Spanning spirits, distribution, tourism and more, Kathleen Willcox speaks to the winemakers doing more than just making wine.
The side hustle has redefined the working lives and finances of many people as the cost of living and inflation have skyrocketed (along with a rise in credit card debt and plummeting rates of savings). But it’s not just for individuals. Increasingly, wineries are launching side hustles to help fill in financial gaps created by lower sales and rising costs.
Historically, focusing on what you do best – i.e., making wine – has been the key to long-term success of wineries. But today, both small and large brands are reconsidering this truism. In the process, many are finding that doing more than ‘just’ making wine has not only improved their bottom line, it has spread their reach, which helps lay the groundwork for future, continued success.
This shift is understandable. While the business of making wine is rooted in history and culture, and is vastly more romantic than making and selling widgets, it is still a business. And businesses can only accumulate so much vertical growth before flatlining, slowly failing or gobbling up the competition to become a monopoly.
When it’s time to diversify, typically businesses either try something pretty different (like Berkshire Hathaway buying Heinz) or look at similar verticals that will help round out their offerings (like Meta/ Facebook’s acquisition of Instagram). Both can work, and wineries are finding their way into businesses that expand on what they do in a new way, and ones that help them enter completely new realms.
Venturing into new fields
In Portugal, the Fladgate Partnership team has been slowly diversifying its Port business in a range of unexpected, initially expensive, but ultimately incredibly lucrative ways for a few decades. One of its first major ventures was The Yeatman Hotel, opened in July of 2010 in Vila Nova de Gaia (a municipality within Porto) with 82 bedrooms. The Relais & Chateaux hotel is unabashedly luxurious, an ambitious decision for a city that at the time was hardly the draw for American tourists that it is today. But that was kind of the point.
“We wanted to draw more people to Porto, because we knew that part of their experience here would be seeing firsthand how Port is made and stored, getting to know the product better and feeling a stronger emotional connection with it,” says Taylor Fladgate’s managing director and chairman Adrian Bridge, adding that, until the Yeatman opened, Porto’s hotel scene was corporate and rather bleak, defined by mid-tier chains catering to business travelers. He decided that the Yeatman would roll out the red carpet for both experienced and merely curious Port drinkers who were also keen to explore the city’s rich history, historic architecture and food culture.
The response to the invitation to the world has been an enthusiastic ‘yes’. The hotel has since expanded to a total of 109 rooms, and has received numerous accolades. When it opened, there were around 30,000 visitors from the U.S. in Porto annually; today, there are around 2 million. While not all of that can be credited to Yeatman’s arrival, the hotel is booked consistently, and several other luxury hotels, seeing their success, have also opened in Porto.
The expansion was also a strategic business decision.
“The Port and quality wine business is very capital intensive,” Bridge says. “They require constant investments in new vineyards, in growth, in warehousing, in barrels and so forth. Whereas something like the hotel and tourism business is a tertiary economic activity. You invest a lot at the beginning, but you don’t need to continue to invest. And it tends to be a cash-flowing business, so there’s a tremendous synergy.”
But once they were here, aside from a few days of visiting Port houses, dining out and checking out cool old buildings, what else was there to do? Bridge says he noted the short length of stays, and decided to create a sort of Disneyland of wine, right at the Yeatman’s doorstep.
“To sustain a tourism destination, you need to offer things for people to do beyond just eating, drinking and looking around,” Bridge says. “And these days, people want experiences.”
Taylor Fladgate opened the 55,000 square-meter World of Wine (WOW) to, as he says it, “put a WOW in the destination.”
The timing wasn’t ideal—WOW opened in 2020—but it has blossomed. It is, essentially, a 10-acre compound dedicated to the history and culture of wine, with seven stand-alone museums exploring the history of wine and viticulture across the world, with 11 restaurants, boutiques and wine shops.
Not cheap
The expansions didn’t come cheap: the hotel cost around $34 million, and the World of Wine required around $110 million. But this year, Bridge expects that while Port will still be foundational to the group’s overall revenue and will account for north of 40%, the balance will be made up in their other projects and investments.
Other producers are also moving beyond their core business, in a bid for continued expansion.
Champagne Billecart-Salmon launched a distribution arm, Billecart-Salmon Sélection to “recognize the excellent winemaking happening across France,” says CEO Mathieu Roland-Billecart, explaining that he felt some of the best – who were often on the small side, and were personal favorites of his – were under-represented at the temples of gastronomy and hospitality that can help transform a brand’s success.
Roland-Billecart used his established contacts to offer these producers “access to top gastronomic places, luxury hotels and specialist wine stores across the world.”
Some of Roland-Billecart’s choices are, at first glance, unexpected. Billecart-Salmon Sélection recently inked a deal to distribute JUKES, a zero-alcohol wine range launched by wine writer Matthew Jukes. The low-sugar, low-calorie drinks brand features a blend of fruit, vegetables, herbs, spices, flowers and organic apple cider vinegar designed to pair well with food, without the alcohol.
“He is a friend of mine, but we also saw it as an opportunity because some people are deciding, for a variety of reasons, to abstain from alcohol temporarily or permanently,” Roland-Billecart says. “We wanted to provide them with an experience that would match the integrity with which we produce Champagne. JUKES tastes great, and it has great complexity, without being sugary.”
In recent years, it has taken Paris by storm, appearing on menus at Michelin-starred L’Arôme and Pavillon Ledoyen, and top hotels, such as Hôtel de Crillon and Le Meurice, and Roland-Billecart says he is excited to see where it will land with Sélection’s help across the world, including in the U.S.
Expanding what they already do
Other producers are taking what they already do—growing and making alcoholic drinks—and just adding a few additional ingredients.
At Pikes Wines in South Australia, that meant launching a brewery. It was actually a back to the future for the family business, which was founded in 1886 as a brewery and boomed until the 1960s when a widespread Brettanomyces infection in the fermentation vessels and casks coincided with a worldwide oak shortage. Eventually, the company was bought out.
But in 1984, Edgar Pike (founder Henry’s great grandson) bought 67 acres in the Clare Valley and revived the family’s link to the land with a winery. After a quick initial surge of growth, and continued growth through the 90s, the Pikes expanded their footprint, growing 20 different varieties on 250 acres through the early aughts.
The Pikes original foray into the beer business in 1996 wasn’t strategic—just the opposite. It was done to honor Andrew Pike’s (Edgar’s son) allegiance to the Pike family roots.
“We first brought beer back with a contract brewer, and it was really a bit of a nostalgia novelty project at the beginning,” says Jamie Pike, the Pikes Group managing director. “Dad is a bit of a dreamer in that way. But the business did well, and we ended up with a 20HL brewery on site at Pikes, which we opened in 2014.”
The brewery (unintentionally) serves as a gateway to the winery for a younger demographic who get exposed to the wine culture almost by osmosis with them operating in the same space.
The brewery and the addition of a new tasting room and farm-to-table restaurant in 2018—also a pipe dream of Andrew’s who, Jamie says, wanted to showcase the local produce—has kept Pikes in the black during what would have otherwise been an incredibly challenging time.
“We have served around 7,500 people in the restaurant in the last 12 months, and our casual beer garden space has also served around 7,500,” Jamie says. “Since 2018, our direct-to-consumer sales have more than doubled. Having a food offering and a new tasting room has definitely helped drive that, but it’s difficult to attribute an exact portion of the growth to the restaurant.”
It has been a heavy lift though. He estimates that restaurant sales generate maybe a 10% net profit, but only with constant attention to detail.
“We call every restaurant reservation the day prior to their booking to see if they’d like to do a hosted tasting before or after, and for walk-ins, our staff checks with the table and introduces themselves between entree and mains,” Jamie says. “This often results in customers trying something different, or going for a brief tasting and to purchase wine on the way out the door.”
Brendan Carter, founder and farmer at Unico Zelo winery in Australia’s Adelaide Hills, meanwhile, says he launched a wine and spirits business together in tandem as a way to slash risk. The sister distillery is dubbed Applewood.
Initial vision
“Our initial vision was simply to start looking at Australian Wine in a bit of a different way,” Carter explains. “At the same time, we began distilling spirits as a way to diversify and ironically de-risk our start-up. A lot was going on in the industry, and we saw distillation as an elegant solution to a number of problems.”
Among the issues Carter says a distillation arm solved was that if their low-sulfite natural wines ran into quality issues, they could be distilled into “amazing” spirits; it provided an outlet to explore native Australian botanicals, which was a growing area of interest for young people; any wine surplus could be turned into brandy; and there was a gap in the market for responsibly produced modern vermouths and fortified wine. It also helped introduce wine people to spirits, and vice versa because they were all under the same umbrella.
“All of our decision making framework is based around the fundamentally perfect definition of sustainability: permanence,” Carter says. “Having both businesses and being able to use our wines in our spirits business if necessary helps us balance grape intake and deal with variations in wine sales year to year.”
The balancing act has provided steady growth: since launching in 2012, the company has grown from zero to substantial. Between 2016 and 2024 alone, the company went from four to 39 full-time staffers, 15 to 82 kiloliters of spirits produced and 225.8 to 306.5 kiloliters of wine produced.
Bridge, who has a holistic approach to diversification, says he also saw a financial opportunity by expanding The Fladgate Partnership’s product line.
“We’ve been interested in the table wine business for a while, but we’ve needed all of our grapes to supply the growing appetite for our special category Ports,” Bridge says.
Without grapes to spare for quality table wine, the company was at a loss until 2023, when it was offered a portfolio of critically acclaimed wines founded by Portuguese businessman Carlos Dias in 2010, with estates in three major regions: the Minho, Dão and Bairrada. Bridge appreciated that the grapes and the wines wouldn’t compete with their Port business, which is based in the Douro Valley.
“The person we bought it from had invested hugely in the viticulture and quality and the branding, but had never turned it into an international brand,” Bridge says. “Given that his sales were about 97% in the Portuguese market, and our business is 94% export, we realized we’d be able to take these wines to the next level.”
Within three years, he estimates that not only will the table wine line be well-represented in international markets, they will have been able to roughly triple the size of the line. The growth in sales of Port are steady, but modest, at about 2% to 3% a year. To ensure long-term economic sustainability, especially amid inflation, he says that simply doing what you’ve always done is no longer enough.
“There is a virtuous circle that can be constructed in terms of two distinctly different types of businesses coming together into one group,” Bridge says. “It does raise complexity. It’s not an easy thing to manage. But when done well, and done together, it can be much more profitable.”
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