In 2022 alone, reports have it that consumers spent over $4 billion on direct-to-consumer wine shipments, and wineries shipped over 8.5 million cases of wine. In 2020, wine club sales for the first time outdid tasting room sales—club sales represented about 36 percent of Direct-To-Consumer (DTC) sales while tasting rooms reduced to 28 percent.
Agreeably, some of that can be attributed to COVID-19 closures but the industry is still witnessing signs of those trends continuing. While starting a wine club can seem simple at first, note that this business can quickly grow to become unmanageable if you fail to take the necessary steps when starting.
When starting a wine club, there are necessary questions to answer, such as how should you structure your club? How will you differentiate your club from your competitors? What will you do to retain customers? What do you have to do to be compliant?
Steps on How to Start a Wine Club Business
Table of Content
Conduct Market Research
Starting a wine club will require extensive research into the market and a good plan of what to offer your clients. It is advisable that you first find out all relevant information about competitor wine clubs. Understand their strategies, their branding, and the sort of events they make available to their members.
Have it in mind that this research will enable you to find out methods you like and the ones you can also copy, while also identifying market voids you can fill and how to ensure your wine club truly stands out. In this line of business, one of the surest ways to achieve success and build a unique brand is to build your unique value proposition.
a. Who is the Target Audience for a Wine Club?
According to industry experts, the demographic composition of wine drinkers in the United States has changed considerably within the past 10 years. For instance, in 2010, 32% of all regular wine drinkers were aged 55 and over, while 28% were aged between 21 and 34.
However, as of 2020, almost half of all American monthly wine drinkers were aged 55 and over. Nevertheless, expect the potential clients of your wine club to be wine enthusiasts and travelers to your area aged from 40 to 55 years or Gen Xers whose buying habits may already be influencing the general wine industry.
b. Is Wine Club Business a Profitable Business?
Yes. Owing to the growing popularity of Direct-To-Consumer (DTC) sales, wine clubs are enjoying massive growth. Note that wine consumers now prefer the benefits of feeling connected to the winery and also having first-class access to an exclusive product.
DTC eradicates the need for intermediaries, therefore wine clubs can make more profit on each bottle they sell. As you cater to the needs of your wine club, there is a greater probability that your profits will stay strong owing to repeat purchases, private events, allocations, etc.
c. Are There Existing Niches in the Industry?
No. But while there are no pronounced niches in this line of business, you wouldn’t want to be like everyone else. To succeed in this market, you must determine what unique qualities you need to promote and the offerings you need to attract clients.
What do you have that the competition doesn’t? You might be an innovative wine club offering canned varietals that are more economical, or maybe you provide organic and sustainable wine. Or, maybe you make apple, peach, and apricot wines coupled with traditional grape wines.
d. Who are the Major Competitors?
- Wine Access
- Vintner’s Collective
- MYSA Natural Wine
- Orange Glou
- Disco Ranch
- WOW Sonoma Monthly Wine Club
- Underground Cellar
- Dry Farm Wines
- Martha Stewart Wine Co.
- Bright Cellars
- Plonk Wine Club
- Blue Apron
- Wine Awesomeness.
e. Are There County or State Regulations or Zoning Laws for Wine Club Business?
Yes. In the United States, every state has its own laws and standards especially when it concerns alcohol shipping. If you intend to use e-commerce to build a club, then you may have to acquire wine shipping licenses for each state you send to, and this can be quite tricky and challenging.
Nevertheless, consider investing in nearby states as well as any state that brings substantial traffic to your wine club, and then branch out from there. Don’t forget to carry out extensive research before expanding to new states at least to understand their administrative and taxation requirements. You will most often be expected to obtain some licenses and permits from local, state, and federal governments, including FDA registration and a license to sell alcohol.
f. Is There a Franchise for Wine Club Business?
Truth be told, there are no franchise opportunities in the wine club market. Wine clubs are most often a platform used by wineries to attract clients and sell their products directly to them. Nevertheless, if you still want to take the franchise route, here are top franchises to consider;
- Eola Wine Franchise: $150,000
- Rosevine Winery: $246,000-$425,000
- Connoisseur: $200,000
- WineStyles Tasting Station: $230,500-$475,5000
- Vintner’s Cellar: $75,000-$300,000
- Tastings: $300,000
- Wine Kitz: $80,000-$100,000
- Crescent Wines: $50,000 – $100,000
g. What Do You Need to Start a Wine Club Business?
- A Good Location
- Licensing and Permits
- Adequate Funding
- Reliable Network
Memorable Wine Club Business Names
- Orchard Knights
- Wine Experts
- Grape Club
- Perfect Choice
- Sip Beauty
- Vine Tasters
- Orchard Believers
- Soul Admirers
- Purple Connoisseurs
- The Wine Vault
- Heaven Circle
- Craft Wine Zone
- Exceptional Tasters
- Eternal Orchard
- Clean Slate
- The Vineyard Owners
- Tongue Critics
- Dinner Table
- Kings of Chardonnay
Register your Business
a. What Type of Business Structure is Best for Wine Club Business?
There are four primary business structures to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Note that the business structure you choose for your wine club will dictate your taxes, personal liability, and business registration requirements. You are advised to form an LLC because it offers liability protection and pass-through taxation while being easier to form than a corporation.
b. Steps to Form an LLC
- Select a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Pick between members vs. manager management.
- Establish an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Wine Club Business?
- Occupancy permit
- Business license
- Sales tax license
- Approval from Alcohol and Tobacco Tax and Trade Bureau (TTB)
- Local regulations – this will vary on the country, state, and even county.
- Liquor License
- Employer Identification Number (EIN)
- Resale permit
- Foodservice license
- Food handler’s permit
d. What Type of Certification is Needed to Open a Wine Club Business?
- Wine Business Management Certificate
- Direct to Consumer Certificate
- Intermediate Wine Certificate
- Wine Branding Certificate
- Master Wine Taster
- American Wine Specialist (AWS)
- Certified Wine Educator
- Wine & Spirit Education Trust Level 1
- Certified Specialist of Wine
- Level 2 Sommelier
e. What Documents are Needed to Open a Wine Club Business?
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
f. Do You Need a Trademark, Copyright, or Patent?
In this line of business, the need for intellectual property protection will depend on the services and products you offer. Do you make your own wine or do you source them wholesale? Are there unique products you are bringing to the market and are they patentable?
You must carry out detailed research to ensure that your club’s name, logo, unique design, etc. are not encroaching into any other wine business concepts, and then consider using a trademark for your protection.
Do your Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Wine Club Business?
The cost of starting a wine club will surely vary depending on your concept, size, location, and the services you intend to offer. It will surely be cheaper to start an e-commerce wine club, however, if you intend to have a brick & mortar location, you will have to factor in your rent, and equipment for producing or packaging the goods. Expect to spend between $4,000 to $50,795 to start a good wine club.
b. What are the Costs Involved?
- Setting up a business name and corporation: $200.
- Business cards, brochures, postcards for marketing: $200 – $300
- Website setup: $1,000 – $2,000
- Facilities construction and preparation, plus land preparation especially if you want to have your winery: $500,000 – $2,500,000
- Vineyard costs such as farm equipment, tools, pesticides, etc.: $10,000 +
- Equipment, such as crushers, fermentation tanks, filtration systems, bottling line, refrigeration, forklift, cups, tables, etc.: $50,000 +
- Insurance: $200 – $600
- Initial marketing such as Facebook ads or search engine optimization for your website: $500 -$1,000
c. What Factors Determine the Cost of Opening a Wine Club Business?
- Research and planning costs
- Legal and administrative costs
- Consulting costs
- Equipment costs
- Permit and licenses
- Build out costs
- Branding, marketing, and promotion costs
- Labor costs
- Security deposits
d. Do You Need to Build a Facility?
Not really! Wine clubs in recent times have developed from tasting rooms to e-commerce, and online wine subscription services are growing massively. These days, even wineries are leveraging e-commerce to develop wine clubs that go beyond local visitors.
However, if you are still looking to construct a physical location for your club, note that size is among the most vital factors that will influence the cost. Note that most wine clubs are between 25 and 150 square feet, with a cost of around $15,000 and $62,000.
e. What are the Ongoing Expenses for Running a Wine Club Business?
- Monthly rent
- Inventory costs
- Insurance premiums
- Hourly labor costs and salaries
- Occasional costs (license renewals, maintenance, training).
f. What is the Average Salary of your Staff?
- Manager: $72,128/Year
- Business Development Manager: $66,880/Year
- Accountant: $62,000/Year
- Store manager: $54,960/Year
- Club Host: $40,622/Year
- Cleaner: $32,412/Year
g. How Do You Get Funding to Start a Wine Club Business?
While there are plenty of ways to raise capital, here are ways to consider for your wine club business:
- Bank loans
- SBA-guaranteed loans
- Government grants
- Venture capital
Write a Business Plan
a. Executive Summary
Wine Vault is a new wine club in Traverse City, Michigan that will also offer co-working spaces to young professionals. Our primary intention is to serve top-quality wine in pursuance of instant diminution to all patrons. Note that our portfolio of wines will be curetted from the best regions, varietals, and styles from all over the world.
At Wine Vault, we intend to sample over 10,000 wines each year and choose only the best for our members. Note that with new bottles in every box and a good space that encourages creativity and connection, Wine Vault will surely remain a club to beat.
b. Products and Service
- Wine club
- Wine tasting sessions and sales from the tasting room
- Direct sale of wine to consumers
- Lease or renting of fully furnished workspaces
- Lease or renting virtual offices
c. Mission Statement
Our mission at Wine Vault is to create a business that offers more than just convenience but develops a different kind of blend, all in a vibrant and loving environment.
Our vision at Wine Vault is to create a calm environment where wine lovers can uncork a positive experience with every bottle, while also providing risk-free wine exploration so that all wine drinkers can easily discover new favorites without numerous trials and errors.
d. Goals and Objectives
- Always exceed expectations
- Be passionately curious
- Never compromise on integrity
- Blend data with imagination
e. Organizational Structure
- Business Development Manager
- Facility Manager
- Club Host
a. SWOT Analysis
- A new and excellent concept that brings together educational tasting menus and a well-designed co-working space for young professionals
- Concrete relationship with suppliers
- Community connections with wineries and relevant associations
- A collaborative environment
- Experience and knowledge of our team
- Intense industry competition
- Well established wine shops, bars, lounges, and restaurants in Asheville
- Number of members in our club and coworking space
- Age of our space and the maturity of our community
- Well designed website
- Well researched marketing plan
- A viable location
- Rising number of young professionals in Traverse City
- New environment regulations
- Availability of substitutes
- The threat of new entrants
- Bargaining power of suppliers
- Bargaining power of buyers
b. How Do Wine Clubs Make Money?
- Monthly subscription from members
- Direct sale of wine to consumers
- Renting space for wedding receptions, corporate events, and other social gatherings.
c. Payment Options
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Offer wine club members invitations to events
- Hold blind tasting
- Offer flexibility and perks to members
- Be customer-centric
- Cross-market with other local businesses (including wineries)
- Take your club online
- Host (virtual) events
- Connect with customers offline
- Reward customers for referrals
- Go to local wine tastings and meet like-minded people.
- Join wine forums on the Internet and look for local, like-minded members.
- Contact your friends and people in your social networks.
- Post a small ad in a local publication, like a newspaper or free want ads.
a. How Much Should You Charge for your product/Service?
Note that wine club membership prices can vary massively. Some plans start at less than $50 per month, while some can cost more than a typical mortgage payment. If you intend to host meetings and tasting events, don’t forget that wine can be quite costly.
Also, note that most people do not join a wine club to sample cheap table wine, instead, they want quality but it shouldn’t be too exorbitant. To succeed in this line of business, always strive to keep your per-bottle costs at $20 to $40.
Ensure that anyone presenting for the upcoming meeting purchases all bottles on a credit card, and then have that person tally up the total cost of the wine. At this point, divide the total cost of the wine by the number of members in the club, then let club members know the amount of money they are expected to pay.
b. How Much Profit Do Wine Club Business Owners Make a Year?
According to reports, annual pre-tax profits will likely range between $42,000 and $1.2 million, based on wine sales and the number of members.
c. What Factors Determine the Amount of Profit to Be Made?
- Number of Members
- Sales capacity
- Nearby competition
- Distributors and network
d. What is the Profit Margin of a Wine Club?
While this will vary depending on numerous factors, nonetheless, aim for a 30 to 35 percent margin.
e. What is the Sales Forecast?
- Year One: $197,000
- Year Two: $435,000
- Year Three: $1,280,000
Set Up your Shop
a. How Do You Choose a Perfect Location for Wine Club Business
To find a suitable location for your wine club, there are numerous factors to consider. These factors may include;
- Sizeable market base
- Geographically convenient for your target market
- Proper zoning
- Available leasing opportunities
- Existing competition
- Taxes and regulations
- Your budget
b. What State and City are Best to Open a Wine Club Business?
- Traverse City, Michigan
- The Texas Hill Country, Fredericksburg, Texas
- Santa Fe, New Mexico
- Palisade, Colorado
- Winston-Salem, North Carolina
- Snake River Valley, Idaho
- Ashland, Rogue Valley, Oregon
- Sonoma and Napa Valley, California
- Geneva, Ohio
- Paso Robles, California
- Santa Maria Valley, Santa Barbara County, California
- Woodinville, Washington
c. What Equipment is Needed to Operate?
- Wine Glasses.
- Wine Refrigerators.
- Wine Racks and Shelves.
- Decanters and Carafes.
- Frozen Cocktail Machines.
- Liquor and Wine Bags.
When seeking to hire employees for your wine club, always focus on those with backgrounds in hospitality. Note that their ability to communicate well with customers while ensuring that your establishment offers a warm and inviting atmosphere remains crucial to the success of your business than a comprehensive knowledge of wines and grape varieties.
Launch the Business Proper
Even before you start designing custom boxes, it is imperative you take time to understand shipping, or purchasing inventory – you must authenticate your idea first. Also, consider setting up a website or landing page to start collecting potential customer emails. Also, check if your Facebook fans and Twitter followers are interested in the idea. Reach out to friends and family to get feedback and advice.
Have it in mind that a good number of wine clubs experience an increase in their sales in December, around the holidays. Therefore, ensure you have your subscription box up and ready by the end of October to ensure you take advantage of this period. Don’t forget there are numerous platforms for selling products by subscription.
a. What Makes a Wine Club Business Successful?
To achieve success in this line of business, you must have an extensive understanding of the budget fluctuation behind your discounts and promotions. Take your time to analyze, for instance, the possible hidden fees that might come with shipments as you scale. Have it in mind that redirecting or returning shipments can be an expense.
Also, note that you will need proper inventory to achieve success in this line of business. You need always need to ask the following questions: What is the state of your inventory? How many wine club members can your inventory support? At which tiers?
Note that the key to keeping customers happy is to ensure they feel like they are part of something unique. Don’t forget to connect with them on a personal level (address them by their first name), provide them with excellent customer service, and ensure they feel special through exclusive “member-only” offers.
b. What Happens During a Typical Day at a Wine Club Business?
For a successful wine club, note that your daily and monthly activities may include;
- Holding once in a month meetings
- Assigning duties for a particular meeting before the actual meeting is held.
- Selecting a host.
- Assigning someone to pick up the wine.
- Selecting the wines to be profiled.
- Note how many will attend the meeting and order wine based on those numbers.
- Seek members or experts to get information about the wines
- Wine club meetings are often held over a period of two to three hours, with a 30-minute socializing break after the discussion and tasting of the first three bottles of wine.
- A good number of wine clubs have their members analyze and score the wines being sampled on a scale of 0 to 20. Once an elected member calculates scores, that member writes up the tallies for inclusion in your wine club newsletter. This is most often sent to members shortly after the meeting.
c. What Skills and Experience Do You Need to Build a Wine Club Business?
- Strategic Planning
- Entrepreneurial Thinking
- Social Media Savvy
- Presentation Skills
- Statistical Analysis
- Talent Management
- Information Technology
- Sales Experience