Many people dream of the lifestyle; an idyllic location with a sexy business that provides a decent income. I’m sure that several smaller vineyards have been set up on that basis only for the proprietors to discover that the reality of owning a vineyard is hard graft and will rapidly eat into cash reserves before generating revenue.  A friend of the family, 15 years in the wine business and with good connections said to me she would only consider setting up a vineyard if she won the lottery!

A couple of vineyards have recently come onto the market in Sussex, my preferred location.  I know of these vineyards, one of which I have looked at in some detail as part of my due diligence. Both vineyards are small, around 10 acres under vine.  One has an attractive events and function centre which is used for hospitality, weddings, etc and a dining room for the general public; all nicely built and well laid out with views over the vineyard and beyond to the South Downs.  It even comes with a ready-to-move-in house, so ideal for someone who wants the lifestyle in a pre-paid package. This vineyard doesn’t come with a winery.  For most this is a benefit as you will need to invest north of £250,000 in equipment (small winery), plus you have building costs and additional labour costs once up and running and, as I mentioned in my previous blog post, to produce a good wine can take years to perfect with no guarantee of selling all the wine produced.  Instead, this vineyard sends its grapes to a 3rd party winery to produce its wine which can provide a better return than selling the grapes wholesale at circa £2300 per ton.  The vineyard produces circa 17,000 bottles retailing at £18 (expensive when you can buy a decent Sauvignon Blanc, for example, in the supermarket for £10), this equates to £306,000, minus production costs and overheads, the vineyard just about breaks even so, having a hospitality business makes perfect sense providing of course that you want to be in the catering trade.

The second vineyard comes with an attractive winery and sits in about 30 acres with 8 acres under vine, producing varietals suited to mainly red wine.  Unfortunately, if I bought this vineyard, I would want to grub these up and replant it. As I mentioned in my first blog post, to me, producing red in the UK is not yet commercially viable. The winery is an attractive and probably expensive building. The viewing platforms and tasting room would give the visiting public a good experience. Unfortunately, it only has a very small production capacity, so when you add in the cost of grubbing up the existing vines and replanting, plus additional equipment costs, the business is too expensive for my needs.  You see I’m not in the market for pretty buildings and serving coffee’s, preferring to put my money into buying a good plot of land, capable of producing some yield even in difficult weather with the objective of producing a seriously good product that can compete against other world-class wines both on quality and on price.

I’ve had my eye on a plot of land coming up for sale in Plumpton and I’ve already visited the site twice.  This week I received the feasibility report produced by VineWorks on behalf of the seller (normally you would commission this yourself).  It is a comprehensive document and a worthwhile investment when buying land for a vineyard.   In addition to providing information on Mesoclimatic Influences – Climatic Analysis – Soil Analysis, etc, the report also provides you with a good indication of the number of plantable hectares, capital outlay needed to make the site productive and annual production costs.  So there are many issues requiring serious thought.

Even if the Plumpton package has hidden gold reserves, the asking price is far too expensive, pushing the chance of making any return on investment too far out.

Ever onwards…….