Comments on: Wine Business Metrics http://www.pinotblogger.com/2006/04/25/wine-business-metrics/ A blog about starting and building a family winery in the Russian River Valley Thu, 21 Aug 2008 19:58:55 +0000 http://wordpress.org/?v=2.6.1 By: Josh http://www.pinotblogger.com/2006/04/25/wine-business-metrics/#comment-478 Josh Fri, 12 May 2006 21:09:02 +0000 http://www.pinotblogger.com/?p=58#comment-478 Danny, Yes you are correct that these metrics are boilerplate, but the norms are specific to the wine industry. The only one that is unique to the wine industry that I listed is COWS, which is of course COGS or cost of goods sold in every other business. As far as advertising spending, yeah, having a marketing budget of 40% would certainly lead to a loss the first year. Generally wineries take 4 or 5 years to turn a profit (you start counting after your first crush, and wine generally has to age a year to three years depending on the varietal). We'd like to cut that down to 3 years. The cost analysis metrics depend on at least a year of mature sales data to have any real meaning. Thanks for the comment. Danny,

Yes you are correct that these metrics are boilerplate, but the norms are specific to the wine industry. The only one that is unique to the wine industry that I listed is COWS, which is of course COGS or cost of goods sold in every other business.

As far as advertising spending, yeah, having a marketing budget of 40% would certainly lead to a loss the first year. Generally wineries take 4 or 5 years to turn a profit (you start counting after your first crush, and wine generally has to age a year to three years depending on the varietal). We’d like to cut that down to 3 years.

The cost analysis metrics depend on at least a year of mature sales data to have any real meaning.

Thanks for the comment.

]]> By: Danny http://www.pinotblogger.com/2006/04/25/wine-business-metrics/#comment-474 Danny Fri, 12 May 2006 19:13:25 +0000 http://www.pinotblogger.com/?p=58#comment-474 Curious if you are spending 40% of your take on advertising this would indicate that you have losses early on. How long do you think it will take to turn the corner? When does the full 10% of administrative kick in? Year one? Generally speaking that cost is probably higher than 10% early on as well. If for no other reason than lack of sales volume. Those metrics that you list are pretty boilerplate for any business. Are there any that are specific to the Wine Business? Curious if you are spending 40% of your take on advertising this would indicate that you have losses early on. How long do you think it will take to turn the corner? When does the full 10% of administrative kick in? Year one? Generally speaking that cost is probably higher than 10% early on as well. If for no other reason than lack of sales volume. Those metrics that you list are pretty boilerplate for any business. Are there any that are specific to the Wine Business?

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