How to buy a vineyard and successfully run a business: tips and examples

Buying a vineyard as a business opportunity

Buying vineyards as a hobby is actually becoming a business strategy. Important aspects such assoil quality,the condition of the grapevinesandauxiliary equipmentand alsohistoryandbrand reputationThey play a key role in this process. Often, along with a well-maintained plantation, the new owner receives a plot of land, an antique house, or vivid memories of magnificent vineyards.

The success story of the Konchi family

Twenty-three years ago, when entrepreneur Bruno Conchi and his wife Rose bought a vineyard in the picturesque region ofTuscany, they had no idea that their product would later gain worldwide fame under the nameChiantiIt will be highly valued in such respectable establishments as the London hotel "The Savoy." Initially, their intention was to produce wine only for their circle of friends and family. However, after a year of grand construction work that cost them millions of euros, they completely modernized their estate.100 hectares.

As a result, this attracted many tourists eager to enjoy the unique taste of Chianti and relax among the picturesque olive groves and vineyards.

Growing interest in vineyards

Inspired by the success of the Conchi family, more and more people are eager to replicate their achievements. "Since the beginning of 2005, interest in purchasing vineyards has significantly increased. Currently, we are receiving at least20 requests per year“And the number of those wishing to purchase vineyards is rapidly increasing,” notes Bill Thomson from Knight Frank.

Main groups of buyers

Customers are divided into two main groups:

• People striving for a unique lifestyle:Most often, they only need a house for vacation and a small piece of land. For example, in France, approximately...70%Vineyards are being purchased by people who have no experience in wine production. These buyers are typically interested in smaller plots.20 hectareslocated in regions with good transport accessibility.
• Investors intending to engage in wine production:Among such buyers, you can find both famous personalities and enterprising businessmen from China. In 2012, in the Aquitaine department of Gironde, known for its prestigious wine regions, the Chinese purchased27 vineyards.

Famous vineyard owners

Among vineyard owners, there are many celebrities. For example:

• Famous actorGérard Depardieuowns plots in regions such as Anjou (Loire Valley), Bordeaux, and Languedoc.
• Former French football playerDavid Ginolabecame the owner of the Coste Brulade vineyard in the south of France.
• Canadian politicianJacques ParizeauI acquired a plot of land at Coteau de l’Élisette in Languedoc.

The share of foreign investors in the market varies by region. This diversity of interests and tastes highlights how vineyards become appealing to people from various professions and cultures, turning them into special places for living and working.

Foreign investments in wineries

According to information provided by Knight Frank for the second quarter of 2014, key foreign investments in wineries are concentrated in Italian regions such as Chianti and Montalcino, where the volume of these investments exceeds 80%. In Tuscany, foreigners own 60% of the vineyards, and in the Argentine region of Mendoza, the similar figure is 50%.

In countries like the USA, France, and Spain, for example, in Napa Valley, Provence, and Somontano, the share of foreign investments reaches about 30%. Interestingly, in Australia's Barossa Valley, foreign buyers make up only about 10%, while locals are much more active in the market.

Russian investors

Russian investors are increasingly considering opportunities to purchase vineyards in Provence and Tuscany, second only to the British in terms of the number of deals. Diletta Spinola, the sales manager for Sotheby’s in Tuscany, emphasizes that many Russians want to acquire vineyards along with luxury villas for business purposes. They are attracted to the idea of creating their own wine brand.

Profit from vineyards

How can one profit from vineyards? While many owners successfully engage in winemaking, there are quite a few who, before establishing their business, are eager to sell their properties.

• “This activity requires special knowledge and skills.”
• “I have encountered buyers who, upon learning about the expenses and challenges, immediately put their vineyards on the market,” shares Thomson.

Cost optimization

To achieve profitability, owners need to optimize costs, which often means taking on many responsibilities themselves. It's also important to remember that the return on investment will not happen instantly.

“Those who are hoping for a quick return on investment should consider that this is not the most optimal option.”— explains William Corby from French Vineyards.“It can take up to ten years to create quality grapes and establish a brand, after which at least three more years are needed for red wine to mature.”

The challenges of owning vineyards

Real estate expert Nigel Lewis on Primelocation.com warns against getting too carried away: owning a vineyard is both an exciting hobby and serious, labor-intensive work. Every idea for creating a bottle of wine requires significant effort.

To ensure profitability, it is necessary to produce at least 40-50 thousand bottles per year, which can generate revenue in the range of 100-150 thousand euros. However, considering that the price of one bottle is at least 3 euros, while production costs 2 euros, the net profit may be relatively small — around 30 thousand euros per year.

Financial realities

Many wineries do not generate significant profits.These funds often barely cover labor costs and the maintenance of the enterprise, he explains.“This is a choice for people who aspire to a certain lifestyle. You can live in a picturesque area and enjoy your own wine.”

Thus, investing in vineyards is not just a financial venture, but also a lifestyle that attracts people who appreciate both natural beauty and gastronomic pleasures.

Investment value of vineyards

Vineyards are a valuable asset that attracts the attention of many investors. Willy Badenhorst, an agent from the well-known RE/MAX company, notes that the risks of losses in this area are quite low, as the value of vineyards is stable and not subject to sharp fluctuations. The prices of such agricultural lands depend on their location.

For example, in European countries, the value of vineyards is sometimes more influenced by current housing prices than by wine prices.

Joint purchase of vineyards

In recent years, co-investment schemes for purchasing vineyards have become increasingly attractive for those looking to reduce financial risks and engage in winemaking. For example, there is an opportunity to become a co-owner of the Villa Dolce Vita winery, which spans 80 hectares in the picturesque Tunuyán area, located in the renowned wine region of Mendoza, Argentina.

Here, plots ranging from 2 to 6 hectares are offered, with the cost of one hectare being around $19,400, which gives many the opportunity to participate in the winemaking business.

Sale-leaseback of real estate

In addition, there is an option to purchase real estate near vineyards through a reverse leasing strategy. For example, the Garrigae hotel chain in the French Languedoc-Roussillon region successfully implements this approach by transforming historic buildings into modern hotels.

Visitors can not only buy rooms but also rent them out, earning from it.guaranteed incomefor nine years.

Main regions and types of real estate

Now let's take a look at various wine-producing regions and properties that may interest investors in the wine production sector.

• Tuscany, Montalcino:Cozy restored houses with four bedrooms on plots of about 10 hectares. The annual price dynamics is 20%, and the cost of one hectare ranges from 135,000 to 200,000 dollars.
• California, Sonoma:A ranch with five bedrooms and a pool, located on 14 hectares. The annual price growth reaches 12%, and the average cost of one hectare is about 296 thousand dollars.
• New Zealand, Hawke's Bay:Modern houses with high-quality kitchens on plots ranging from 20 to 40 hectares. The annual price dynamics is 25%, and the cost of land is between 130,000 and 170,000 dollars.
• Australia, Barossa:A variety of properties, including modern homes and vacation cottages, with areas ranging from 110 hectares. The annual price dynamics is around 15%.
• New Zealand, Marlborough:Cozy homes with 4-5 bedrooms on plots of 20-40 hectares at prices comparable to previous regions.
• Italy, Chianti:Picturesque rural houses with 4-6 bedrooms and unique architecture on plots of 30 hectares. The annual price dynamics is 5%, and the average cost reaches 128 thousand dollars per hectare.
• California, Napa Valley:Modern farmhouses with land suitable for stables or additional vineyards, occupying 14 hectares. The annual price dynamics are exactly the same — 5%, and the average prices range from 135,000 to 588,000 dollars per hectare.

Architecture and lifestyle in France

France is a paradise for lovers of classical architecture. In the Rhône Valley, you can find magnificent 18th-century châteaux with pools and outbuildings.

This region features real estate from different eras and styles — from historic buildings in Brunello to luxurious mansions in Bordeaux and Burgundy, where prices greatly depend on the condition and location.

Proposals in Spain and Argentina

In Spain, on the picturesque island of Mallorca, new homes with 5-6 bedrooms are available, while in Mendoza, Argentina, there are modern colonial-style residences with three to five bedrooms and a swimming pool.

These sentences demonstrate a wide range of options for those who want not only to invest but also to become part of the cultural lifestyle associated with winemaking. It is important for potential investors to consider the nuances and characteristics of each region in order to make informed investment choices.

Conclusion

In conclusion, I want to emphasize that buying a vineyard is not just an investment in a business, but a whole lifestyle. With each passing year, interest in such acquisitions is growing, reflecting the desire of many people not only for the romance of rural life but also for creating their own brand and the opportunity to be part of a unique winemaking process.

After the example of the Konchi family, many realized that owning a vineyard is not just about having a summer house with grapevines, but a serious business that requires careful planning and long-term effort. Despite the appeal of this venture, it is important to understand that behind every bottle of wine lies years of hard work, and the journey is not always easy.

Key aspects of vineyard ownership

• Investments.All buyers are driven by the desire not only to enjoy romance but also to make a profit.
• Participation in the process.Successful wineries are those that are ready to actively engage in winemaking.
• Long-term liabilities.It takes a lot of time for a vineyard to start bearing fruit.

As practice shows, successful wineries are those who are ready not only to invest money but also to actively participate in the process. Accepting this challenge can bring not only financial benefits but also joy from living in a beautiful and picturesque place, away from the hustle and bustle of the city.

The life experience of a vineyard owner

This choice is undoubtedly for those who value not only economic benefits but also strive for harmony with nature and the culture of winemaking. Ultimately, purchasing a vineyard is not just about profit; it's a philosophy that can enrich life with experiences, impressions, and exclusivity that cannot be bought.