Route to Market, the start of a bottle of wine’s journey to the consumer, is the producer. This section summarizes the different types of business that producers have.

1. Estates

Estates produces wine from grapes grown in its own vineyards (including leases).

Advantages	・Ensuring quality control at every stage ・Monopolize the profits from wine production ・Easier to tell the “story of the wine” (stronger appeal to consumers who want the “real thing”)
Disadvantages	・High capital and cost. ・Producers are vulnerable to the impact of unseasonable weather conditions on production volumes, which may reduce profits. (Large-scale Estates have the advantage of being able to spread the risk and cost.)

2. Growers

Growers only grow grapes.

Advantages	・Growers can concentrate on growing grapes (no need for winemaking, sales, or marketing) ・Cash inflow is fast, which is advantageous in terms of cash flow.
Disadvantages	・The risk that the selling price of grapes will fall due to changes in vintage or fluctuations in supply and demand, resulting in lower profits.

There are also two ways to sell grapes.

How to sell grapes	Advantages	Disadvantages
Contract with a specific producer or merchant	Growers will have stable management and mental peace of mind.	There is a risk of reduced profits if Growers fail to meet quality standards.
Sold on the spot market	Can be sold at a higher price in case of grape shortage	May be less expensive than contracted price.

3. Grower-Producer

Advantages	・
Disadvantages	・

4. Merchants：商人

Merchants mainly buy wine and sell it under their own name. However, involvement in winemaking varies from region to region, with Merchants generally providing technical support for viticulture and winemaking.

Advantages	・Merchants do not need to purchase and manage vineyards, so they can operate with little capital (this is especially useful in areas where land is expensive). ・Flexibility to purchase grapes even in a bad year.
Disadvantages	・Merchants have little control over the quality of the wines they buy. → To some extent, this can be eliminated by Merchants building cooperative relationships with producers. ・There is a possibility that the wine to be purchased will be expensive.

En Primeur（プリムール）

En Primeur is a method of selling wine before it is bottled.

The system developed in Bordeaux after World War II, when the chateau was struggling financially.

Merchants buy the wine in barrels before it is bottled, and the wine is aged and stored by the producer until it is ready for bottling.

Merchants act largely as wholesalers, buying a portion of the chateau’s stock and selling it to various distributors and retailers.

This often involves wines that are only available at En Primeur, and which are valued by investors.

5. Grower-Merchants：生産者＆商人

Grower-Merchants have two sides: Estates and Merchants. In other words, they make wine from their own vineyards, but they also buy and sell the wine.

Grower-Merchants deals in wines of all price ranges, with premium wines produced from their own vineyards and inexpensive and mid-priced wines often purchased.

6. Co-Operatives：協同組合

Co-Operatives are associations made up of groups of producers who produce and sell wine from grapes grown by their members.

Advantages	・Members can purchase expensive equipment through joint investment. ・Cooperative members can outsource marketing, packaging, and distribution (especially marketing, which is more efficient and effective than doing it individually). ・The cooperative can produce entry-level wines, while producing higher-end wines under its own brand. ・Large cooperatives are able to generate economies of scale.
Disadvantages	・Cooperatives are often democratically managed, which makes the decision-making process slow and cumbersome. ・Cooperatives and producers may not have the same course of action.

7. Custom Crush FacilitiesとVirtual Winemakers/Wineries

Custom Crush Facilities is a type of cooperative model, mostly found in California. They are contract winemaking companies that produce wines at the request of producers, ranging from inexpensive mass-produced wines to super-premium, low-volume production.

Virtual Winemakers/Wineries are producers who use Custom Crush Facilities or other winery facilities to produce wine.

Advantages	・Producers who outsource the production of wine do not need to invest in equipment. ・No need for consensus building for decision making, which is a disadvantage of cooperatives. ・They can draw on the expertise and skills of professional winemakers.
Disadvantages	・There is a risk that the style desired by the producer will not be clearly communicated to the winemaker, and the wine will not be what they are aiming for.

8. Conglomerates：複合企業

Conglomerates are companies that deal not only in wine but also in a variety of alcohol products, and there is a growing trend for major companies outside the wine industry to enter the market.

By owning many small and medium-sized companies at various stages of the supply chain, from production to distribution and sales, they reduce the middleman margins.

Conglomerates retain a great deal of scale and influence, which allows them to have strong bargaining power when purchasing grapes and wine and selling them to retailers.

Examples of conglomerates

• Large company: E&J Gallo (California, USA)
  Responsible for 40% of CA wine production in 2018 and about 22% volume of the US wine market in 2020
• Medium company: Michele Chiarlo (Piemonte, Italy)
• Small company: Felton Road (Central Otago, NZ)