AP Program

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ALTERNATING PROPRIETORSHIP

Owning your dream winery is just an Alternating Proprietorship away!

What?

An Alternating Proprietorship (AP) is a winery/wine-making model that allows a winery to be established without owning vineyards and a physical building. A host winery/wine-making facility is contracted to accommodate AP’s. This facility serves as the physical, bonded location for making the wine marketed by the AP.

How?

How is this different from a custom crush facility?
An AP affords a more hands-on approach and control of the outcome of your wine with full winery & commerce privileges.

Basic requirements:

• Physical, bonded location with wine minimums stored in facility
• Compliance permits — ABC, TTB, etc.
• AP winery must employ own wine maker (in name only)

Why?

Requires minimal start-up costs
“When you look at the economics, there’s no way for the little guys to participate against the big fel•lows unless you develop an innovative way for them to have production cost efficiency that wouldn’t be available to them as a single producer in their own premise. If we can provide low costs of produc•tion, a 15,000 case brand can have the economy of scale normally only associated with a half-million case brand, and we have a different way of skinning the cat.”
— Allan Hemphill, CEO of Vinwood Cellars

AP can practice full sales/distribution commerce

“What also drives many custom crush customers to become AP’s is the fact that a state winery license gives them extensive privileges that a wholesale license does not. These additional privileges include having a tasting room, making retail sales to consumers, exercising expanded direct shipment privileges, and participating in competitions and charity tasting events.”
—Doing it right: The right why’s and how’s of APs

Initial wine release in a fraction of the time a brick & mortar winery takes

“In addition to economics, shifts in local land use policies have also made establishing a new winery incredibly difficult in the last decade. Almost all of the major wine producing regions have adopted strict land use regulations requiring each winery to obtain a use permit. Unfortunately, the public pro•cess involved allows the protests of neighbors to stymie the issuance of permits, potentially for years, And even once neighbors are appeased, water, waste water and environmental issues must still be addressed at additional costs that often makes building a stand-alone winery out of the question. All of these factors provide significant inducements to using an AP to start a winery.”
— Doing it right: The right why’s and how’s of APs

Fast-tracks brand equity and investment appreciation

“A to Z Wineworks was ranked the number one hottest small brand of 2006. The amazing back story is A to Z Wineworks is a virtual winery. The inaugural 2,500 cases produced in 2002 garnered Food & Wine Magazine’s award for the best American Pinot Noir under $20. A to Z’s rapid growth and success was so great, it afforded them the opportunity to purchase Rex Hill Winery in 2006.”
— Summary from Wine Business Monthly, February 2007