Welcome to Inside Winemaking, your ultimate guide for professional winemaking created for industry insiders and passionate enthusiasts alike.
Dive into the world of winemaking with host Jim DeWayne, that's me, a Napa Valley winemaker with skin in the game, as I interview top industry professionals from California and beyond.
My mission is to provide a unique, informative, and entertaining perspective on winemaking. Each episode explores the backgrounds and expertise of winemakers, grape growers, and technical wine pros.
Whether you're a novice or an expert, you'll enjoy first-hand stories and gain insights into grape growing and wine production.
Join me to explore the challenges of winemaking, share valuable insights, and become part of a community of wine enthusiasts and industry professionals. Today's episode is sponsored by Innovent.
I am joined today by Ashley Leonard, winemaker turned winemaking software entrepreneur and founder of Innovent.Ashley, thanks for coming on.Thanks for having me, Jim.
As a user of Innovent's winemaking software myself, I value what you do and your supporting of the podcast.
I appreciate that, Jim.It's totally my pleasure.And I'm even more happy that you're using Innovent at CV.How's that going?
It's been a game changer.I was skeptical at first that I needed it, thinking that I wasn't large enough or sophisticated enough, but I've been pleasantly surprised.It's great production software.
It gives me peace of mind that all my activity is tracked and saved and helps me make better, if not faster, winemaking decisions.It's so fun and easy to use, and it automates my TTB reporting, my favorite part.It's great.
That's so awesome, Jim.I love that you're getting so much value out of it.
How can others find out about Innovate?
Well, you can go to our website, innovent.us, and you can fill out the form there to join my team on a call.You can also join our online winemaking community and talk to each other.
It's a great place to just banter about being in the industry, share your challenges and successes, and learn from each other.Go to thepunchdown.innovent.us to sign up for free.
Hey folks, welcome back to the podcast.I currently do not have any classes to promote.However, I did want to remind you of the winemaking video course.You can get $25 off.
This is the video course put together by Clark Smith, author of the book Postmodern Winemaking.I had Clark on the podcast back in the summer of 2023.This is a fantastic resource.
One of the questions I'm most commonly asked through this podcast is whether people People want to know whether I recommend or not the UC Davis online certification.
Honestly, it comes down to the person and what you want to do and what you want to achieve.But that's about 10 grand.It takes two years and you have to go at the university's pace.
Fundamentals of winemaking made easy video course is less than 500 bucks on demand.So you can go at your pace and very accessible and very practical winemaking education.
I think that UC Davis is the gold standard of research and didactic understanding of immunology. I just want to also let you know about the video course because it's very accessible for a lot less money.
And with the code insidewinemaking.com, you get $25 off.So even more affordable.OK, next July 2025.I'm thinking going back to Spain.This is the Inside Winemaking podcast trip to Europe, which I plan for every June going forward.OK, so
We went to Spain in this past year in June.It was incredible.It was awesome.And we're going to go back to Spain because I love Spain.I speak Spanish.That is part of it.I do not speak French.I did not speak Italian or German.
And so it's just a, that's a heavier lift for me.We'll get there eventually, but I'm thinking of, I'm going to branch out a little bit.We're going to go to Portugal, go to the Douro for half of the week.
And then I think we do the second half of the week in Galicia up in Northern Spain. I'm sorry for over-pronouncing that, but it's beautiful wine country.
I've been talking to some people in Spain and everyone just has nothing but just positive affirmation that this is the place to go.It's beautiful, great food, great things to see, lots of cool wines, especially white wines.
which I'm very excited about.So that's on the plan for July 2025.If you're interested in that, please email me, Jim at InsideWinemaking.com and I will put you on the information list.
Otherwise, all the updates, all stay up to date, get on the email list that's at the website InsideWinemaking.com.Okay, let's talk about today's guest. John Michael Carter, one of my favorite people.
I met John Michael a couple of years ago when he came to Deep Winemaking in Napa, the three day class I put on each August.And I have been working with him since then through a consulting relationship.
And it's it's given me this insight into the business he's built, which I'm just incredibly impressed with.John Michael is in Greenville, South Carolina, Carter Family Wines.This is an episode that I wanted to put out.
because there's a lot of people, I think, that can look and evaluate the model, the winemaking business model that John Michael has put together with his winery, which is outside of major wine region.
So he's trucking grapes in, but he's thought a lot about what he's built.He's executing really well.He's successful. And I just I think this is an important model that could help a lot of people.
So without further ado, here we go with John Michael Carter from Carter Family Wines in Greenville, South Carolina. John-Michael, thank you very much for doing this.I'm excited to talk to you.
We've known each other for a couple of years now, so I'm going to try not to ask too many questions that I already know the answer to.
But for the benefit of the audience, can you give a little bit of background to yourself in terms of your professional career and then shifting into wine?
Sure.Happy to.And it's, it's a joy to be here.It's kind of surreal.I've spent years on the other side being a listener.So it's a little intimidating to be in front of the mic, but delighted to be here.I really came up through business.
I was in business for a long time and, you know, really enjoyed that part of my career.And it afforded me a lot of opportunities to be around wine and became a collector.
and really became so, you know, enthused about wine that it became almost obsessive.So for me, I spent a lot of time transitioning from just a collector and enthusiast of wine to really learning and becoming a student of wine.
That took me on about a decade-long journey before I finally started to really entertain the idea of making it my profession.And that's what I've done today.
Okay, you have gone through and created a unique business model, and that's what I'm most interested in speaking with you today.Tell me the thought process that you went through of what you wanted to achieve.
Unlike many winemakers or people coming into this business, you had thought about like, how can I make this work financially from the beginning?
I spent a lot of time with a lot of winemakers, a lot of owners, and a lot of the people like membership directors and general managers who make wineries run.
My interest wasn't just in being a winemaker, although that's where I get the greatest passion.I think because I come from the business world, I had a lot of interest in
Really, everything that goes into running a winery, and certainly if you think about revenue, it comes generally in three forms in a winery, through distribution, through retail, and through D2C.
I spend a lot of time understanding not just what it takes to make good wine from winemakers, what it takes to grow quality grapes on the viticulture side, but just
you know, the same amount of time was spent understanding what's the highest margin piece of the business, what's the lowest margin piece of the business.
I got a lot of good advice from winemakers and they said, almost every one of them, selling, I mean, making wine is generally not that hard.Selling wine is really hard.
And I got lots of counsel, like that often winemakers have an optimistic sense when they're the owners of how much wine they'll be able to sell.
They will overestimate on their revenue models, their capabilities, and the revenue they're going to generate.And I really paid attention to that advice and that counsel, and it really formed and shaped my approach to how I built my winery business.
So your question is, or I think your ask is, let's talk about that.What makes it unique, right?So let's walk through the three ways you generate revenue.Distribution, which is generally how about 70% of all wine is sold.
Candidly, I don't love that model.If you're not big and you don't command the attention of the distributor and you're a small guy, It's hard for me to fathom outsourcing sales to somebody who's not even my employee.
Somebody who represents dozens of brands, and I'm probably a tiny fraction of the revenue that they generate.And let's be honest, it's the lowest margin part of the winery business.And candidly, I don't like it.And it doesn't appeal to me.
I think the second most pervasive way we generate revenue through the winery is retail.And let's also be honest, that's a lot of hard work. It's a lot of hours and it did not appeal to me.
What did appeal to me and what I spent a lot of time analyzing was D to C. Yes, I know it's the smallest part generally of many wineries business, but it also is the highest margin piece of business.
And what I always loved, Jim, and what I always came back to was the recurring nature of it. that if you delivered a great product, and if your customers liked that product, they would generally stay loyal.And it became very predictable.
I realized you could almost predict your revenue in the D2C channel a year in advance.Whereas with distribution and retail, it could be a roller coaster of ups and downs.Now, I will say this, I spent a lot of time talking to
DTC membership directors about churn-in and churn-out.What was the average churn-out on an annual basis for wineries?And that disturbed me.It's a significant double-digit percentage of any wine club.So I really started to study, why is that?
And often, it was the distance of a relationship.So for instance, I live in South Carolina. I become a winery member at a winery in California.That winery promotes all the events they do, the pickup parties, but I can't go to them.
And frankly, when I looked at the sort of events that most of the members in a wine club get, they were unaccessible. They were expensive.
And so what I really dreamt up was not only if I had members and I knew that I was going to stay small, so we're capped at about 1,000 members.Most of those members are going to be in my backyard.
So if I create events for them that they could attend, that were largely free, and I developed a personal relationship with them because when they came in for tastings, they were hanging out with me, the winemaker and the proprietor.
I thought that I could dramatically decrease what are the industry averages in turnout, or the number of members that leave you every year.
And that has proven to be true over the four years that we've had our club, and it's been remarkably successful.And today, it represents 100% of our revenue.
Isn't average churn for winery wine club members like 18 months?I mean, that's not the churn percentage, but that's like average length that a member stays in a winery.
So this isn't sourced through data.It's sourced through the information that was given to me by a couple dozen membership directors.But the average I heard was around 30 percent churn.So every year you're losing about 30 percent of your members.
So that in itself blew my mind.
I can't imagine sustaining any business that lose 30% of their customers every year, but it was always offset by membership directors who would say, yeah, but we would churn in 40% and net 10% growth or something to that effect.
And I thought, wow, what if you decreased your churn by half and maintain your churn in?You'd have remarkable growth.Or what if you could deliver such an exceptional experience for your wine club members, not only the wine being terrific,
but giving them lots of other reasons to want to be in the wine club and you mitigated that to nearly zero.And that's what we have done.My average churn each year for the last four years has been one and a half percent.
That's pretty awesome.You got to be proud of that one.
I am.And it hasn't been easy, but we thought a lot about it before we started the club and we spent a lot of time making sure that we delight those wine club members and we give them a lot of reasons to stay.
I think they would all tell you the reason they're in the club is because they like the wine and they think it's exceptional.But I give them a lot of other reasons to want to be wine club members and to get a lot out of that membership.
Okay, I want to talk a little bit more about that.So first of all, you identified perhaps which is the biggest one, which is location.They're close, so any activities, any membership events, they can make it to just by distance and geography.
Do you think that's the most important thing?
I do, and I think there's only one way you can pull that off.If I was going to be big, so I live in Greenville, South Carolina. we can talk about this la all we get, we source our truck the grapes to our wi here.We're capped at 3000 club members.
So 1000 cas in the fall.And then I n Wine club dinners, things like that.At a thousand members, even in a smaller community like Greenville, South Carolina, I don't need to stretch out beyond, you know, 50 square miles of the city.
I have members in other states.I have members outside of 50 square miles, but it represents less than 5% of my total membership.
And that's really intentional so that most of my wine club members can participate in a lot of events that we create, wine club dinners, pickup parties, educational workshops, different things that they find value in.
The only way you pull that off is to stay small, and I have always wanted to stay small.In the early days, that wasn't a problem because nobody knew about us and nobody was knocking at my door for other opportunities.
Since then, we've gotten a great reputation regionally. You know, we've had lots of knocks on the door for opportunities ranging from distribution to white labeling that could help us grow beyond that 3000 case limit.
And I have zero trouble saying no to every one of those opportunities because I'm clear minded that I can have a really good business. just me and my wife running this winery at 3,000 cases with 1,000 members.I believe in transparency.
You can run the numbers.They pay $1,000 a year at 1,000 members, and that's a really good business.I'm a big believer in that philosophy that the second restaurant is never as good as the first one. And I want to stay small.
And like I said earlier, I want to have a personal relationship with every club member, know them by first name and have that be authentic.And at a thousand members, I don't need to have a large footprint.I don't need to sell a lot of cases.
And I'll be honest, Jim, you know, I come from a world of big companies, venture capital investors and boards.I know what it's like to be large.And at this point in my life, I don't want to be big.I love being small.I love not having employees.
Nobody's asking me for a raise.HR is not knocking on my door.And there is nothing that gives me more joy. than controlling every part of the operation, from the business, to being the winemaker, to being the cellar master.
And I get to do that because I'm small.
How tempted are you to go beyond a thousand wine club members, or is that your firm line in the sand?
That's my firm line in the sand because think about it at 3000 cases to take the workload and the capacity required beyond that really requires me to hire additional employees.And that's something I just don't want to do.
You might chuckle, but if you know entrepreneurs, and I am one, this winery is my seventh startup in my professional career, you know that we are micromanagers, we are perfectionists, we are control freaks.
And the ability to control every bit of the winery and not hand it off to another employee or another person is something I really treasure and value.
Understood.Okay.I want to talk about a little bit about, since we're going to talk about metrics, customer acquisition and what are the benefits?We've talked about people being in that radius near you in Greenville.
What are the things that people like to do?What are the events that have. really positive feedback.And then maybe we can talk after that about finding new members.
I spent a lot of time understanding the best strategies and tactics to sign new members.So I would talk to a lot of wineries in the years that I spent planning to do this, but learning from others before I did it.
And let me say this too, in a small town like Greenville, South Carolina, you can't do what a lot of wineries do, which is open your winery and kind of figure quality out as you go.
Because I can't tackle somebody who comes to the winery three or four years later and say, you should come back, my wine got better.You have to deliver a great product on day one and word will spread.
And so I was really focused in the time that we were preparing to build the winery in understanding how to make great wine and I spent a lot of time with a lot of great winemakers and I'm a curious person.
I asked a lot of questions and I kind of understood the secrets of making great wine, fortunately, before I ever made my first bottle of wine.But when I was talking to proprietors and wine club membership directors,
The experience of what happened during a wine tasting was clearly the leader of the pack.And I knew from my own experience that when that wine tasting was led by a winemaker,
I valued it more than any other person who could lead a wine tasting, whether it was the authenticity of the person making the wine, whether it was their ability to take you beyond what an hourly worker may know from a subject matter expertise standpoint about the wine, had real value.
Certainly, I learned that as somebody who would go to tastings, but I also you know, talk to membership directors, and I would ask, what's your conversion of club memberships when somebody from the production team does it?
You know, and they always said, it's higher, but only if they could tell, if they were a good storyteller.
And let's be honest, Jim, there's a lot of winemakers who are super talented at the science of making wine, but put them in front of a group of people, and they might be socially awkward, or they're not a good storyteller.
But when you have, when you can do both, When you understand wine and you can communicate that really well, there is no better strategy for converting a wine tasting, someone at a wine tasting, to becoming a wine club member.
And I am certainly self-aware of my strengths and weaknesses.And one thing I'm really good at is telling a story.And it's easy to do when you have the passion that I do and you're also the winemaker.
So the number one strategy and almost the only strategy we employ is wine tastings.We do wine tastings every day and every weekend.I have a 96% conversion.
If somebody comes for a wine tasting, 96% of the time, and this is over the last four years, they will become a wine club member.That probably makes
Experienced industry veterans' heads explode when they hear that number, but I commit to you, it's true.
You balance that with 1.5% churn out, it's why we've grown an average of 170% over the last two years, because we're really good at delivering an exceptional experience, one that's led by me during the tasting.
And, you know, we barrel taste, we talk through wine, we give a field tour of the production equipment.And when they walk out of there, they feel a sense of connection, a very personal connection with me and the wine.
And then my commitment to them is they can come back for a wine tasting anytime they want, as many times during the year as they want, at no additional cost. To this day, I have never spent a dollar on marketing.
And yet I have a three month waiting list to schedule a tasting to come to our winery amongst our own members.Because what happens is they bring friends, they bring family who are not winemakers.
And when they come for the tasting, we convert them to become a wine club member.And it becomes this kind of self-fulfilling prophecy.And it's been an incredibly successful strategy for us growing the business and signing up new members.
At $1,000 a year, it's not a cheap wine club.How do you sort of pre-qualify people or communicate people what they might be getting into so that you don't have that surprise?
Because I think that would be – at a 96% conversion rate, you're getting the right people in the door from the beginning.How do you do that?
I'm not sure I have a polished answer for how do I get the right people.I do think when you start signing up wine club members who are OK with that price point, they generally bring other people that are OK with that price point.
Now, I will say this.At $500 a case twice a year, that's $35, $40 a bottle.In your world, Jim, from Napa, that's a bargain.
And frankly, I don't want to sound brash here, but I would blind taste my wines against, you know, many Napa wines, where the average price point on a bottle of Napa wine is in the $80 range, you know, we're half that.
So, and most of my people are wine club members in Napa, they know, and they find the wine not only to be good, but I think they find it as a value compared to a lot of the wines they're buying.
I don't really have any friction over that price point and often get the feedback from my wine club members that they feel the wine is priced fairly.I will say, though, it's a certain demographic.
It's a certain socioeconomic demographic that becomes a wine club member, and I'm clear on what that is.But the truth is, I don't have to go hunt for it very hard because my members are bringing those folks in for me.
You now have a lot of reps.
If you and your wife are hosting these tastings daily and sometimes on the weekends, what are some of the early days, what are some of the things that you did wrong or not as good, not as evolved that you've learned in watching people's reaction to your storytelling and to your pitch?
In the early days, I would spend too much time sitting in the tasting room talking about the wine.
What I find wine club members value more than anything else is being around the production equipment, showing them how a press works, showing them how a distemmer and a crush operates. showing them what the pumps look like.
I'll have people ask me, why do you use a three-inch diameter hose and not a two-inch diameter hose?I just kind of laugh.You know, they want to know what a tri-clamp is.They love the cellar.
They love to be around barrels, learn about barrels, understand the decision-making process and the types of barrels and the toast you use and why you use, you know, first and second year barrels and what that might taste like.
And then certainly, and I think, you know, most wineries know this, they love barrel tasting and when they can sample the different wines, they feel a sense of connection.So I think the biggest lesson I learned was not to underestimate
the value that potential wine club members see in learning about the production process and give them that exposure.I think conversely to another mistake I would make in the early days was going too deep on particular subjects, things I care about.
I mean, things you and I care about.You and I have had many conversations where we'll geek out on, well, what's your nitrogen?What's your potassium?You know, how did you balance your TA when it was out of, you know, that's a little too deep.
So understanding, you know, find the depth that I think is understandable by a layman.You know, don't make it simple, but don't make it complicated.Find that right depth that's applicable to most people.
And I've learned that through repetition, in addition to making sure you expose them to the production process.
How many people are in the Greenville area?
And I ask because there's a huge percentage of the population in the country and the percentage of people that listen to this podcast, quite frankly, that live in small towns where they think or just non-wine regions where they think like, well, I couldn't have a winery here because I couldn't sell enough wine.
And the greater Greenville region is 850,000 people.That's not a lot.And it's not just in the city.I'm saying just within that 50 square mile radius area, I need 1,000 of them.And we've been really fortunate.
Now, like I said, about 5% are outside the region or in other states.But I don't need a massive market share.I need a fraction of the population.And we've been really clear about those numbers and how to attain them.
What equipment did you start with?I want to talk a little bit about winemaking.
You talked about some of the ways you learn winemaking from talking to other people, but a small winery with no employees, can you go through the process of how you actually do the work?
I'm especially thinking harvest here, the big work that takes a lot of time.
Yeah, so I kind of mentioned this, but I'll expand upon it.I knew that I was going to make world-class wine sourcing grapes from South Carolina.So the first order of business was where to source them from.
You know, and we looked at Napa and Willamette and Washington State, but I really love Paso Robles. I'm really crazy about Paso for many reasons.You know, I learned a lot of lessons about how to make great wine.
And one of the most important that I repeatedly learned from winemakers was really the science of phenolics.And Paso has extraordinary phenolics because of the diurnal shift.
And so, you know, harvest time is generally later than Napa, even though it's central California for Bordeaux varietals, which we make a lot of Bordeaux blends, or primarily Bordeaux blends.
And so I knew that was a great wine growing region from a finale perspective, as well as many other areas of subject matter that matter when you're making good wine.
So developing a relationship with a grower in the Paso region who would allow me to be a part of the farming process. I don't want to just source my grapes and go pick them up and see them for the first time.
I want to be in the vineyard continually with my grower.A lot of farmers at a small scale aren't interested in dealing with guys like me.And I'll be honest, Jim, I'm not easy to deal with.I'm a perfectionist. I grew up, you know, on a farm in Kansas.
I understand the value of agriculture.I understand the ethical value of doing it.It's why farming organically is important to me.
But establishing that relationship and now plural relationships, because I've learned the value of diversifying and not having all your eggs in one basket, if you will.So if Mother Nature is cruel to you in a particular vineyard, you need
diversification.So today we have a bigger footprint.But in the early days it was just that particular vineyard.For all of the grapes that we harvest and bring to Greenville, I lead that harvest.
So I will fly out the day before harvest once I've made the decision on the pick
And largely, you know, I'm getting labs sent to me, making the decision that the labs tell me it's time to harvest, but I'll fly out and just really make the sensory observation that it's time, then fly back to Greenville.
My wife generally comes out with me, and then we supervise the harvest.
We really have a very specific protocol for what has to happen, because I'm going to put my grapes on the back of a refrigerated truck, and I'm going to truck them at 35 degrees cross country.
But that's not enough to keep them cold and to stave off fermentation.So during the pick, during the night, I am next to the leafers. as those grapes are coming in and being put into half-ton macro bins and all of my grapes have to be picked by hand.
A machine would be too hard on them and they'd never make it in pristine condition to Greenville, South Carolina.What I'm doing at about every six inches of layers of grapes on the back of that macro bin is I'm putting a layer of agide
so that I prevent saccharomyces from occurring.And then I'm putting dry ice on top as well, every six inches.
Because even though it's cold at night when we're picking, and even though it's cold on the back of that truck, deep down in the center of that macro bin, it gets warm.And if I don't put dry ice on there, that fermentation will start.
So I've got to keep those grapes cold in that journey. Once we're done with the pick early in the morning, I race to the airport in San Luis Obispo or San… Can I just pause you for one moment?
I just want to clarify for people who might not be familiar with Aegide.That's the brand name of the product that's the Metchnikovia pulchremia and maybe another non-saccharomyces species.
And different suppliers have different names for their products, but these are the non-fermentative yeasts that sort of hold your must in stasis.They're not chewing through the nitrogen and they're kind of staving off a lot of the bacterial action.
I just wanted to clarify that because I know that not everyone's familiar with that.
Yeah, some people will use SO2 to the same effect, but I like Ajit and I like to lessen my SO2 foot prep.
So one of the things that I do after I put our grapes on the back of that refrigerated semi-truck and I head back to Greenville is prior to putting them on the back of the truck, I take a cellular brick
It's made by a company called Bottle Titan, and I bury it deep within a half dozen of those macro bins.It emits a cellular signal through the thick walls of that reefer truck.You can't just use an Apple AirTag.
You've got to have a special device, otherwise it won't be able to emit a signal.It allows me to track the geolocation, the humidity, the temperature, and the dew point of everything that is happening on the back of that truck to my grates.
That's important to me.That's my livelihood.And I need to track those grates.
In the early days, I had to deal with a lot of nonsense with truck drivers, including one year when I got a notification that the temperature on the back of the truck had gone from 35 to 45 degrees.
And when I tracked the geolocation of the truck, it was in the parking lot of a casino. That is the kind of silliness I've had to deal with over the years.
Today, I have a family-run trucking company in North Georgia that I trust that gives me really good people, and I don't have to deal with that kind of thing.
But once the grapes arrive, and I usually pick on a Tuesday, they arrive early on a Saturday morning, then we really focus on processing those grapes. If they're red, we will then sort and slightly crush.
I believe in maceration, so we'll cold soak them for three or four days in the cellar, really to drive out phenolics.We'll get them at room temperature.We'll inoculate.
We'll run through our fermentation protocols, press, and then we'll barrel down everything.We use French oak on all of our wines. And that range of aging time can be anywhere from one to four years.
So we got to talk about we, because I know that's part of your business and that's very interesting.But I do want to step back real quick and talk about the refrigerated trucking.
There's two things as a winemaker who has worked to help other people make wine, especially outside of California, that drive me crazy.One, it's people's unwillingness to pay for laboratory analysis.
And two, it's people out of state that don't understand the value and or the necessity of refrigerated trucking.
Can you help me underscore the difference between refrigerated and non-refrigerated trucking and what it does to your final outcome of your wine?
Because for me, I think it often makes a difference between a good wine and a wine that you're trying to offload your accountant and maybe even flushing down the drain.
I don't see how you could prevent fermentation and not deal with serious VA issues if you're not using refrigerated trucking.
It just gets too warm, and I think that's applicable not if you're doing something extreme like I am, which is putting your grapes on the back of a truck for four days and driving it cross-country.
But even if you're going from, you know, Central California up to Napa, and they're spending hours in the truck, I can't say that I've ever done that, but I would be hesitant to do that without refrigerated trucking.
Now, it's a check you got to write, and I'm sure that's the impediment that makes most people not want to do it.But I need those grapes in absolute pristine condition, and there is no way to pull that off without refrigerated trucking.
I totally agree.And I like the way you put it.That's a check you have to write.And that's true.But if you're making wine, you're writing lots of checks.And that just seems to be one that I found people are unwilling to write.
That's one of those like, well, why don't you take a year off, gather some more money, then we can do this the right way.I have grapes coming up from Santa Barbara to Napa and from Paso Robles.I do the refrigerated trucking.
It just, I just think it's an absolute necessity.I don't mean to harp on that, but it was good to hear it from you.
Well, the one thing I will say is if you're doing a small batch of grapes, if you're only putting a ton or two in the back of that truck, you're paying the same amount of money as if you put 10 or 20 tons on the back of that truck.Right.
And so you're probably hearing that from really small wineries that don't want to write that check. And certainly in the early days, when I was doing just small amounts, it was a big check to write.
But that check has been the same check even as we've grown.And, you know, now we'll do somewhere between 15 and 20 tons.
Who is we at the Weiner that does all this work?Because you don't have any employees.You made that clear.
That's right.So we are the collection of my wine club members.Jim, I never ever dreamt of this, but I'm sure you'll get a kick out of it.
In thinking about all the things that we could do for wine club members, we kept hearing from members, do you ever need volunteers?Do you ever need help?
And, you know, the first thing a winemaker thinks is no, I don't want to deal with wine club members who don't know what they're doing around the winery, because that's more work than it's helpful.
Another job on top of your already job.
That's right.But the truth is when I started to think about where I could involve those folks, it was just simply sorting grapes in the macro bins and putting them in smaller bins.
And then we could run them through the production equipment and that needs to happen quickly.I don't want the grapes sitting outside on a hot day for, you know, more than an hour or two.
Actually, you know, at least all day, it generally takes us four to six hours to process everything.
So what we started to do was to say, okay, if you want to come in for a two-hour shift, come in at 8 a.m., we'll serve you breakfast, and we could use the extra manpower.That took off.
Last year, we had to shut down the number of volunteers because we had so many people who wanted to volunteer.I had 120 volunteers last year. in the back of the winery helping us hand sort grapes.
The truth is we've ended up purchasing so much automated equipment.I don't need the help of the volunteers anymore, but I don't dare stop doing it because they love it so much.
And so I kind of get a kick out of it and have a smile on my face because we've turned it into a really wonderful thing we call Harvest Weekend where the members enjoy it.You know, we feed them, we give them a t-shirt, a bottle of wine.
And I'm grateful for the help, but it's really become a popular event and one in which it makes our wine club members feel like they have a part in the making of the wine and the development of the winery.
And frankly, I think it's a source of pride for a lot of them.
Totally makes sense.But you've got to have a couple people that know what they're doing.If you run into stemmers and other pumps and things like that, what does that crew look like?
So I've got two interns that have been with me for two and a half years, and not just interns for Harvest.They help me year-round.One's a sommelier in hospitality, the other one's also in hospitality, a beverage director.
And it's gotten so comfortable with them that there's an amount of things to teach them, frankly.They know what's going on and they know what's happening around the winery.
I don't pay them though, Jim, but I think of meaningful ways to make it worth their time.
So, for instance, this year I told them, you can make 10 cases of your own label, your own wine, and I'll pay for everything, or I'll send you to a four-day wine camp led by Jim Duane in Napa, California.
And they both decided they wanted to go to wine camp with you, and they'll probably make their cases of wine next year.But they find real value in that.
They're both learning, and I'm not so sure that someday they may not be in the wine production business.They're certainly in a hospitality related to wine today, but that's a big help.
And then I have a couple of other members, like during bottling weekend, that's a lot of work. And they're members that have helped me out over the last couple of years.So there's not a big learning curve for them.
They can jump right in on a Saturday and Sunday and help me.And we've been able to sustain everything we need to do from a labor perspective with our two interns and a couple of other guys who are seemingly always there when we need them to help us.
Totally makes sense.And for things like punchdowns and all your fermentation management after stuff is processed, is that just you and your wife and those guys?Or how does that work?Because I know you don't quit your full-time job.
Yeah, it pretty much is.My wife, Catherine, and I, we do everything, including running all the fermentation protocols, including our punchdowns, soon-to-be pump overs. But I've also invested in equipment.
And I know that the more you can automate production with equipment, the less human beings you need.And I'm really obsessed with that part of the wine business.In the early days, there was a lot I didn't know.
I didn't want to write big checks until I was sure the equipment that I needed.But this will be our fifth harvest.I've learned a lot about the right equipment.I've been able to purchase most of the right equipment.
And it eliminates a lot of human labor needs.
As someone who's made a small startup winery, what are the few, just handful pieces of equipment that were the most critical investments at the beginning?
Well, certainly a press.I started that first year with a small basket press.I overwhelmed that thing.It took hours. I underestimated the value of having a substantial press.That certainly is not a problem today.Pumps, you can't just have one pump.
You got to have two because one of your pumps is going to go down.Redundancy has been a real obsession for me over the last couple of years.My wife is always asking, why did we buy that?We already have one of those.
The point is you got to have two of them because something's going to break.And at those critical moments, you don't get a second chance to crush or to stem or sort or press.So I think redundancy would be my second. important.
But let's be h as a small winemaker when started, you probably do to buy two of everything.unrealistic expectation, as quickly as you can get know, two of everything d
And I assume that being away from the centrality of a major wine producing region, you don't have access to things like a mobile bottling line.So that then forces you to bottle on site, which forces you to bottle or to buy some bottling equipment.
Is that a correct assumption?
It is.I just can't get a closest bottling lines to miles away in northern No Virginia.And frankly for You know, 3000 cases and at one time, they're not with me.So we've had to
I've really upgraded that equipment over the last couple of years to try to automate that process.And to be honest, Jim, I don't want a lot of help during bottling.There's a lot of things you've got to pay attention to.
And there's a lot of quality control.And while it's monotonous and it's laborious, my wife and I pretty much managed to do most of the bottling ourselves.We're lucky to have the help of the interns who know what they're doing.
But we do most of it by ourselves.And we, like I said, really improve the equipment we use to speed up that process.
Where did you learn a lot of that work?Because bottling is not easy.And you and I have had many conversations.
But aside from that, outside of that, our relationship, where have you learned sort of the technical aspects and how to manage your quality assurance, your quality control?
I'll harken back to what I said earlier about knowing that you can't open a winery and then figure things out in a small area like I live in.And so I spent years learning from really good winemakers in Napa, in Paso, in Washington State.
everything from volunteering from harvest to just cleaning equipment to getting access to the winemakers.Frankly, because I was so persistent, I wouldn't go away.And I'm a curious person by nature.I would just ask lots of questions.
And by the time I started the winery, I had built a network of really talented winemakers all across California.And I'm really lucky to still have them as mentors today.
You included many of them on speed dial and I can call them and ask them questions because your perception about living in Greenville, South Carolina is accurate in that I'm not amongst a fraternity of great winemakers and people that I can lean on.
So I understood clearly in the early days that I needed to have a strong network of mentors.And that doesn't just happen.You got to go out and get them.And then you've got to build those relationships.And then you've got to maintain them over time.
And I work really hard at doing that.
Let's talk a little bit about your style of wines.How would you describe, let's start with red wines, the Carter Family Cellars red wines.
Phenolically rich.I have, I really believe in phenolic extraction, understanding the levels at which you're extracting at, and really understanding how that impacts everything from flavor to color to tannins and mouthfeel.
I'm a big fan of Bordeaux varietals and of blends, so I rarely make a single varietal wine.I think for me, the most fun I get as a winemaker is when I can blend
Petit Seurat with cab or to not with, you know, Malbec and cab or, you know, whatever my blends are.And so I get a great, I get a lot of joy out of that.
I spend a lot of time in bench trials, really blinding through and working hard to do blends and spend a lot of time.
during those formative years as I was learning the technical side of winemaking from really good blenders on how to approach that and how to make those blends.I'm not interested in making red-fruited wines.
I really like purple, black-fruited wines and thinking again phenolically how you do that both in the vineyard as well as the winemaking process.On the white side, I'm not really interested in making another Chardonnay or another Sauvignon Blanc.
Frankly, I think there's lots of great ones out there, but I think it's so common that I really want to look at wines that are not common in the United States.I love Rhone white blends.
I love Albarino, you know, Iberian sort of peninsula wines, and we make both.And I'm a big fan of running it easy on acid.
I think a lot of, you know, take a Sauvignon Blanc or an Albarino, you know, so often the first time that first mouthfeel hits the mouth, it's too acidic, and then your mouth naturally salivates and compensates.
Well, I think that's a terrible first impression.So, you know, I want to go for low acid, uh, white blends that are we do a really terrific w out of Applegate Valley, in Oregon.We have a rea there with the grower.An albariño from the east
And in those situations, because you really can't ship white grapes, are you shipping juice or do you have a contract with them to, for them to make wine and work with you through the winemaking?
Yeah.So you're right.We'll vinify our white wines on site with the grower.And while we're active and everything that's happening, you know, during the farming process, it's just too much to run that many trucks of grapes.
And so we'll vinify our whites on site with the grower.
And just get them through fermentation and ship them out to you to finish them off?Exactly.
Exactly.We'll sometimes just ship them out.I'll run flex tanks out and then we'll fill the flex tanks and bring them back.There are some occasions that we'll bottle on site if it makes sense to do that.
It's really a year by year, vineyard by vineyard situation.
I want to talk about silk screening and how that works in with your business, but also tell me about the way you think about blends and labeling, varietal or not.How do you communicate what's in your bottles to your customers?
Yes.You know, it's interesting.I very much at first was focused on I think, you know, the way you think about wine is vintage expression.
And so it was only after I was doing bench trials where I began to say, you know, if I take my 2019 petite Syrah, which really needs more time to age than my cab, at least in my case, and I blend it with my 22 cab, it makes the best wine.
But of course, if you're putting 5% of another you know, years wine in your wine, you can't use the vintage.Well, I don't like that rule.
And because I'm not trying to sell my wine through distribution or people who are uninitiated through retail, I'm just trying to sell to my wine club members who know me.I want to make the best wine possible.
So we got away right away from making it vintage specific, and we started to label each release as Series 1, Series 2, Series 3.
And my wine club members largely know that, for instance, Series 4 is the 2022 vintage, primarily of Cabernet, but it might have 70% cabernet, 30% tannot, and tannot's from another year.
And we're not shy about explaining that, but it allows us to make the best wine.I'm not a great rule follower anyway, so I don't like the rule.I understand why it exists, but I want to make the best wine possible.
So if I want to hold off on a vintage because I think it needs another year in oak, I will. If I want to blend from two different vintages, if I want to blend from four different vintages, I will.The goal is to make the best possible wine.
And then from a labeling perspective, I love that etched silkscreen look.And so we use a glass, we'll send them to do all of our silk scree send the bottles to me.
N be very precise so I don' or you know, lord help m enough bottles for the win really be thoughtful and you know, a couple of months before you do your bottling because all of that takes logistics to get that ordered and sent back to you.
But the finished product is something we're really proud of when it comes to labeling.And I'll be honest with you, Jim, if you're doing a manual bottling line like I am, the biggest time suck is your paper labeling.
So if I can remove that and have my glass etched, that's a big time savings for me when I'm running the bottling line by myself.
Totally makes sense.And now you've got that good corker, right?
That, you know, we were the first year we did the hand corking and that was not fun, but I was hesitant because there was a lot I didn't know about bottling and, you know, thinking about pressure, you know, under the cork and the ullage and all of those things.
And we ended up getting an automatic corker and it saved us a ton of time.
How viable do you think your model is for other people to run?Or maybe ask a different way.What are the key inputs?
Obviously, there's some upfront capital, but what are the key inputs in terms of time and skills, or maybe geography even, that someone needs to say, we're going to franchise this model?Because I think it's just an awesome model.
I'm really impressed with what you've built.
You know, I've gone from having a lot of mentors, which I still do.There's no absence of that, but it's kind of ironic.I've ended up mentoring a few people who started out like I did.
And in almost every case, Jim, I see an absence of either desire or ability in some part of being the proprietor and the winemaker.They might be really good at science and a good winemaker, but they're terrible at sales.
Or they might be a good salesperson, but they don't understand how to run a business.I think you have to balance those three things, being a winemaker and understanding the science of how to do it.
I guess I should say four things, because you really got to start on the viticulture side.You don't have to be the farmer, but you have to understand what it takes to make good grapes.Otherwise,
You're just buying bulk grapes or bulk wine or both of them.I think you've got to be a good winemaker and invest in the science.I think that's where 90% of all winemakers come from.They love the idea of making wine.They might even be good at it.
They might understand the farming aspect as a viticultural perspective, but they don't understand what it takes to sell wine or what it takes to run a business. So the first thing I do is try to make sure their eyes are wide open.
And as much time as they spent learning how to be a winemaker, they need to learn how to run a business or they need to learn how to sell wine and be comfortable with that.That's the biggest problem I see repeated over and over.
As far as distribution of time, I've never thought about this before specifically, but from the cuff, I would tell you I spend 20% of all working hours being a winemaker and 80% of my time selling wine and running a business.
And that's fine by me because I love to do it all.I love to sell wine as much as I love to make wine.
But I think that comes as a shock for a lot of winemakers because, frankly, I think they think the wine is going to sell itself or it'll be a lot easier to sell.And you know this, Jim, because you mentor a lot of other winemakers.
They always grossly underestimate the level of effort it's going to take to sell wine and the time that it's needed to do it.
Absolutely true.I mean, myself included.
What's a reasonable amount of capital that someone should have to start a small winery?Let's call it outside of California.Or maybe what's the minimum?
So I would put it in this perspective.I'm not trying to be evasive.I'll give you a precise answer.But it comes in phases.You're going to need somewhere between $150,000 on day one just to show up with rudimentary equipment.
But you're not going to be profitable in year one.You're likely not going to be profitable for the first three to four years.
And frankly, if you're waiting on grapes, and especially with red wine, it needs time in bottle, you may not be profitable till year four or five.I had a five-year profitability model.I'm now approaching year four.
I was not profitable until year three and a half.So we just broke even at the winery. I have spent just south of a million dollars of my own capital, and I spent about $750,000 to $800,000 before I got to break even.
When I say break even, it means paying for that equipment as well as the annual production cost of everything from grapes to corks to bottles. That kind of information I freely give because frankly it's hard to get your hands on that.
People don't want to talk about it, but I know who listens to this podcast, people like me who are winemakers and frankly many people like me who are thinking about becoming winemakers and I always get frustrated with their unrealistic expectations.
I can start with little to nothing And then I'll wait till I make profits and subsidize the growth of the business.That's not how it works.
You don't need millions of dollars, but you certainly need tens of thousands of dollars to start and hundreds of thousands of dollars before you become profitable.
And I think there are very few exceptions to that, no matter how small you are or how small you want to be.
Well, I really appreciate the candor.That's super helpful to anyone listening.Cause you don't, it's hard to find those figures anywhere else.What's next.What are you excited about building within the business currently?
It's been such an interesting journey where. Every day, month, quarter, and year, I experienced things that I hadn't imagined, no matter how much I tried to methodically plan for everything that was going to happen.
It's interesting now, as we kind of arrive into capacity, now we enter another chapter of the winery's maturity.It's not about growth any longer.It's not about adding wine club members.It's about keeping the existing wine club members happy.
And so thinking about how we adjust to that is really going to become the priority.And we're just on the eve of hitting our capacity.The next thing, too, is that we rented our building.And candidly, I'm tired of paying rent.
I want my own winery that I own. Now I don't want a vineyard and we are near the downtown part of the city that I'm in and our members love that because we're not a destination.
They don't have to drive one hour, have a tasting and then drive another hour to come home. literally in the downtown area.Now we're in a discreet place where nobody knows where we're at because we're not open to the public.
But our members know where we're at.We're kind of like this cool speakeasy, and that's by design.We're intentional in that way.But we need more space, and I want it to be a space that I own.
So one of the things that we'll be working on over the next 18 to 24 months is identifying that space and either rehabbing an old warehouse to accommodate us, or buying land and putting a structure on top of it.
And I think that's going to be the next really big challenge I have in front of me.
It'll be so exciting to have your own space.I'm really looking forward to that for you.One thing I do want to go over, though, is I think you've done a great job in almost what I think of as like a dog whistle.
And that's the name of your wines, which don't make sense to me.But people that live in your area understand that.Can you talk about how that's worked out for you?
You know, even though I get my grapes from California or Oregon, I don't put those ABAs on my bottle.It's important to me that my members know those grapes may come from California, but that wine is made here in South Carolina.
And so to really strengthen that brand, We take and make a label for every bottle that has something to do with South Carolina.So for instance, we have a Rhone white blend.It's called Jasmine.
Jasmine is the state wildflower of South Carolina, and it tells that story on the back of the bottle.
Our two most popular regs are called the Lords, after the Lords' proprietors, the eight English noblemen given land grants to settle South Carolina, something every kid learns in school in South Carolina.
And we took the family crest of each of the families and made this beautiful label out of it. for while I breathe I hope is the state motto of South Carolina and it covers one of the bottles and again it tells the story on the back of the label.
There's, we have a wine called Sassafras, a Malbec blend that we just released.Sassafras, Mount Sassafras is the highest point in South Carolina.
So everybody immediately identifies with these labels because it means something to them and it's a way to really strengthen that brand image of a South Carolina wine made in South Carolina but derived from world-class grapes in California.
I think that's very cool.When I got those bottles and we'd had discussions with him before, I saw it as an opportunity for you to tell the story and explain like you've just done here.
But I think it's super cool that someone coming in from that area, they already know or at least they recognize names.I think that's something that's also a great model for someone in a non-California region.
I'm not having to fight over trademarks and copyrights, which you know is exhausting.
Right, right, yeah, to have something long tail, not just make it one word, it's always easier in the whole trademark process.Okay, is there anything else that you think that we should talk about before we start wrapping this up?
No, I mean, I'm always happy to answer questions, especially from folks like me who are thinking about starting or just getting started.
I think it can be hard to find people to talk to, resources to talk to, and I'm always willing to share time or to jump on a phone call.I've had several people just come to the winery from out of state just to see it, experience it.
Yeah, I'm happy to pay it forward because as I said, there are so many mentors out in California who are willing to help me and still help me today.You almost feel an obligation to do it for others.
So you can go to our website at Carter Family Wines, not just to learn about the winery and the wines, but to contact me as well.And I'm happy to help anybody who wants to talk or meet.
Thank you for that.You know, for certain people, that's going to be a tremendous resource.So that's awesome.I'm really excited for 2030 when you start your franchise business.
Maybe you're not going to do the franchising, but what's the viability of other people using the model that you have built?
I think it is viable.And the only reason, I mean, I say it's not going to happen, it's just because I know how much work that it takes to build out those models.But, you know, I don't know that I've gotten it all right.
And there might be some things I'd change, but I think that if somebody is willing to think differently and think about a revenue model that's dedicated to, you know, direct to consumer, if you're willing to put the time in and you're willing to understand that, you know, you don't have to write huge checks up front.
But you do have to spend a lot of time selling wine and learning the business of wine and balance that with being a winemaker.It's not overly complicated.It's just think differently.Think outside the box.
And I think the model that we've built here is replicable.And if somebody's thinking about doing it, I encourage them to to look at it and talk to me, and I'm happy to help them.
And if somebody wants to take this and run with it and franchise it, go do it.It won't be me, but I'm happy to consult for them.
Yeah, no, I'll help you with technical stuff, but business, that's not my experience.Okay. I was up in Park City last weekend.We had a trip for Territorium Wines.We went to go visit the market and try and sell some wine.
And Ben Matthews, my business partner in Territorium, we were hiking through the hills and we came across Sagebrush. And I grabbed it, I just put it to my nose, and I was like, this is the smell of my childhood.I grew up in Salt Lake City.
Sagebrush was everywhere.That scent just, like, just snapped me back to being a little kid and playing outside.Can you talk about where you grew up?You said Kansas, I think, earlier.But what's the smell of your childhood?What brings you back?
I just had a similar experience.I went back to Kansas.My family still has an 1,100-acre dirt farm there.And wheat, soybeans, milo is what we've raised and what we crop.And I had gone back during the wheat harvest.
There's not many more smells that remind me more of my childhood than when the combine is running through the field and it's harvesting the wheat.It kind of smells like
fresh flour, you know, bread that's baking and it just, it waltz across the plains during, you know, July or June when they're harvesting wheat.And it's always something that brings me back to my childhood.That's beautiful.
All right.John Michael, this has been awesome.Thank you so much for this.I think a lot of people are going to get some tremendous value.So anything before we sign off?
Just reciprocally, thank you, Jim.I mean, it truly is an honor to be able to be on this side of the microphone with you because for years you have been a source of great information for me and I know my peers as well.
And I'm sure I've listened to every one of your podcasts multiple times, and it's just been great to have that as a learning resource.So keep doing what you're doing because you are appreciated.
All right.That's awesome.
All right, folks, thank you for listening.Show notes.All the important information about everything that goes on with the podcast can be found at InsideWinemaking.com.
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Use all caps to get that discount.Okay, that's it.Thank you for listening. I'm going to leave you today with a message from this episode's sponsor, Inovant, as read by Ashley Leonard.Okay, Ashley.
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