Liquidity Panorama
When a group of investors acquired the property now called Liquidity Wines in 2009, “it was nothing but dirt and vines,” says Ian MacDonald, one of the founding partners and Liquidity’s president.
Farming on the property goes back to the 1930s when Charlie Oliver developed Oliver Ranch, once touted as the biggest soft fruit orchard in the British Empire. In 1971 the Liquidity parcel was planted with non-vinifera varieties.
Starting in 1991, they were replaced with the current varieties for a total of 20 acres planted, a third of that with Pinot Noir vines still in the ground. A suitor with plans for the winery took over the property in 2005 but ran into financial difficulties, providing the opportunity for a group of three investors to acquire the 30-acre property in 2009.
One of Liquidity’s founding partners, Ian MacDonald, whose company Moving Products supplies non-athletic uniforms for the Olympic Games, oversees the winery operation as Liquidity’s president.
When Liquidity opened in 2012, the winery produced less than 2,000 cases of wine in its first year. In five years of operation, Liquidity has been transformed into one of the Okanagan’s premiere destination wineries, the Mediterranean -style house on the property encompassed by a contemporary, west coast-style winery, with production just over the 7,000 case mark.
Remarkably, given the economics of starting a new winery, “Liquidity will be profitable this year,” he adds. “On average it takes 8-10 years for new wineries to make a real profit. As well, we’ve had a positive cash flow from the start, not the usual circumstance for 80 per cent or more of wineries.
“The dream of owning your own winery is becoming very remote in the world of consolidations and a scarcity of land which, at $200,000 to $250,000 an acre, is more expensive than ever,” MacDonald says. “When I made my pitch to investors, now thirteen partners, I told them it was the worst investment ever. You need the right investors with deep pockets who are willing to take more of a risk upfront. They were committing to providing the level of quality and experience required to create our own identity as a world class winery in the Okanagan and establish a marketing platform to build a national brand.”
To gain insights on what people are looking for when they walk in the door, MacDonald visited top destinations in New Zealand. “It comes down to three top things,” he says, “the setting, the wine and a chance to meet the owner or winemaker.”
Photo by Jon Adrian
Liquidity Bistro
The Liquidity Bistro has a focus on seasonal, sustainable, artful food.
Starting from scratch, “we decided to build this into a destination for all who want that experience, one that works as well for boomers as millennials.
Everything from the front gate, long driveway and landscaping to the modern architecture, art gallery and bistro have been designed accordingly. When people walk past the sculptures at the front door and look through the walls of glass to the other side of the building and see the iconic view over rolling hills and Vaseux Lake to McIntyre Bluff for the first time, they say ‘Oh My God’. People drop in for a tasting and I see them on the patio sipping on wine three hours later.
“When you get people to pause, they remember it and share. The wine, the food and the art, that is our shtick. It is something to package yourself with and take to the market. With 80 major works of art and sculptures on site, we are holding art shows and lectures all the time.”
MacDonald realized the plan was not going to work without integrating wine with a quality culinary experience. “At Liquidity, kitchen and dining room are open to each other,” he says. “They are together in the same room so you feel like you’re in your own home. The diner thinks, ‘I wish I lived here’.”
Essential for success at a small, land-based winery is developing marketing strategies that includes social media and direct to consumer sales. Compared to other industries which spend massively on advertising, including social media, the wine sector as a substantial product category is mostly ignoring this sector, according to MacDonald.
“Almost no dollars are spent on advertising on Facebook and Instagram,” he says. “Considering Facebook’s appeal to boomers and millennial’s preference for Instagram, a more interactive and user-friendly platform, social multimedia is wide open for trailblazers in the wine industry.”
A leading voice in favour of allowing free direct to consumer (DTC) shipment of wine across Canada, MacDonald explains that interprovincial barriers are a major threat to the wine industry.
“Without the distribution channels of the big guys, we have to ship at least 60 per cent of our wine just to stay alive,” he says. “Given that DTC is now only 4 per cent, social media is key to maintaining vital connections with wine consumers.”
In recent months, Liquidity has been exploring opportunities by working with a former vice president of Facebook to develop social media strategies.
Liquidity Instagram
“Realizing that we have to invest a lot of time, money and energy in this area, we have started a 60 day test program to be followed by a 90 day roll-out, MacDonald says. “As well, we have approached Facebook with a plan to look into using Liquidity as a test to show how well this type of marketing can work for the wine industry in Canada.”
Liquidity has introduced a new wine club concept to develop online wine sales. The first of its kind in Canada, the Equity Tasting Club gives members the opportunity to try Liquidity wines at home before buying.
“For an annual fee of $75, the winery will send a box containing 3 x 200 ml samples shipped under temperature-controlled conditions at least twice a year,” MacDonald says. “Members agree to purchasing a minimum of 18 bottles each year, which range in price from $19 for Pinot Gris to $54 for Reserve Pinot Noir.”