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Uncorking the Benefits of Adding Wine Storage to a Self-Storage Operation

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Wine storage might still be just a niche in the self-storage industry, but more facility operators are considering it as demand for the service increases. Offering a first-class option in your market can bring in new customers and help the revenue pour in.

Self-storage operators are always seeking additional ways to generate revenue, and there are lots of add-on profit centers that can help with this, one of which is wine storage. This highly specialized offering is still a niche in our business, but depending on your location and market, it can be profitable. Consider:

  • Wine appreciation and collection is growing. Another market segment that’s increasing is home-brewing of beer and wine.
  • Wine aficionados are traveling to more wineries, attending more tastings and even taking classes. Their love of wine has bolstered sales and clubs.
  • The traditional client base tends to be older, wealthier and well-traveled. Wine-storage customers include personal collectors, wine merchants, restauranteurs and bar owners. They might be business professionals who travel and need a place to accept their auto-shipments, or retirees who need a place to keep their wine when they travel or leave for a second home.
  • Renters are typically long-term, potentially storing their bottles for years as their collection grows or has aged.

For all these reasons, offering a first-class wine-storage “cellar” that’ll protect customers’ cherished investments can bring in new business and revenue.

Design

Proper construction is the foundation of a great wine-storage area. Insulation in the walls, ceiling and floors will help maintain the proper physical conditions. You’ll want to include:

  • Temperature and humidity sensors
  • Two climate-control systems, to reduce wear and tear and provide a backup if one fails
  • A backup generator for power failure
  • Wine lockers in a variety of sizes, made of wood or metal
  • Finished floors rather than bare concrete, which can hold moisture and add humidity
  • Low-level lighting, such as LED, which doesn’t generate heat and withstands cool temperatures
  • An alarm system to alert management of a power failure or system malfunction
  • Wine racking to discourage the use of cardboard boxes, which hold moisture and increase humidity (wood boxes are OK)

Climate Control

Wine is expensive. Aging it properly takes time and can increase its value. When a client is storing a $10,000 bottle, you want to make sure you’re providing the best possible environment. Check the temperature and humidity several times daily. It’s critical for wine to be stored at a consistent temperature, traditionally 55 degrees, with 60 percent humidity. Minor fluctuations should be addressed quickly, before damage occurs.

Set up a service contract with an HVAC company that can respond to calls the same day. And make sure the company stocks parts! A self-storage operator I once worked for attempted to replace a cooling system on a Friday, but the technician was missing a part that couldn’t be delivered until Monday. We had to rent a temporary cooling system for the weekend.

Store only wine in your designated wine-storage area—no personal or household items. I once had a client who wanted to store his beach towels and chairs with his wine so the next time he visited his beach home, everything would be ready to go. However, non-wine items can absorb moisture, attract bugs and create a potentially harmful environment for wine, so just say “no.” Try renting the customer a small traditional storage unit for these extras.

Risk Management

While wine storage is a great profit center, there are some precautions you’ll need to take. First, it’s critical to get additional insurance on the building that houses the wine-storage area. While many collectors have riders on their homeowner’s insurance, it’s also important to offer tenant insurance for additional coverage.

Each customer should sign a release that holds the management, company and owner harmless from any damage, deterioration of value or loss of any/all wine in the storage area. The release should include protection for managers who have access or keys to wine lockers.

Security is imperative. Some collections could easily be worth tens of thousands of dollars. The wine-storage area should have its own access door and separate security, with only staff and wine customers allowed. Include video cameras and an alarm. Consider limiting access to only office hours. Of course, each wine locker should each have its own lock.

If a customer wants you to accept wine deliveries on his behalf, you’ll need a key to his space, which should be managed with great care. When accepting deliveries, only individuals who are 21 years or older can sign. If you have younger employees, an older staff member will need to be onsite during delivery hours.

Marketing

Since wine storage is a specialized niche, it’s important to market it to as many potential clients as possible. Many people don’t know wine storage is even possible, so continually promote it to your existing tenants and the community at large. Consider creating a separate Facebook page just for your wine storage and cross-promote it on your facility page.

There are a variety of opportunities to market your offering. Here’s a short list of some local businesses and organizations that can help drive customers to you. Reach out to them and see if you can set up some sort of referral program or barter:

  • Wine stores
  • Wine clubs
  • Caterers
  • Wedding planners
  • Restaurants
  • Realtors
  • Chamber of commerce
  • Builders
  • Homeowners associations
  • Country clubs
  • Apartment communities

Wine storage can be a profitable addition to a self-storage facility. A small area can accommodate many lockers, which increases your average rent per square foot and profitability. Thorough market research will help determine if there’s market demand to add this profit as a viable option for your location.

Donna Edwards is a property manager for The Bradshaw Group. She started in the self-storage industry in 2013. Her performance as a site manager led to an expansion of her responsibilities to include roles as a traveling trainer, site auditor and inspector for new acquisitions across the Southeast. She regularly creates content on manager training and improvement. She’s currently an office manager and freelancer helping small business owners manage and market their businesses. To reach her, e-mail kj.dl.edwards@gmail.com.

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