Is your agri-tourism plan as good as your wine?

The opportunity to taste and buy the wine you are so proud of is not the only reason people come to your winery. They want to experience where the grapes are grown and the wine is made; they are looking for that emotional connection with you, your product and your lifestyle. With the increase in agri-tourism, more and more customers expect your winery to offer additional attractions. These ventures are also an important component of your wine’s brand recognition, as they will help differentiate your winery and generate more profits.

Agri-tourism activities add value to your winery. Beyond the expected wine tour and wine tasting, they can involve a wide variety of activities and products that can increase your profits, such as giftshops, restaurants, bed-and-breakfasts, weekend workshops, bicycle rentals, pony rides and petting zoos, flowers, baked goods and cheeses.

Before deciding to enhance your winery with a new enterprise, you need to ensure you have a plan that will be profitable and will fit your family’s goals and lifestyle.

Where to Start

Setting Your Goal

Your first step in developing a plan should be to ask yourself whether branching out will enhance or detract from your goals. Key questions to ask yourself include: Is my goal to increase profits? Will this activity build up my wine’s brand recognition? Promote other products or services? Share my values with others? Develop a business my family is involved in and can be handed over to my kids? How you answer these questions will play a big role in helping to determine whether a new venture would be right for you.

Researching Your Market and Budgeting

In addition to establishing goals, you need to complete sound market research and financial budgeting. Is there a demand for the type of experience you are going to offer? Will you have competitors in the region? What will make your venture more attractive than your competitors? How much will it cost to implement? What are your expected returns? What is your model for success – do you want to create a “Napa Valley of the North” or a more informal experience?

Management Issues

Along with these questions, you will also need to consider a wide range of management issues that will impact the success of your enterprise. These include:

• Support and Social Skills
  If you operate a family-run business, you will want to ensure your family supports your plan. You should also be “people” persons who are outgoing and friendly, enjoy entertaining, and feel comfortable interacting with a wide range of visitors. If you live at the winery and offer overnight accommodations, will your family be willing to give up some of its privacy?
  
  You should also ask yourself if there are specialists you can collaborate with who will develop and run your winery’s new agri-tourism venture. Consider whether you need a manager who already has a proven track record with similar ventures, someone who will operate your business under contract based on performance, or someone who will be an independent operator and pay you rent and a percentage of profits.

• Site Feasibility
  Key factors to consider here include whether your property is easy to find, creates the image your brand wants to project, is located reasonably close to other tourist facilities, is well-kept and tidy, has ample parking, and can accommodate cars and tour buses.

• Liability Insurance
  Despite the best safety precautions, accidents can happen anytime and anywhere. To ensure you are not held legally liable if someone injures themselves on your property, you should ensure you have a liability policy in place before you start your venture. Depending on your situation, this may be added to your existing policy, require creating a general liability policy, or involve setting up a separate company. Be sure to consult a lawyer to ensure you are fully protected.
  
  Keep in mind that even with a liability policy, you will still need to ensure your site meets any required safety standards. It should also be wheelchair-friendly.

• Staffing
  Staffing will be a key consideration if you are launching a new enterprise. Depending on your circumstances, you may need additional help in areas such as production, customer service, event planning, and marketing.
  
  Also it is important to consider the seasonality of your business and if you will operate year-round or from spring to fall only. This requires careful planning and budgeting in terms of closing down and gearing up your operations. You may also need to find good staff who will be willing to work for only five or six months of the year.

• Government and Regulatory Agencies
  When launching any new venture, you must comply with certain laws and industry regulations. Take time to research exactly what these regulations are so you do not run into any major obstacles down the road.

• Target Audience
  Remember to identify who the prime audience for your new venture is, such as local residents, families, yuppies, seniors, and special interest groups. What is your strategy for tourists? Which areas do you want to focus on? North America? Europe? Asia? Do you want to cater to tour groups? If you do, what special facilities will they need?
  
  This information is vital to knowing whom you will be marketing your enterprise to and where they will be coming from. While many tourists speak English, you may want to consider translating menus, brochures and other marketing collateral into the language of your major tourist groups.

• Marketing Tools
  The marketing strategies you choose may vary significantly depending on the type of operation you offer. Among the techniques you may wish to consider are direct mail, partnership marketing, tourism tradeshows and conferences, incentive programs with tour operators, visitor information centers, web sites, word-of-mouth, and newspapers and magazines. Keep in mind that marketing your wine at your store will enable you to cut out the middle man, ensuring you can retain the greatest profits.

• Budget
  Regardless of the type of venture you choose to offer, you will need to put some capital aside for your initial set-up costs. This could range from a few thousand dollars to hundreds of thousands. Be realistic enough to budget for the infrastructure to succeed, then phase out your project so you can grow your facilities strategically in keeping with market demand and what you learn along the way.

While agri-tourism offers wineries a unique way to attract more people and expand your business, you need to determine what type of enterprise you would like to offer – and whether it’s the right fit with where you and your family are at today and where you want to be tomorrow.

This strategic decision means taking the guesswork out of this process; it’s too important a task to rely on a hunch. Also keep in mind that you may need outside advisors to assist with this enterprise analysis, so that your agri-tourism plan can be as good as your wine. As Shakespeare said, “Good wine is a good familiar creature if it be well used.”

By Andrew J. Raphael, Director of Agri-Food. For more information, please contact your local MNP advisor or Andrew at 1.877.688.8408.