Adding Wine Storage to a Self-Storage Business: Marketing, Design and Legal Considerations

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By Jim Ponti

This year marks 18 years of consecutive growth for wine consumption in the United States, so it’s no wonder wine storage has become a hot commodity. Like the wine industry, self-storage has evolved in many ways over the years. Not only are the details, designs, operation and aesthetics more calculated, the services being offered by many facilities have expanded.

In many affluent urban markets, self-storage facilities have either added wine storage or included it within their original construction design. Traditional self-storage and wine storage have proven to be a good marriage, and the basic self-storage operational design caters to wine storage with little additional personnel services or operating expenses. If you're interested in combining wine storage with your existing or future self-storage development, consider the following important aspects: market feasibility, facility design and legal considerations.

Determining Your Target Market

There are mainly two reasons for the inclusion of wine storage in a traditional self-storage facility. First, the monthly revenue per square foot of floor area can be exponentially higher than typical climate-controlled storage. Second, it broadens the market appeal and quality perception of a facility while bringing another market segment through the doors. Both are great reasons to consider wine storage, providing your facility is in this specific demographic landscape.

While there are fairly specific parameters that can be analyzed to determine the feasibility and design/unit mix of a typical self-storage facility, determining market demand for wine storage is generally much more subjective. A detailed list of considerations could be the topic of another full article on this subject.

Generally speaking, it’s preferable to have a market that represents the top 20 percent to 30 percent income bracket that lives within a 20-minute drive of the facility. In addition, you must analyze income and professional variables, construction details of relevant housing units, and drive times to your specific location. For example, multi-story, higher-density ownership markets are always preferable in that housing costs on a per-square-foot basis are generally well above regional averages, and available interior space is usually very limited. Also, very few of these properties will include any type of building or associated wine-storage areas.

In some markets, newer high-end housing  subdivisions will include well-designed and fairly large wine-storage areas or at least an option for the same within the basement. Certain areas have drive times that vary significantly depending on the time of day or day of the week. Surveys of nearby competitor wine-storage businesses, metro wine clubs and wine retailers can also provide significant insight into an area market. In so many words, many wine collectors have shared with me the same sentiment: “Regardless of the wine-storage area that you build for yourself, your collection will always outgrow that space.”  That's good news for the wine-storage industry.

Rather than jumping in the deep end of the pool, many self-storage owners choose to test the water and add their wine storage in phases. In existing facilities, an initial area should be earmarked along with an anticipated adjacent area for future phases. Reconfiguring standard storage areas into wine storage can be accomplished fairly easily for those whose market demands more space. For new construction, it’s much simpler to accommodate the initial and anticipated phases from the onset. Size steps are usually dictated by available equipment capacity or available conversion space.

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