So, you want to start a winery/meadery/cidery

by Chris Webber
August 10, 2020

Here is another one of those questions that gets asked a dozen times a day on the various
wine/mead/cider groups on facebook. “What do I need to do to legally sell my awesome
wine/mead/cider?” The running joke in the wine industry is, to make a million dollars in the wine
business you start with two million. In this article I am only going to touch on the very basics of what it
takes to go pro. For the sake of brevity, I will simply use the word wine throughout this article but be
aware I am including mead and cider as well since all three are covered under the same federal law and
in pretty much every state and territory. Be aware that only Washington and New Jersey have an actual
accurate definition of mead written into law.

Before we get into the process there are some things you must absolutely know before you begin. As a
home wine maker, you are allowed by federal law to make up to 100 gallons of wine per adult in the
household per year not to exceed 200 gallons ( 26 U.S.C. 5042 and 27 CFR 24.75(a) ). Most states have the
same limitations or less. This can generally be gifted to friends and family and sent off to your favorite
competition without issue. DO NOT attempt to circumvent the rules on selling your wine without a
license or bad things will happen. This includes trading goods and service. If it can be construed as
having value, it can be taxed and Uncle Sam wants his tax. The Revenuers do not have a sense of humor
on this issue.

National Conference of State Legislators: Home Manufacture of Alcohol State Statutes

https://www.ncsl.org/research/financial-services-and-commerce/home-manufacture-of-alcohol-state-statutes.aspx

Another piece of advice that will save you thousands in up front cost. You do not need a lawyer to file
the paperwork for you. The federal application can be done entirely online and it costs nothing. As far as
your city and state, simply give them a call. They will help you through the entire process. If you are still
not sure what to do, feel free to contact me and I will help you.

What’s next? First of all, you need to literally make awesome wine. Once you start a business you have
an obligation to that business to be viable and successful. I know most people believe they make great
wine because all their friends and relatives drink it and say it is great, but they have a vested interest in
your relationship, so they are probably just being nice. Someone who is going to spend $10 or $25 or
even $50 on a bottle of your best hooch isn’t going to want just any old “homemade” quality booze.
That’s not to say there aren’t some great home wine makers out there. By the same token there is
plenty of swill available for sale.

Suffice to say it takes more than a half dozen decent batches to say you are ready to make such a
commitment. You need at least 3 – 5 years of fermenting experience with a hundred batches to your
credit. In my case, I also used my GI Bill to earn an AAS in Winemaking from the Northwest Wine
Academy before I went pro. If you have never owned a business before it would also be advisable to
take classes at the local Community College.
 Outlanders Keep, LLC Business Plan

Next you will need a Business Plan. Starting and running a winery isn’t something you can do off the
cuff. You are going to invest a lot of time and money just getting set up. You need something to help
keep you on track. This will also help you if you seek financing other than your 401K or life savings. Be
aware that most financial institutions will not lend to new wine makers since it can take up to seven
years before you become profitable. Family and Crowdfunding seem to be the most common means of
financing a new winery. Our Business Plan is actually eleven volumes (see image above). There is a
Readers Digest version available in the Files section of the American Mead Makers Association (Public)
group on facebook (OK Business Plan).

A lot of the things you need to do can be done simultaneously. You can search for a location, but you
need to check with your local jurisdiction, ie city/county, on zoning. Every state, township, county
perish, city, town, village, et al, is different. Fortunately, we live in a residential neighborhood within the
city limits that is zoned for home-based businesses. Be aware, some places will allow you to actually run
your winery out of your basement, however, you must have a dedicated ingress/egress to the winery
space. This is partly due to Fire Code, but mostly it is a Fourth Amendment issue. The regulators have
the right to show up at your business unannounced, but they can’t access your winery by going through
your house. We ended up bringing our single car stand alone garage up to code with water/sewer,
power and gas. You will have to work with your local jurisdiction on building permits and code
requirements.

Here in Washington we were not allowed to get our license until we had built a fully functioning winery
and it had been inspected by both the city to comply with code and by the state liquor board. I am
willing to bet it is basically the same in every state. The cost of building your winery is entirely based on
the size of your pocketbook. Our whole buildout was about $8500. Again, every state is different, but it
was only $110 for our state liquor license and $50 for a city business license. I also highly recommend
you legally form your company before you start the process. The main reason being all your expenses
can then be charged to the company. You will get some great tax advantages doing it this way.

At the same time, you will want to contact every agency that has an interest in your business and find
out what their requirements, if any, apply to you. I’ve included the TTB checklist at the end of this article
and an additional checklist I created when we were going through the process of all the local agencies I
had to contact. You may not have to submit all the documents on the TTB list depending in your
corporate structure. Feel free to modify the additional items checklist to your circumstances.

Contract Brewing
What is contract brewing?

With contract brewing, you hire another brewery to brew and package beer for you, or you can rent out
another brewer’s facility and brew the beer yourself. It’s still your beer: You own the recipe and decide
how the beer is made.

This also applies to wine.

Nerdwallet
Contract Brewing: A Low-Cost Alternative for Brewery Startups

2ndKitchen
What is Contract Brewing? (+Pros and Cons for Craft Brewers)

Custom Crush
So, what exactly is a custom crush facility?

A custom crush is a bonded winery that allows other wine brands to make wine at their facility, often
times even making the wine for you. You’ll still have to get your own winery license in order to market
and sell your wine, but you can completely avoid the cost of maintaining your own facility, allowing you
to instead concentrate on actually selling your wine.

VINEPAIR
Custom Crush: How To Make Wine Without Owning A Winery

Dundee Vintners
Your Winemaking Partner in Willamette Valley, Oregon.

Alternating Premises
An alternating proprietor arrangement consists of two or more persons or entities taking turns using
the same space and equipment to produce wine. In almost all situations, an existing proprietor-owner
of a bonded wine premises agrees to rent space and equipment to a new proprietor.

Gravity Wine House

How to start a wine label
(Custom Crush and Alternating Premises)

Alcohol and Tobacco Tax and Trade Bureau

Industry Circular Number: 2008-4
Other resources:
IAP Career College
Winery Owner Certificate Course Online

WineMaker Magazine
From Hobby to Startup

SevenFifty Daily
How to start a Tasting Room

nc wine
Starting a Winery in North Carolina
(Great info even if you are not in North Carolina)

YouTube
Heidi Noble: On Starting A Winery
(A different approach)
 Chris Webber is owner of Outlanders Keep, LLC, a craft winery based in
Lakewood, Washington that specializes in country wine, mead and cider; dba
Lake Grove Cottage Cellars for wine, Dragon’s Lair Meadery for mead and
Chambers Creek Cider Company for cider.

He is founder and former President of the American Mead Makers Association

and the Washington Mead Alliance and has lectured at the Mead Makers
Short Course at UC Davis, of which he is a co-founder. He has both an AAS in
Winemaking and a Certificate in Wine Marketing and Sales from the
Northwest Wine Academy at South Seattle College.

Chris retired in June 2017 as a Sr Logistics NCO after serving 37.5 years in the military where he also
gained experience in military intelligence and avionics and served as a Drill Sergeant. He was deployed
three times in support of the Global War on Terrorism.

Other articles available thru the many facebook wine, mead and cider groups are:

• A Complete List of Books on Mead Making

• Build your own four carboy drying rack
• Myths, Legends and Lies about Poison Fruits
• Printing Your Own Labels
• Recycling used bottles
• Shipping Wine
• Build your own large capacity Steamer
 NEW WINE PREMISES CHECKLIST
To be filed in duplicate with TTB’s National Revenue Center in Cincinnati, Ohio

ALL OF THESE DOCUMENTS APPLY FOR EVERY NEW APPLICATION:

􀂉Application to Establish and Operate Wine Premises, Form 5120.25, including the
answers to the questions on the back of the form.

􀂉Application for Basic Permit, Form 5100.24, if wine will be produced and/or blended (not
required for storage-only bonded wine cellars)

􀂉Wine Bond, Form 5120.36

􀂉Surety company representative Power of Attorney, if filing a Surety Bond
􀂉Diagram (plat/plan) of the winery premises.
􀂉Environmental Information, Form 5000.29
􀂉Supplemental Information on Water Quality Considerations, Form 5000.30
􀂉Signing Authority:
􀂉Power of Attorney, Form 5000.8 or
􀂉Signing Authority for Corporate Officials Form 5100.1 or
􀂉Other evidence of signature authority, such as a specific notification in
organizational documents.
􀂉Statement advising that the premises is covered under the National Historic Preservation
Act (if applicable)

􀂉Source of Funds Documentation

􀂉Lease Agreement (if applicable)
􀂉Trade Name Registration statement (if required by state or local government)
􀂉Personnel Questionnaire, Form 5000.9 (if applicable)
􀂉Legible photocopy of the Driver’s License or official State ID card of the primary contact
person who will be interviewed by phone by TTB regarding the application

www.TTB.GOV
THE FOLLOWING MUST BE SUBMITTED FOR ALL CORPORATIONS:

􀂉List of Stockholders of more than 10% which includes their addresses and amount of
shares held

􀂉By-Laws
􀂉Certificate to Operate in a Foreign State (if organized in a different state)
􀂉Certificate and Articles of Incorporation

THE FOLLOWING MUST BE SUBMITTED FOR ALL PARTNERSHIPS:

􀂉Partnership Agreement

THE FOLLOWING MUST BE SUBMITTED FOR LLCS:

􀂉Signing Authority for Corporate Officials, Form 5100.1

􀂉Corporate resolution or specific notification in organizational documents
􀂉List of Interest holders of more than 10% which includes their addresses and amount of
interest held

􀂉Operating Agreement
􀂉Certificate and Articles of Organization

To be filed with the IRS

􀂉Application for Employer Identification Number, Form SS-4

www.TTB.GOV
Checklist for local jurisdiction
FDA form 3537 Food Facility Registration Form

State Dept of Licensing Master Business License

State Dept of Revenue Reseller Permit

State Dept of Agriculture

Puget Sound Energy (gas)

Pierce County Dept of Health Approval

Pierce County Public Works & Utilities

Tacoma City Light

City of Lakewood Business License

Lakewood Fire Dept Approval

Lakewood Water District

LeMay Solid Waste