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Feb 1, 2014 10:42 AM

North American winery numbers

I'm interested in the proportion of 'virtual' wineries to brick and mortar wineries within California. I'm guessing it's higher than in the US overall, but am curious. Anyone have access to the numbers?

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  1. According to the Wine Institute -- -- there were 8,806 BONDED wineries in the US, in 2012. That's more than your chart shows for Bonded + Virtual combines.

    Short answer is I have no idea.

    Long answer: you could look here -- -- and scroll down to the lists which are linked near the bottom of the page . . .

    2 Replies
    1. re: zin1953

      Interesting, Jason. Unless I misread, the numbers I posted were just released by Wines & Vines. Oh, well. All those links are to lists of wineries with no breakdown as to b&m or virtual. But thanks.

      1. re: Midlife

        My point was simply that your figures you posted (from the trade publication "Wines & Vines") shows 8,391 wineries TOTAL for all of North America, whereas the figures from the Wine Institute¹ claim a total of 8,806 for ONLY the Unite States -- Canada and Mexico are not included in their numbers.

        I'm guessing the TTB keeps better records. ;^)

        HOWEVER, I would think you should be able to get the numbers you want directly from Wines & Vines
        (65 Mitchell Blvd, San Rafael, CA 94903; Phone: 415.453.9700) I'm guessing that, if they can quote figures for the country as a whole, they are probably compiled state-by-state.

        ¹Source: U.S. Tax and Trade Bureau and Wine Institute

      1. re: Robert Lauriston

        By trade definition it's a winery that does not have any brick and mortar (physical) facility. So, AFIK, it includes wineries that own no vineyards or winemaking facilities.

        1. re: Midlife

          And so . . . does it need a bond? or merely a brand®?

          1. re: zin1953

            My guess is that they do, assuming that they are responsible for paying the taxes on their product.

            But I know just enough about how this works to be aware that some custom winemaking facilities do 'all' the work for some brands, including storage and shipping, so it's possible that specific relationship is different as to who takes out the bond. Just applying logic to this, which could be a big mistake.

            1. re: zin1953

              According to a phone conversation with someone at Wines and Vines THEIR definition of a virtual winery would NOT require it to be bonded.

              1. re: Midlife

                I'm not sure how you could go about compiling statistics about how many house-branded wines are on the market.

            2. re: Midlife

              Forlorn Hope and Scholium Project both make their wines in Tenbrink Vineyards' winery. Does that make them "virtual"?

              1. re: Robert Lauriston

                If I gave time I'll try to contact Wines & Vines to get their definition of a virtual winery.

                1. re: Robert Lauriston

                  Apparently so. I spoke with someone at Wines and Vines who said their definition of virtual is related to having their own winemaking facilities. It is not related to vineyard ownership or bonding.

                  1. re: Midlife

                    Right! That's what I thought (but was not sure of) -- all you need is a business license and to be licensed with the appropriate California state sellers licenses by the ABC in order for you to sell to restaurants and retail stores, as well as direct to consumers.

                    This makes the gap between the Wines & Vines claim of 6,565 BONDED wineries in the US and the Wine Institute's number of 8,806 BONDED wineries in the US all the more significant.

                    Someone is way off! ;^)

                    1. re: Midlife

                      I don't think this "having winemaking facilities" is a distinguishing factor here. So called "virtual" wineries do have their equipment (stainless steel tanks, barrels, etc.), they also occupy floor space and have "brick and mortar" around them, even though it could be just a rental space. A good example of such a winery is Jelly Roll of Santa Ynez (you would be hard pressed to find their street address). I mean if you are pouring something of your own creation into a bottle, putting a label on it you are hardly "virtual".

                      1. re: olasek

                        I don't disagree with that in a broader sense, but the definition Wines & Vines gave me is in relation to the figures they published and the terminology they chose.

                    2. re: Robert Lauriston

                      I have been to Tenbrink to pick up Forlorn Hope. It is not virtual. I do not know who has the bond.

                  2. re: Robert Lauriston

                    Seems like different people have different definitions of "virtual winery," including or excluding négociants, winemakers' side projects in their employers' wineries, custom-crush labels, and brands. Some apparently reject the term entirely: the phrase is not used on

                    Wines & Vines distinguishes bonded wineries, virtual wineries, and brands, and say "Virtual wineries have a brand name and produce wine at host facilities," which doesn't entirely clarify where they draw the line between virtual wineries and brands, or whether those are mutually exclusive categories.


                    Another article says virtual wineries are "legally wholesalers and retail wine sellers."


                    The head of the Washington Wine Institute said, "There is no such thing as a virtual winery. You’re either a winery or you’re not. And under federal law, if you’re a winery, you need to produce wine at your premise."


                    "Virtual wineries [are] winemakers who use some else's facilities to make their own wine and place their own label on the wine. The winemaker may work independently of the winery [or] be employed by the winery. Some better-known virtual wineries[:] Underdog Wine's Big House, Fish Eye and Cupcake."


                    "Kim Crawford … opened the first Marlborough 'virtual winery.' He purchased grapes from contract growers, leased production space from other wineries, and made … wine."


                    1. re: Robert Lauriston

                      Good discussion. I believe I own one of the so-called "virtual wineries" with these characteristics:

                      * Fed TTB approval to be in the wine business, eg background check, etc. TTB (formerly ATF) also approves every label for every wine every year through their COLA approval system.

                      * applied for and received CALIF ABC licenses 17 and 20 permitting retail and wholesale of wine.

                      * no vineyard, no brick and mortar. Grapes are purchased from growers under long term contract and wine is made by a winemaker at a bonded winery under a custom crush agreement. No bond required for a custom crush client. The bonded winery we work with has 5 "virtual clients" like me. It gives them additional steady revenue and helps them leverage their large investment in facilities and equipment. It also allows the winemaker to have fun with small batches of wine apart from his employer's usual stuff.

                      * we own the company, the brand and it's trademark and are responsible for all sales and sales tax payments.

                      * we buy labels, corks, bottles and pay fees to make the wine, bottle it and label it to our specifications. We then move it offsite to temperature controlled storage (for a fee) where wine sits prior to distribution.

                      All revenue, or lack thereof, goes to the private crush client --me. Neither the winemaker nor his bonded winery participates in profit or loss.

                      This sounds like a real wine business to me, but one where the facilities and vineyards are contracted for rather than owned. Makes every sense for small to medium producers. Owning vineyards, a winery and equipment makes no sense whatsoever for this segment of the wine producing business.

                      What do you think?

                      1. re: cortez

                        Yes, if you could make your own distinct wine using 100% someone else's equipment/facilities then I would be satisfied with calling it a virtual winery. But the word 'distinct' is crucial here, no just purchasing someone's juice and calling it your own.

                        1. re: cortez

                          Yup! Everything but the bond . . .

                          1. re: cortez

                            That makes sense, at least for California. The wine is taken out of bond (i.e. federal taxes are paid) when you move it to offsite storage?

                            Apparently in Washington the law's not so clear and some people have been proposing tighter regulations.

                            1. re: Robert Lauriston

                              Yes, wine is completely distinct and not juice shared by other wine producers. And yes, fed tax is paid via the bonded winery when wine is removed to offsite storage.

                              Financial boundaries for small/medium producers and financial incentives for somewhat larger bonded wineries make this rational for both.

                              Go virtual!