TOURIS M VICTORIA INVESTMENT GUIDELINES FOR WINE TOURISM MINISTER’S FOREWORD

Tourism is a big also receiving increasing inquiries from medium to small contributor to Victoria’s investors wanting to explore the possibility of investing economy representing in food and accommodation infrastructure in Victoria’s 5% of Victoria’s Gross wine regions. Inquiries like these provided the basis State Product and 6% for preparing these Guidelines, with wine producers, of all employment. investors, developers, local government, and community There are many factors groups being the target audience. behind Victoria’s increasing success in The Guidelines are thought to be the first of their kind by tourism, but one is the any Australian tourism agency, thus highlighting Victoria’s spectacular growth in interest in leading this important segment of Australia’s wine tourism. This small but growing segment of our tourism market. The Guidelines summarise the issues that tourism industry is becoming more and more visible need to be considered in investing in wine tourism - from to our domestic and international markets. concept to reality.

Victoria claims to be Australia’s food and wine capital, I commend the Investment Guidelines for Wine Tourism. supported by some 22 wine regions and over 400 wineries. Encouraging visitors to Victoria to experience our provincial food and wine first-hand, spreads tourism benefits across the State and generates many flow-on benefits to regional cities and towns.

Wine-related tourism is not new. Visitor infrastructure at many regional wine areas is first-class. Many established vineyards are now upgrading cellar doors and new projects are under development or being scoped. JOHN PANDAZOPOULOS MP These include significant investment in restaurants and Minister for Tourism and Major Events accommodation which are new business activities for many vineyard owners. In some cases, new investors are behind these proposals, forming innovative partnerships with the vineyards and adding to the marketing of Victoria’s wine regions. Associated off-vineyard investment in wine tours, food and accommodation in regional wine centres, and small town master plans that highlight wine production are also adding to Victoria’s momentum in wine tourism.

While Victoria is making good progress in wine tourism, as Tourism Minister, I want to quicken the pace.

Tourism Victoria is receiving more and more inquiries from vineyards big and small about how to develop their investments into tourism destinations. We are

1 TABLE OF CONTENTS

Introduction 03 1. Context for Investment in Wine Tourism 05 1.1 International 05 1.2 What’s on Offer - Victoria’s Wineries 05 1.3 Importance of Tourism at Regional and Local Levels 06 1.4 Strategic Direction 06 2. The Regional Context 07 3. The Market at a Glance 09 4. Developing the Concept 11 4.1 Assessment of a Wine Tourism Project 11 4.2 Key Factors 12 4.2.1 Regional Character 12 4.2.2 The Customer Base 13 4.2.3 Competition 13 4.2.4 Brand Positioning 13 4.2.5 Financial Resourcing 14 4.2.6 Staff Resourcing 14 4.2.7 Alliances 14 4.2.8 Promotional Support 14 4.2.9 Product Mix 15 5. Financing Wine Tourism 16 5.1 Who is investing in Wine Tourism? 16 5.2 Why invest in Wine Tourism? 16 5.3 Business Planning and Obtaining Finance 18 5.4 Issues for Obtaining Finance 18 5.5 Structural Options 19 6. Planning and Design 21 6.1 The Planning Framework 21 6.2 The Planning Process 22 6.3 Other Approvals 22 6.4 Planning and Design Issues 22 6.5 Local Government 24 7. Case Studies 25 7.1 Red Rock 26 7.2 Hanging Rock Winery 28 7.3 Lyre Bird Hill 30 7.4 Warrenmang 32 7.5 Pettavel 34 7.6 Brown Brothers 36 8. Project Development - Summary Checklist 38 9. Key Contacts 40 10. Selected References 42 Disclaimer 42

2 Investment Guidelines for Wine Tourism Chateau Tahbilk INTRODUCTION Writer and humorist, Fran Lebowitz, has noted that: “... food is an important part of a balanced diet”. Increasingly, it seems, wine is becoming an ‘important part’ of the Victorian tourist experience.

What is wine tourism? It is usually not the sole reason we travel yet Victoria’s Wine and food seems to focus regional cultural burgeoning wine (and food) industries are adding differences in a way that no other pursuit does. new dimensions to the enjoyment of regional Victoria. One thinks of the fortified wine (and characters) Travellers are increasingly seeking a more rounded of Rutherglen; the Italian heritage of the King Valley; engagement with the characters, places and culture Yarra Valley sophistication; Mornington’s professionals. of their chosen tourist destinations. Wine - its growing, It is also a logical partner to the other things for which production, tasting and consumption - provides an we travel - rest, business, seeing friends, golf, fishing, easy social entry point for most of us and an absorbing landscape, adventure and so on. enthusiasm for others.

3 As time goes on it is becoming difficult to separate in 1974 pioneered the concept of a major ‘ground-up’ out ‘wine tourism’ from just ‘tourism’. However for wine tourism complex with restaurants, merchandise, the purposes of these guidelines investment in wine farmers markets, reception facilities, cellar door, concerts tourism is taken to mean: (and even a ‘model farm’) established to lure the visitor to the Goulburn. • Direct investment in a winery or vineyard to service tourists. Examples are: cellar door sales, As visitation has grown, the question of accommodation accommodation, café/restaurant/epicurean has become increasingly relevant to some wineries’ centre, education, conference facilities, etc. development. Different responses have emerged - B&B’s have suddenly become part of the Victorian culture • Investment in infrastructure not at the winery but and can now be found as a part of many wineries’ developed as an adjunct to a winery experience offer; Natalie Pizzini has made the Whitfield pub an or trading in support of a winery experience - easy way to spend another day in the King Valley; All hotels, gourmet foods, restaurants, specialty Saints specialises in weddings and receptions; Chateau shops, attractions. Yering and the Lancemore Group’s hotels have elevated • Investment in promotional ventures designed to wine touring to a five star experience and opened up encourage tourism based on the attractiveness of wine possibilities for corporate conferences. imagery or product - trails, festivals, concerts, and so on. Why Invest in Wine Tourism? Background to wine tourism in Victoria The last ten years have seen an explosion in planting and Travelling through rural areas has been part of the wine production in Victoria. Competition is fierce and Victorian scene since earliest European settlement. In many small and medium size growers must establish the 1846 the Argus notes that visiting Bendigo vineyards to ‘next step’ for their business. Wine and food tourism purchase wine and grapes was a popular part of everyday gives winemakers an opportunity to relate directly with provisioning. More recently, W.S. (Sam) Benwell’s Journey their customers building brand loyalty and providing into Wine (1961) reported the special joys of sampling direct income from restaurants, accommodation and the winemaker’s art on site - even if he was speaking at, the other ancilliary businesses. For the investor, the perhaps, the lowest point of the Victorian wine-making growth in regional tourism and the interest in lifestyle industry’s history. He wrote: “A list of the wines which product - especially food and wine - can offer a rewarding have gone forever from our tables would make mournful investment vehicle. reading ... What is left in Victoria that is drinkable? ... Who makes it, and how did the vineyard come to be there? ... Purpose of These Guidelines To find the answer to these questions, one must make Tourism Victoria works to position Victoria as the leader a journey ... wine is always best when it is drunk near its in attracting investment in quality tourism infrastructure. own soil”. Wine and food writers also encouraged the It facilitates projects by providing strategic focus and advice gourmet tradition - Peter Smark, Dan Murphy, Len Evans, to public and private sectors. Investment Guidelines for David Dunstan, James Halliday and others all contributed Wine Tourism is the second in a series, following Tourism to a new public interest in wines and winemaking. But it Victoria’s Building Tourism from Concept to Reality published was Rutherglen’s Wine Festival of 1967 (later the Winery in 2000. The establishment of the Victorian Wineries Walkabout) which heralded the possibilities for a new Tourism Council (VWTC) in 1992 to provide advice relationship between wine, travel and recreation. The to the Minister has been pivotal to the growth and introduction of the Wine Equalisation Tax with subsequent importance of wine tourism. concessions for cellar door sales has re-enforced the financial significance of on-site sales to most growers. Tourism Victoria assists in the improvement of Victoria’s tourism assets by identifying economically and socially Most typically, the development of wine tourism in sustainable infrastructure opportunities which will maintain Victoria has been an incremental process. Sales from the the state’s competitive edge. The wine industry is rapidly winery have led to basic cellar door facilities perhaps with emerging as an area in which Victoria has special strengths access to ‘behind the scenes’ wine-making. Bill Chambers’ and potential. Rosewood Winery at Rutherglen retains the informal charm of this first step whilst places like Chateau Tahbilk Wine producers and investors both require background introduced cellar door sales into historic buildings to information to make informed assessments of the wide provide genuinely world class environments, bursting range of wine tourism options and approaches available to with heritage and a real sense of place. Others have gone them. These guidelines are a step in canvassing investment on to design purpose-built tasting outlets (matching the options with a view to exploring and realising the best growing sophistication of the new breed of winemakers). potential tourism outcome. Increasingly, opportunities for gourmet banquets and functions at the winery were seen as a means of supplementing income and expanding awareness of the label. The Mitchelton development

4 Investment Guidelines for Wine Tourism 1. CONTEXT FOR INVESTMENT IN WINE TOURISM

1.1 International challenge is to realise the potential of the wine regions Four major structural for international visitors. challenges are facing With its participation in The Global Network of Great Wine Rochford on Eyton Rochford winegrowers around Capitals Melbourne has joined Bordeaux, San Francisco, the world: a shift in Bilbao-Rioja, Porto, Cape Town, Santiago and Florence consumer demand from in promoting business, education and wine tourism on small specialist retailers the world stage and international promotion of short stay to modern retail or day trips from Melbourne may in the future include chains; the emergence Victoria’s outstanding winery experiences. of dominant brands; increasing international 1.2 What’s on Offer - competition; and changing consumer demand for Victoria’s Wineries different quality and types of wine. All these forces are leading to larger scale production and distribution The regional spread of grape growing over the last ten systems with, at the retail outlet, pressures to simplify years has been phenomenal. Victoria now has 28% of brand ranges. In turn, the place of the small producer Australia’s vineyards and wine tourism is increasingly is becoming more vulnerable to competition, less stable being seen as an important stimulator of regional tourism. contract arrangements and increased difficulties in In 2002 of some 400 Victorian wineries, over 200 were distribution and promotion. In the short term, most reported as having cellar door facilities and it has been producers are also facing oversupply conditions in estimated that the majority of Victorian wineries draw certain varieties that are unlikely to equalise before 2005. ‘at least’ 50% of their revenue from cellar door sales. Again, in the short term, the increase in the exchange In 1994/95 the number of visits to Victorian wineries rate may curtail overseas expansion and therefore was 1.6 million. By 2001/02 this had ballooned to 3.2 increase domestic competition. million. 54% of these were to the growing areas close to Inbound (international) tourism directly provided $7.2 Melbourne - Yarra Valley, Mornington Peninsula, Geelong, billion. towards Australian’s Gross Domestic Product in Sunbury and Macedon Ranges - reflecting a growth in 2002-2003. In total export earnings international visitors visitation to those areas of 19% since 2000. spent $16.7 billion. on all goods and services produced Tourism infrastructure - accommodation, eating out, by the Australian economy. The Australian tourism tourist trails, even adventure sport - has followed the industry employs over 540,000 people. Importantly, growers. For some regions such as the Yarra Valley, tourism tends to be a labour intensive industry with Pyrenees and Rutherglen the wine industry is a major benefits to regional employment. contributor to tourism. In the ‘emerging’ wine regions Identifying the synergies between the tourism and wine - including Mornington, Geelong/ Bellarine Peninsula, industries is one of the exciting, unfolding, challenges to both. Gippsland, King Valley, Ballarat, Macedon/ Sunbury, Bendigo and Heathcote - wine and food tourism is Internationally, Australia’s wine has gained recognition. becoming a significant component of the region’s Recently interest in Victoria’s wine tourism regions has attraction. For some towns like Milawa and Oxley the started to grow amongst international visitors. The Yarra ‘gourmet’ traveller is becoming central to their identity Valley wineries have quietly crept up to fifth (behind and to local producers of cheese, olives, honey, relishes Melbourne City, The Great Ocean Road. Sovereign Hill, and other regional produce. and Philip Island) on the Victorian Tourism Operator’s rankings of all tourist destinations. But the actual numbers Equally important, the nature of wine tourism is of international tourists to Victoria (1.21m. or 23.5m. changing. The Yarra Valley ‘Grape Grazing Festival’ has nights) remains a small fraction of intrastate or interstate demonstrated the power of festivals celebrating the trips (where Tourism Victoria focuses its major wine new vintage and others like the King Valley’s ‘La Dolce tourism marketing effort). Nonetheless international Vita Fiesta’ emphasise the increasingly strong cultural visitation can be significant for wineries on existing relationship between local food and wine. Over the touring routes - the South Gippsland wineries near coach last five years winegrowers associations and regional routes to the Penguin Parade, are one example - and the tourism authorities have generated a rich feast of festivals and trails which focus attention on particular local

5 products and specialisations. Petanque competitions the importance of the Victorian Wineries Tourism have become identified with celebrations in the Pyrenees Council in providing direct industry advice to the Minister. and at the Wood, Wine and Roses Festival at Heywood somehow wine has found its way into main billing with The Strategy maintains the regional structure of planning woodchopping! Music - from Spray Farm’s international but also identifies a shift towards the importance of concerts to Eyton’s Summer Music Series - adds another focusing attention on “... specific destinations, events dimension. The opening of the Besens’ TarraWarra or activities that are the key motivators for visitors... Museum of Art will usher in new standards for winery quality destinations with a strong sense of place offering related activities. boutique accommodation, restaurants, shopping, galleries, markets and appropriate quality service”. 1.3 Importance of Tourism at Regional This approach involves the identification of key and Local Levels destinations - villages, attractions, and in some cases areas (such as The Great Ocean Road. and The Grampians). Tourism is an industry which contributes $10.6 billion a year to the state’s economy, and employs 156,000 As a part of its overall approach, Victoria’s Food and Victorians. 2002 figures estimated that the economic Wine Tourism Plan 2004-2007 will explore: value of Victorian wine tourism was $412m. and Victorian • Existing strengths Wineries Tourism Council figures suggest that (for visitors to a cellar door) 53% reported that wineries • Cooperation between regional wine and food groups were the main reason for visiting a region. • Encouragement of quality food and wine festivals It is clear that investment in wine and food tourism is already having a significant impact on Victorian • Preferred areas for development regional economies. This is more than an ‘added-value’ • Opportunities for agri-tourism development proposition - wine and food are generating visitation (seen most clearly in the 40,000+ who visit the Yarra • Market positioning and strategic direction Valley over the weekend of the Honda Grape Grazing Festival). Again, the attraction of wine is encouraging not • Education and accreditation of operators only increased visitation but also increased length of stay Ideally, new product development should be closely and, if return visitation is an indicator, increased visitor aligned to investment attraction and infrastructure satisfaction with the regional experience. development of these strategic focal points. 1.4 Strategic Direction ‘Wine tourism’ is not new. For many years visitors have been seduced by the aura of wine and have sought it out at its source. It is only over the last fifteen years that the special synergy between winemaking, food and tourism has been officially recognised and fostered. Australia’s Wine Industry Strategy 2025 called on the industry to “... Capitalise on wine tourism opportunities by stimulating wine tourism and improving profitability for wineries”. In 1997 the Office of National Tourism provided funding for the Winemakers Association’s National Wine Tourism Strategy. Now most states have instituted formal studies to scope and develop wine tourism. Since its establishment the Victorian Wineries Tourism Council has been instrumental in moving Victoria to the forefront of national wine tourism through its promotional publications, market intelligence surveys, public awareness campaigns and encouragement of wine and food festivals.

Victoria’s Tourism Industry Strategic Plan 2002-2006 identifies wine and food as a tourism product of state-wide significance and a key segment for development. The Strategy calls for wine and food to be included “... as core product strengths” in all marketing strategies. It also identifies the promotion of the Yarra Valley as “... Victoria’s hero food and wine destination to national and international markets”. Additionally, the Strategy commits to improving regional restaurant experiences and restates

6 Investment Guidelines for Wine Tourism 2. THE REGIONAL CONTEXT

Victoria has eight promotion bodies to co-operate in marketing and tourism regions which product development. provide a strategic Brown BrothersBrown direction for Marketing, The regions include The Murray, North-East Victoria, Infrastructure Gippsland, Melbourne, Melbourne Surrounds, Great Development, Industry Ocean Road, Grampians and Goldfields. The general Development, Product geographic boundaries of these are identified below: Development and Regional Tourism Development Plans (RTDPs) have been International Marketing. developed for each of the State’s tourism regions and The regions provide a are used to co-ordinate Marketing, Industry and Product clear focus for tourism Development and Infrastructure activities.

A20 REGION S

20 Grampians Gippsland

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n O Park A8 S S ra lley Ballarat Yar V a A1 MELBOURNE A1 M1 Port A1 Phillip M1 A1 B100 N B100 Peninsula Phillip 0 50 Island 100 km SOUTHERN OCEA N Great Ocean Road BASS STRAI T Victoria’s Tourism Regions

7 Many of the RTDPs identify food and wine as a product Wine Regions strength and/or a product that is a point of difference. AROUND MELBOURNE Additionally, food and wine is identified as being a complementary activity to many other tourism activities Yarra Valley 1 and therefore adds significant value. Mornington Peninsula 2 Geelong 3 The plans identify that there is a need for quality Sunbury 4 accommodation in regional Victoria to leverage the ability Macedon Ranges 5 for induced visitation to the regions to increase overnight stays and yield. Investment in food and wine tourism will help to achieve this objective and is therefore supported WESTERN VICTORIA by the RTDPs. Ballarat 6 The tourism regions do not match the emerging Pyrenees 7 Grampians 8 boundaries of wine producing areas (See map below) Henty 9 however, each region is assessed and characterised on the basis of its ‘brand attributes’ (key regional features, destinations, attractions) and ‘brand personality’ NORTH-WEST VICTORIA (emotional or intangible attributes). Most often these Murray Valley 10 identify wine and food as a positive regional attribute. Swan Hill 11

CENTRAL VICTORIA Bendigo 12 Heathcote 13 Goulburn Valley 14 Upper Goulburn 15 Strathbogie Ranges 16

NORTH-EAST VICTORIA Rutherglen 17 Beechworth 18 Alpine Valleys 19 King Valley 20 Glenrowan 21

SOUTH-EAST VICTORA Gippsland 22

Wine Regions of Victoria

8 Investment Guidelines for Wine Tourism 3. THE MARKET AT A GLANCE

Understanding the make Repeat Visits up of the market - the 87% of respondents were repeat visitors. On average, Spray Farm Spray ‘who, how and why?’ those who were questioned made 3.5 trips per year - is an essential input which included wineries. 80% reported at least one visit into any investment to a winery each year (including 28% who reported 2-3 decision. The nature visits per year). and number of visitors to wineries and adjunct business have changed Regional dramatically since Sam With most visitors coming from Melbourne it is not Benwell’s travels. As surprising that the Yarra Valley and Mornington regions ‘lifestyle’ becomes attracted the highest visitation: almost a tangible term for a whole range of consumption • Yarra Valley 48%* behaviours, customer choices about wine (and food) can describe quite different types of people. However, • Mornington Peninsula 36% some general trends are clear - the number of people interested in travel, wine, food and local experiences • Rutherglen 18% continue to grow; the young are becoming involved; and • Geelong 12% certain regions are gaining sufficient ‘weight’ to act as tourist magnets. Building relationships with these markets • Pyrenees 11% is a key to successful wine tourism development. * multiple choices allowed In 2003 Tourism Victoria with the Victorian Wineries Tourism Council (VWTC) conducted the Victorian Cellar Duration Door Survey (following its 2001 Cellar Door Survey). Over half (51%) of those questioned reported that they This survey was completed by visitors to Victorian cellar were day trippers; one third (35%) were on short trips doors about themselves, their reasons for visiting and of 2-3 days duration; and 14% were part of a trip of four their tourism habits. In summary, the survey reported: or more days.

Age Wine Consumption and Wine A significant increase in 25-34 year olds and 35-44 Club Membership year olds over the 2001 Survey. The 25-34 year old 46% of cellar door visitors drink wine ‘a few times a demographic now represents the largest single segment. week’; 32% ‘every day’. 24% belong to a wine club or society. Life Cycle The highest lifecycle group was in the family sector (32%) Planning and Information Sources but the report noted that older couples (28%) and 77% reported that they planned to visit a winery before younger couples (26%) were also strongly represented. departing on their trip. Key reference points were: recommendations from family and friends (44%); Tourism Geographic Profile: Victoria’s Wine Regions brochure (27%) and Tourism 58% of visitors to Victorian cellar doors were from Victoria’s ‘Jigsaw’ brochures (26%). Melbourne and a further 19% from regional Victoria. Interstate visitors represented 20% whilst overseas Motivation to Visit tourists represented only 3%. Apart from wine tasting, the key reasons for visiting a winery included: its surrounding scenery (24%); its atmosphere (15%); and a food experience (20%).

9 Main Reason for visiting Region Most enjoyable aspect of a winery visit 53% of visitors suggested that visiting wineries was the The increasing importance of friendly staff was main reason for visiting a region. Reasons stated were: emphasised by the VWTC cellar door survey. In 2001 visiting friends and relatives (14%); a weekend away this aspect was reported as secondary to the quality of (14%); and attending sporting or outdoor events (10%). the wine. In 2003 although the quality of wine remained stable at 31%, “friendly staff” had lifted from 23% to Reason for Choosing a Particular winery 36% to be the most significant determinant of enjoyment. Wine quality was important but not the only The significance of food facilities and ambience also consideration when deciding on which winery to visit. increased between 2001 and 2003. Respondents noted: In summary, three key trends are clear: • quality of wine (20%) • Wine is a significant driver of tourist demand. As • reputation (19%) market demand for regional tourism grows, investment potential of projects associated with wine are • food (17%) becoming sustainable as attractive investments.

• recommendation (17%) • Additional activities - particularly food - are sought after as a part of the wine experience. Investment in • past experience (13%) conjunction with wine enterprises offers strong ‘value • ambience (13%) adding’ to both wineries and new enterprises. • Wine and food tourism is no longer limited to older Other activities demographic profiles - youth (25-34 year olds) is The most mentioned activity participated in by winery increasingly important. The market for regional wine visitors was eating out (73%). Arts and crafts, shopping, and food experiences is made up of segments with high picnics, outdoor activities and events/festivals were also disposable incomes. Strong return visitation indicates mentioned. that loyalty is high suggesting high yield and strong word of mouth promotion.

10 Investment Guidelines for Wine Tourism 4. DEVELOPING THE CONCEPT

4.1 Assessment In every project there are certain aspects which of a Wine determine success or failure. These ‘key success factors’ Mitchelton Tourism Project may relate to demand, margins, or revenue levels. The investment They may also be dependant on other things happening opportunities are - success in a regional wine trail promotion, an upturn there. Victoria’s in intrastate tourism, containment of building costs, tourism infrastructure differentiation from competitors, etc. Often a project’s is developing as fast as success is dependant on its location - near a major city any in the country but or destination hub, or perhaps, near a major landmark. grape growing and wine In any case, identification of key success factors and an production has added analysis of the ‘sensitivity’ of those factors to change is a dimension which important in checking the ‘best case’ and ‘worst case’ has opened up further possibilities for new ventures in possibilities for a project. accommodation, restaurants, gourmet ventures, primary production, events, festivals, adventure sport... and more. Figure 1, below, indicates the principal factors which should be assessed in preparing a wine tourism From an investment point of view, developing a successful investment proposal. The ‘above the line’ factors: Regional wine tourism product requires attention to many aspects Character, Customer Base, Competition and Brand Position of the existing business and of the ‘adjunct’ business represent the context for a new venture. The factors under consideration. The same issues must also be ‘below the line’ - Financial Reserves, Staff, Alliances, and taken into account by an external investor in a project. Promotion - are the resourcing issues which will provide Investment in wine tourism is no longer a matter of direction particularly in respect to scale and long term shortening the distribution chain by opening a cellar door financial viability. Examination of both types of variable facility. A range of variables must now be considered may suggest the most appropriate type of components in decision-making to move away from a simple wine for a project - small scale and minimum risk BBQ facilities, production model. a family-run B&B,... or... a $6m conference centre. Existing Loyalty Identity / Image Tourism Wine Tourism Type Tourist Numbers Tourism Needs Tourism Objectives Statutory Planning Local Attractions

Regional Character Customer Base Competition Brand Position

Tourism Product

Financial Reserves Staff Resources Alliances Promotional Support Components

Cellar Door Self Cafe

Capital Accommodation Cashflow

Paid / Free Picnic / BBQ Winery Tour Staff / Contract

Tourism Victoria Events Regional Tourism

Other Attractions Conferences Growers Association Functions Adventure Arts / Craft Wine Education Other …

Figure 1 Wine Tourism Investment Issues

11 Although a fortunate few can enjoy the winemaking • Short term promotion to new markets - investment in process purely as a pleasurable pastime, investors are festivals, regional promotions and brand alliances may focussed on business outcomes. Establishing the financial be a means of opening the brand to an new audience. feasibility of any new or ancillary business is a critical step in undertaking a project. • Lifestyle - the grower or investor may simply wish to enjoy the development of a larger concept. Predicting performance of a business is rarely risk free and any feasibility analysis is only as good as its base • Capital appreciation of real estate - investment in information and assumptions. Nonetheless a careful buildings, landscaping and facilities can add to long approach to feasibility analysis can provide a good way term attractiveness and property value. of exploring the issues which may make the difference A clear understanding of the objectives of the investment between success and failure. A feasibility analysis will, in and its contribution to a wider vision of the enterprise’s any case, be required as a part of any approach to banks future is essential in evaluating feasibility and in or other investors for funding. determining its real tests of success. Feasibility of a project depends not simply on accurately gauging market-place demand. Financial profitability 4.2 Key Factors is the objective and accurate estimation of the costs (Refer Project Development - Summary Checklist p.36) and revenues associated with meeting demand is the real outcome of a feasibility assessment. If feasibility 4.2.1 Regional Character assessment is not a competence of the grower or Visitors understand regional differences and seek them investor it is best that this stage is undertaken by an out. It may be the ‘terroir’ [Fr.“soil”] of the winery or independent specialist consultant. the impression one has of particular places - the Examination of trends in a particular industry is the landscape, the people, the climate, attractions, starting point for any assessment of future performance. and special events. It is important to realise that a wine tourism project Regional character provides the matrix within which can mean an understanding of many different industries a tourist offering is made. It can be effected by the - each with their own market dynamics. Even basic marketing objectives of tourism authorities or by the cellar door sales can be directly effected by trends approach of local government to development, heritage in merchandising. Restaurant fashions are constantly protection, environmental objectives, and so on. changing. Accommodation is dependant on disposable income, and so on. The location of the venture is a key consideration - proximity to local attractions and to key tourism Assessing past performance is one aspect of establishing hubs may be critical to visitation. Already a tourism trends; predicting the future is the other. Often trend to wine regions close to Melbourne has trends, which history suggests are likely to continue, justified infrastructure development in restaurants can be turned into short term episodes by a larger and accommodation on the Mornington Peninsula trend or one-off occurrence. Changes in government and the Yarra Valley. Macedon Ranges wineries have policy - for example, water rights - can have a similar found easy alliances with spa and restaurant operators effect. An understanding of broad economic trends is in Daylesford and Hepburn Springs. As international usually obtainable from banks, government agencies, interest in Australian wineries grows it is likely that or professional consultants. Industry associations and proximity to Melbourne will become a crucial issue for banks usually have data on sector performance which inbound tourism. Again, as Tourism Victoria’s planning can be used to fill in details in particular industries. around regional attraction unfolds it is clear that other Other agencies such as Tourism Victoria, the Victorian opportunities will emerge around those tourism ‘hubs’, Wineries Tourism Council, the Winemaker’s Federation particularly for the intra - state and inter-state markets. of Australia and regional tourism authorities can assist in providing further specialist insight and statistical Ideally, a wine tourism venture will springboard off information about visitation levels and market segments. regional character. It has been easy to associate wine with For more complex projects it may be appropriate to regional difference (and continuing efforts at appellation commission market research to help establish the scale controls on labelling emphasise the significance of terroir); and type of demand. now, associated food, building design, and even the welcome of staff must reflect local differences. A project While investors are seeking to maximise the return on developed without a clear understanding of the regional their investment in a tourism-based project, often the constraints and character, risks missing opportunities goal is not purely immediate revenue. The vision for the to build on these special attractors and to contribute project may embrace such issues as: to them. In some cases - Milawa, Yarra Valley, and • Long term brand development - here the number Rutherglen are regional examples - the wine (and food) of people who engage with the brand may be more factor has become a central driver in establishing an important than a financial contribution. identity for the future.

12 Investment Guidelines for Wine Tourism 4.2.2 The Customer Base 4.2.3 Competition Any wine tourism project relies on customers. Competition can come in two forms - other wineries; Understanding the present and potential numbers of or other attractions. Although a number of wineries visitors, their needs and aspirations is a critical part of concentrated in a particular area can provide a certain any business planning. ‘weight’ in the marketplace they can also compete directly for the tourist’s dollar. Similarly, other attractions may In simple terms, visitor needs can be considered as of bring visitors but they may also consume the traveller’s two types: time and money.

• ‘Functional’ - the basic requirements: roads, toilets, Some competition may be beneficial, enhancing the total shelter, opening hours, signage, wheelchair access, etc. regional offer and expanding the overall visitation from • ‘Aspirational’ - needs for more emotionally-rooted which the new project may draw its patronage. Other desires such as: personal recognition, exploring what competition may simply dilute a limited visitor pool. is new, security, peer approval, respect, fun, the best The challenge to investors is to define possibilities for of good living, and so on. establishing competitive advantage based on their special These issues are the matters that can be defined by situation, skills, and resources. Imagination in creating rigorous market research or even just by talking to a new concept, improving an existing one, or finding visitors. Frequently ‘demographic’ grouping can offer market niches which are not being serviced are the keys insight to the way people may behave - age can be a to competing successfully. factor, as can family status, or income. Tourism Victoria utilizes the Morgan Value Segments which identify 4.2.4 Brand Positioning ‘lifestyle’ categories based on the particular segments The identity and image of a winery (and its wines) approach to spending. Other markets are identified by is a key asset of an enterprise. the use associated with a venue. For example weddings, conferences, and celebrations often bring guests to a Public trust of a brand can mean acceptance of products place which they may not otherwise visit. at the retail and wholesale level. It can also assist in financing and it can place a firm or a family in a social or Targeting particular lifestyle, demographic or other cultural context. It must be protected and nurtured. segments can be important in designing the features of the project and efficient advertising depends on focusing A tourism adjunct to the wine business must positively on the media relevant to a target market. contribute to the wine brand. And it can! Many investors have actually built their wine brand by entering an While it is important to assess the type of visitor it is adjunct market. Careful consideration of the implications equally important to understand the size of potential of a new venture on the existing brand is central to visitation i.e. the number of people that are likely building on existing loyalty and to providing access to a to come. Some large scale projects and major joint larger patronage base. Usually the new venture should promotions can begin new tourism trends to a region; be congruent with the brand identity of the winery - a other projects may improve visitation from special premium wine is not well serviced by a poor restaurant; niches in the market; for others the absolute upper strength in an Italian grape may well be enhanced by a limit of visitation will be the existing numbers coming to game of bocce; ... and so on. the region, taking account of trends - up or down - for the future. However, there is no attraction which will It is critical to remember that in any brand association capture the total potential market. In fact, in estimating arrangement the business purpose is to enhance the visitation, the investor must start at zero (and this is what winery brand image - and therefore profitable sales - an existing winery going into a cellar door operation by improving: without any existing reputation, promotion, alliances, • Awareness of the brand signage, etc. etc. can expect) and build up the project’s visitation profile according to its appeal to its targeted • Preference for the brand markets. Accurate estimation of the scale and frequency of demand is perhaps the hardest but most important • Intention to purchase the brand single determinant of a successful business development • Actual purchase of the brand’s products exercise. • Satisfaction with the brand Understanding the market is not simply a ‘once-off’. Ongoing market reconnaissance is vital to remaining • Respect or loyalty to the brand competitive. Keeping abreast of customer needs can range from simply requesting postcodes to undertaking ongoing qualitative or quantitative market research on a regular basis.

13 Much of the recent growth in wine tourism products Cost is not the only consideration. Staff (especially front can be attributed to brand building. Frequently concerts, of house staff) are vital in maintaining strong customer restaurants, events, sponsorships, accommodation, satisfaction and therefore return visitation and positive galleries, tours and other initiatives operate at little or brand impressions. no profit but have enormous impact on building or enhancing brand image. 4.2.7 Alliances Increasingly, success in developing a tourist resource is linked 4.2.5 Financial Resourcing to alliances with regional enterprises and associations and Ancillary products can be attractive in providing with external brands, which can reinforce awareness of additional revenue and ‘smoothing’ seasonal cash flow the grower’s brands. variations; however strict business planning must be the basis for deciding on a new venture. Institutional financing Typically, initiatives include taking advantage of economies will be linked to a clear analysis of demand and return of scale in branding, joint marketing initiatives, and on investment. It is necessary to establish the capital promotions. Growers and tourism associations also requirements of a proposal and to justify the cash flow provide the opportunity for consolidation of market requirements over a reasonable business horizon. Benefit research and network data bases. can be determined by either an increase in existing Association with other wineries and attractions, growers winery business or on the basis of a stand-alone adjunct associations, accommodation, retail outlets, events, business. Accommodation, restaurants, events and so on restaurants, services and retail products can all be must be evaluated in terms of that particular industry or useful in bringing tourists to a winery. The work done in terms of adding brand awareness or image for the by Browns Brothers and other local wineries in the wine label. North East has been outstanding in generating interest Financing expansion of the business depends on: in the Milawa/King Valley region. The Scotchman’s Hill group has built strong relationships with accommodation • One’s own funds businesses in the Geelong region to assist its wedding and function clients. There are many other examples. • Borrowings of loan funds More generally, industry associations such as the • Securing capital through equity injection, Victorian Wineries Tourism Council have generated sharing or raising enormous awareness of wine tourism in the Victorian Inevitably, tourism also involves issues of public liability context. The Winemakers’ Federation of Australia has and property damage. Insurance implications must be broad experience in research and advice on wine tourism carefully assessed and costed in advance. and its excellent guides, reports and research resources are invaluable to any grower seeking expansion into 4.2.6 Staff Resourcing wine tourism. Running a vineyard and winery is, typically, a full time Brand alliance with external corporations is an activity occupation. Vineyard operations can draw heavily on the which is being used to mutually enhance brand image. most valuable resource of the owner - time. The decision BMW (Aust.) for example has utilised a number of Yarra to expand operations into tourism ventures must be Valley winery destinations to re-enforce its image as a undertaken with a clear view of the implications for staff prestige car provider. Similarly ballooning in the Yarra and the impact on the time resources of the winegrower. Valley has become a popular part of the wine experience. Most of the time running a B&B, for instance, is not in Assessment of the contribution to a project of existing cleaning or cooking but in attending the phone for bookings. and potential alliances can be a decisive factor in Adjunct businesses have their own needs for expertise determining long term viability. and generally conform to the financial dynamics of the ‘other’ industry. Staff issues including: the owner’s 4.2.8 Promotional Support expertise, local availability of suitable personnel, and Assessment of a new venture should take account training requirements should be analysed. Similarly, the of the continuing requirements for promotion in the need for contractors and specialist consultants needs to marketplace. Advertising, public relations and loyalty be realistically assessed and costed. programs are likely to underpin a viable enterprise.

Staff costs (including statutory and other on-costs) Tourism Victoria and regional tourism authorities provide are usually a major part of any enterprise’s annual crucial promotional support to wine tourism initiatives. expenditure. Consideration of whether staff are to Tourism Victoria’s publication, Wine Regions of Victoria, be employed on a full time, part time or casual basis has a distribution of 125,000 throughout Victoria and its depends on seasonal and daily demands. regional ‘jigsaw’ brochures are perhaps the single most significant influence on self drive tourists.

14 Investment Guidelines for Wine Tourism There are also other free opportunities for news, Customer Need Business Activity Associate markets radio/television and internet coverage. Television, in (Morgan)* Buying Cellar Door All day trip and overnight particular, can be powerful in raising awareness of a Merchandise (Visible Achievement/Look at Me/Socially Aware/Young Optimist/ wine and its brand. Travel programs, Postcards, Discover Gourmet produce Traditional Family) and Australian culture programs are constantly seeking Gallery new angles on the Victorian scene. Learning Tasting Education, interest group Wine education (Socially Aware, Traditional Family) Again, co-branding with other businesses may enhance Winery tours Museum awareness and image. This may be as simple as Accommodation B&B Weddings, romance, providing wines to the local art gallery or as complex Hotel / Motel festivals, gay/lesbian, as formal deals with major corporations as part of joint adventure, sports (Visible Achievement/Socially promotional exercises. Sponsorship is a form of co- Aware/ Young Optimist/Look at branding. The trade off is between the winery’s cash Me/Traditional Family) Business Conference facility Seminar, convention, retreat and/or kind in return for association with the ‘brand’ Eating Cafe Day trip, romance, festivals, of the local group, charity, cultural centre or product. Restaurant events, gay/lesbian, Epicurean Centre adventure, sports (Visible Nonetheless provision for paid advertising, sponsorships BBQ / Picnic Achievement/Socially Aware/Young Optimist/Look at Me/Traditional or public relations activity is prudent. Family) Weddings, functions Reception facilities Weddings, celebration (Visible Achievement/Young 4.2.9 Product Mix Optimist/Look at me/Socially Aware) The opportunities for investment are limited only by * Morgan Value Segments © Roy Morgan Research imagination and potential market demand. Broadly, Table 1. Customer Needs customers display consistent needs which commercial on-site ventures can tap into. Holiday buying behaviour can be significantly different The table right (Table 1) summarizes some relationships from day to day shopping. Wine sales and specialty between the needs of customers, potential wine associated consumption are typically more attractive in a holiday activity which may satisfy those needs, and some possible situation and the opportunity is to cater to such markets for the new enterprise. specialties. Again, wine education represents an activity which may best be pursued on site. It is also clear that accommodation associated with wineries has added a positive dimension to an overnight stay. Meeting the need for corporate conferencing is especially appropriate in a winery as is demand for food and celebration.

15 5. FINANCING WINE TOURISM

(Important Note: It is not the purpose of these guidelines to broach all the issues associated with possible finance and financial structures for undertaking a new project; nor to recommend any. However some exploration of structural options may provide prompts to further discussion with qualified accountants or financial advisors)

5.1 Who is • to directly increase yield, and net return through investing in additional income streams; Spray Farm Spray Wine Tourism? • to enhance a brand in order to maintain or increase The great lesson of the market share; past ten years is that investment in wine and • to improve the value of the capital asset of the land wine tourism can come and its improvements; and from many quarters • lifestyle. - dedicated wine growers, professionals, Perhaps most significantly, wine tourism projects can the hospitality industry, offer some growers a way to balance cash flow over the superannuants, long term development of a wine business. The early international corporations, farmers and others. set up years of a wine business are characterised by low However, it is important to differentiate between revenue. As vines mature, the label is established in the the two types of investor involved in wine tourism: marketplace and economies of production are realised, break even is achieved and eventually ongoing profit • the winegrower or winery expanding its offer to achieved. A tourism product can, however, be achieved the public for revenue or brand development; and more quickly and may deliver positive cash flow sooner. • the external investor using visitation to a wine region The model below (Graph 1) reflects a hypothetical case as a springboard to infrastructure development in of cash flow from wine (in blue) and tourism (in red). hotels, accommodation, restaurants, gourmet food, It can be seen that the net cash flow position (in green) merchandise and so on. can be improved, especially in the sensitive early years through introduction of a tourism product. By the time 5.2 Why invest in Wine Tourism? reinvestment in tourist product is required (shown below Wine producers’ viewpoint at Year 8), vineyard income is nearly established and the Growers may have a number of major financial overall net cash flow position is manageable by Year 15 motivations for entering into a wine tourism venture: the overall benefits of cash flow from both sources are clearly apparent. $ 400 Wine

Tourism 300 Net Cash Flow 200

100

0 Year 7 8 9 1 2 3 4 5 6

11 13 15 16 12 14 18 10 17 19 20

-100

-200

-300

-400

-500

-600

Graph 1. Cash flow

16 Investment Guidelines for Wine Tourism The simplified models (based on nominal value per of the brand in the wider marketplace and be seen as case) below demonstrate the advantage to the wine undesirable from that point of view. Nonetheless the producer in undertaking direct sales. In Model A the desirability of encouraging visitation to the winery to producer achieves profit solely in the margin between capture the winery experience and cellar door (with production costs and wholesale less distributors charges. associated restaurant) sales is clear. Model B shows that while there may be costs of direct sales - administration, time, travel, representation, etc The Wine Equalisation Tax (WET) rebates available - equivalent (or near) the distributor’s charges, the whole from the Commonwealth and Victorian governments to retail component is retained by the producer, in this case small growers for cellar door sales (up to $300,000) have doubling gross margin. also provided a strong inducement to most producers to establish cellar door facilities and direct mail-order Model A: 100% Distributor services. Under changes announced in the 2004 Budget producers will now receive a maximum rebate of $/ Case $290,000 per year on all sales up to $1m. - effectively Production cost 40 neutralising the cost of the WET for 90% of wineries. The net effect is to put distributor sales in the same (rebated) Distributor (say 20% Wholesale) 20 situation as cellar door so this may actually remove some of the incentive to open a direct outlet. Producer Gross Margin 40 Small growers certainly benefit from direct sales in other Retailer 40 ways as well - principally in saving distributors’ margins and competition for shelf space and smoothing year TOTAL (RRP) 140 round cash flow. But even the basic cellar door operation must be considered a small business with all the requirements for staffing, promotion, branding, facilities,

Production cost ongoing costs and so on.

Distributor There are no rules for sequencing investment. Brown

Producer Gross Margin Brothers have shown the prudence of moving forward from a stable financial and marketplace platform. On the Retailer other hand, Spray Farm has successfully demonstrated that intensive investment in events, food and functions can help quickly elevate a brand above the ‘also-rans’.

Graph 2. Without cellar door Often, to support a cellar door operation, a grower will invest in ancillary facilities from BBQs to restaurants, B&B’s or other attractions. The option seems reasonably Model B: 100% Own Sales simple. Vines take years to produce income whereas a restaurant can be productive immediately. The challenge Production cost 40 is to make visitors come ... and buy!

Cost of sales 20 In addition to capital commitment to growing grapes and making wine, the grower is then faced with new financing Producer Gross Margin 80 needs for buildings and fit-out. The danger lies in over- TOTAL (RRP) 140 extending reserves while there remain demands on the winemaking business to cover establishment, expansion, stock holding costs or in riding out over-supply situations. Unsustainable costs in a new venture can actually Production cost endanger the core business. Frequently the answer can lie Cost of Sales in a smaller investment in cooperative regional marketing Producer Gross Margin or in drawing external investors into the business or in encouraging synergistic development by others. Sometimes the ‘new’ business may prove to be a superior investment to the wine business. Generally, however, the rule is that as business grows more external funding will need to be injected. Graph 3. With cellar door Throughout, the grower-investor must carefully gauge In practice cellar door sales are limited by the demand the level of investment which is sustainable and the at cellar door. If the total production cannot be sold implications of borrowing or capital raising on wine-trade directly, other distribution must be arranged. Again selling development and control of the business. purely through cellar door may limit the establishment

17 Outside investors’ point of view • Piggy-back development - Relationship to events, External investors usually seek to associate with attractions, etc. the wine tourism industry: • Alliances - formal and informal. • to make profit and a satisfactory internal rate of return • Financing - capital structure and cost. • to invest in the long term growth of the wine industry • Profitability - satisfactory Internal Rates of Return; • to invest in the long term growth of the reliable revenue, expenditure and cashflow tourism industry performance.

• to invest in the long term capital growth • Marketing plans - links to operators, brochures, trade show attendance, advertising, sponsorships, loyalty • because of lifestyle considerations programs.

Benefits of cooperation • Organisation - Corporate structure, management Cooperation of winemakers and other investors can structure, staff. contribute to: • Operations - hours of operation, cyclical maintenance • risk reduction costing, risk management, insurances.

• sharing of expertise • Government support - Access to grant • increased borrowing power programs, subsidies.

• expanded brand profile • Statutory - Requirements for: planning approvals, Worksafe, licensing, environment protection, shop • synergies of development and marketing trading, etc. The principal benefit is, however, a question of scale. Although there are opportunities to invest in wine 5.4 Issues for obtaining Finance tourism at all different levels, increasingly, the scale of Put simply, there are two types of finance: investment in facilities is growing larger as tourists expect • Loan Funding - Usually borrowed on the basis of more (and get more from the competition). There is no repayment of a loan plus interest based on security doubt that the more vigorous the wine tourism industry of the proponent. This type of arrangement is most becomes the more cost effective larger scale investments appropriate for small scale ventures with a value in infrastructure become. of under $2m. 5.3 Business Planning and • Venture Capital - Equity participation from Obtaining Finance superannuation funds, managed investment funds, Proper business planning is the key to prudent specialists in rural business, merchant bankers, etc. investment. A good business plan will test the concept For ‘premium’ deals arrangements involving debt and of the project; it will provide a required basis for equity involvement may be established. Usually this consideration of others - banks, financiers, etc; and, it will will involve projects of at least $2m. provide targets against which the new venture can test Banks and finance institutions gauge the risk of their itself in operation. The plan should clearly identify: involvement in particular investment in the context of • Purpose - Why the enterprise is being undertaken. the expected performance of the industry in which it sits. For example, an investment in a winery restaurant could • Objectives - What is hoped to be achieved by the be considered as a part of the restaurant industry and/or venture. as a part of the wine industry. Current bank guidelines rate large scale wine enterprises more highly than smaller • Concept planning - explaining the concept. ones. This will effect the ease with which funding may • Vertical or horizontal integration - Relationship with be available. Similarly, the restaurant industry is seen as other activities. having its own risks. Generally the greater the lender’s, or investor’s, perception of risk, the costlier and less flexible • Identification of business - What industry is the new arrangements are likely to be. venture in? What are the trends and opportunities of that industry?

• Market positioning - Where the new venture sits in relation to competition, market type and market demand.

18 Investment Guidelines for Wine Tourism To improve attractiveness to financial institutions, Most structures should therefore be entered into on investors must be rigorous in addressing clearly and the basis of a clearly understood vision of personal and reliably: enterprise goals reaching well into the future.

• Business Skills - the track record of a proponent in the Financial structure (or corporate structure) may be chosen business or in earning other income. considered in the context of:

• Actual Capital Costs - Independent quantity surveyor or • financing architect assessments of costs. • income sharing • Business Plan - finance ratios, revenue estimates, cost estimates, etc. • taxation planning

• Pricing - “Premium Wine Experience” or lower value • indemnification and limitation of liability price bracket. Some regions’ ‘brands’ can sustain • family inheritance planning $30.00 / bottle, some cannot. Similarly some tourism products can attract a premium others may have Sole proprietorship, where a business is operated in to find another position due to issues of margin and the name of an individual is perhaps the simplest form customer profile. of structure. Revenue and outgoings provide the basis for the individual’s net income and, accordingly, tax • Brand - Is existing brand awareness sufficient to draw responsibilities. The proprietor also retains responsibility customers? Does cellar door etc build brand or is it for legal obligations, including debts. This structure costs better to build other experiences as an anchor to the little to set up and can quickly reflect the financial success business? of a business, particularly when it operates in only one • Benchmark - Estimated performance against industry enterprise. The structure can present limitations in benchmarks. respect to capital raising as the assets of the business are essentially limited to those of the proprietor. The great • Risk - Risk can be in the form of: competive pressure in advantage of this structure is that it does ensure close margins; demand trends; and liability to litigation. personal control of a business.

• Impact on rest of business - does the new enterprise ‘fit’ A partnership can increase access to borrowings and with the existing business. can bring together complementary skills. A husband and wife can also value their respective input into a business • Capacity to meet demand of the tourism industry - lead for taxation purposes. A partnership does, however, times, volumes and commissions. open up possibilities for internal dispute regarding overall • Regions tourism performance and catchment - eg direction. In the situation where a grower seeks the distance from Melbourne, existing established regional partnership of a tourism specialist, say a restaurateur, tourism industry. it is important that corporate vision and goals are clearly agreed and that dispute settlement procedures • Scale - Size of enterprise, capital requirements, are envisaged. Additionally, a partnership usually has turnover etc. unlimited legal liability.

• Security - Is debt secure? Proprietary companies provide a separation of legal entity from the individuals involved in them. In this way • Presentation - Is the proposal presented in a financial participation in the company can be at legal professional manner, inspiring confidence? ‘arms length’ through shareholding and consequent dividends and legal liability lie with the company - not the 5.5 Structural Options individual. Establishment of a company structure does Wine tourism projects are often characterised by involve some costs and annual reporting to the Australian a development of interests between a grower or Securities and Investment Commission. It also entails high winemaker and new expertise (in say restaurants, standards of record keeping and public scrutiny. Directors accommodation or some other venture). Where two of a public company are also required to comply with or more parties are sharing funding of a project close clear standards of decision making and retain financial attention needs to be paid to the type of corporate and responsibilities in certain situations. The proprietary financial structure chosen to reflect interests and control company does offer a means whereby a diversity of future plans. Too often winemakers have seen a need to owners can be accommodated through shareholding attract capital to cover stock holding or expansion then and election of Directors. The company structure does found that their new ‘partner’ has gained unanticipated not necessarily preclude shareholder friction as holdings rights to the firm’s management and assets. fluctuate but it can provide impartiality of management and perhaps a more stable base for accessing finance.

19 Badger Brook Winery

Managed Investment Funds (‘MIF’) represent Recently, Pooled Development Funds have emerged to another vehicle of use in raising finance. In a managed take financial positions in winemaking and associated investment scheme your funds (and other participants) enterprises. The First Wine Fund and the Authorised are, in effect, combined to provide a capital base for a Investment Fund are examples. Typically, these companies common enterprise. Such schemes have been utilised use shareholder funds to invest in existing wine to invest in a variety of enterprises including: property, businesses or to undertake new ventures. Stock market small businesses, shares, cash management and listing entails considerable expense in meeting statutory agricultural projects. requirements for shareholding, capital and prospectus issue but provides a certain ongoing strength in raising Established as a proprietary company (with the finance. Usually this type of investment company provides consequent advantages and disadvantages) a MIF can impartial administration of the business, however, at this be designed to accept shareholder funds from, say two, scale it can be difficult for smaller participants to retain participants in a project on the basis of a transfer of control over strategic decisions. shareholding. A MIF can also act as a contributor to another entity which can include proponents of Two other more specialised structures have recently a particular scheme. been utilised.

In some cases where a portfolio of assets is to be held, an To facilitate construction of its 32-apartment equity structure of ‘stapled securities’ can be considered development at Yarra Glen, Balgownie Vineyard Resort instead of simple shareholding. Stapled securities usually has offered the 1 and 2 bedroom units for 199 year lease comprise two or more separate entities (for example a (off the plan) on the basis that the lessee could make the loan note, or trust unit, and a share) that must be traded unit available to the resort to enable it to offer rooms as one ‘stapled security’. This arrangement can allow for in conjunction with its proposed conference centre and some flexibility in distributing income and equity general tourism. This lease option enabled the company between participants. to conform to planning subdivision requirements whilst at the same time providing financial participation by Strict controls apply to the establishment of these others in the project. types of investment vehicle and establishing a Managed Investment Scheme, or participating in an existing one, At Tarrawarra, Eva and Marc Besen have established the is a complex business which should only be undertaken TarraWarra Museum of Art Ltd as “... the first privately after getting high quality financial advice. funded, significant public visual arts museum to be set up under the Australian Government’s philanthropic measures announced in March 1999.” (TarraWarra Museum of Art brochure)

20 Investment Guidelines for Wine Tourism 6. PLANNING AND DESIGN

The development of any • A Local Planning Policy Framework (LPPF) which food and wine tourism contains a Municipal Strategic Statement (MSS), investment requires and Local Planning Policies. The framework identifies Paringa Estate Paringa careful and considered specific long term directions about land use and planning and design development in the specific Local Government in the early stages area and presents a vision for the community of the development and other stakeholders. process. For any food and wine tourism • Zones which specifically identify what types of land use project to succeed it activities, development and subdivision could possibly will need approval from be undertaken. relevant Government • Overlays, as well as zones, which can apply additional departments including Local Government. controls on the development of a site. eg. Building The development of a winery with restaurant and height, heritage and vegetation protection. associated accommodation for example, would, in the • Particular Provisions which identify specific first instance, require planning approval from the relevant requirements for land use, development and Local Government Authority. The following will provide subdivision. information on the Planning Framework which controls development in Victoria, the general planning process • General Provisions and Land Use Definitions. to gain approval and some design considerations when Therefore, before considering a particular use and considering the development of a food and wine development of land specific consideration should be tourism investment. given to the Zone and any Overlay control which may Further information on the Victorian Planning Framework be applicable to the site. can be found at www.dse.vic.gov.au Zones 6.1. The Planning Framework The Planning Scheme zones are listed in the planning Victoria’s Planning Schemes are governed by the Victorian scheme and identified on the Planning Scheme Planning and Environment Act 1987, which provides a maps. Each particular zone has a purpose and set of statutory base for land-use and development planning. requirements. This information will indicate if a planning The Act specifies the planning process and the particular permit is required and the matters Council must consider procedures Local Government must take in the before deciding to grant a permit. This zone also contains assessment of a planning application. Underpinning the information relating to land uses, subdivision of land, Act are specific Local Government Planning Schemes construction of new buildings and other changes to which specify land use and development controls and the land. A zone sets out the land use controls in three policies. sections as follows: • Section 1 Uses - Uses which do not require a permit The Planning Scheme The Planning Scheme effectively determines what types • Section 2 Uses - Uses which require a permit of development and land use can be undertaken on land • Section 3 Uses - Uses which are prohibited and any new development must comply with the specific requirements. Thus, for example, a permit for a B&B accommodating no more than 6 people does not require a permit in a They contain: Rural Living Zone (RLZ) but ‘a Restaurant’ does; and • A State Planning Policy Framework (SPPF) which a ‘Nightclub’ is prohibited. describes strategic issues of state importance.

21 Overlays 6. Council Decides Application Not all land has an overlay but some sites may be • Approval (Usually with conditions), or; affected by more than one overlay. An overlay may relate specifically to significant landscapes, heritage, building • Refusal. height limits, vegetation, etc. which attract permit controls 7. Review by Victorian Civil and Administrative over and above other scheme controls. Tribunal (VCAT), if applied for Where land is used for multiple purposes, which are • By permit applicant against conditions or refusal. not identified as ancillary, each use must comply with scheme requirements. • By an objector against an approval.

Councils are continually adding to and amending their The time taken for the consideration of an application schemes and therefore careful consideration should will vary considerably for each Local Government area be given to the current planning controls relevant to and will be determined by the work load of the Council the land. staff, the number of objections (if any) to the proposal and the various issues involved in the assessment of the 6.2 The Planning Process application. Investors should discuss the timing of the In most cases, a food and wine tourism proposal will application with the relevant Local Government officer require a planning permit, however, this should be to gain an understanding of the length of the application confirmed by meeting with the Local Government process. A refusal at Council level may not mean the Authority to discuss the idea. If a planning permit is end of a permit application. Appeal against a Council required a general outline of the process is: determination may be pursued through the Victorian Civil and Administrative Tribunal. 1. Pre-application Preparation

• Review the planning scheme. 6.3 Other Approvals In addition to the State planning legislation, there are • Discuss the proposal with Council. a number of other permit authorities which must be • Talk to neighbours. approached for certain aspects of some developments. These include: • Consider getting professional advice. • Vic Roads - Traffic management, highway access and 2. Prepare and Submit the Application highway signage.

• Complete application form. • Heritage Victoria - Listed historic buildings and places, aboriginal, and shipwreck sites of state-wide • Pay required fee. importance.

• Lodge required plans and drawings. • Consumer Affairs - Liquor licensing - Vignerons Licence 3. Council checks the Application (Cellar Door or licenced restaurant)

• Is all information provided? • Environment Protection Authority - Pollution and noise emissions. • Council may request further information. • Local Government Health Requirements - food 4. Application is Advertised, if Required preparation areas require health approval.

• Advertised for at least 14 days. • Local Water Authority - Sewerage and water supply.

• Usually by letter to neighbours and a sign on site. Investors should consult each of the relevant authorities to determine their specific requirements and any • People affected may object. application procedures. Local Governments planning 5. Council Assesses the Application office will generally guide you on the authorities that you may need to consult with. • Considers objections.

• Holds mediation meeting, if needed. 6.4 Planning and Design Issues There are a number of issues which should be addressed • Considers any Referral comments. in consultation with the relevant Local Government Authority. Some may be of a minor or technical nature • Assesses planning scheme provisions. others may be central to success. A strong Council • Negotiates with applicant. commitment to food and wine tourism can be the key variable in making or breaking a project and the lesson, • Prepares report. therefore, is talk early, talk often to Councillors and staff.

22 Investment Guidelines for Wine Tourism Money spent on good design is a wise investment and building. For example, it would not be desirable for a will help maximise functionality and customer experience. building to look out onto a car park, toilet facilities or It may be prudent to engage an experienced designer service areas; the more appropriate response would be or architect that can lead you through the design phase. to capitalise on view lines across natural land features Design of a new facility requires not only forward such as vines, a valley or water body. Quality view planning of physical elements but a strong understanding lines to the building could be encouraged with a building of a winery’s brand character. A new building or height, massing and an external finish that complements extension can reinforce an existing character or the surrounding built form, landscape and can signal a new direction for the winery. It must be topographic features. considered as a major public statement of the aspirations of the winery; the sense of arrival and amenity of the Building Layout facilities is critical to the visitor’s impression of the A functional, well designed building will assist with the product and services. Some of the most successful management and comfort of visitors to the venue. Some food and wine tourism investments feature well planned considerations include the provision of disability access, and designed facilities that fit well within the landscape, wet weather protection, provision for deliveries and are contemporary and reference their locality. service areas, provision for solar orientation and access The following will provide insights into some of the to natural sunlight and food preparation areas that planning and design issues that should be considered comply with relevant health standards. in the scoping and design phase of a food and wine The building layout should also include provision for tourism product. possible future expansion should this be necessary.

Access and Car Parking Landscaping In most cases food and wine tourism development is Quality landscaping is one way of significantly adding linked strongly with road touring and therefore the to the food and wine tourism experience. Consideration provision of quality vehicular access and car parking is should be given to retaining as much significant vegetation central to a quality experience. that is on the site and also to planting appropriate new Vehicular access should be provided to allow safe and landscaping. Landscaping can define and accentuate efficient movement of vehicles considering adequate site a pleasant entry way and can also screen any visually distances for vehicles exiting and entering the site. In many undesirable structures or vistas, such as service areas cases, consultation with Vic Roads would be required for or staff facilities. Careful selection of plant species is new access points, where it abuts a main road. Vehicle important as each species type would have different slip lanes may be required to allow adequate distance mature heights and screening abilities. for vehicles to enter or exit a main or local road. Consideration should be given to drought tolerant Adequate car parking should be provided to plants particularly those that are indigenous to the local accommodate the likely number of vehicles that may area. Many Local Government Authorities can provide be associated with the proposal. The Planning Scheme suggested planting lists. Indigenous plants can help stipulates the minimum required number and dimensions attract native birds and animals to your facility which of car parks. For example, a restaurant is required to can be a tourism feature. provide 0.6 car spaces to each seat available to the public. In a number of cases consideration may be given Signage to providing additional car parking to accommodate any The appropriate identification of a food and wine tourism overflow which may result. Provision should also be made business is important to encourage visitation and brand to accommodate buses as, in a number of cases, bus identification of the premises. The Planning Scheme groups may be associated with wine tourism activities. stipulates specific requirements for signage and in many Wet weather access to the facilities from car parks should cases Local Government authorities have specific design also be considered. It is also critical to plan car parking to policies for new signage which should be considered. minimise the likelihood of visitors bringing vine disease into the vineyard. In general, signage should be located and designed to be clearly visible without obstructing sight lines and resulting Building Design in visual clutter. The design of the signage will, in most cases, give the visitor a first impression of the venue. Any buildings proposed should be designed to consider the brand image of the wine product and the surrounding landscape. Site Servicing New development requires the provision of essential In particular, consideration should be given to the site services which include things such as electricity, setbacks, height and orientation of the building so that water, sewerage and drainage. it provides for desirable view lines both to and from the

23 Servicing availability is a matter for discussion with the mechanisms which may include appropriate site layout, Local Government authority and servicing agencies to acoustic treatments to buildings and the appropriate determine the capacity available. In a number of cases in location of any emission flues etc. rural or semi rural areas mains sewerage or water may not be available so consideration will need to be given to Health Considerations the provision of water and wastewater treatment on site. If food and beverage is involved, various health regulations and requirements are required to be satisfied. Amenity Considerations In particular, food preparation areas are required to meet Any new development proposal will result in changes health standards and satisfy the Local Government health to the existing environment. Some impacts may include, requirements. noise generation, smell and fumes, traffic movements and stormwater run off. Consideration should be given The following diagram (Diagram 1) illustrates some to minimising the impacts of these by using appropriate design and planning issues for a wine tourism proposal.

Vineyard

ay Dam spr er s

Bewareto Ov Visitor Pest / Disease Management Zone NO ENTRY

Trees for Summer Shade View View

View to Dam Vineyard

t Highway View to Winery Kitchen

nou Restaurant Vats r Tu

Barrell Hall e Highway Car Park Courtyard Interior View Cellar Barrels / Processing

e Door Service

Parking NO ENTRY n e

Sig BBQ Control Vehicle Access Vineyard Operations Gate Picnic ree Shad Winery T Wineries Stopping Distanc Signage Allow Accommodation d Roa Accommodation Visible from est / Disease Management Zon

Cellar Door but Separate P

Car rking Vineyard Presence Pa ay

Create Gate spr Accommodation Views er s

Bewareto Ov Visitor e Views NO ENTRY Pest / Disease Management Zon

Vineyard

Diagram 1. Design issues

6.5 Local Government • Economic Development Strategy - the contribution Local Government in Victoria is seeing the positive of wine tourism in economic development and benefits - in jobs and economic growth - of wine tourism employment can be highlighted in the Council’s and are active in facilitating projects. Economic Development Strategy.

Local Government is a focal point for attracting • Tourism Strategy - Many Councils have identified investment in food and wine tourism. A number of the special possibilities tourism can bring to the projects in Victoria have been achieved by clear Council municipality. This strategy can: identify the significance policy support. of tourism to the local economy; identify assets; and possible incentives. In a number of ways Local Government can support food and wine tourism: Food and Wine Tourism, is in effect, an emerging land use (particularly when the issues of complex use of rural • Internally - identification of food and wine tourism as a land is in question). There is considerable potential for corporate priority by including objectives in the Council’s some Local Government areas to explore wine tourism corporate plan and by providing staff resources. strategies focusing on developing infrastructure which combines primary production with ancillary public and • Planning focus - at the MSS and LPPF level, the Local commercial facilities. Council can indicate its approach to land use and other planning. Clear statements of strategic direction and Rate concessions are generally difficult for Local planning objectives are important not only in initial Government to concede. Nonetheless there is a capacity considerations but also in the event of appeal at the for Councils to contribute incentives through such things Victorian Civil and Administrative Tribunal (VCAT). as promotions, trails, road access and staff support. Already local government support of this type has resulted in many positive initiatives in wine tourism.

24 Investment Guidelines for Wine Tourism 7. CASE STUDIES

The following case studies are intended as a cross section of some of the initiatives taken in Victoria in developing wine tourism. The cases range from the small to the large; from B&B’s to major regional tourism infrastructure investments. Cases have been chosen to reflect different Victorian wine producing or tourist regions, a variety of investment levels and the different weighting of particular factors for success. All show perceptiveness in meeting the market in a responsive and personal way.

25 7.1 RED ROCK “Small vigneron finds niche market in west”

Red Rock is truly small. Red Rock captures some tourists from visitors to the Red About 15kms from Rock lookout (on the Volcanoes Discovery Trail) and others

Rohan Little Colac, it is owned and from travellers going by coast along the Great Ocean run by a young couple, Road then returning to Melbourne inland. New regional Rohan and Dominique attractions which are pulling customers into Red Rock’s Little. There are a few catchment include: the Otway Fly (a major investment other small wineries in in Australia’s largest tree-top walk); Timboon cheese; the region (including and whale watching at Warrnambool. Rohan reckons Empress and Barwon that 30% of his customers are locals, 30% intrastate, Plains) but by no stretch 30% interstate and 10% internationals. In the absence of the imagination can it of quantitative market research he estimates that most be considered a “wine visitors are in the 40-60 year old demographic - most region”. Rohan started the 16 ha. vineyard in 1997 and travelling as couples. based his investment decisions on the availability of suitable land at a reasonable price and proximity to an This wine tourism venture has been warmly embraced by existing tourism feature - the Red Rock volcano, which is the local community and Council. Rohan and Dominique an existing tourist attraction. Cellar door and some food advertise in local papers and on local radio. They chip were always considered a part of the overall plan. He has in for school raffles, the kindergarten, football club constructed the very basic (but not unaesthetic) cellar and churches. The Colac Visitor Information Centre is door/restaurant (120 seats) himself (for $70,000!). All up important in sending visitors out to the winery and the they have spent about $700-800,000 buying land, house, Colac Otway Shire has got behind a wine and food trail buildings and establishing the vineyard - most of this of 16 attractions, including Red Rock, for Great Ocean from the sale of their Melbourne house but with some Road Marketing. reinvestment of profit and some local Bendigo Bank The brand appeal may be characterised as ‘personal, contribution to new works. They are currently building fresh, and inexpensive’ and this is the nature of the a small barrel room facility which will include two self people involved, staff, the buildings, the wine and the contained B&B apartments - all up cost, about $350,000. needs of the market Red Rock serves. Everything fits.

Rohan’s background is in the hospitality industry as a Rohan’s advice to growers seeking to expand into wine wine consultant and broker and as restaurant/function tourism is: manager in Melbourne and at Erskine House, Lorne. He produces most of the popular varieties - his aim is simple • Remember why you are doing it and don’t listen ‘fruit driven’ wines at about $15-$18/ bottle. Recently to too many people. Rohan has also introduced a highly pleasant sparkling • Don’t expand or upgrade for the sake of ego. methode champagnoise tache. • There are efficient sizes for wineries but between Following an unexpected demand from locals for those sizes can be inefficient; instead of gradual inexpensive receptions, ‘vigneron lunches’ and meals expansion, get comfortable at a targeted size then plan (c. $15/ main course) he has employed an experienced the ‘leap’ to the next size. ‘foodie’ friend to assist in running the restaurant. This has developed into a worthwhile business in its own right • Everyone’s a critic and everyone could do what you are and is important in introducing the label to local retailers doing better than you - they can’t. On the flip side you and business accounts. The new B&B apartments will will be showered with compliments, these people have help in accommodating a demand for wedding parties. no greater expertise than your critics. Dominique runs the cellar door which is achieving a healthy average spend of $50 per customer. Visitation • Prioritize your time at what you are best at, not what to the cellar door and restaurant (excluding functions you most enjoy doing. and weddings) is running at about 1000-1500 per month • Business management is number one; there is many May to October and 2000-2500 per month November a perfectly manicured vineyard/winery that is not a to April. sustainable business.

26 Investment Guidelines for Wine Tourism Summary

Scale Small Financing Own Bank Brand Character Young Energetic Inexpensive Regional Character Rural non-wine Environmental Holiday Restaurant Lunches Receptions Jazz Nights Cellar door Basic Accommodation Coming Planned Expansion Accommodation Message Sometimes demand can be created Respond to the market

27 7.2 HANGING ROCK WINERY “Quality producer takes advantage of proximity to Melbourne”

Hanging Rock near John sees tourism to the region as an integral part Woodend is one of of his overall marketing effort. Hanging Rock Winery those special places that is a driving force in the local Campaign Committee encourage visits and which raises funds to be matched by government for Anne and John Ellis mythmaking. John Ellis’ promotions. Local wineries, food producers, and retailers Hanging Rock Winery now participate in events such as the Harvest Picnic, (with a new breed the Worlds Longest Lunch, the Good Food Show, the of Macedon Ranges Hanging Rock Races and classic car rallies. Hanging Rock winemakers) is adding Winery has an advertising and promotions budget of another dimension nearly $150,000 and a permanent in-house marketing to the legend. staff of 1.5 (full time equivalent) whose job it is to get media coverage and to manage promotional initiatives. Hanging Rock aims for the premium and super-premium So the tourism activities such as co-branding deals end of the market. Its “Macedon” sparkling has just with prestige accommodation like the Lake House, the received a prestigious international gong for Australia’s Bentinck and Campaspe House sit alongside marketing best. Its public face belies the major investment in investments such as a sponsorship of the Melbourne processing which is skilfully hidden out the back. John Football Club. and Ann Ellis established the vineyard in 1983. The winery was built in 1985-86 ready to make its first John’s enduring objectives are financial. He is continually vintage in 1987. A cellar door was always part of the looking for ways to increase yield and improve concept and came on stream in 1990. profitability. He takes the view that the land is an asset which must produce a reasonable return. Whilst he In addition to its cellar door outlet Hanging Rock retains enormous confidence in the long term future has its ingeniously designed ‘Winery Retreat’. (This of wine production, he believes that regional tourism accommodation facility is, essentially, a four star cross initiatives are critical in establishing a brand identity between a B&B, a ski lodge and a conference complex. which will enable the larger business to function. He It has four double rooms with a floor plan allowing for also takes the view that a ‘smoothing’ of cash flow can flexible accommodation of couples, families or groups at contribute to the enterprise’s overall financial health - a a base rate of $180 per double room per night including matter dear to John’s heart having survived the vagaries breakfast.) The barrel hall followed in 2002 - designed to of an unsatisfactory equity sharing arrangement with provide for storage and the building for future expansion investors earlier in the winery’s history. As a result of that into food and functions. experience John and Ann are committed to retaining The cellar door and distribution list provide about management and equity rights as an essential part of any 20% of Hanging Rock’s nearly $4m. sales (the rest is financing of the future of Hanging Rock winery. made up predominantly of wholesale sales with healthy There is no doubt that the future will, at some time, see injections from interstate and export markets). The an investment in a restaurant within the winery complex. accommodation component of the winery is currently Also there is, attached to the winery, a large acreage producing about $60,000 in revenue and a small profit of undeveloped farmland (not suited to viticulture), after expenses. John is a believer in wine tourism - not surrounded by virgin forest. In fact the winery retreat is just because of his Chairmanship of the Victorian on a separately titled 40 ha property which has a current Wineries Tourism Council (more the other way around) permit for development as a tourist facility. There is or because it contributes directly to revenue but because potential for development of this property to increase he has seen how important it can be in establishing the the accommodation side of the business. Hanging Rock brand in today’s market environment.

28 Investment Guidelines for Wine Tourism Summary

Scale Medium Financing Self Bank Brand Character Premium Regional Character Interesting Mystical Proximity to Melbourne Restaurant No Cellar door Yes Accommodation Yes On Site Possible Expansion Restaurant Functions More accommodation Message Careful brand development associated with regional character Objective of, income generation Structure now protects ownership

29 7.3 LYRE BIRD HILL Gippsland accommodation

Lyre Bird Hill is one of a Lyre Bird Hill is located off the South Gippsland Highway. group of small wineries Owen has observed that the rerouting of the highway established in South has meant that its finger signage has been scrapped and Gippsland (Koonwarra) cannot be re-instated under new guidelines. He is not either as an alternative pleased! Marketing the winery remains Lyre Bird Hill’s Robyn and Owen Schmidt Robyn to dairy industry major challenge. Owen and Robyn allocate $10,000 rationalisation or the each year for advertising, publication (including their ‘retirement dream’. newsletter which goes to 1500 loyal clients and website) In this case Owen and and promotions. The business relies heavily on loyalty Robyn Schmidt gave up of those who have stayed overnight or who come to city jobs in accounting the special banquets. Lyre Bird Hill has also concentrated and catering services to plant some 6 acres of grapes on building alliances with local B&Bs. about eleven years ago. They have established a typical ‘packing shed’ winery and are producing some very good Lyre Bird Hill has attracted visitors diverting from varietals. Production runs between 600-2000 cases the Penguins and Wilson’s Prom. They rely heavily on depending on seasonal conditions. Cellar door sales are visitors and owners of holiday and permanent homes in critical to wine sales generating about $80,000 (from the beach resorts along the coast from Phillip Island to 4000 visitors) revenue in 2003. Trade sales contributed Walkerville. They support Local and Regional tourism another $30,000 and Owen’s making for other local publications and promotions and attend a number of growers, another $30,000. Food & Wine Festivals held throughout Gippsland. They are also involved with a group of 14 wineries in the Owen and Robyn were early adapters to the B&B trend. process of developing a Wine Trail in South Gippsland. Their principal accommodation is three bedrooms within However, the collaborative efforts are at the first stages the house - modern (4 1/2 Star), and comfortable; and of ‘tourism readiness’ with strong commitment of cellar in an adjoining farm cottage which is used for families. doors to regular hours yet to be consistently achieved Dinner with the winemaker, featuring estate wines, by some of the participants. Owen and Robyn see any is available to B&B guests. This is a good means of shortfall in advertised commitments as a serious failing in promoting wine sales. Very basic facilities in the winery a tourist market which is becoming increasingly reliant on provide for bush banquets and picnics. Entering the a professional approach. Nonetheless a character of rural wine and food business has meant that Lyre Bird Hill friendliness epitomised by Lyre Bird Hill and the nearby has had to register as a ‘food premises’ with the local Ramsay’s Vin Rose are emerging as the core of council. This also means appointment of a certified ‘Food a regional brand identity. This fits Lyre Bird Hill’s Safety Supervisor’ (Robyn) and establishment of a ‘Food aspiration to provide “good wine, good food, and Safety Plan’. Local B&Bs saved by sharing the cost of good accommodation ... without too much palaver.” bringing an accredited food safety course to Leongatha, rather than travelling separately to Melbourne. The cellar door’s ‘Vigneron’s Licence’ covers most of their activities and limited licences are required for off site and one off events. Income from accommodation has risen progressively each year until 2002 (when, like many other small vineyards, Lyre Bird Hill reports some temporary reduction in 2003 cellar door sales and accommodation bookings) and now accounts for about $70,000 revenue. Owen suggests that the four income streams provide a major advantage in balancing income - when wine production is down accommodation can be up; when trade sales are up, winemaking can be down ... and so on.

30 Investment Guidelines for Wine Tourism Summary

Scale Small Financing Own Bank Brand Character Friendly Intimate Carefully made Regional Character Rural Friendly Sustainable produce Restaurant No. But ancillary food events Cellar door Yes Accommodation In house B&B and cottage Message Personal commitment to hospitality Accommodation provides brand loyalty

31 7.4 WARRENMANG “Ground up venture in the Pyrenees”

Not much slows weekday demand for food and accommodation which up Luigi and Athalie could not sustain high calibre staff and services purely on Bazzani. weekend patronage.

Luigi’s CV includes the Athalie thinks that the “on site” experience of guests has

Athalie and Luigi Bazzani Grand Metropolitan been vital in building a loyalty to the wine brand. She Hotel and the believes that visitors enjoy recreating their rural stay each Connaught Hotel in time they open another bottle of Warrenmang! London, then the first class salons of the Warrenmang, with the other champions of the Pyrenees Queen Elizabeth I on the - Taltarni, Blue Pyrenees, Dalwinnie, and Redbank - has London-New York run. been instrumental in developing the reputation of the Over the last thirty years their energy and passion for whole region and in developing a viable visitation. hospitality has left many travellers with fond memories Athalie now markets the resort from a shop front in the of regional Victoria. They claim that their Copper Pot main street of Ballarat. She claims this has boosted bookings (est. 1970) in Bendigo was the first “real” restaurant and brought her closer to both potential customers and the in regional Victoria and many people agree. La Scala tourist industry. (started in 1976) in Ballarat cemented their reputation for excellence. Along the way they got the idea that they Recently Warrenmang has announced its next step should provide their own wines for their restaurant tables - refinancing as a listed company with the involvement ... which in turn led to an involvement at Warrenmang. of a major Australian investor with British connections who is understood to be planning to link Warrenmang Warrenmang’s cellar door opened in 1978 staffed by with the Glen Kara vineyard at Landsborough with plans “a local woman who did not like wine”. In 1986 they sold to expand to 200,000 cases by 2013. The float involves La Scala and a planned (by Athalie) retirement turned raising $6m. (minimum) in 35 cent shares. into the establishment of the Warrenmang restaurant (by Luigi). By 1989 the first cottages had been built - a response to the issues of strengthened drink/drive laws. This was a turning point in sales at Warrenmang. In 1988 Athalie recalls selling $100,000 from the cellar door for the entire year. Once the cottages opened and the restaurant was launched this sales figure was achieved after one month.

Warrenmang started with six 4-bed cottages followed by six double suites then a further five. Now there are eighty four beds. Increases in capacity over ten years saw a sustained doubling of cellar door sales and export leads. Success was based on continual development of the quality of the wine and on Warrenmang’s reputation as an outstanding restaurant. This status was confirmed by a three hat award by the Age Good Food Guide. In 2003 Warrenmang Vineyard Resort was voted Australia’s best in the Great Wine Capitals Wine Tourism International Awards.

Warrenmang has also focussed on capturing the conference market. This business has provided a lynch pin to the other tourist facilities providing as it does a

32 Investment Guidelines for Wine Tourism Summary

Scale Medium

Financing (Proposed Listed Company) Brand Character Quality

Regional Character Quality

Restaurant Yes (and, until recently, at Bazzani’s Bendigo) Conference facilities Up to 100 delegates

Cellar door Yes

Accommodation B&B cottages Luxury Suites Message Drive, stamina and vision counts Growth may require external equity involvement

33 7.5 PETTAVEL “New Player on the Geelong Block”

The Pettavel story is visit and the Age Good Food Guide awarded Pettavel a different. Mike and coveted ‘hat’ in 2002/03 and 2003/04. Pettavel was also Sandi Fitzpatrick were recognised as the 2003 Best New Restaurant and Best The Fitzpatricks significant Mildura Winery Restaurant in 2004 by the Victorian Restaurant contract growers (with and Catering Association. a small winery outlet) who saw the shift in Robyn is a believer in cooperative action at the local power from growers level. She has been President of Wine Geelong which to wineries and decided includes a representative of Geelong Otway Tourism and that they would be is involved in marketing and promotion of the cellar door better placed to join offers of local wineries. Most recently, Wine Geelong the latter. They sold up, set up vineyards in the Geelong has produced its first wine trail involving wineries of region then ten years on have established the new the Geelong and Bellarine regions. Robyn has also been complex on the Geelong - Colac Road. - after reviewing Secretary of the Geelong Winegrowers Association figures on highway use. $8m. later they opened Pettavel which focuses on the technical aspects of winegrowing. in December 2001 with a view to attracting Great Ocean (Surprisingly, a number of Geelong restaurants do not Road trippers, Melbournians, holiday makers from Lorne, serve regional wines despite their special character Anglesea, Torquay and the coast, and passing trade. and quality.)

The winery and restaurant (180 seats) building is striking From its own budget, Pettavel, allocates some $40,000 and set up to provide maximum efficiency in wine for advertising and $20,000 for promotions. Pettavel has production. The interior surprises in comparison to the gained cover on TV’s Postcards and has been reviewed utilitarian exterior. Consultants in architecture, winery (positively) in Gourmet Traveller, Vogue Entertaining, and design, label design, brochure design and a consultant the Herald Sun. Still, Robyn is quick to acknowledge that chef were employed to assist with the set up. it is in the marketing area that she wishes to see rapid development over the next few years. To that end, Pettavel is the largest crusher and producer of wine in Pettavel has recently appointed a specialist the region. They now crush 1200 tonne (of which 500 marketing manager. is for their own labels - Evening Star (eco); Platinet ($25); Émigré ($40)). The new centre is run by Mike’s daughter, The restaurant at Pettavel contributes about 20% of Robyn, and employs up to 30 people. overall revenue and a small profit. Robyn sees its main purpose as a part of the branding process - introducing Pettavel provides lunch but no evening restuarant visitors to a quality experience and quality wines. She is meals (apart from summer Friday nights) because of toying with the idea of adding accommodation or a staff shift issues and the distance from central Geelong. spa facility to the complex ... sometime in the future. The resturant is well booked for functions and corporate entertainment. 10% of their output is cellar door; 15% through functions and restaurant; the rest to the trade, bulk, and juice to various wineries. There is a strong emphasis on customer service and a front of house manager has been appointed to handle staff training and quality control.

The Pettavel objective is expressed as “quality, quality all the way” aiming to be associated with top-end Geelong players, Scotchman’s Hill and Bannockburn. Already they have achieved success. Stephen Downes, food critic from The Herald Sun, awarded the restaurant 19/20 after his

34 Investment Guidelines for Wine Tourism Summary

Scale Medium Financing Own Bank Brand Character Quality Regional Character High quality wines Mixed destination image Restaurant Yes Cellar door Yes Accommodation No Possible expansion Evening meals Spa accommodation Message Food excellence complements wine product Tourism offers option to growing only and builds brand

35 7.6 BROWN BROTHERS “Incremental growth creates regional strength”

With annual production For a number of years the Brown family have been running at about vigorous promoters of their region as a focus for tourism.

The Browns 750,000 cases and a The North East Valleys Wine and Food Association has staff of 200 (full time grown to coordinate the activities of some 200 wine, equivalent) Brown farm gate and food operators in the Shires of Indigo, Brothers is entitled to Wangaratta and Alpine. Brown Brothers see events call itself a significant such as the Wangaratta Jazz Festival as directly relevant player in the Australian to their marketing and provide support through direct wine industry. But CEO, sponsorship and hosting of their own jazz events. As Ross Brown, is quick to the Milawa Gourmet Region concept has gained Council point out that the ‘big and participants’ support, the character of the Milawa- four’ wine companies - Orlando, Southcorp, Hardy and Oxley-King Valley area has become increasingly attractive Mildara Blass - provide 80% of the domestic supply with to tourists and ancillary businesses - cheese, olives, a further 10% shared by the next eight biggest companies blueberries, mustards, nuts, and even mead - have (including Browns). In this context competition for retail established a full time retail presence. Restaurants such shelf space is fierce with the top fifteen producers taking as the Cheese Factory and the King River Café have 90%. The strategic problem for Browns was to retain quickly established formidable reputations and steady and grow their share of this tight market whilst expanding clientele. Regional accommodation is also linked - most though increased export to world markets. grandly at Lindenwarra Country House Hotel developed in cooperation with Brown Brothers on land opposite the Today’s Brown Brothers enterprise is one of Australia’s winery entrance but also in development of B&Bs great family stories. With nearly one hundred and fifty and upgrading of local motels and hotels. years at Milawa successive generations have contributed to the gradual building of the brand. Ross describes the Brown Brothers tag line is “nothing but the wine” and brand attributes that they see as the core of Brown they do not plan to cater for functions, seeing this as Brothers’ identity today as: “Innovative, Passionate, too remote from their core business. (Although Ross’s Unpretentious”. For Ross, brand recognition is crucial to brother, Peter, has taken over the All Saints Winery retail success and wine tourism offers a means through at Wahgunyah and is specialising in hosting some of which the brand awareness of the Australian market Victoria’s most glamorous regional wedding celebrations.) can be sustained.

Browns have made significant investments in on-site visitor facilities since the present cellar door was opened in 1980. In 1987 the first Wine and Food Weekend “... celebrating Spring, live music, food and wine” was held. The Epicurean Centre followed in 1994. Brown Brothers Easter (April) and Winter (June) Festivals attract more people every year. Some 100,000 visitors now come to the Milawa cellar door annually yet direct cellar door sales account for only about 6% of Brown’s business, emphasising the importance of tourism to image and education not revenue alone.

36 Investment Guidelines for Wine Tourism Summary

Scale Large Financing Own Bank Brand Character ‘Innovative, Passionate, Unpretentious’. Regional Character Genuine Australian plus Italian culture makes gourmet region Restaurant Epicurean Centre Cellar door Expansive Accommodation Local Lindenwarrah Message Gradual evolution Regional alliances Clear strategy Family ownership

37 8. PROJECT DEVELOPMENT - SUMMARY CHECKLIST

The following checklist should be used as a quick reference guide to the development of your wine tourism investment, from concept to reality. If you have any queries or require assistance contact Tourism Victoria on (03)9653 9777.

Scoping the Concept ISSUE CONSIDERATION NEXT STEP Tourism Product What are the wine Many opportunities exist which may include: • Review opportunities which will add value to the wine brand. tourism Investment • Cellar door sales. • Talk to other industry people about their experiences. options? • Regional Produce sales • Talk to your business adviser about opportunities which will • Food / Restaurant. improve business profitability and cash flow. • Accommodation. • Discuss opportunities with your Regional and Local Tourism • Events and Festivals. Authorities. • Wine Trails and Tours. • Review other wine regions and wine tourism benchmark • And many more. case studies to assist in scoping new ideas.

Customer Base Is there a market for Define visitor numbers, types and needs. Investigate: • Investigate sources of information, which may include: the idea? • Visitor Demographics - age, income, gender. • Tourism Victoria - Marketing Information, cellar door survey, • Lifestyle and visitor needs. current players in the market, tourism research, Industry • The visitors desired aspirations. information. • Visitor origins intrastate, interstate, or international? www.tourismvictoria.com.au Ph. (03) 9653 9777 • The long term trends in the industry. • Local Government, www.mav.asn.au Ph. (03) 9667 5555 • Numbers of visitors to the wine region and surrounding • Australian Bureau of Statistics, www.abs.gov.au area. Ph. (03) 1300 135 070 • How many visitors can your project hope to capture? • Wine Makers Federation of Australia - Industry information, • Can your product create new demand? wine tourism information data base and research information. www.wta.org.au Ph. (08) 8222 9255 • Tourism Australia, www.tourism.australia.com Ph. (02) 9360 1111 • Department of Industry Tourism and Resources, www. industry.gov.au Ph. 1800 024 095 • Commission specialist market researcher, as necessary. For a list of potential consultants contact the Australian Market and Social Research Society, www.mrsa.com.au Ph. (02) 9566 3100

Developing the Concept ISSUE CONSIDERATION NEXT STEP Designing the Concept What are the Planning • Prepare the initial design and layout of your proposal. • Review planning controls applicable to the site. Information and Design issues that • Clarify the Planning Scheme controls applicable to the site. is available from the Department of Sustainability and need to be considered? Zoning, building height, heritage and landscape controls. Environment www.dse.vic.gov.au Ph. 13 61 86 Customer • Is a Planning Permit and Building Permit required? Service Centre. • Consider key planning and design issues which may include: • Discuss the concept with the relevant Local Government Access and Parking Authority and Service Authorities. To find out what Building Design Local Government Area is relevant contact the Municipal Building Layout Association of Victoria www.mav.asn.au Ph. (03) 9667 5555. Landscaping • Engage professional advice as necessary: Signage • Architect - Royal Australian Institute of Architects www. Site Servicing architecture.com.au Ph (03) 9654 8066 Amenity Considerations • Landscape Designer - Australian Institute of Landscape Health Considerations Architects www.aila.org.au Ph. (03) 9650 1898 • What other approvals are required? Liquor licensing, Vic • Town Planner - Planning Institute of Australia www.planning. Roads, Heritage Victoria, servicing authorities etc. org.au - Ph: (03) 9347 1900 • Does the project meet Council Policy and strategy plans?

38 Investment Guidelines for Wine Tourism ISSUE CONSIDERATION NEXT STEP Regional Character Does the project fit in • Is the project close to main transport nodes and touring • Define the wine character of the region. with regional strengths? routes and other complementary tourist attractions? • Identify the strength of local food and wine offers. • What are the characteristics of local wine making which can • Assess regional and local tourism initiatives by talking to be further enhanced and capitalised on? your Regional and Local Tourism Associations. Details • Are there local food producers that could be featured in of Regional and Local tourism bodies can be found at your project? www.tourismvictoria.com.au Ph. (03) 9653 9777

Competition Is competition useful • Investigate whether local wineries, events or attractions Visit and assess: or detrimental to the are going to keep visitors away from your project or attract • Local wineries and meet other winemakers to determine project? further visitation. what your competitors are doing. For details of local • List the existing regional destinations and attractions that wineries go to www.tourismvictoria.com.au Ph. (03) 9653 might complement your investment. 9777 which includes details of wineries in the various wine regions of Victoria. • Major attractions, festivals and sporting events. • Local destinations cities and towns. • Local wine touring initiatives and determine if they will encourage visitation to your project.

Brand Position Does the project enhance • Assess the contribution of existing market place loyalty and • Review mailing list to gauge customer loyalty and potential to brand image, awareness recognition to the project. support the project. or acceptance (and vice • Does the project reinforce brand characteristics? Prestige, • Compare wine, venue and regional character and align with versa)? value etc. brand image. • Assess staff characteristics and training against brand character and image.

Promotion and Alliances Is the ongoing marketing • Identify which Tourism Victoria marketing services and • Contact Tourism Victoria. www.tourismvictoria.com.au of the project critical? policies support the region. Ph. (03) 9653 9777 • Assess regional tourism initiatives & services which market • Contact other growers and grower associations. Details of the region. grower associations can be found at www.aglinks.com.au • Quantify future marketing opportunities: • Contact Regional and Local Tourism Associations. www. Advertising - paid in magazines, guides, radio, TV etc. tourismvictoria.com.au Ph. (03) 9653 9777 Public relations - free in news papers, magazines and radio. • Approach editors and producers. Sponsorship - Charity community, sporting cultural etc. • Approach the media for rates. • Identify complementary services, sponsorships and products. • Canvass possible sponsorship opportunities and cost. • Identify co-branding alliances or “in kind” opportunities to • Seek professional advice as necessary from Marketing promote with other attractions. and advertising professionals. • Identify need for professional assistance. • Estimate costs.

Developing the Business Case ISSUE CONSIDERATION NEXT STEP Business Planning & Financial Resources Is the project feasible • Undertake a Feasibility Assessment, which includes a market • Engage professional advice, as necessary, for preparation and is it likely to be and financial feasibility. Some considerations include: of the feasibility assessment. For guidance on the successful? • Market demand and trends. preparation of a feasibility report contact Tourism What Capital, Cash flow • Competition. Victoria www.tourismvictoria.com.au Ph. (03) 9653 9777 and Financial structure is • Future growth potential. and Department of Innovation Industry and Regional required to sustain the • Concept design and costing. Development www.business.vic.gov.au Ph. 13 22 15 investment? • Profitability, projected cash flows and return • Engage a professional business advisor, as necessary, to on investment. prepare a detailed business plan to identify possible financial • Possible benchmarking with other projects. options and business planning issues. • Options Appraisal. • Some of the ways you can find an accountant / business advisor that suits your needs include: • Preparation of a Business Plan to determine the financial and • Through the Institute of Chartered Accountants in business strategies for the proposal. Some considerations Australia (ICAA) www.icaa.org.au Ph: 03 9602 5844 or include: • CPA Australia www.cpaaustralia.com.au • Assess the market structure particularly the competitive Ph:(03) 9606 9606 or forces affecting supply and demand. • The National Institute of Accountants (NIA) • Identify options and define what business Structure is www.nia.org.au Ph: (03) 8665 3150 appropriate for the business - Sole proprietor, partnership, • Ask your friends or business contacts for a Company, managed fund etc. recommendation • Identify what the business is and its components. • Trade associations • Identify the market that will be serviced by the investment. • Advice from your banker, solicitor or consultant • Determine the proposed sales and marketing strategies. • Contact the Victorian Business Line • Determine how the business will be managed and the www.business.vic.gov.au Ph 13 22 15 (local call) operational staffing issues. • Contact your bank or financing body to determine • What are the business establishment and ongoing costs? application requirements. • What are the potential sources of funds for the investment?

39 9. KEY CONTACTS

Australian Bureau of Statistics Department of Industry Innovation GPO Box 2796Y, Melbourne VIC 3001 and Regional Development Telephone: 1300 135 070 Invest Victoria Facsimile: 1300 135 211 55 Collins Street, GPO Box 4509RR Email: [email protected] Melbourne VIC 3000 Web: www.abs.gov.au Telephone: 03 9651 8100 Facsimile: 03 9651 9531 Australian Institute of Landscape Architects Email: [email protected] Level 1, 41 Exhibition Street, Melbourne VIC 3000 Web: www.invest.vic.gov.au Telephone: 03 9650 1898 Facsimile: 03 9650 3360 Regional Development Victoria & Victorian Business Centres Email: [email protected] 55 Collins Street, GPO Box 4509RR Web: www.aila.org.au Melbourne Victoria 3000 Telephone: 13 22 15 Australian Market & Social Research Society Email: [email protected] Level 1, 3 Queen Street, Glebe NSW 2037 Web: www.business.vic.gov.au, www.iird.vic.gov.au Telephone: 02 9566 3100 Facsimile: 02 9571 5944 Food Victoria Email: [email protected] GPO Box 4509RR, Melbourne VIC 3001 Web: www.mrsa.com.au Telephone: 13 22 15 Web: www.food.vic.gov.au Tourism Australia Level 4, 80 William Street, East Sydney Department of Victorian Communities GPO Box 2721, Sydney NSW 2001 1 Spring Street, Melbourne VIC 3000 Telephone: 02 9360 1111 Telephone: 03 9208 3333 Facsimile: 02 9361 1388 Facsimile: 03 9208 3577 Web: www.tourism.australia.com Email: [email protected] Email: [email protected] Web: www.dvc.vic.gov.au

Australian Wine & Brandy Corporation Department of Infrastructure PO Box 2733, Kent Town, SA 5071 80 Collins Street, Melbourne VIC 3000 Telephone: 08 8228 2009 Telephone: 03 9655 6666 Facsimile: 08 2882 2022 Facsimile: 03 9655 6752 Email: [email protected] Web: www.doi.vic.gov.au Web: www.awbc.com.au Department of Sustainability & Environment Bureau of Tourism Research 80 Collins Street, Melbourne VIC 3000 GPO Box 1545, Canberra ACT 2601 DSE Customer Service Centre Telephone: 02 6213 6940 Phone: 13 61 86 Facsimile: 02 6213 6983 Email: [email protected] Statistical Inquiries Line: 02 6213 7124 Web: www.dse.vic.gov.au Email: [email protected] Web: www.btr.gov.au Environmental Protection Authority Herald & Weekly Times Tower, 40 City Road Cooperative Research Centre for Viticulture Southbank VIC 3006 PO Box 154, Glen Osmond SA 5064 Telephone: 03 9695 2722 Telephone: 08 8303 9405 Facsimile: 03 9695 2785 Facsimile: 08 8303 9449 Web: www.epa.vic.gov.au Email: [email protected] Web: www.crcv.com.au Grape and Wine Research Development Corporation 67 Greenhill Road, Wayville SA 5034 Telephone: 08 8273 0500 Facsimile: 08 8373 6608 Web: www.gwrdc.com.au

40 Investment Guidelines for Wine Tourism Consumer Affairs Victoria (Liquor Licensing) VICROADS Level 2, 452 Flinders Street, Melbourne 3000 Head Office Administration GPO Box 123A 60 Denmark Street, Kew VIC 3101 Melbourne 3001 Telephone Enquiries: 13 11 74 Telephone: 1300 55 81 81 Web: www.vicroads.vic.gov.au Email: [email protected] Web: www.consumer.vic.gov.au Victorian Wine Industry Association 14/123 Queen Street, Melbourne VIC 3000 Municipal Association of Victoria Telephone: 03 9642 2505 GPO Box 4326PP, Melbourne VIC 3001 Facsimile: 03 9642 2506 Telephone: 03 9667 5555 Email: [email protected] Email: [email protected] Web: www.vwia.org Web: www.mav.asn.au Victorian Wineries Tourism Council National Wine Centre of Australia C/- Tourism Victoria, GPO Box 2219T Corner of Hackney Road and Botanic Road Melbourne VIC 3001 Adelaide SA 5000 Telephone: 03 9653 9777 Telephone: 08 8222 9222 Facsimile: 03 9653 9722 Facsimile: 08 8222 9201 Web: www.tourismvictoria.com.au Email: [email protected] Web: www.wineaustralia.com.au Wine Makers Federation of Australia National Wine Centre, PO Box 2414 Planning Institute of Australia Kent Town SA 5071 G-05 / 60 Leicester St Carlton Victoria 3053 Telephone: 08 8222 9255 Telephone: 03 9347 1900 Facsimile: 08 8222 9250 Facsimile: 03 9347 2900 Email: [email protected] Email: [email protected] Web: www.wta.org.au Web: www.planning.org.au WINETAC Property Council of Australia First Floor, 206 Greenhill Road Level 7, 136 Exhibition Street EASTWOOD S.A. 5063 Melbourne VIC 3000 Telephone: 08 8373 7090 Telephone: 03 9650 8300 Facsimile: 08 8373 7091 Facsimile: 03 9650 8693 Email: [email protected] Web: www.propertyoz.com.au Web: www.winetac.com.au

Royal Australian Institute of Architects Wine Titles Level 1, 41 Exhibition Street, Melbourne VIC 3000 Australian Wine Online Telephone: 03 9654 8066 97 Carrington Street, Adelaide SA 5000 Facsimile: 03 9650 3360 Telephone: 08 8223 4799 Email: [email protected] Facsimile: 08 8223 4790 Web: www.architecture.com.au E-mail: [email protected] Web: www.winetitles.com.au The Australian Wine Research Institute PO Box 197, Glen Osmond SA 5064 Wine Industry State Associations: Telephone: 08 8303 6600 New South Wales Wine industry Association Facsimile: 08 8303 6621 www.nswwine.org.au Email: [email protected] Web: www.awri.com.au South Australian Wine & Brandy Industry Association Inc. www.winesa.asn.au Tourism Alliance Victoria PO Box 18136, Collins Street East Queensland Wine Industry Association www.queenslandwine.com.au Melbourne VIC 8003 Telephone: 03 9650 8399 Victorian Wine Industry Association Inc. Facsimile: 03 9650 8543 www.vwia.org Email: [email protected], [email protected] Vineyards Association of Tasmania Inc. Web: www.vtoa.asn.au, www.cvtc.com.au www.winetas.org Tourism Victoria Wine Industry Association of Western Australia Inc. GPO Box 2219T, Melbourne VIC 3001 www.winewa.asn.au Telephone: 03 9653 9777 Facsimile: 03 9653 9722 Web: www.tourismvictoria.com.au

41 10. SELECTED REFERENCES

1. Statistical Sources • Tourism Research Report Vol 5 No.1, Autumn 2003, • Australian Bureau of Statistics, Australian National Bureau of Tourism Research, 2003 Accounts: Tourism Satellite 2002-2003 • Report on the Nature, Scope and Prospects for Wine • Tourism Australia / Bureau of Tourism Research Tourism in Australia. Global Tourism & Leisure Pty Ltd for The Wine Lodges Group, August 2003. • 2003 Victorian Wineries Cellar Door Survey for Tourism Victoria and the Victorian Wineries 4. Wine Makers Federation Tourism Council of Australia Wine Tourism Guides; • Our Guide to Wine Tourism (series) - www.wfa.org.au 2. Tourism Victoria Publications: • Wine Regions of Victoria • Wine Tourism Uncorked - A guide to making wine tourism work for you. • ‘Jigsaw’ Regional Guides 5. General • Victorian Tourism Industry Strategic Plan 2002-2006 • Wine Tourism - Perfect Partners. Proceedings of the • VWTC Strategic Plan first Australian Wine Tourism Conference, Margaret River. Western Australia, May 1998. Elizabeth Cowan • Planning and Building Tourism from Concept to Reality University / BTR, 1999. - Guidelines for Planning and Developing Tourism Projects in Victoria • Pathways to Profitability for Small and Medium Wineries. Acil Consulting for Department of 3. Market Information Agriculture, Fisheries and Forestry, 2003. • Tourism Victoria / VWTC • The Profitability of Investing in a Small Vineyard and 2003 Wine Tourism Activity Statement Winery. Dakis and others. Dept. of Natural Resources and Environment, 2001. 2003 Cellar Door Survey • KPMG Wine Industry Report - Surrendering the Advantage?, KPMG, July 2003.

Disclaimer These guidelines are not intended as financial recommendations or as the principal basis for investment decisions. Further specialist advice is required to provide current, or project particular, information for specific investments.

Tourism Victoria has sought to ensure the accuracy of all the information incorporated into the guidelines. However, estimates and observations are: based on present judgment; subject to the reasonable scope of the guidelines; and subject to future events which may not have been foreseen.

Where there is reliance on secondary data supplied by other organisations, reasonable steps have been taken to ensure the quality of these data. However the validity and reliability of the data supplied depends on the skills and professionalism of the organisations originally collecting and/or supplying these data.

It is important that these assumptions are taken into account when using these guidelines as an input to decision-making.

42 Investment Guidelines for Wine Tourism