passion of it, I love agriculture. From the vineyard management side, if you are running a small vineyard of your own I think the biggest difficulty is labor cost/availability. Even a small vineyard requires quite a bit of labor during the growing season (training vines during early stages, pruning, spraying fungicides or foliar nutrients, maintaining the row cover crops/mulch, fixing irrigation leaks, harvesting, et cetera). A family could certainly run a few acres themselves if you have a few kids/extra hands, though! The nice part about vineyards, as our vineyard management partner says, is the vines "go to sleep" and give you a nice off season during winter!
One thing we've done to help mitigate the labor need is design our new vineyards going forward to be "touchless". Beyond the initial install/training phases, we can run every aspect of vineyard operation by machine (except irrigation repair, grab a shovel!). We can run about 320-400 acres (about a half-section) with 1 or 2 full time folks + equipment. This method can pose issues for smaller acreage as the initial equipment/install investment is high. It could be something to look into if you can co-op with other folks locally to use it jointly or find a vineyard management company near you that specializes in helping manage vineyards. They would typically already own all the equipment and have labor ready to go.
- 5yMike ReynoldsPro Memberconstruction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
Originally posted by @Mason Moreland:
Morning, Bigger Pockets!
I want to try to give back to the community that has helped me so much. If anyone has any questions on investing in the winery/vineyard space, agriculture, or questions about environmental issues, I would LOVE to help you out! Ask me anything ("AMA") you want to know or questions you might have and I'll do my best to answer or connect you with someone who can.My background: ~8 years professional environmental consultant and wildlife biologist (phase 1/2's, wetland delineation/permitting, oil & gas, etc); ~3 years in the oil and gas industry doing environmental work; partner in standing up one of the biggest wine grape vineyards in Texas by acreage, also currently standing up a high-end "custom crush" winery in the heart of West Texas vineyard country; ~6 years financial modeling/underwriting residential and unique real estate and business opportunities; 8 years total investing in real estate, mostly SFR and small MFR holdings in West Texas and DFW
Hope I can be helpful to you!
-Mason
Funny you should mention winery. My niece I was told lately wants to start her own in a few years.
How long does it take before it produces wine usually?
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
@Mike Reynolds, neat! Here in Texas or elsewhere?
Might be a distinction to make between the different parts of the value chain to answer your question. To get to bottle you loosely have a few steps and a wine industry business can be on any one step (or sub-step) or multiple steps to vertically integrate.
- Vine Greenhouse - grafts the vines
- Vineyard - grows the grapes
- Winery - processes the fruit and makes the wine
- Label - the actual brand on a bottle (marketing/distribution)
A winery can “turn on” basically immediately, you just have to get juice into fermenters! A vineyard can take 3-7 years to “turn on” depending on your management philosophy and methods. Ours make first production 3rd year and stabilize around year 5. One thing someone can take advantage of as a winery permit holder to reduce startup equipment costs is use “custom crush” services where customer has a winery permit but the custom crush facility can process the fruit and assist or do all the winemaking in their facility. - 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Mike Reynolds:
Originally posted by @Mason Moreland:
Morning, Bigger Pockets!
I want to try to give back to the community that has helped me so much. If anyone has any questions on investing in the winery/vineyard space, agriculture, or questions about environmental issues, I would LOVE to help you out! Ask me anything ("AMA") you want to know or questions you might have and I'll do my best to answer or connect you with someone who can.My background: ~8 years professional environmental consultant and wildlife biologist (phase 1/2's, wetland delineation/permitting, oil & gas, etc); ~3 years in the oil and gas industry doing environmental work; partner in standing up one of the biggest wine grape vineyards in Texas by acreage, also currently standing up a high-end "custom crush" winery in the heart of West Texas vineyard country; ~6 years financial modeling/underwriting residential and unique real estate and business opportunities; 8 years total investing in real estate, mostly SFR and small MFR holdings in West Texas and DFW
Hope I can be helpful to you!
-Mason
Funny you should mention winery. My niece I was told lately wants to start her own in a few years.
How long does it take before it produces wine usually?
What varietals are you planting there in Texas ??? having grown up in N> CA Napa Lake Sonoma Mendo counties and now living in the Willamette valley I have seen first hand how the Winery business has blossomed all over the country.. And have come to learn its quite site specific as to varietal and harvest yields.. And then what the open market is willing to pay for a bottle of wine from different appellations.
In Napa growing up there in the 60s it was a pretty small industry dominated by the second generation Italians. Then Corporate world came in and started to consolidate At one Point Neslte was the largest producer of fine wine in the US.. With Beringer its flag ship label. Then came the rich and famous I want my own vineyard.. And the big money came in Silicon valley billionaires celebrities and just folks that were very wealthy and wanted this dream of making wine.
As it relates to real estate Dave Del Dotto if you recall him he was one of the first TV real Estate pitchmen like a Carleton sheets.. he did his shows from Honolulu with Bikini clad babes.. Well he invested all that guru money in Napa Valley and has a few spectacular wineries and labels. one of them was across the street from where i lived for a decade.. Fun guy to have a bottle with and learn how Guru ism in real estate started.
Vineyard Management is a HUGE business in these areas.. and is not mechanized god forbid .. But i can see it for other vineyard type set ups were your not trying to produce 100.00 plus bottles of Cab..
Oregon has blown up and now the rich and famous are buying out the local growers and wineries who hardscrabble it.. No money in it until you sell.. thats the big pay day. But its a fun business and the Wine makers and vineyardist are quite close knit and take care of each other.
My favorite area that has popped up in the last 25 years though is Eastern Washington Walla Walla area great Reds from that area..
Any way back to Texas what flavor do you produce there I have never seen a Texas made wine.?
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Mason Moreland:
@Mike Reynolds, neat! Here in Texas or elsewhere?
Might be a distinction to make between the different parts of the value chain to answer your question. To get to bottle you loosely have a few steps and a wine industry business can be on any one step (or sub-step) or multiple steps to vertically integrate.
- Vine Greenhouse - grafts the vines
- Vineyard - grows the grapes
- Winery - processes the fruit and makes the wine
- Label - the actual brand on a bottle (marketing/distribution)
A winery can “turn on” basically immediately, you just have to get juice into fermenters! A vineyard can take 3-7 years to “turn on” depending on your management philosophy and methods. Ours make first production 3rd year and stabilize around year 5. One thing someone can take advantage of as a winery permit holder to reduce startup equipment costs is use “custom crush” services where customer has a winery permit but the custom crush facility can process the fruit and assist or do all the winemaking in their facility.Good friend of mine has a few of those bottling trucks.. so winery produces he pulls in with his big rig and does all the bottling, Lots of swapping of production and grapes and what not in the industry.. Napa got hammered though with the smoke this year..
jury is out with the oregon harvest vs a vi smoke.
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
@Jay Hinrichs, to sum it up succinctly, Texas is where Napa was in the 1960's. Lots of farmers experimenting for many years and a few folks getting really serious.
In Texas the are four main growing regions and each has vastly unique climates and soils, and in addition each vineyard may have it's own training/trellising method that lends itself to different varieties. The regions, generally, are the High Plains (my area, from Midland up north to Amarillo), the Trans Pecos/High Desert area (Ft. Stockton, Ft. Davis, Marfa), North Texas (north of DFW), and the Hill Country (central TX). Each has their difficulties and differences, but generally the easiest area to grow is the High Plains (deep sandy loam soil with calcareous base, hot days/cool nights, flat topography, low humidity, good groundwater and rainfall). The most popular varieties tend to be those from hot growing regions of the world and include Tempranillo, Mourvedre, Sangiovese, Viognier, Malbec, Primitivo/Sangiovese, and your usual suspects (Merlot, Cab Sauv, Sauv Blanc, Pinot Noir) due to market preferences more than climate suitability.
On flavors, like I said above, Texas is a wildly varied state, like CA, in climate, soils, and methods, so basically everything from traditional whites/reds you might find in CA to crazy native grape/hybrid variety wines!
There are two main reasons you've probably never seen a Texas wine on the shelves. One is that we are constantly operating at a fruit deficit. Winery permits have grown enormously in the state, but vineyards can take a long time to catch up with fruit demand. We only have around 5k bearing acres currently (I'm working on that!). On great years we can only provide half of the fruit needed to produce the Texas-made wines consumed just within Texas by Texans. The second is that essentially all wine made in Texas is consumed in Texas and never makes it out, much is still direct-to-consumer, largely because the wineries don't need to get into distribution!
The deficit of fruit/juice/bulk wine is shipped in from California. The same is true for other wineries east of the Rockies. Our goal is to provide the raw materials not just for Texas, but for every winery needing fruit this side of the Rockies. That will mean getting Texas well over the 10k acre mark.
On mechanized vineyards, there will always be a space to find a "niche" in all businesses as you do in real estate (multifamily, flips, BRRRR, vacant land, wholesaling, etc). This is one problem in Texas, almost everyone does exactly the same methods and tries to compete in all the price-point niches of wine. We need to dial things in and find our niches here. There is certainly a market for hand-managed vineyard wines, and they have to command a price commensurate to the labor costs to make them worthwhile for the grower ($40+ per bottle). Margins are tight in the high-end space, like you mentioned in Oregon. Mechanized vineyards can produce the same, or better, quality fruit as traditional vineyards with margins several multiples higher than traditional vineyards. This puts you into a more logical (for me) market of targeting those $7-$40 "everyday" wines. It's like syndicating large multifamily properties vs. buying class-A SFR's with traditional financing and self-managing one at a time. Mechanized vineyards are a niche in the industry. Most of the profitable big-wine players are/are heading the mechanized route (EJ Gallo, Constellation brands, etc). The "pie" of consumers is larger, end product quality is great, and the margins are much better. We still have traditional hand-managed VSP trellised vineyard, and I expect we will plant more, but I don't anticipate it being our bread-and-butter niche as the market is significantly smaller at that price point.
- 5yMike ReynoldsPro Memberconstruction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
Originally posted by @Mason Moreland:
@Mike Reynolds, neat! Here in Texas or elsewhere?
Might be a distinction to make between the different parts of the value chain to answer your question. To get to bottle you loosely have a few steps and a wine industry business can be on any one step (or sub-step) or multiple steps to vertically integrate.
- Vine Greenhouse - grafts the vines
- Vineyard - grows the grapes
- Winery - processes the fruit and makes the wine
- Label - the actual brand on a bottle (marketing/distribution)
A winery can “turn on” basically immediately, you just have to get juice into fermenters! A vineyard can take 3-7 years to “turn on” depending on your management philosophy and methods. Ours make first production 3rd year and stabilize around year 5. One thing someone can take advantage of as a winery permit holder to reduce startup equipment costs is use “custom crush” services where customer has a winery permit but the custom crush facility can process the fruit and assist or do all the winemaking in their facility.Actually, right here in east Texas. There is one winery that opened a few years ago here. In the span of three years we got a brewery, distillery and a winery.
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
@Mike Reynolds, that's fantastic! We are HUGE proponents of the Texas beverage industry, we'd love to help her out any way we can. I'll send you a DM with my contact info. We'd love to see more wineries and vineyard acres here in-state!
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Mason Moreland:
@Jay Hinrichs, to sum it up succinctly, Texas is where Napa was in the 1960's. Lots of farmers experimenting for many years and a few folks getting really serious.
In Texas the are four main growing regions and each has vastly unique climates and soils, and in addition each vineyard may have it's own training/trellising method that lends itself to different varieties. The regions, generally, are the High Plains (my area, from Midland up north to Amarillo), the Trans Pecos/High Desert area (Ft. Stockton, Ft. Davis, Marfa), North Texas (north of DFW), and the Hill Country (central TX). Each has their difficulties and differences, but generally the easiest area to grow is the High Plains (deep sandy loam soil with calcareous base, hot days/cool nights, flat topography, low humidity, good groundwater and rainfall). The most popular varieties tend to be those from hot growing regions of the world and include Tempranillo, Mourvedre, Sangiovese, Viognier, Malbec, Primitivo/Sangiovese, and your usual suspects (Merlot, Cab Sauv, Sauv Blanc, Pinot Noir) due to market preferences more than climate suitability.
On flavors, like I said above, Texas is a wildly varied state, like CA, in climate, soils, and methods, so basically everything from traditional whites/reds you might find in CA to crazy native grape/hybrid variety wines!
There are two main reasons you've probably never seen a Texas wine on the shelves. One is that we are constantly operating at a fruit deficit. Winery permits have grown enormously in the state, but vineyards can take a long time to catch up with fruit demand. We only have around 5k bearing acres currently (I'm working on that!). On great years we can only provide half of the fruit needed to produce the Texas-made wines consumed just within Texas by Texans. The second is that essentially all wine made in Texas is consumed in Texas and never makes it out, much is still direct-to-consumer, largely because the wineries don't need to get into distribution!
The deficit of fruit/juice/bulk wine is shipped in from California. The same is true for other wineries east of the Rockies. Our goal is to provide the raw materials not just for Texas, but for every winery needing fruit this side of the Rockies. That will mean getting Texas well over the 10k acre mark.
On mechanized vineyards, there will always be a space to find a "niche" in all businesses as you do in real estate (multifamily, flips, BRRRR, vacant land, wholesaling, etc). This is one problem in Texas, almost everyone does exactly the same methods and tries to compete in all the price-point niches of wine. We need to dial things in and find our niches here. There is certainly a market for hand-managed vineyard wines, and they have to command a price commensurate to the labor costs to make them worthwhile for the grower ($40+ per bottle). Margins are tight in the high-end space, like you mentioned in Oregon. Mechanized vineyards can produce the same, or better, quality fruit as traditional vineyards with margins several multiples higher than traditional vineyards. This puts you into a more logical (for me) market of targeting those $7-$40 "everyday" wines. It's like syndicating large multifamily properties vs. buying class-A SFR's with traditional financing and self-managing one at a time. Mechanized vineyards are a niche in the industry. Most of the profitable big-wine players are/are heading the mechanized route (EJ Gallo, Constellation brands, etc). The "pie" of consumers is larger, end product quality is great, and the margins are much better. We still have traditional hand-managed VSP trellised vineyard, and I expect we will plant more, but I don't anticipate it being our bread-and-butter niche as the market is significantly smaller at that price point.
how do you handle wind and hail storms ? got to think a big hail storm could wipe out a crop ? just curious..
Walla Walla had a big freeze some years back.. but one thing I see is some thing hits the vines they get pulled and replanted.. then its also soup de jour of what the public wants.. I mean look at what the movie Sideways did for Pinot Noir.
Well best of luck with it being Texas i am sure Texans will super size it in no time !!!!! its a great industry really.. I was not in it but of course had numerous friends and acquaintances that were.. some of the legends though are starting to Pass.. its the new breed.. One of my Duaghters friends they both went to Davis my daughter got a finance degree and works for Intel.. Her friend went through viticulture school and now is the head wine maker at Mumms... and has made a pretty significant name for herself..
- 5yMike ReynoldsPro Memberconstruction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
Originally posted by @Jay Hinrichs:
Originally posted by @Mike Reynolds:
Originally posted by @Mason Moreland:
Morning, Bigger Pockets!
I want to try to give back to the community that has helped me so much. If anyone has any questions on investing in the winery/vineyard space, agriculture, or questions about environmental issues, I would LOVE to help you out! Ask me anything ("AMA") you want to know or questions you might have and I'll do my best to answer or connect you with someone who can.My background: ~8 years professional environmental consultant and wildlife biologist (phase 1/2's, wetland delineation/permitting, oil & gas, etc); ~3 years in the oil and gas industry doing environmental work; partner in standing up one of the biggest wine grape vineyards in Texas by acreage, also currently standing up a high-end "custom crush" winery in the heart of West Texas vineyard country; ~6 years financial modeling/underwriting residential and unique real estate and business opportunities; 8 years total investing in real estate, mostly SFR and small MFR holdings in West Texas and DFW
Hope I can be helpful to you!
-Mason
Funny you should mention winery. My niece I was told lately wants to start her own in a few years.
How long does it take before it produces wine usually?
What varietals are you planting there in Texas ??? having grown up in N> CA Napa Lake Sonoma Mendo counties and now living in the Willamette valley I have seen first hand how the Winery business has blossomed all over the country.. And have come to learn its quite site specific as to varietal and harvest yields.. And then what the open market is willing to pay for a bottle of wine from different appellations.
In Napa growing up there in the 60s it was a pretty small industry dominated by the second generation Italians. Then Corporate world came in and started to consolidate At one Point Neslte was the largest producer of fine wine in the US.. With Beringer its flag ship label. Then came the rich and famous I want my own vineyard.. And the big money came in Silicon valley billionaires celebrities and just folks that were very wealthy and wanted this dream of making wine.
As it relates to real estate Dave Del Dotto if you recall him he was one of the first TV real Estate pitchmen like a Carleton sheets.. he did his shows from Honolulu with Bikini clad babes.. Well he invested all that guru money in Napa Valley and has a few spectacular wineries and labels. one of them was across the street from where i lived for a decade.. Fun guy to have a bottle with and learn how Guru ism in real estate started.
Vineyard Management is a HUGE business in these areas.. and is not mechanized god forbid .. But i can see it for other vineyard type set ups were your not trying to produce 100.00 plus bottles of Cab..
Oregon has blown up and now the rich and famous are buying out the local growers and wineries who hardscrabble it.. No money in it until you sell.. thats the big pay day. But its a fun business and the Wine makers and vineyardist are quite close knit and take care of each other.
My favorite area that has popped up in the last 25 years though is Eastern Washington Walla Walla area great Reds from that area..
Any way back to Texas what flavor do you produce there I have never seen a Texas made wine.?
That's some very cool info there. I have heard that name before. My brother actually bought into the Carrollton Sheets back about 15 years ago.
i really don't know what flavors or colors they make as I am not really a wine guy. I am a beer snob though lol. I love the micro breweries and the different flavors. I do recall years ago there was a Llano Estacato wine but I haven't seen it in a while. I think it was a South Texas wine.
I'll have to pick my niece's brain for more info. She is the wine person. And if I know her she will get it done somehow.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Mike Reynolds:
Originally posted by @Jay Hinrichs:
Originally posted by @Mike Reynolds:
Originally posted by @Mason Moreland:
Morning, Bigger Pockets!
I want to try to give back to the community that has helped me so much. If anyone has any questions on investing in the winery/vineyard space, agriculture, or questions about environmental issues, I would LOVE to help you out! Ask me anything ("AMA") you want to know or questions you might have and I'll do my best to answer or connect you with someone who can.My background: ~8 years professional environmental consultant and wildlife biologist (phase 1/2's, wetland delineation/permitting, oil & gas, etc); ~3 years in the oil and gas industry doing environmental work; partner in standing up one of the biggest wine grape vineyards in Texas by acreage, also currently standing up a high-end "custom crush" winery in the heart of West Texas vineyard country; ~6 years financial modeling/underwriting residential and unique real estate and business opportunities; 8 years total investing in real estate, mostly SFR and small MFR holdings in West Texas and DFW
Hope I can be helpful to you!
-Mason
Funny you should mention winery. My niece I was told lately wants to start her own in a few years.
How long does it take before it produces wine usually?
What varietals are you planting there in Texas ??? having grown up in N> CA Napa Lake Sonoma Mendo counties and now living in the Willamette valley I have seen first hand how the Winery business has blossomed all over the country.. And have come to learn its quite site specific as to varietal and harvest yields.. And then what the open market is willing to pay for a bottle of wine from different appellations.
In Napa growing up there in the 60s it was a pretty small industry dominated by the second generation Italians. Then Corporate world came in and started to consolidate At one Point Neslte was the largest producer of fine wine in the US.. With Beringer its flag ship label. Then came the rich and famous I want my own vineyard.. And the big money came in Silicon valley billionaires celebrities and just folks that were very wealthy and wanted this dream of making wine.
As it relates to real estate Dave Del Dotto if you recall him he was one of the first TV real Estate pitchmen like a Carleton sheets.. he did his shows from Honolulu with Bikini clad babes.. Well he invested all that guru money in Napa Valley and has a few spectacular wineries and labels. one of them was across the street from where i lived for a decade.. Fun guy to have a bottle with and learn how Guru ism in real estate started.
Vineyard Management is a HUGE business in these areas.. and is not mechanized god forbid .. But i can see it for other vineyard type set ups were your not trying to produce 100.00 plus bottles of Cab..
Oregon has blown up and now the rich and famous are buying out the local growers and wineries who hardscrabble it.. No money in it until you sell.. thats the big pay day. But its a fun business and the Wine makers and vineyardist are quite close knit and take care of each other.
My favorite area that has popped up in the last 25 years though is Eastern Washington Walla Walla area great Reds from that area..
Any way back to Texas what flavor do you produce there I have never seen a Texas made wine.?
That's some very cool info there. I have heard that name before. My brother actually bought into the Carrollton Sheets back about 15 years ago.
i really don't know what flavors or colors they make as I am not really a wine guy. I am a beer snob though lol. I love the micro breweries and the different flavors. I do recall years ago there was a Llano Estacato wine but I haven't seen it in a while. I think it was a South Texas wine.
I'll have to pick my niece's brain for more info. She is the wine person. And if I know her she will get it done somehow.
For sure its very regional.. I remember going to my cousins wedding in Wisconsin and the girls were all lugging Stiens around full of beer.
A wedding in CA the girls would all have a glass of white wine LOL..
Also hard stuff mixed drinks much more prevalent in some areas.. but CA was more like France or Italy you had wine with every meal every day of the year and sometimes to much wine. And of course living there everyone who comes to visit wants to go wine tasting.. Used to be free to taste years ago now it can be 50 bucks a pop.. here is a winery to check out which is one of my Favs.
Jarvis winery Napa.. its the only winery in the US 100% inside a cave.. Jarvis owned Wiltronics and sold it for some multiple of B 30 years or so ago and spent millions if not 100 million on this winery or more.. wines are very good His caves are over the top cool
it was right up the hill from my house at Silverado so I always took folks there and across the street to Del Dotto he was a hoot.
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
@Jay Hinrichs, talking "high winds" with folks in the Central Valley of CA is always funny! You should see faces when we tell them our version of "high winds" is when we get sustained 50+ MPH winds almost every year, priceless. For wind, it tends to be more of an issue when vines are young/training and it could break new cordons, it depends on trellis style but you may have to use temporary catch wires, taller shelters, or more ties. For hail, that can absolutely wipe you out! Most times it will simply reduce yield/acre, but if you get that once in a century hail it can do some damage to vines. VSP grapes can also be hail-netted (called bird netting everywhere else I suppose!).
Freezes can damage vines on either end of the season, either a "late" freeze late into spring after green up, or "early" in early fall. There are several strategies to protect from untimely freeze events (air turbines, burning hay, taller trellising away from the colder ground-level air, etc), but the most cost efficient are taller trellises and choosing varieties that develop at the correct times to avoid freeze damage and take advantage of our hot weather to ripen. Typically folks get multiperil crop insurance to protect against both yield loss and vine death from freeze/hail/other natural disasters. Luckily we have little fire risk on the high plains, as essentially all the region is in row crops which act as excellent fire breaks.
That's exactly right, Jay. With the "wind up" time to vineyard production, you can almost plant the exact opposite varieties of what are in favor at the moment and end up with what everyone wants when you come into production!
@Mike Reynolds, I hear you there! I'm a RE/business geek that enjoys a glass, definitely not a sommelier! Llano Estacado is one of the biggest/older brands here in Texas and is based out of the high plains here in Lubbock.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Mason Moreland:
@Jay Hinrichs, talking "high winds" with folks in the Central Valley of CA is always funny! You should see faces when we tell them our version of "high winds" is when we get sustained 50+ MPH winds almost every year, priceless. For wind, it tends to be more of an issue when vines are young/training and it could break new cordons, it depends on trellis style but you may have to use temporary catch wires, taller shelters, or more ties. For hail, that can absolutely wipe you out! Most times it will simply reduce yield/acre, but if you get that once in a century hail it can do some damage to vines. VSP grapes can also be hail-netted (called bird netting everywhere else I suppose!).
Freezes can damage vines on either end of the season, either a "late" freeze late into spring after green up, or "early" in early fall. There are several strategies to protect from untimely freeze events (air turbines, burning hay, taller trellising away from the colder ground-level air, etc), but the most cost efficient are taller trellises and choosing varieties that develop at the correct times to avoid freeze damage and take advantage of our hot weather to ripen. Typically folks get multiperil crop insurance to protect against both yield loss and vine death from freeze/hail/other natural disasters. Luckily we have little fire risk on the high plains, as essentially all the region is in row crops which act as excellent fire breaks.
That's exactly right, Jay. With the "wind up" time to vineyard production, you can almost plant the exact opposite varieties of what are in favor at the moment and end up with what everyone wants when you come into production!
@Mike Reynolds, I hear you there! I'm a RE/business geek that enjoys a glass, definitely not a sommelier! Llano Estacado is one of the biggest/older brands here in Texas and is based out of the high plains here in Lubbock.
well one thing wont hurt them and that is flooding I have seen Napa vineyards 3 feet under water many times.. but you know farming is farming.. hazards exist in every crop..
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
For anyone interested in rough-justice numbers on the Texas wine industry, take a look here. There is no mandatory reporting in Texas, so these are all approximate, but it is an interesting slice of data!
- Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes5y
Own a VRBO in the middle of OR wine country in Dundee.
OOC - What does a winery need to do (independent of seasonal issues) to make consistent money?
Just seems like a lot of rich guys are buying smaller wineries and feeding them, the few big guys that have been established here are OK, and then a lot of starving types doing it because they love it.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Steve Morris:
Own a VRBO in the middle of OR wine country in Dundee.
OOC - What does a winery need to do (independent of seasonal issues) to make consistent money?
Just seems like a lot of rich guys are buying smaller wineries and feeding them, the few big guys that have been established here are OK, and then a lot of starving types doing it because they love it.
winery you start up and run like any start up lean and very little profit.. you get a name.. rich guy comes in and pays to much you retire.. thats whats happening now in the Oregon wine scene..
- Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes5y
winery you start up and run like any start up lean and very little profit.. you get a name.. rich guy comes in and pays to much you retire.. thats whats happening now in the Oregon wine scene..
Yeah, I've seen that with long-timers and the guys with names. I'm curious about the 30-40 something that wants to spend 20 years getting there. Plus I don't see a lot of prime developable stuff in the neighborhood around Dundee.
My cousin has the family farm in Montana, agriculture is a tough way to make money and not a real comfortable income besides the land value when you sell.
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
Again I would point out that the wine industry is separated out into very distinct/unique businesses each with it's own set of upsides/downsides as I mentioned above. A vineyard is wholly different business model from a winery business model, and a winery that sells "labels" operates nothing like a "custom crush" winery (provides processing and winemaking services for those selling labels). Each should be considered separately from the other when analyzing strategy and financials. Comparing a vineyard to a winery selling "labels" would be like saying the business models/financials on syndicated multifamily properties are the same as wholesaling SFRs just because they are both real estate businesses.
@Steve Morris, it can be a struggle as a winery selling "labels". If your winery model is to make a "label" and market it, you have a lot of competition in the space. You have to carry a lot of inventory to feed demand out of season and not run out of product during the year, this carries a cost. To be successful it is like selling any other "widget" and is as @Jay Hinrichs said, you have to run lean and be REALLY good at marketing and moving your product. This is the main reason I prefer the "custom crush" winery model to a traditional winery. Sell the services (shovels) to the wineries/labels (gold miners). You carry no inventory and get paid essentially upfront. You don't get a big name or get famous doing it though!!!
Even deeper on the growing/vineyard side, farming annual row crops versus growing perennial grapes is a vastly different business model, has much greater appreciation potential, and far different income/acre than row crop farming. Much more akin to an orchard or traditional improved residential/commercial real estate. In annual row crops, you are largely dependent on the whims of government subsidies and drastic worldwide commodity market swings. Wine grape prices are usually steady (when Napa isn't on fire) partly due to the long turn around times to start new acreage, and they are not tied to government subsidies. Land values here go from $2,500-$4,000/ac for irrigated row crop and you will be lucky making a 6% CoC return in good years with row crops. Vineyards typically appraise well over $30k/acre before reaching first production. Annual CoC yields for vineyards match those of good multifamily residential deals in tough years/years you take an insurance check, and lap them thrice over in normal/good years, but you take on risks and mitigation measures of different names, but similar magnitudes, to a residential property operator.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
its so nice to talk on BP about something other than my tenant is a turd or how do I buy this property with no money LOL.
talk about appreciation.. when i lived in the napa valley prime Rutherford step cab land up and running was about 200k an acre then it went to 400k then up from there not sure today but I suspect its up there..
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
@Jay Hinrichs I’m glad! $400k is crazy!!! Underlying raw land value must be high as well, $30k+?
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Mason Moreland:
@Jay Hinrichs I’m glad! $400k is crazy!!! Underlying raw land value must be high as well, $30k+?
underlying land value now a days probably 400 to 700k PER ACRE in prime Napa valley.. Sonoma little less
Lake county just north and mendo just north is less.
Oregon far less as well..
in the Dundee hills of ORegon when i first came here in 90 there was not a lot going on the value was in TIMBER then i just sold the land off for homesites I know look at some of the stuff i owned that was Jury soil southern exposure and its got vineyards on it.. have not check vineyard land prices in a while concentrated on building houses these days.
- Member since 2020 · 2 posts · 0 votes5y
Thanks Mason for sharing this knowledge. I live here in Dallas and work in Frisco. Where in North Dallas are vineyards/wineries?
How do you see the market of natural wines ?
-Juan
- Specialist · Midland, TX · Member since 2018 · 198 posts · 148 votes5y
Originally posted by @Juan Gonzalez:
Thanks Mason for sharing this knowledge. I live here in Dallas and work in Frisco. Where in North Dallas are vineyards/wineries?
How do you see the market of natural wines ?
-Juan
Juan,
They are generally scattered across the area and tend to be smaller in size. North Texas presents some pretty challenging issues on the soils (clay) and climate (high humidity, fungal issues, disease) fronts but it has had vineyard acreage consistently for a long time. Someone actually put a few acres in along the east side of 121 there North of Glade Rd south of Grapevine!
I think the natural wine market has a great shot at being a large niche market. It’s a different approach than the one we take, but I think it caters to a similar market slice as other organic/sustainably grown foods (a big segment!). In my opinion the market share for natural wines and organic wines will only grow from where it’s at now. Take a look at Southold Farm + Cellars. Regan is good people, they have an engaging philosophy and eclectic flavors that keep you curious. Their tasting room is truly breathtaking. Theirs is one of the only “wine clubs” my wife and I have personally belonged to. - Rental Property Investor · Streetman, TX · Member since 2018 · 527 posts · 495 votes5y
@Mason Moreland Terrific thread! It is interesting to see the economics behind running a vineyard. We recently relocated back to Texas after 7 years working in California. Our home was within a couple miles drive from some terrific small wineries. Our favorite pastime was to go visit the small wineries on the weekend, we really got spoiled. One of our favorites was run by a retired executive from Sony/Ericsson. He ran the winery out of his house. He usually had live music on the weekends. I got to talking to him about his place. He said his boss wanted him to move to Dallas. His response was “what, Give up all this?” He retired to run his winery full time. He had about five acres in grapes and purchased grapes from other local growers. Many people with small vineyards would trade grapes for wine. I’ll give you the grapes for half the wine was a common deal.
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