Exploring a wine farm micro-cluster: A novel business model of diversified ownership

Abstract

The winery tourism literature has traditionally focused on how to increase tasting room sales or to understand visitors as wine buyers to better promote product sales. It has been found, however, that wine tourists desire more from the wine tourism experience than just the tasting and purchase of wine, resulting in wineries offering additional attractions and experiences to their visitors. This paper uses a case example located in South Africa to examine how one privately owned business has created a highly successful ‘micro-cluster’ of authentic, experiential, and holistically synergistic attractions spread across two of its adjacent wine farms. Using a novel business model combining wholly-owned businesses, partnerships, and tenants paying a percentage of gross revenue, this agritourism venture has become a major tourist destination, attracting more than 400,000 visitors annually. This study demonstrates how ‘micro-clustering’ on wine farms, previously unexplored in the literature, can become a major revenue stream for wineries and their related on-site businesses, while at the same time providing an excellent marketing opportunity for their products. The model may also be applicable to other businesses in rural areas where the creation of micro-clustered attractions can contribute to the economic development and prosperity of a community as a whole.