Paul Breaux had one successful business -- in real estate -- and certainly didn't need another one. But when he threw a party, in 1996, to celebrate his first batch of cabernet sauvignon from the tiny vineyard where he grew grapes as a hobby, his friends pleaded with him to let them buy bottles of his precious fermented fruit juice to take home. No such luck. Because of federal and state alcohol laws, Breaux couldn't sell the wine. That was the moment, however, when he started toying with the idea of ramping up production at the vineyard so he could do more than sell grapes.
Not that selling grapes was much more than a sideline at that point. Breaux, the owner and CEO of $12-million Sun Realty Inc., in Nags Head, N.C., and his wife, Alexis, had bought a 404-acre, two-home farm in northern Virginia in December 1994. Before he purchased the property, Breaux had traipsed all over the lush, hilly land. On it he found a smattering of overgrown vines besieged by briers, weeds, and saplings. The couple eventually "Bush-Hogged between the vines," Breaux says with a thick Cajun drawl, and cleared the area of unwanted growth.
In the meantime, Breaux had to plant a crop of something on the property to maintain his farmer's tax benefit. So he poured $24,000 into feed corn and soybeans, which produced only a $12,000 profit. He knew he wasn't going to rely solely on the income from his farm -- after all, he was still flying to Nag's Head in his private plane a few times a month to check up on Sun Realty -- but still, he wasn't the type of guy to jump only halfway into a project. The lack of profit "told me instantly that this was not going to be a lot of fun," he says. That's when Breaux started thinking about his scraggly vineyard. Since the state of Virginia ranks sixth in the nation in the production of wine-making grapes, Breaux figured he could get his tax break by raising grapes and then selling them to a local winery. By 1996, after he'd nursed the vines back to health with the help of local grape guru Dave Collins, Breaux says, "we had some fruit." That's when he made the wine and threw the party -- and began to think seriously about turning the tax break into a real business.
With $45,000 in cash from his own pocket, Breaux doubled the size of his vineyard -- from three to six acres. And in 1997 he began to outfit the winery, buying tanks, a new bottler, filters, and a small winepress for his first production season in the fall. By the end of 1997 he had mature fruit and a license. All he had to do was wait and taste what came out of the bottle.
The next spring was Breaux's first selling season, and he unloaded $40,000 worth of wine that year. That revenue figure, he says, "was a joke." But the reviews certainly weren't. They were serious. And the buzz was that Breaux had the goods.
Breaux Vineyards Ltd. hasn't turned a profit yet, but its proprietor sees one around the corner. Now that he has 43 acres of both red and white grapes producing 11 varieties of wine, Breaux's total 1997 capital investment of $307,000 is starting to pay off; he expected to hit $400,000 in sales for 2000. He's invested in a tasting room and a patio, where the vineyard can host parties and weddings. But that's not all. In a business in which wineries live and die on the happy tongues of sommeliers, wine writers, vintners, and importers, Breaux Vineyards is turning some taste buds in its favor. By early November, Breaux had already racked up close to 80 awards, including medals at competitions in California. Not bad for a guy who was just looking to hold on to his special tax status.
Anne Marie Borrego is a reporter at Inc.
THE START-UP ISSUE
Please e-mail your comments to email@example.com.