Adding a Juice Line to a Winery

Will it be profitable to add an unfermented juice line to an existing winery in order to generate supplemental income? Research conducted at the University of Arkansas focusing on the economic considerations of smallto medium-sized wineries has been extended to incorporate the necessary components to analyze juice production as an additional product line for wineries. In a previous article in the 1992 Wine East Buyers' Guide, it was pointed out that the economic position of a winery business is enhanced by continually seeking out and taking advantage of new opportunities. One such opportunity for Eastern wineries is to extend the product line by engaging in juice production and, as a matter of fact, an increasing number of small wineries are considering grape juice production as a supplemental enterprise to maximize facility use as well as boost profits. The purpose of this article is to present initial research and economic analysis to provide assistance in the decision-making process for winery managers considering the potential economic opportunities in juice production. As with all economic analyses utilizing specific data, results may or may not apply directly to an individual winery. The unique circumstances of the economic and technological environment in which the individual operates must be carefully considered in interpreting and applying the results of this research since each winery will have different demands for juice. Nonetheless, general guidelines can be established to help develop the decision-making framework which can be useful to the managers and operators of wineries considering juice production and marketing.