Stop mixing everything up: understand the true profitability of your vineyard

Canadien winemakers have a burning passion for their craft. But as soon as numbers are mentioned, everything becomes a matter of intuition. They are asked what their yield is at the vine, in grapes, or in bottles?

Here we go: one bottle per vine, or a yield per hectare that makes you dream… But if we push a little, this famous yield per hectare is inflated by a closer planting.

And the yield in bottles? The rule of thumb: 1 bottle per vine...Not reliable, with all the losses in the cellar and at bottling which eat into the results, the age of the vine, the choices of cultivation management.

The problem is that most vineyards aren't just one business; they're a collection of activities gathered under one roof. As long as you look at everything as a single unit, it's difficult to know what's really running smoothly... and what's surviving thanks to the rest.

Let's be honest, there are two blind spots that come up far too often:

👉 the role of ancillary activities, such as event planning

👉 and vineyard management as a multifaceted business

When events obscure the wine's true performance

Weddings, tastings, themed evenings… these activities are now part of the business model of many Canadien vineyards. And that's a very good thing.

The problem is not the event itself. The problem is when its results become intertwined with those of the wine industry .

This happens far too often

• Event revenues compensate for excessively low margins on wine

• Wine seems "profitable"... when it isn't actually.

• Selling prices remain too low because “overall, it's acceptable”

  
  

Result :

👉 We invest more in a production that cannot finance itself

👉 We make decisions based on apparent, but misleading, profitability

However, the principles of calculating the cost price are clear: each activity must bear its own costs and generate its own result , without being silently subsidized by another.

A vineyard is not just an activity… it’s an ecosystem

A vineyard rarely operates as a single line of business. In practice, there are almost always at least four distinct activities :

1️⃣ Viticulture (grape production)

A fully-fledged agricultural activity, with its own risks, variable yields and very real costs.

2️⃣ Winemaking

A processing activity where losses, specialized labor and technical choices have a direct impact on the cost per bottle.

3️⃣ Wine Marketing

Sales on-site, in grocery stores, in restaurants, at SAQ — each channel has its margins and requirements.

4️⃣ Events and agritourism

A service activity which often proves to be very lucrative, but which also requires a significant mobilization of time, manpower and infrastructure.

When everything is lumped together into a single result, the ability to manage the business is completely lost . This is precisely where activity-based costing becomes the essential tool for regaining a clear vision and asking the real management questions. ( See article from April 29, 2024. )

Another advantage is that by dividing the vineyard into four distinct activities, one finally becomes aware of its strengths… and its weaknesses in each of them .

Why separating activities changes everything

Separating the results by activity finally allows us to answer essential questions:

• Does my wine really finance itself?

• Am I selling certain vintages below their actual cost?

• Are my events profitable… once all costs are included?

• Where should I invest to improve overall profitability?

  
  

Without this separation, we risk making good decisions for the wrong reasons , or bad decisions thinking they are justified.

A management tool, not a bureaucratic exercise

Talking about cost price and separation of activities may seem cumbersome, even bureaucratic. In reality, it's quite the opposite.

It is :

• a decision-making tool

• a way to regain control

• a solid foundation for setting prices, choosing markets and directing investments

  
  

Vineyards that know exactly where their profit comes from are also those that weather difficult years, poor harvests, or market fluctuations better.

In conclusion

Your vineyard is not "complicated". It is rich, diverse and multifaceted .

To transform this diversity into a true asset—and not a source of complexity—it is essential that each activity be examined, understood, and managed according to its specific circumstances. Our specialized cost accounting service for vineyards supports you precisely in this process, offering a clear and detailed view of the profitability of each of your activities.

👉 Wine must be profitable as wine.

👉 Event planning must be profitable as a service.

👉 And the whole thing must function as a coherent business.

It is at this moment that the cost price calculation takes on its full meaning and becomes much more than a simple number: it transforms into a real management tool at the service of your passion , supported by our expertise dedicated to the reality of winemaking.