Business Summary:
This is a lovely little business that has both a manufacturing side and a sales side. Production combines creativity and technical skills with light physical work to produce and bottle the wines. Sales have both a retail and wholesale element. A winery is a very different experience than most retail environments. Retail customers are a joy as they come in looking to have a good time and spend money, not to hand over a problem. Wine margins are in the 70-80% range and you not WalMart set your prices.
Currently the business is being run as a retirement business, eight months out of the year, and 22.5 hours per week. However, licensing includes the ability to add a restaurant/ wine bar, and to sell directly to re-sellers. At present wholesale is being handled by a distributor. In this mode we are unable to keep up with demand.
The winery is too far north to grow grapes commercially. There is no vineyard associated with the winery. We produce local berry wines and use concentrates from a California winery supplier for our basic varietals. For variety we use juices from international vineyards in small batches.
The sale includes the building, which for tax and legal reasons is not an asset of the winery. The building, built in 1873, totals over 8000 sq-ft with the 4800 sq-ft winery on the first floor, an office and two apartments on the second floor. One apartment is an 1800 sq-ft three bedroom with two baths. The basement has thick stonewalls and would make a beautiful wine cellar/ wine bar. The winery has a two-year-old roof, new windows, plumbing and wiring and a new period-correct facade.
The area is in the western Upper Peninsula of Michigan in a University town with vast outdoor and water recreational areas. Tourist seasons include summer for the water and woods; fall for the color and hunting; and winter for snowmobiles. The area has been touted as having one of the highest quality of life ratings anywhere in the US.
Period to period sales have grown 40% in the second year and are up 9% through August. We are currently switching production to larger vats and a better quality of wine and are having growing pains keeping up with demand. Cash flows (not including discretionary spending) were about $27K in 2007, but are projected to be flat to down for 2008 due to slower production. This is an asset sale with the building at $235K (< $30 per sq-ft), and furniture and fixtures, liquor license and inventory making up the rest. Federal and state approval for license transfer is required.
Go to the link below for a tour of the winery.
carrouselwinery.com/tour
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