Research pick: Crowdfunding your wine cellar - "Crowdfunding in wine business as financing opportunity for smaller wineries"

Crowdfunding in the wine business could represent a useful opportunity for small wineries, allowing them to garner the necessary funds to make their speciality product for a discerning and engaged clientele.

Giuseppe Festa, Gerardino Metallo, and Maria Teresa Cuomo of the Department of Economic and Statistical Sciences at the University of Salerno, in Salerno, Italy and Mario Situm of the Institute for Corporate Restructuring, at FH Kufstein Tirol University of Applied Sciences, in Kufstein, Austria, address the notion in the International Journal of Globalisation and Small Business.

Crowdfunding is the practice of financing a venture through raising small amounts of money from a lot of people, usually via social media and the Internet. It has been used by authors, musicians, artists, scientists, charities, and organizations very successfully. The incentives for the funders can vary enormously and are often correlated with the size of their donation. For example, an author might crowdfund the publication of their book and offer smaller donors a free copy of the published first edition, a slightly bigger donation might get the donor a signed copy, bigger still and additional materials and merchandise might be offered or perhaps access to “secret” details, such as videos or short stories or background essays from the author. Sometimes, there might be an opportunity to receive a credit in the publication for a large donation or perhaps the opportunity to meet the author.

The extension of such a concept to winemaking has obvious benefits. The small winery gets the necessary funding to grow their grapes and make their wine. The donors get to drink the wine they helped make and perhaps get a tour of the vineyard, they might also have the opportunity of a share of the profits instead of the wine. There are a limited number of crowdfunding sites aimed at wineries and their consumers. However, the concept is expanding in offering donors involvement, engagement, and commitment at different levels

The researchers caution that in this relatively new world of wine crowdfunding, those involved at the winery side, the wine entrepreneurs and managers, need to constantly provide and communicating effectively with their donors to ensure positive sentiment and ongoing commitment, especially given that wine-making is not a one-off event as publishing a book might be, but an annual task.

Festa, G., Metallo, G., Cuomo, M.T. and Situm, M. (2019) ‘Crowdfunding in wine business as financing opportunity for smaller wineries‘, Int. J. Globalisation and Small Business, Vol. 10, No. 3, pp.278-292.