Bill and Gail Day – Long Distance Winegrowers

If you have been following the Texas wine industry for any length of time, you have most likely heard there are not enough grapes being grown in Texas. We have heard different viewpoints from winegrowers in the High Plains and winery owners as to the reason why there are not enough grapes and why more are not being grown.

We have become friends with Bill and Gail Day who live near us in Houston, however they own a vineyard in the High Plains. Perhaps this may be a possible solution to the limited number of grapes in Texas. To find out, we talked with the Days this weekend.

TWL: Can you tell us about your background?

Bill: “I was born on a farm in Roswell, New Mexico, and grew up farming. I got a degree at Abilene Christian University where I met Gail. She came home with me to the farm and for six years we farmed at Roswell. It was cotton and alfalfa farming and we started a commercial garden there. By our sixth year we were up to 40 acres of commercial garden, all of which we sold at a roadside fruit stand. We did a whole lot better selling vegetables than selling cotton and hay. I remember that lesson very well because ultimately that’s what attracted me to the vineyard business. With the farm background I felt like I at least understood growing.

“I am a financial planner by profession. One of the things I do is to plan not two or three years down the road, but 25 years down the road. I realized one day that one of the things I preached to my clients is diversification and here I was with everything in stocks and bonds. I reached that point in my middle 50’s like most people do, and wondered what I would do in my retirement. I know me well enough to know I would drive this woman who has lived with me for 40 years that I would drive her nuts if I was around the house all day at the point I finally retire.

“I looked at pecans, olives, and grapes and a coworker drew my attention to an ad where Fritz Westover (ex-Viticulture Extension Program Specialist for the Texas A&M AgriLife Extension Service) was holding a one-day course in Houston on growing grapes in Texas. I signed up and dragged Gail along. Fritz said the average yield of grapes in Texas is four tons. As I studied what Fritz taught us during the class, I ran into Ed Hellman, Texas Tech viticulture professor, and he changed my mind from growing grapes outside of Houston to the High Plains.

“After looking for months, somebody mentioned Cliff Bingham. I got in touch with Cliff around July 2009 and we made arrangements for me to come out Labor Day weekend to see his grapes. I can tell a good farmer from a long ways away and I could tell he was a good farmer because his fields were clean and he was growing organically which means no chemicals. He showed me his vineyard, the fruit was heavy on it, and they were in the middle of harvest. Gail and I went out the next morning to watch harvest. The other person people had been telling me I needed to see was Bobby Cox. We met him that morning and as we were talking, Cliff called Bobby and told him what the yield was from that block of grapes they were harvesting and the number was 8.3 tons to the acre as opposed to Fritz Westover’s average yield in Texas of 4 tons. It made it clear to me that what I was hoping to do would work, because at this point I knew I couldn’t do it myself which meant I had to have a partner to actually do the growing. We talked to Cliff and worked out a mutually agreeable deal.

“From a pure investors standpoint, if I had taken the same money and put it into a balanced portfolio of stocks and bonds and had grown it for 10 years assuming that you could get average returns, the differential between the two was a magnitude of four times. A lot of things can happen with grapes, but a lot of things can happen with a stocks and bonds portfolio too. I didn’t want to have everything in stocks and bonds, so now I have a balanced portfolio in something that’s completely divorced from the normal stock market.”

Gail: “I have a new business model. Whatever your spreadsheet tells you, divide half the proceeds you think the crop will produce and double what you think the expenses will be, and if that relationship is still a good deal, then go forward. But if you can’t live with that relationship then you don’t need to engage in farming.”

TWL: Tell us a little bit about your vineyard.

Bill: “After our previous farming events, I figured we needed all the luck we could get so I named it Buena Suerte Vineyards which in Spanish is ‘good luck.’ If Cliff was going to do the farming it needed to be close to his present operation. We found 640 acres and so we bought it.”

Gail: “Bobby Cox explained the property as a red wine farm. Although we were new to the wines of the world at that point in time, we knew we wanted to grow a red wine.”

Bill: “We planted 40 acres in 2011 and in 2012 we planted 10 more for a total of 50 acres. In 2011, we planted Mourvèdre, Tempranillo, Sangiovese, Trebbiano, Viognier, and Muscat Giallo. In 2012, we planted three other varieties: Ruby Cab, Carignan, and Cabernet Sauvignon.”

TWL: What are the challenges of owning a vineyard long distance?

Bill: “Travel time. My father was a very good farmer and one of the things that Dad taught me is that the most important thing you can do on the farm is the shadow of the owner. I can’t be there that much. I can only be there occasionally because I have a full-time job in Houston. So the way I get around that is the shadow of Cliff and his sons, and the shadow of Bobby Cox on that land, because I know they are better grape growers than I am. What you really need is a shadow of somebody who really knows what they’re doing and I’ve got that.”

“We visit our vineyard maybe six times a year. We have been actively involved in a lot of things with the vineyard. The way Gail and I are most actively involved is the marketing of the grapes. That’s something we can actually do on the weekends and by telephone because the wineries aren’t out there and are closer to Houston. That’s what I do professionally is market, so I feel that’s the best use of my time.”

TWL: Do you have future plans for your vineyard?

Bill: “I have lots of future plans but some of them may not come to fruition for 25 years. I’m a huge fan of GO TEXAN and I can appreciate the frustration some folks feel over this current argument. We can’t allow ourselves to get wrapped around the axle over this issue. What we have to do is be working together as a group to encourage more people to try wine, find wines that they like, to discover that Texas wines can compete successfully with world class wines, and that’s my goal too. I happen to be a massive fan of Rioja style wines and that’s Tempranillo. Some people are saying that Tempranillo is Texas’s answer to California Cab. I happen to agree.

“As far as future plantings, I’m more than willing to do so, but at this point I want the farm to produce the income to pay the expenses to plant more.”

Gail: “Before the end of the first growing season all the grapes were under contract.”

TWL: People say there are not enough Texas grapes. What are your thoughts on that?

Bill: “Well there aren’t, but I think a large part of the reason is because people don’t have to grow the grapes themselves. There’s a lot of romance in the mind of someone who works 8 to 5 about having the freedom, and working outside, and enjoying the growing of something to create a new place of beauty on this Earth. A lot of folks get started on it and then they discover it’s a full-time job, it’s a lot of hard work, and I wish I had air-conditioned the vineyard! At the end of the day you’re just stuck, it’s hot and sweaty, I’m tired, and I still have 40 more hours to go just today to finish.

“The model I’m working on is a model for people who want to have exposure, is that you have to have a real strong interest in being part of this. This is not a normal investment. It is not for the faint of heart. It is not something I would recommend to any client of mine because the risks are significant, so you have to have disposable capital that you want to risk in this fashion. You may not get your money back.

“Bobby Cox has a map of every vineyard that has been planted on the High Plains since the late 60’s. It is a tragic map. The reason it is tragic is the recognition of how many dreams died because they were too early and they didn’t have the wisdom of actually growing grapes. In the 80’s and 90’s several of the wineries went broke, and when the wineries went broke, the vineyards had no place to sell their grapes. It’s only today that I think an investor mindset could actually look at it and say we have a critical nucleus of wineries.

“The Department of Agriculture has kept records and every year they record all the acreages of grapes that go in and they keep track of the mature acres of grapes. Every year there has been 100 to 400 acres of grapes planted. That’s been happening for 25 years. By this time we should have a heck of a lot of grapes in the ground. But the sad truth is that folks who thought it would be fun went out and planted three or four or five acres, and discovered it wasn’t fun and it was a whole lot of trouble. So let’s just let it die because I don’t want to deal with that anymore. And that’s what’s been happening. And then we’ve had the bigger vineyards go in and they lost their market. If you don’t have any place to sell your grapes, it costs about $1,500 per acre a year just to grow them. If you don’t have a market for them, you’re in deep trouble. That was the issue back in the 80’s and the 90’s.”

Gail: “Another piece is that you have to plant the varietals that the wineries want and can sell. While there can be some education about Tempranillo and Viognier because they grow well here, you can’t just grow Blanc du Bois and Lenoir which are the varietals that will grow on the eastern half of the state. A lot of the numbers that Fritz Westover had in that first presentation about how to start a vineyard was all predicated on a five acre vineyard and it could be planted anywhere. Planted anywhere really limits the kinds of grapes you can grow. So you have to decide if this is a very expensive hobby or is this going to be a business enterprise producing an income stream.”

Bill: “For the industry to flourish, we have to grow high quality grapes that grew originally in Spain, Italy, or France, and we have to find those varieties that will make world-class wine here regardless of the name of the grape.”

TWL: What recommendations do you have for someone who would like to own a vineyard long distance?

Bill: “Come to Grape Camp and come to the TWGGA conference in February and meet first-hand the High Plains growers. I’m not saying that growers elsewhere are not good but the High Plains is the place to grow the best quality grapes. If you want to be an investor, you need to be thinking in terms of finding somebody who was already spent their own money to develop a vineyard. You can go up there and look at it, and see and watch them harvested, and watch the weight tickets. If they’re hitting six to eight tons or more, then they could be a partner if they’re willing to do it. They may not be willing to do it. They may not want to partner. I was lucky. Cliff was willing to have a partner.”