Invest in wine without drinking the profits

(MarketWatch) - Nearly everyone who’s enjoyed a good glass of Chardonnay (or better yet, visited the vineyard that produced it) has fantasized about going into the wine business. After all, not only is wine one of life’s great pleasures, it’s also an increasingly marketable commodity: Sales of wine in the United States increased by 2% in 2012, hitting a new all-time high of $34.6 billion, according to wine industry consultant Jon Frederikson.

But as promising as that sounds, the glass may only be half full, so to speak. That’s because making wine is an expensive, time-consuming endeavor and returns on investment can take years, if not decades, to realize. “It’s a 10- to 20-year haul,” says famed actor and former “Saturday Night Live” star Dan Aykroyd, who’s invested in wineries based near his home in Canada. Moreover, the wine business has gotten super-competitive of late, especially for small-scale entrepreneurs trying to go up against the giants that have come to dominate the industry. Consider that Constellation Brands, an upstate New York company that started nearly 70 years ago selling bulk wine to bottlers, now encompasses such labels as Robert Mondavi, Kim Crawford, Clos du Bois and Arbor Mist — all prominent wine brands unto themselves.

In other words, those who venture into the wine business find themselves with plenty to, um, whine about, often in spite of their love of the grape and the sophisticated lifestyle they associate with it. “The glamour that people perceive is just that — perception,” says Earl Sullivan, founder of Telaya Wine in Idaho.