As July turned into August, we received a notice from a winery that was discontinuing wine tastings.

That struck me as an unusual event.  By far, most American wineries offer tastings, using them to promote their product and attract new customers.  So I read on to see what was behind this.  The winery (Farfelu Vineyards in Flint Hill, VA) has decided to do no more tastings, effective immediately, although they will be still selling wine for a while yet.  Why did they do it?  According to their E-mail, they have struggled with the demands of running a small winery for six years, and have decided to close on November 1, 2006.

Winery closings make me sad.  There are always people who have devoted years or decades to building a dream, and all too often the ending is disappointment.

The notice set me to thinking about wineries that do not offer wine tastings.  Some are simply not open to the public, or only on a very limited basis.  The small ones may not have a facility to use, or find it too difficult to manage.  There are also some in the fortunate position of having already established a solid reputation and existing channels for distribution.  Some even sell all they make on a subscription basis, so there is no point in offering the tastings to the public when there is nothing available to sell.

Tastings are often a difficult issue for small wineries.  Properly managed, they can make a winery profitable.  Badly done, they can disrupt and damage the prospects of the winery’s success.

On the plus side, they attract people – potential customers who might buy wine.  Wine the winery sells direct to the consumer is usually the most profitable, because they do not have to discount their wine to a store or distributor.  Once the customer is in the tasting room, sipping the wine, discussing the merits of the vintage, the winery can build a rapport with them.  Even if the customer does not like the wine, many people feel they should make a “courtesy buy” before leaving.

The minus side is the cost of pouring the wine.  A tasting room is usually necessary, and they range from strictly utilitarian to stand-up bars to tasteful lounges to splendorous great rooms with gorgeous views.  The plainest we ever tasted at was a board over two barrels, not twenty feet from the vats right after harvest, with little gnats settling on the glasses as we sipped.  We may have had the most fun at a den-like room in West Virginia sitting around the table with the owner and his wife (Lambert’s Vintage Wines in Weston).  The high end ones in California or the Finger Lakes or other places can become “destinations”, created to bring the customer in just by existing.

Once you have that tasting room, you have to staff the place.  That means either the owner (and family) work, or they hire and pay employees to do it.  Hiring someone is usually the most difficult decision a really small business makes, because the employee is going to be paid – if money gets tight, often the owner simply takes less – or let go, with the emotional impact no employer is looking forward to eagerly.

Then you have to pour the wine.  Glasses have to be bought and washed, cash registers are needed, and more.  Expenses add up. This raises a dilemma: will you charge a tasting fee? 

Many people feel the need to make that “courtesy buy” I mentioned above if the winery offers tastings for free.  Even if they do not like the wine, they will buy at least one bottle because they feel they owe it to the winery owner.  We have done it.  Sometimes we have difficulty finding even one bottle that we can agree on.  One time, nothing we tasted would do and we bought some very nice wineglasses instead – but the people standing next to us loved what they tasted and bought liberally.

If the winery charges for the tastings, many people feel the “courtesy buy” is not needed.  They no longer feel obligated because they see the tasting as a business transaction.  The winery has been paid for what they offered.  The customer can then leave without guilt.

Customers love free samples, and many people will argue that the winery will re-coup all the value of the tastings in good will and purchases.  That might be so, but it is a risk.  All businesses take risks, but this is a very difficult one for a new or small winery to accept.  They are looking forward into a foggy future, hoping it will work out.  It is doubtful they can afford the type of market research that would give them a better idea of the outcome, and many do not have the deep pockets to afford expensive mistakes.

Every sample poured has to be paid for somewhere, somehow.  Every taste poured brings the average price of a bottle up a little bit.  When a winery is small, with limited production, they have to be very mindful of the effects on their finances.  Too many free pours and they won’t have enough to sell for a profit, or they will have to price their wine higher to cover the cost.  Charge too much for tastings and few will come (unless your wine is really good, of course).

That is why wineries try to get the added sales from the tasting room.  Glasses, wine accessories, jewelry, t-shirts and anything else that will lead to an impulse buy.  Even better, they’d like to get you on their mailing list to keep in touch with you.  Just like any other business, they need to maximize the opportunity your presence has created.

I understand that.  I think there is a flow back and forth from the wine drinker to the winery here that is perfectly reasonable.  Once in a while, I think some wineries manage it badly.  Next month, I’ll look at this from the consumer’s side, and discuss what I think you have a right to expect when you go to a winery for a tasting.