Business & Management
The Start-Up Winery, Part II: changes in plans
In January, when we started our year-long series following two start-up boutique wineries, we didn't know exactly where it would lead. Sure enough, just two months later, both of our start-ups have veered off their initial courses in ways that might have been predicted, but still come as a surprise. In this installment, we'll find out how and why their trajectories have taken a turn.
First, let's get reacquainted with our volunteers, who were selected for both their similarities--novice winemakers of super-premium red wines just embarking on construction of their physical wineries; and their differences--the first in the lofty, and pricey, environs of Napa Valley's Howell Mountain AVA; the second, in Woodinville, a Western Washington locale known for its wineries but not for its grapes.
For decades, Dr. Marc Cohen, a Manhattan urologist, had longed to live and make wine in Napa Valley. In 2000, he purchased a 21-acre, agricultural-zoned property and undertook to convert its orchards to Cabernet-bearing vineyards. Bureaucratic snarls and dubious neighbors notwithstanding, Cohen persisted in planting his vineyards and planning his winery, using lots of expensive, expert hired-help. His first vintage in 2003 yielded only 25 cases of Howell At The Moon Cabernet Sauvignon.

Patrick Smith and his Old Field partners will produce one more vintage in this rented warehouse in Woodinville.
Our subjects in Washington, Patrick Smith, Kevin Taylor and Dan Farrelli, are food and wine lovers with backgrounds in construction and development. When last we talked, they were in negotiations to purchase 7.8 acres near Woodinville, home of Washington's flagship St. Michelle Wine Estates. With advice and assistance from Jay Soloff and Christopher Upchurch of neighboring DeLille Cellars, they had rented a warehouse as a temporary winery, and in 2005, produced their first vintage of Syrah and Cabernet with grapes purchased from Eastern Washington's best-known AVAs. Licensed as Old Field Cellars (a name already in use by a Long Island winery), they have yet to name their brand.
A Change In Latitude
A change in location is the biggest news from the Old Field project. The purchase of the rural acreage, expected to close in December, did not go through as planned. "The negotiations were going on, but not as well as I thought we could do," Smith says. "I thought we could do better."
Instead, the partners decided to sign on to an ambitious project, Woodinville Wine Village, a 27-acre multi-use parcel under construction by MJR Developers in the heart of Woodinville's tourism district. The Old Field partners were able to purchase a 1-acre piece of the property on which to build their own winery/ retail operation, which Smith expects will happen at a faster pace than at the first site.
"It's the coolest thing," Smith says. "(MJR) was going to build it all out themselves. Instead, they are selling us a piece of land within the village." There, Old Field will build a 6,000-square-foot winery and an additional 4,000-square-foot structure dedicated to offices, retail/tasting space and a dining room.
Three other premium wineries will operate in the wine village, including DeLille, which, according to Soloff, will have a second crush warehouse and a retail cellar door. Principals of all four wineries hope to design a shared courtyard in which to hold major culinary/wine tasting events.
The Old Field partners plan to break ground for their winery in May (and promise to provide sketches for our next installment). The new operation will be ready for the 2007 crush, Smith says. Meanwhile, "We'll have one more vintage in the warehouse." Old Field already owns much of the necessary equipment, including pumps, crusher/destemmers and a Europress press.
"One of the most important things, and biggest challenges, will be to incorporate the latest in water treatment technology," Smith says, explaining that the site is surrounded by natural creeks. "We've expressed that to our architect, and a design is in the works to handle wastewater treatment and recycling." The winery will also have two temperature-controlled areas, a warmer one for malolactic fermentation and a cooler one for storage. Estimated construction costs are $200 per square foot.
Because of the partners' preference for Shiraz, the new winery will be designed with Australian-style décor and motifs. To that end, and to stimulate their creativity in coming up with a brand name, all three Old Field partners and winemaker Chris Upchurch (also of DeLille), planned to embark on a jaunt Down Under this month.
There, they set up special tours at "all of our favorite wineries," Smith reports. They know they want a name to reflect their interest in Australian-style wines, but, as Soloff, their marketing consultant, advises them, "It's important to have a story to go with the name." When they return from their excellent adventure in Oz, Smith promises, the Old Field partners will have many stories, and a name to remember.
A Change In Attitude
The good news from Napa is that Howell At The Moon's 2004 Cabernet Sauvignon is "drinking beautifully and should be bottled in April for a fall release," according to Cohen. The not-so-good news is that progress on the winery's construction will continue at a slower pace until that release and its anticipated revenue flow. "High costs have become an issue at this time," Cohen says.
In the fall, Cohen gutted a former rental residence, and the 2,300-square-foot building is now being reconstructed as winery offices, guest services and a 175-square-foot lab for standard wine testing. Cohen estimates that construction costs and equipment for the lab will be in the range of $30,000.
Estimated construction cost for the building will be about $400 per square foot; architect Michael Rada of St. Helena is designing this and a separate concrete crush pad and 2,500-square-foot storage facility made of pine with 1-by-8 foot siding and rigid-paneled insulation. "The features are representative of the beautiful wooded landscape and history of the property as farmland first developed in the 1920s," Cohen says. Brandl Custom Builders of St. Helena is the contractor.
Cohen did not begrudge spending top dollar for design and production of a memorable package. Bottles from Napa's Bergin Glass are etched with a charming depiction of Cohen's Jack Russell Terrier, Tysie. Cohen came up with the concept, and contracted with Tina Ficarra (labeldesignbus.com) for design and color. So far, she's billed $15,000, "With more to come, but worth every penny spent," Cohen says. Closures are natural cork, and Cohen has opted to forego capsules for orange wax seals, that "will look like a moon when lying down in a wine cellar, very identifiable."
Pina Vineyard Management of Rutherford continues to manage Howell At The Moon's 8 acres of vineyards. "Farming costs are approximately $15,000 per acre per year," Cohen says, adding, "But this is for complete management." Pruning was scheduled for the end of February, and was expected to take just one day. "Each crew member can prune approximately 200 vines per shift," Cohen says. "There are 1,556 vines planted per acre in my vineyard."
Cohen was happy to report that despite the winter storm that flooded much of Napa County, his vineyard survived without damage, thanks in large part to his perspicacity in site selection. "It is at the top of Howell Mountain, and several streams on the property provide excellent drainage," he explains.
Still, there's a touch of melancholy in Cohen's latest report. "Since the last interview, everything seems more difficult," he says. "This is primarily because costs keep rising, and still no revenues. I find it now financially difficult to finish the building of the winery in a timely fashion. I have to make the decision to look for investors, and since I am the only one involved, this is very large, with unknown ramifications," he observes. He now expects construction to be complete "in another year."
Another bright spot among the financial low-lights, though, is the quality of the wine in which Cohen has invested so much thought and money. "The 2005 Cabernet Sauvignon is only six weeks in new French oak barrels, but already has the classic elegance and flavors of the terroir, representative of wines from the appellation," he said in late January.
Rising costs, changes in plans; stuff happens, but when your wine tastes like you dreamed it would, therein lies the payoff for any start-up winery. We'll have more from our ambitious new vintners in the May issue.
First, let's get reacquainted with our volunteers, who were selected for both their similarities--novice winemakers of super-premium red wines just embarking on construction of their physical wineries; and their differences--the first in the lofty, and pricey, environs of Napa Valley's Howell Mountain AVA; the second, in Woodinville, a Western Washington locale known for its wineries but not for its grapes.
For decades, Dr. Marc Cohen, a Manhattan urologist, had longed to live and make wine in Napa Valley. In 2000, he purchased a 21-acre, agricultural-zoned property and undertook to convert its orchards to Cabernet-bearing vineyards. Bureaucratic snarls and dubious neighbors notwithstanding, Cohen persisted in planting his vineyards and planning his winery, using lots of expensive, expert hired-help. His first vintage in 2003 yielded only 25 cases of Howell At The Moon Cabernet Sauvignon.

Patrick Smith and his Old Field partners will produce one more vintage in this rented warehouse in Woodinville.
A Change In Latitude
A change in location is the biggest news from the Old Field project. The purchase of the rural acreage, expected to close in December, did not go through as planned. "The negotiations were going on, but not as well as I thought we could do," Smith says. "I thought we could do better."
Instead, the partners decided to sign on to an ambitious project, Woodinville Wine Village, a 27-acre multi-use parcel under construction by MJR Developers in the heart of Woodinville's tourism district. The Old Field partners were able to purchase a 1-acre piece of the property on which to build their own winery/ retail operation, which Smith expects will happen at a faster pace than at the first site.
"It's the coolest thing," Smith says. "(MJR) was going to build it all out themselves. Instead, they are selling us a piece of land within the village." There, Old Field will build a 6,000-square-foot winery and an additional 4,000-square-foot structure dedicated to offices, retail/tasting space and a dining room.
Three other premium wineries will operate in the wine village, including DeLille, which, according to Soloff, will have a second crush warehouse and a retail cellar door. Principals of all four wineries hope to design a shared courtyard in which to hold major culinary/wine tasting events.
The Old Field partners plan to break ground for their winery in May (and promise to provide sketches for our next installment). The new operation will be ready for the 2007 crush, Smith says. Meanwhile, "We'll have one more vintage in the warehouse." Old Field already owns much of the necessary equipment, including pumps, crusher/destemmers and a Europress press.
"One of the most important things, and biggest challenges, will be to incorporate the latest in water treatment technology," Smith says, explaining that the site is surrounded by natural creeks. "We've expressed that to our architect, and a design is in the works to handle wastewater treatment and recycling." The winery will also have two temperature-controlled areas, a warmer one for malolactic fermentation and a cooler one for storage. Estimated construction costs are $200 per square foot.
Because of the partners' preference for Shiraz, the new winery will be designed with Australian-style décor and motifs. To that end, and to stimulate their creativity in coming up with a brand name, all three Old Field partners and winemaker Chris Upchurch (also of DeLille), planned to embark on a jaunt Down Under this month.
There, they set up special tours at "all of our favorite wineries," Smith reports. They know they want a name to reflect their interest in Australian-style wines, but, as Soloff, their marketing consultant, advises them, "It's important to have a story to go with the name." When they return from their excellent adventure in Oz, Smith promises, the Old Field partners will have many stories, and a name to remember.
A Change In Attitude
The good news from Napa is that Howell At The Moon's 2004 Cabernet Sauvignon is "drinking beautifully and should be bottled in April for a fall release," according to Cohen. The not-so-good news is that progress on the winery's construction will continue at a slower pace until that release and its anticipated revenue flow. "High costs have become an issue at this time," Cohen says.
In the fall, Cohen gutted a former rental residence, and the 2,300-square-foot building is now being reconstructed as winery offices, guest services and a 175-square-foot lab for standard wine testing. Cohen estimates that construction costs and equipment for the lab will be in the range of $30,000.
Estimated construction cost for the building will be about $400 per square foot; architect Michael Rada of St. Helena is designing this and a separate concrete crush pad and 2,500-square-foot storage facility made of pine with 1-by-8 foot siding and rigid-paneled insulation. "The features are representative of the beautiful wooded landscape and history of the property as farmland first developed in the 1920s," Cohen says. Brandl Custom Builders of St. Helena is the contractor.
Other costs to date include French oak barrels; Cohen paid about $850 each for 30 barrels in 2005. "Additional costs are barrel racks and storage," he notes. "As you can see, the cost without revenues is quite high."
Cohen did not begrudge spending top dollar for design and production of a memorable package. Bottles from Napa's Bergin Glass are etched with a charming depiction of Cohen's Jack Russell Terrier, Tysie. Cohen came up with the concept, and contracted with Tina Ficarra (labeldesignbus.com) for design and color. So far, she's billed $15,000, "With more to come, but worth every penny spent," Cohen says. Closures are natural cork, and Cohen has opted to forego capsules for orange wax seals, that "will look like a moon when lying down in a wine cellar, very identifiable."
Pina Vineyard Management of Rutherford continues to manage Howell At The Moon's 8 acres of vineyards. "Farming costs are approximately $15,000 per acre per year," Cohen says, adding, "But this is for complete management." Pruning was scheduled for the end of February, and was expected to take just one day. "Each crew member can prune approximately 200 vines per shift," Cohen says. "There are 1,556 vines planted per acre in my vineyard."
Cohen was happy to report that despite the winter storm that flooded much of Napa County, his vineyard survived without damage, thanks in large part to his perspicacity in site selection. "It is at the top of Howell Mountain, and several streams on the property provide excellent drainage," he explains.
Still, there's a touch of melancholy in Cohen's latest report. "Since the last interview, everything seems more difficult," he says. "This is primarily because costs keep rising, and still no revenues. I find it now financially difficult to finish the building of the winery in a timely fashion. I have to make the decision to look for investors, and since I am the only one involved, this is very large, with unknown ramifications," he observes. He now expects construction to be complete "in another year."
Another bright spot among the financial low-lights, though, is the quality of the wine in which Cohen has invested so much thought and money. "The 2005 Cabernet Sauvignon is only six weeks in new French oak barrels, but already has the classic elegance and flavors of the terroir, representative of wines from the appellation," he said in late January.
Rising costs, changes in plans; stuff happens, but when your wine tastes like you dreamed it would, therein lies the payoff for any start-up winery. We'll have more from our ambitious new vintners in the May issue.
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