The wine market has exploded over the past three decades. Perhaps you are even enjoying a savory pinot or succulent chardonnay while reading this article! Wine businesses generated nearly $47.2 billion of revenue in the U.S. market in 2018/19 and the total number of 9 liter wine cases sold reached a new record of 408 million! While the figures are not yet out for 2019/20, that number is expected to rise. When did this wine craze start and why can’t Americans get enough of it?
What is Wine and How is it Produced? The Process is More Complicated than you think!
Wine is an alcoholic beverage made from grapes in a process known as fermentation. After the grapes are crushed, yeast is added. The sugar in grapes transforms into ethanol and carbon dioxide. The fermentation process differs between red and white wine. White wine typically ferments in closed steel tanks for 2-3 months while red wine may only need a few days or weeks to ferment and can sit in open air tanks.
Once fermentation is complete, a process known as clarification is initiated. At this stage, the wine produces a lot of sediment and other byproducts from fermentation that need to be expelled. Dead yeast, tannins, and proteins are all removed from the liquid. The wine is then transferred to another tank or barrel.
At this point, the wine can either sit for days, months, or years – or a producer may choose to bottle it right away. Aged wine produces a smoother and fruitier taste the more wine is allowed to oxidize.
The Different Types of Wine
To the average wine layman, there are two types of wine – red and white. The varieties go far beyond color! Get ready to wow (or annoy) the guests at your next dinner party:
Chardonnay – A very popular wine in the U.S, Chardonnay is considered medium and full-bodied. This type of wine is often described as exhibiting crisp fruit flavors like apple and pear combined with citrus aromas and hints of spice and vanilla. Chardonnay is best paired with creamy sauces or chicken dishes.
Riesling – Originates from the Rhine Valley in Germany. Riesling is a sweet and acidic wine. It balances out with honey flavors and a slight mineral texture. Riesling pairs well with spicy Asian cuisines and pork.
Pinot Grigio – First made in Italy. The wine is dry and crispy, but also very light. A different style of cultivation produces a more medium-bodied wine that has a floral aroma. Pinot Grigio is best paired with seafood, more specifically shellfish.
Sauvignon Blanc – Similar in taste to Pinot Grigio, but more of a citrus flavor. Sauvignon Blanc pairs great with chicken, vegetables, and shellfish.
Cabernet Sauvignon – Originating from Napa Valley, California. This style of wine is aged in French barrels where dark fruit flavors are combined with spices and other earthy aromas. Try your next Cabernet with a juicy steak.
Pinot Noir – Grows in arguably the coldest climates that wine can exist in. The taste is often described as having a smooth, fruity flavor. Pinot Noir has red-fruit aromas, most commonly cherry, and a touch of spices and earthiness. Pinot Noir typically lasts in your palette long after your drink is finished. They pair well with heartier meets like venison and bison.
Syrah – Bold and rich. Australians may know this variety as Shiraz which is much sweeter than the European Syrah. Both versions are rich in fruit flavors, yet notably complex. Syrah is perfect for succulent meat dishes like veal.
Zinfandel – Made with the only grapes indigenous to the Americas. The wine is grown only in California. Zinfandel is also one of the most alcoholic wines out there. Anything smoked or grilled would pair perfectly with this California wine.
Malbec – Originally produced in France but now popular worldwide, especially in Argentina. Malbec is a full-bodied wine, rich in taste and texture. It works best with steak or other grilled meats.
Merlot – Popular in the U.S. and France. Merlot is essentially a stronger version of Cabernet Sauvignon. Merlot tastes exquisite when paired with a hamburger, lamb, or duck.
When Did Humans Begin to Produce Wine?
The wine production process constitutes a lineage steeped in history ranging back thousands of years and across numerous civilizations:
- 4100 B.C. – A team of UCLA researchers discovered ancient wine making artifacts in Armenia from this time. These artifacts include a wine press, grape vines, skins, and seeds.
- 3100 B.C. – Egyptians typically used wine in religious ceremonies due to its resemblance to blood.
- 1200 B.C. – The Phoenicians, located around the Mediterranean, were the first to spread wine throughout Europe. Traders transported wine in ceramic jugs as well as grapevines. Jewish people began to use Phoenician wine in their religious ceremonies.
- 800 B.C. – Wine in Greek society became more than a popular beverage. The Greek god Dionysus was named after wine! As Greeks conquered more lands, they introduced grapevines to the conquered areas.
- 146 B.C. – Similar to the Greeks, the Roman Empire named the god Bacchus after the drink. Wine cultivation was a key part of Roman culture. As the empire expanded, soldiers introduced grapevines to regions such as modern day France, Germany, and Italy.
- 380 A.D. – When Rome officially recognized Christianity under Emperor Constantine, wine became an important part of Christian culture. Monks began to produce wine for religious ceremonies all across Europe and the Middle East.
- 1492 – Columbus sails the ocean blue and brings wine with him. Wine spreads throughout Latin and South America for the next 300 years.
- 1769 – Franciscan missionary Junipero Serra introduces California to wine. Serra opens a mission near modern day San Diego. His monks open the first Sonoma winery in 1805.
- 1788 – The First Fleet, a British expeditionary fleet, sails to Australia to establish a penal colony. The fleet also carries grapevines to spread across Australia.
- 1980 – China begins to open up its economy to global markets. French wine is soon imported in vast quantities. French entrepreneurs begin to establish China’s first wineries. China is now one of the largest consumers and producers of wine in the world.
When did the Wine Craze Begin in America?
It is difficult to think of a time when wine was not as popular in the U.S. The fruity beverage is a go-to drink for people eating out, celebrating, or just looking to unwind after a long day. Starting in 1985, U.S. wine consumption began to falter from an estimated 480 million gallons to 380 million gallons in 1993. The following year, wine consumption began to rise and has not looked back since – over 770 million gallons were consumed in 2018! What caused the growth in wine consumption?
The Baby Boomer Effect on Wine Sales
When Baby Boomers began to hit their peak earning years in the early to mid-90s, they began to spend money on higher quality alcohol. On average, Boomers had more disposable income than any other generation due to the economic boom the 1990s created.
The U.S. economy grew 4% annually between 1992 and 1997. Furthermore, an average of 1.7 million jobs were added each year and the unemployment rate dropped from 8% in 1992 to 4% in 1999. Finally, stocks quadrupled in value during the decade as the Dow Jones grew 309%! Gone were the days of drinking a case of PBR with friends. Boomers could afford to spend money on wine for a classy night out.
Researchers Discovered Hidden Wine Health Benefits
In 1992, French researchers released their findings on the fantastic health benefits of wine. Scientists were puzzled as to why the French population had a lower mortality rate due to Coronary Heart Disease (CHD) than Americans.
After all, the French had a much higher rate of smoking among the adult population and their diet consisted mainly of saturated fats – two lifestyles that generally combine to negatively impact heart health. The researchers attributed this lower risk of CHD to wine. The study concluded that consuming 20-30 grams of wine each day can reduce the risk of CHD by at least 40%!
How are Entrepreneurs Getting into the Wine Business?
Entrepreneurs define their success by identifying trends in the market and jumping on an opportunity before everyone else. When it became clear the market for wine wasn’t going anywhere but up, entrepreneurs started to open their own wine businesses.
Some wine businesses, like wineries, are usually family owned and passed down through generations. Apart from manufacturing their own product, wineries typically offer informational tours of their facilities. Wine tourism revenue increased 10 to 15% between 2013 and 2016 alone!
While some entrepreneurs start their own wineries or wine-based businesses, others continue to follow the franchise model instead. When someone acquires a franchise, they purchase the license to provide services or distribute a product under a more established brand. Wine franchises offer support in areas such as management, equipment, operation, training, and design. Some wine franchises that are hot on the market are listed below.
Pinot’s Palette combines an art studio experience with wine. Family and friends come together in an immersive painting environment. Parties can either consist of a families, friends, or employees. There are currently 135 franchises in operation and the brand looks to rapidly expand.
- Approx. Initial Fee: $22,500 (per 2019 FDD)
- Approx. Startup Cost: $96,800 – $199,840 (per 2019 FDD)
- Approx. Revenue Range: $154,519 – $874,833 (per 2019 FDD)
Wine and Design
Wine and Design is another addition to the paint and sip franchise industry. In a two-hour class, customers paint whatever they want under the guidance of an instructor and enjoy wine throughout the experience. Wine and Design provides glasses, canvases, and paintbrushes while a local artist helps make your dream painting a reality.
- Approx. Initial Fee: $25,000 (per 2019 FDD)
- Approx. Startup Cost: $69,950 – $221,200 (per 2019 FDD)
- Approx. Revenue Range: See FDD
Sculpture Hospitality provides alcohol to restaurants, bars, hotels, sport arenas, and other ventures. As the entertainment industry generates billions every year, there is never a shortage of alcohol to be had. Sculpture Hospitality currently has 24 franchises in operation.
- Approx. Initial Fee: $50,000 (per 2019 FDD)
- Approx. Startup Cost: $54,000 – $55,000 (per 2019 FDD)
- Approx. Revenue Range: See FDD
WineStyles Tasting Station
Founded a little over 10 years ago, WineStyles Tasting Station provides retail stores where customers can sample and ultimately buy wine, beer, coffee, tea, chocolate, cheese, and gourmet food items. Each store consists of a warm and friendly sitting area for customers to enjoy their tasty treats with a glass of wine. There are currently 13 franchises in operation with the company projecting more locations in the future.
- Approx. Initial Fee: $23,500 – $41,000 (per 2019 FDD)
- Approx. Startup Cost: $230,500 – $475,500 (per 2019 FDD)
- Approx. Revenue Range: $524,675 – $1,205,978 (per 2019 FDD)
The Rise of Wine May Have Begun in Antiquity, But It’s Popularity Isn’t Slowing Yet!
It is no accident that wine has been around for thousands of years. Civilizations have utilized the grape beverage for religious ceremonies, celebrations, or even as a means of trade. Wine has played a crucial role in the cultivation of the planet and the transformation of societies. Now in the midst of a wine boom, Americans can’t get enough!
A wine franchise should certainly appeal to every entrepreneur who is passionate about the industry. Now sit back and enjoy that tall glass of red or white wine while you consider your franchise options!
By Tyler Dikun and Jim Notaris