If you are in your first year of winemaking, you might feel like cash is disappearing faster than you can track it. You are writing checks for grapes, barrels, bottles, equipment, and vineyard labor, but there is no revenue coming in yet. For many new winery owners, it feels like money is leaking out of every corner, and they cannot quite see where it is all going.
This is one of the most common questions winery accountants hear: Where does all the money actually go in that critical first vintage?
Understanding the answer does more than ease anxiety. It gives you the clarity to plan, budget, and avoid surprises in the years ahead.
Why the First Vintage Is So Costly
Unlike most small businesses, a winery requires heavy upfront investment before a single dollar of sales comes in. A retailer can buy inventory one month and sell it the next. A restaurant spends on ingredients daily but earns revenue nightly. A winery pays for grapes, barrels, and production costs months or years before sales are realized.
This timing gap makes the first vintage one of the most cash-intensive periods in the entire lifecycle of a winery. Even if you are financing some of the expenses, you are still laying out significant money up front.
Breaking Down Where the Money Goes
A typical first-year winery budget usually falls into a few major buckets.
Vineyard Costs
If you own a vineyard, a large portion of your spending will go toward vineyard labor, vineyard equipment, irrigation, trellising, pest control, and seasonal supplies. Even if you purchase grapes instead of growing them, this is still one of the biggest checks you will write. Grape prices vary dramatically depending on region and variety, but it is not uncommon for this category alone to consume a large portion of your first-year budget.
Winemaking and Cellar Expenses
This includes the cost of crushing, fermentation, barrels, tanks, and cellar labor. New barrels can cost hundreds of dollars each, and you need multiple barrels per varietal depending on your production size. Neutral barrels are less expensive but still add up. On top of that, you have racking, storage, and ongoing cellar supplies. For a new winery, the first purchase of equipment and barrels is often the most overwhelming expense.
Packaging and Bottling
Many new wineries underestimate how much packaging eats into the budget. Bottles, corks, capsules, and labels all add up. If you are choosing custom glass or premium design elements, the costs can double compared to standard packaging. Bottling also requires labor and, in many cases, mobile bottling services if you do not own your own line.
Sales and Marketing
Even before your wine is released, you are likely spending money on branding, website development, tasting room build-out, and marketing campaigns. You may also be hiring staff to run your tasting room or wine club. These costs often feel frustrating because they show up well before the revenue does, but they are essential for building the customer base that will sustain your winery.
Overhead
Finally, there are the general and administrative costs that every business faces: insurance, accounting, licensing, utilities, and office expenses. These are easy to overlook in planning, but they can quietly consume a significant portion of your budget.
Why It Feels Like Money Just Disappears
The reason many winery owners feel blindsided in their first vintage is that these costs hit all at once. You are buying grapes in September, barrels in October, bottles in December, and paying vineyard labor throughout the year. Without a clear financial roadmap, it feels like there is no end in sight.
What is actually happening is that you are front-loading investment into inventory. All that spending is being locked up in grapes, barrels, and bottled wine that will eventually be sold. The challenge is that you cannot see the value until revenue begins flowing in.
How to Plan for the First Vintage
This is where a winery accountant becomes critical. By creating a detailed budget and cash flow projection, you can see exactly when costs will hit and how much funding you will need to cover them.
For example:
- How much cash should you reserve before harvest begins?
- When will you need to pay for bottling and packaging?
- How many months of overhead should you plan to cover before wine sales start?
A winery accountant can also show you scenarios for different production levels. Producing 500 cases might have one cash requirement, while producing 1,000 cases could double or triple the upfront need. Having these projections in hand prevents you from running out of money halfway through production.
The First Vintage Is an Investment
It is important to remember that your first vintage is not just an expense. It is an investment. Every dollar spent is building inventory that will eventually turn into revenue. When you sell that first vintage, you begin recapturing your costs. Over time, with careful cash flow management and smart scaling, you will see the cycle become easier to manage.
Takeaway
If you are wondering where all the money goes in your first vintage, the answer is simple: it is going into the foundation of your business. Grapes, barrels, bottles, and labor are not money lost; they are money invested in wine that will drive your future sales. The challenge is surviving the gap between outflow and inflow.
With the help of a winery accountant, you can plan for those cash crunches, build a realistic budget, and approach your first vintage with confidence instead of stress. Your money is not disappearing. It is working for you in the cellar, waiting to come back as bottles on the shelf and revenue in your account.
At Llamas Financial, we help wineries plan for exactly this stage. With clear projections and winery-specific accounting, you will know where the money is going and when you will see it return.
