Today Yesterday Jim Lapsley presented some recently aquired aggregate (and anonymous) data on small privately held wineries. The accounting data summarized in the slides to the right shows that, on average, 10-20K case wineries seem to offer the best combination of size and profit margin. The data, gleaned from P&L’s supplied to Silicon Bank from its portfolio of small winery loans, also seems to indicate that when you get past 10-20K cases growing bigger can actually cost you in terms of Net Income. Since a larger proportion of your wine must be funneled through the three tier system instead of direct, you actually are better staying moderately sized rather than growing.

I think that the average net income for a 1-3K case winery is a little low at $45,000, but then again a simple average doesn’t differentiate between many factors that can lead to a winery being more profitable than another.

Tomorrow is the last day of talks at OIV and will feature winery profiles of a host of Napa wineries including St. Supery. Check back then for a recap of the final day and the course as a whole.