Made to order: Contract winemaking takes the sting out of starting

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Michael Shaps (right) started Virginia Wineworks with partner Philip Stafford in 2007. In addition to producing its own wines, the business now has more than 25 clients who use its operation to make wines from their own grapes, which are then sold under distinct labels. Most of Virgnia Wineworks’ clients produce between 1,000 and 4,000 cases of contract wine per year. Photo: Jack Looney Michael Shaps (right) started Virginia Wineworks with partner Philip Stafford in 2007. In addition to producing its own wines, the business now has more than 25 clients who use its operation to make wines from their own grapes, which are then sold under distinct labels. Most of Virgnia Wineworks’ clients produce between 1,000 and 4,000 cases of contract wine per year. Photo: Jack Looney

There’s long been a saying (half-jokingly, of course) in the wine industry: “To make a small fortune, you need to start with a large fortune.” While it may not always be the case, the reality is typically that many years and much capital must be pumped into a fledgeling wine growing operation before the first bottle is sold. Vines don’t grow overnight, and even after they do start producing usable grapes, it normally takes few vintages before the fruit is “wine-worthy.” All that talk you read on wine labels about “old vines”? Turns out there’s something to that.

Unsurprisingly, the delay between the initial outlay and the first realistic stream of income creates a significant barrier to entry in the industry, especially when the land and/or winemaker isn’t a proven winner and thus can’t command significant investor commitments. So what’s an aspiring winegrower to do?

If you’ve got the cash (and can afford to lose it on a yet-unproven investment), then you can simply float it for the first few years; but for everyone else, contract winemaking (also known as “custom crush”) is a valuable stepping stone to full operation. While many established wineries engage in some informal “contracting,” both to help utilize extra capacity and bolster the bottom line, the upsurgence of smaller “garage winemakers” in concert with larger contract winemakers has lowered those barriers significantly.

“Custom crush has been around for a long time, all over the world,” explained Virginia Wineworks’ Michael Shaps. “It helps wineries that have capacity issues, but mainly it’s a way for start-up wineries to get a going without the capital intensive demands of building a winery.”

Shaps, who started Virginia Wineworks in 2007 with partner Philip Stafford, never envisioned their rather traditional winemaking operation becoming a regional leader in contract winemaking; in fact, says Shaps, “we had no plan to do contract winemaking, we were just making the Michael Shaps and Wineworks brand; but I saw a need for this service and we started with a few customers.”

Today, Virginia Wineworks’ contract winemaking customer list (which includes custom restaurant labels for the likes of Keswick Hall and the Virginia Museum of Fine Arts) has blossomed to over 25, with most of those clients producing between 1,000 and 4,000 cases every year. While the focus of the operation remains the estate’s VWW and Michael Shaps brands, the efficiency of using their existing equipment for “insourcing” is a no-brainer for Shaps and his team.

What does a contract winemaker actually do, you might wonder? Well, excluding growing the grapes, almost anything you need: “[Contract winemaking] allows clients to focus on the two most important aspects of the business: grape growing and marketing,” said Shaps. “Winemaking is really the least important aspect of the business. You can’t make good wine without good grapes and you can’t survive in this business no matter how well the wine is made unless you can market it. So we are really the bridge that brings those aspects together.”

While the client’s emphasis is directed towards growing grapes and marketing, the contract winemaker focuses on making the wine. Shaps said the clients can be as involved as they choose in that part of the process.

“We work hand in hand with them on a production plan and winemaking style,” said Shaps. As any aspiring winemaker will tell you, this type of experience is invaluable; it’s a hands-on masterclass in bringing the juice from vineyard to bottle. Clients also learn when to say “no” to subpar fruit. “We tell them that we reserve the right to refuse their grapes if they deliver fruit that does not meet our standards for quality winemaking,” Shaps said. “We have turned away a lot of fruit over the years.”

Far from a generic winemaking service, the business is designed to not only assist but also educate potential independent winegrowers.

By offering the expertise, experience, and equipment that is so difficult to come by for the aspiring winemaker, contract winemakers like Virginia Wineworks are lowering the financial and logistical barriers to entry into this industry. In an area like Virginia where so much of the land is yet to be explored by vintners, that can only be a good thing.

Evan Williams is a co-founder of The Wine Guild of Charlottesville. Find out more at wineguildcville.com.

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