Vineyard Economics

We put this information sheet together to assist buyers in understanding producing vineyards and potential viticultural acreage. Viticulture is a business impacted by forces that include weather, plant disease, consumption, grape prices and financing. You can’t put agriculture in a neat little box. What we are presenting is a general overview of the business as it relates to your real estate investment.

Paso Robles is an emerging force in the international wine industry. California, France and Italy are the top three wine regions in the world. Paso Robles, along with Napa, Sonoma, Monterey and Santa Barbara counties, is one of the top five wine regions in California. Some of the greatest international wine producers in the world have taken a position in the Paso Robles appellation. Companies such as Southcorp, Chateau Beaucastle, Caymus, Gallo, Stimson Lane, Constellation, and Wine World have secured vineyard property to primarily source premium red wine varietals. Our climate, soil water and location are ideally suited to the creation of high quality premium fruit. A very exciting area with our best years well ahead of us.

Our vintners and growers have joined together to create the Paso Robles Wine Country Alliance. This organization is responsible for promoting the appellation and providing it’s members with value added services in regards to our industry. The Paso Robles Wine Alliance has created a number of high caliber annual events to showcase our wine community and our products. Vintners and grape growers often times are strange bedfellows. We work together. We have a tight wine community committed to promoting the appellation. A great benefit for our wine community.

Vineyards produce crops on an annual basis. Harvest time is between August and November. A big spread. Grapes are harvested by hand or machine picked. The grapes are sold to wineries all over California. Many of our local wineries have vineyards that they utilize for estate wines. Most wineries purchase fruit from the outside for a portion of their wines.

Vineyards usually take three years, from the initial planting, to produce the first crop. Newer planting techniques and plant material have been showing a very small crop in the second year. By the fourth year the vineyard should be in full production. Farming costs are incurred throughout the first three years even though there is little or no crop. There are no harvest expenses, which are significant, if there are no crops.