BELLE MEADE PLANTATION: SOCIAL ENTREPRENEURSHIP AND SUSTAINABILITY AT THE FIRST NON-PROFIT WINERY IN THE U.S.

Abstract

After examining the latest financials for the nonprofit Belle Meade Plantation in 2004, Alton and Sheree Kelley were frustrated. For the fifth consecutive year, donations from corporations and individuals had declined, resulting in the lowest total annual revenue in memory. Clearly, management needed alternative revenue sources and could no longer rely primarily on donations for sustaining operations. It was time for some entrepreneurial ingenuity. An ambitious plan would eventually emerge for building and operating an on-site winery. Now, almost ten years later, the Plantation operates the only such nonprofit winery in the United States, and the addition provides almost half of the organization's total revenues. The gradual shift from an exclusively "donor-based" mentality has now changed Belle Meade's approach to embracing other revenue stream opportunities. For one, should management extend operations to an on-site restaurant that is approaching an expiring lease agreement? Such a move could create an additional source of revenue and leverage the existing winery so that food and wine could be paired at the restaurant. Second, the State laws that previously prohibited off-site expansion of the Plantation's winery business were now gone. As a result, if it so desired, Belle Meade Plantation could legally open another winery at a new location such as downtown Nashville. An additional winery location could complement the current brand in a variety of ways while serving the Nashville market.

Headnote

ABSTRACT

After examining the latest financials for the nonprofit Belle Meade Plantation in 2004, Alton and Sheree Kelley were frustrated. For the fifth consecutive year, donations from corporations and individuals had declined, resulting in the lowest total annual revenue in memory. Clearly, management needed alternative revenue sources and could no longer rely primarily on donations for sustaining operations. It was time for some entrepreneurial ingenuity. An ambitious plan would eventually emerge for building and operating an on-site winery. Now, almost ten years later, the Plantation operates the only such nonprofit winery in the United States, and the addition provides almost half of the organization's total revenues.

The gradual shift from an exclusively "donor-based" mentality has now changed Belle Meade's approach to embracing other revenue stream opportunities. For one, should management extend operations to an on-site restaurant that is approaching an expiring lease agreement? Such a move could create an additional source of revenue and leverage the existing winery so that food and wine could be paired at the restaurant. Second, the State laws that previously prohibited off-site expansion of the Plantation's winery business were now gone. As a result, if it so desired, Belle Meade Plantation could legally open another winery at a new location such as downtown Nashville. An additional winery location could complement the current brand in a variety of ways while serving the Nashville market.

Key words: social entrepreneurship, organizational sustainability, marketing, diversification

INTRODUCTION

"Ifyou 're in the wine business and you 're not making money today, it's not the industry's fault. Check your business model. " Adam Beak, Managing Director Bank of the West's North Coast Agricultural Banking Center (Huyghe, 2014)

Belle Meade Plantation was founded in 1807, by John Harding. The Belle Meade Mansion was built in 1853, by Harding's son and Confederate Army General William Giles Harding. By the time of the U.S. Civil War, the Plantation had become famous as a 5,400 acre stud farm that was producing some of the best racehorses in the South.

Over the last century-plus, Belle Meade's breeding lineage boasted some of the best-known thoroughbred horses in U.S. history, including Secretariat and many others such as 2014 Kentucky Derby winner California Chrome. And through it all, the Greek revival-styled Mansion was the centerpiece of the affluent Belle Meade region of Nashville, with the historic homestead surrounded by 30 acres of manicured lawns and shade trees. A long driveway led uphill to the mansion fronted by six columns and a wide veranda. Inside, the restored building was furnished with 19th-century antiques that hint at the elegance and wealth that the Southern gentility enjoyed in the late 1800s.

As of 2004, Alton Kelley, former restaurateur and hospitality executive, and current president of Belle Meade Plantation, and his wife, Sheree, winery manager, were both facing the monumental task of securing adequate, long-term funding for the historic non-profit. For the fifth consecutive year, donations from corporations and individuals had declined to the lowest levels in memory, and the couple believed they had little choice but to look for solutions that were well outside of the proverbial box. Clearly the organization and its board of directors could no longer rely solely on corporate donations for the ongoing operations of the Belle Meade Plantation. So, after evaluating and discarding a variety of other alternatives, the Kelleys set about pursuing an ambitious plan to build and operate a nonprofit winery on this historic site to help sustain current and future long term financing needs. The idea was bold, given that there were no other known nonprofit wineries in the U.S. However, they believed that if they could successfully navigate through the numerous legal and market-based challenges, this was an initiative that could provide the necessary funding required for supporting the property's ongoing operations.

At the time, the existing sources of funding for the operations of Belle Meade Plantation were (in descending revenue order): (1) ticket sales from visiting tourists, (2) hosting special events, (3) corporate and private donations, and (4) sales of items from the gift shop, including a line of private-labeled products, such as cheese, country ham, grits, and a variety of souvenirs.

Paid staff offered Plantation tours to the general public, and costumed guides followed a theme (for example, holidays, aspects of plantation life, etc.) that changed every three months with the seasons. These themed tours provided fascinating glimpses into the lives of the people who once lived at Belle Meade. The grounds also included a large carriage house and set of stables that date back to 1890, and that now housed a large collection of antique carriages. During the tour, visitors w7ere also given a glimpse inside a variety of other historic facilities on the property, including a log cabin, a smokehouse, and a creamery. Belle Meade's park-like grounds made it a popular site for festivals throughout the year.

In late 2009, The Harding House Restaurant opened on the grounds, immediately adjacent to the mansion, replacing the popular "Martha's at the Plantation" restaurant. The restaurant is an independent operation and pays rent to Belle Meade Plantation, with all profits remaining in the restaurant. The rental agreement between the restaurant and Belle Meade Plantation is for a three-year period, and the current operators are in the final year of that lease. Based on his past experience in the restaurant industry, and the success of the winery, Alton was contemplating non-renewal of the restaurant's lease. Instead, he was considering opening a new restaurant that would feed off of the 450,000 customers who currently visit the Plantation each year. There is an opportunity to operate a quality restaurant and pair wines produced at the Belle Meade Winery with food prepared in the restaurant. While this would provide another revenue stream for the Plantation, there were risks associated with a new venture such as this.

HISTORY OF BELLE MEADE PLANTATION

John Harding founded Belle Meade Plantation in 1807, by purchasing an initial 250 acres of land near Richland Creek, several miles southwest of Nashville, Tennessee. John was from the Commonwealth of Virginia, a state known for thoroughbred racing and breeding, and he was most certainly a man of his roots.

Harding's first foray into the horse industry was through the breeding of thoroughbreds. Dating back to as early as 1816, there were advertisements in Nashville newspapers for horses standing stud at John's farm. In 1820, he commissioned a brick home in the Federal style on his farm, and officially named the estate "Belle Meade." By this time, he owned his own horses debt free and became interested in racing them locally. John registered his own racing silks with the Nashville Jockey Club in 1823 and was training horses on the track at another of his properties, McSpadden's Bend Farm.

John's son, William Giles Harding, was living on the McSpadden's Bend property and worked with his father training horses. By the time William Giles assumed management of the Belle Meade plantation, he had become keenly interested in all aspects of breeding and racing. In addition to be active in several local jockey clubs, William Giles raced at all the area tracks, including Clover Bottom, Gallatin, and Nashville. By 1865, he had become Brigadier General William Giles Harding in the Tennessee State Militia and was captured by Union authorities in 1862.

Even though the Civil War interrupted both breeding and horse-racing in the southern United States, General Harding managed to keep all of his thoroughbred horses, due primarily to the resourcefulness of his head hostler Bob Green. At the time, Belle Meade was large enough in acreage that Green somehow managed to elude Union troops through the war's end by hiding the prized horses at various locations throughout the heavily-wooded nearby hills. So, while other breeders lost everything during the war. General Harding was able to pick up where he left off at war's end.

In 1867-1868, Harding won more purses with his own horses than any man living at that time in the United States. He was also beginning his breeding activities in earnest, and in 1867, held the first sale of horses bred on his farm. He was the first in Tennessee to use the auction system for selling thoroughbreds. Yearling sales began in 1867 and were held annually until 1902. With the auction system, he became the most successful thoroughbred breeding farm and distributor in the State of Tennessee. When General Harding died in 1886, The Spirit of the Times praised him as having done as much to promote breeding interests as any American in the 19th century.

In 1868, General William Hicks Jackson married General Harding's oldest daughter Selene and moved into the Belle Meade mansion. He was an avid horseman and began working with his father-in-law to expand the breeding fann. By 1875, they had decided to retire their racing silks and concentrate on breeding. After General Harding's death, General Jackson assumed one-third ownership of the horse farm with Selene's half-brother John and General Jackson's brother Howell, who married Selene's sister Mary Elizabeth. However, he was the only family member working as daily manager. General Jackson's flair for entertaining and his confident, outgoing nature helped the farm to attract thousands of people to the yearling sales. While General Harding expanded the family home in 1853, introducing the Greek revival style seen today, General Jackson modernized the interior in 1883. The family added three full bathrooms, complete with hot and cold running water and a telephone, by 1887.

Visitors to the Mansion through the years have included President and Mrs. Grover Cleveland, Robert Todd Lincoln, General Ulysses S. Grant, General William T. Sherman, General Winfield Scott Hancock, and Adlai E. Stevenson.

NONPROFITS MOVE IN DIRECTION OF SUSTAINABILITY

The economic downturn in 2007 reduced household incomes and lowered investors' and consumers' confidence in the economy. One result was that many nonprofits faced especially troubling times. Most nonprofits' incomes dwindled during these recessionary times, based on a variety of factors: (1) private contributions declined as individual, corporate, and foundation donors reduced capacities or the willingness to give, (2) federal, state, and local funding sources also declined or disappeared altogether, and (3) earnings from endowments shrunk along with their capital market values (www.guidestar.org). At the same time, such economic downturns also put added demands on nonprofits' already diminishing resources, including: (1) a typical increase in the frequency of client requests for financial or service need, (2) a decrease in the number of individuals who, based on concerns regarding their own household incomes, were either unable or unwilling to volunteer their time in support of organizational mission. These changes typically led to reductions in services offered by the nonprofits, as well as the elimination of a variety of routine activities, such as public outreach and building/vehicle maintenance. Nonprofits tended to lean their budgets in a way so that every possible dollar was channeled more directly into client services (www. guidestar. org).

"Revised estimates showed that charitable giving by Americans peaked at $309.7 billion in 2007, before dropping back to $290.9 billion in 2008 and further declining to $278.6 billion in 2009 as the recession continued. The average rate of growth in charitable giving for 2010 and 2011 was the second slowest of any two-year period following all recessions since 1971," according to Patrick Rooney, executive director of the Center on Philanthropy at Indiana University (Fiscaltimes.com, 2012).

By 2013, the Recession of 2007 had severely impacted individuals, organizations, businesses, the government and nonprofit sectors. While some argued that the nation was starting to recover, other businesses and organizations were still feeling vulnerable. Barro (2011), for example, observed that there was an ongoing global financial crisis and ".. .a chance of a double-dip recession" (p. 45). As leaders of the nonprofit sector planned for the future, they sought a deeper understanding the financial impact of the recession and the actions taken as a result of the challenging economic times. Understanding these aspects carried the potential of assisting executive directors and other leaders in determining strategically the operational needs of their organization as they considered how to best serve their communities moving forward.

Guidestar, a research organization that since 2002 had been gathering data about nonprofit finances from surveys and other sources such as 1RS Form 990, studied changes in financial activity among nonprofit organization across the United States (see Figure 2). It was clear that charitable contributions to nonprofits continued a relatively short-term decline before bottoming out in the middle of 2009. Hopes were high for a turnaround as the general U.S. economy slowly began to improve. However, as of 2011 a clear majority of organizations (59%) continued to report that contributions were either down or stable, at best (Gassman et al., 2012).

Nonprofit organizations, facing cuts in donations from both individuals and organizations, began experimenting with new ways to strengthen their bottom lines. In addition to cutting costs and eliminating waste, nonprofit leaders were also thinking more creatively about how to use the talents and time of volunteers, garner new donations, strengthen ties with existing donors and create alternative ventures that would generate additional revenue. According to the Sontag-Padillia, Staplefoote, and Gonzalez (2012), a promising method for nonprofit organizations to overcome reliance on limited external funding sources was to think more creatively about their fundraising strategies and consider the role of nontraditional philanthropic organizations or individuals. No matter what stage of development or maturity the organization was in, a sense of vitality throughout the organization was necessary if it was going to continue to grow in the future. The needs of an organization, as well as the communities it serves would change, so an organization could not be limited to maintaining the status quo. Instead, an organization would need to constantly adapt, develop, and innovate in order to be truly sustainable (Bowman, 2012).

Alton Kelley was a finn believer in necessity being the mother of invention. He felt that when an organization's financial resources began to dry up, people needed to be creative about where to get help and how to keep their operations viable. Belle Meade Plantation was no exception. So as he and Sheree contemplated the future of Belle Meade Plantation in 2004 and carefully considered the Plantation's dwindling financial support from philanthropists and private donors, they realized that management had no choice but to consider substantive changes in order to ensure long-term survival. Furthermore, given the organization's outstanding role throughout history as a place of prominence, he believed no one associated with the Plantation was going to view simply "getting by" as an acceptable strategy. Tradition indicated that Muscadine grapes were grown on the plantation as far back as the 1800s. The Hardings, Belle Meade's 19th century founders, actually produced wine from the vineyards on their property. As they considered the change in financial conditions in conjunction with this history, the Kelleys became convinced that resurrecting wine production and sales on the property would provide a major source of revenue and self-sufficiency for the property in the future.

WINE INDUSTRY IN TENNESSEE

History

Like many other states, Tennessee's wine industry had emerged and was expanding during the late 1800s. However, the industry was destroyed by Prohibition in the 1920s, and more than a half-century would pass before the industry would re-establish itself with any degree of significance. In the late 1970s, Judge William O. Beach championed legislation that enabled the State's wine industry to move forward more rapidly. Judge Beach was an amateur winemaker who wanted to open his own commercial winery in Tennessee. Another industry leader was Fay Wheeler, who was instrumental in assuring passage of the Wine and Grape Act of 1977. In 1980, she started Tennessee's first licensed winery, and to many, Fay was considered the founder of Tennessee's contemporary wine industry.

According to Alcohol and Tobacco Tax Trade Bureau data prepared by Wine America, in 1975 Tennessee had no formal wineries. Twenty years later, the number had grown to 15 wineries, and between 1995 and 2005, the number of units nearly doubled to 27. As of 2010, Tennessee boasted 45 registered wineries, with the likelihood of continued growth. Figure 3 illustrates the concentration of wineries in the state of Tennessee. Nineteen were located in Middle Tennessee, with the Winery at Belle Meade registered as the only one in the city of Nashville, in addition to maintaining its unique position as the only nonprofit winery not only in Tennessee but in the U.S.

American Viticulture Area (AVA)

An AVA is defined as a designated grape-growing (i.e., wine) region in the U.S. that is distinguished by geographic features. Its boundaries are defined by the federal government's Alcohol and Tobacco Tax and Trade Bureau, a unit within the U.S. Department of the Treasury. The Mississippi Delta AVA was established in 1984, and this large area includes parts of Louisiana, Mississippi, and Tennessee. Unfortunately, it was later discovered that the southwestern comer of Tennessee included in the AVA had difficulty successfully growing grapes. Wineries were therefore, allowed to use the state designate "Tennessee" as the AVA if the grapes used to make the wine were sourced from the State.

Tennessee Grape Varieties

There were, as of 2014, somewhere between 500 and 750 acres of wine grapes grown in Tennessee-a number that was on the rise. Some of the more common examples of Tennessee-grown grape varieties, their properties, and the resulting wine characteristics are provided in Table 1. Many vineyards were small (i.e., less than five acres), which presented a challenge to growers, since wineries had to weigh and balance the decision to buy small quantities locally against purchasing larger quantities from outside the state's borders.

Grapes grown in Tennessee were divided into three basic types: (1) vinifera, (2) hybrids and (3) Native American. Some of the better-knowm vinifera varieties included Cabernet Sauvignon, Cabernet Franc, Gewürztraminer and Merlot. Common hybrid varieties grown in Tennessee included Chambourcin, Chardonel, and Traminette, while better known Native American varieties included the Catawba, Concord, Niagara, Norton (Cynthiana), in addition to the Muscadine family of grapes. Muscadine cultivars included the more common Carlos, Doreen, Magnolia, Sterling, Black Beauty, Fry, and Noble types and a seemingly endless array of other Muscadine cultivars. Vineyards that were planted decades ago with Muscadine grapes now hosted a mixture of grape cultivars. As a result, there was a common tendency to call a wine "Muscadine," rather than having to identify the specific name of the grape.

Interestingly, not all wines were produced from grapes. Several Tennessee fruit-bearing trees or bushes were commonly used to produce what was accordingly referred to as "fruit wines." The more common wine varieties took advantage of fruits such as black raspberries, peaches, blackberries, strawberries, rhubarb, and apples-all of which grew well within a portion of the geographic areas included within the State.

THE WINERY IS BORN

Even at significant levels of visitor traffic, base admission ticket revenues were not near enough to fully support the site's operation. And since local fundraising had become more difficult following the most recent economic downturn, as Kelley noted, "Every time there is a new charity in Nashville, the 'giving pie' gets thinner."

Additional revenue streams beyond base ticket sales were going to be needed in order to remain solvent. "There was a lot of brainstorming among staff to come up with new ideas," said Kelley. "And as we continued to believe, it was important that everything we did was connected to the site's heritage. We just looked for ways to modernize what the original owners did and make money to support the site."

It was clear to the Kelleys that a significant and relatively permanent source of funding was needed to securely fund the operations of Belle Meade Plantation into the future. They considered several revenue options, while feeling constrained by a desire to narrow viable possibilities to those that fit with the historical nature of the Plantation and its "roots." Along the way, the seeds of a winery concept began to germinate, and a decision was subsequently made to visit the Biltmore Estate's Winery in Ashville, North Carolina. "We were looking for best practices among small to medium size wineries," Kelley would later share.

The new Biltmore Estate Winery had opened in May of 1985, and was a momentous occasion in Biltmore's history. Mr. Bill Cecil Jr. proclaimed that it was "the most historic event since my grandfather (i.e., George Vanderbilt) had opened his estate to his family on Christmas Day ninety years earlier" (www.biltmore.com). The modern-day Biltmore vineyards boasted six varieties of grapes and spanned more than 90 acres. The Biltmore's award-winning wines continued to be available in retailers and restaurants across the country, and the winery was the most visited winery in the United States.

While the Kelley's initial concept for a winery in Nashville was relatively small compared to Biltmore's, they saw incredible potential for such an operation, since there were currently no wineries in Nashville. And the Biltmore statistic was not lost on them that one out of five guests to the Estate were making a wine purchase before leaving the property.

After their visit to the Biltmore, the Kelleys were convinced that a winery, albeit on a much smaller scale, could be successful in Nashville, and their next decision was that it would need to be located on the Belle Meade property.

A meeting with the board of directors for the plantation ensued, and in it, the Kelleys presented their proposal for a winery. Through their research, the Kelley's had determined that an existing building on the property that was built in 1998 as an education venue could be converted into the winery and a gift shop. However, this would not come without a significant financial investment. In order to get the winery operational, an investment of $250,000 would be required. The Kelleys had detennined that in the first year of operation, all of the bottling activities would be done by hand, using employees of the historic plantation, the winery, and volunteers. As sales increased beyond the $1,000,000 level, mobile bottling equipment would be used for the higher volume.

The Kelleys concluded their presentation to the board, providing projected revenues for the first five years, along with the planned operation's anticipated expenses. Two of Alton's board members were presidents of local banks, and both were convinced that the proposed winery was a fairly low-risk investment. The remaining board members concurred and ultimately a final vote yielded approval for the project.

The Winery at Belle Meade first opened to visitors touring the Mansion in November 2009. The building where the winery was housed had been built in 1998, originally as an onsite education building. However, its combination of size and location on the premises made it a reasonably good fit for serving as the initial start-up site for the winery. By 2009, the directors of the historic plantation renovated the building for use as a combination winery and tasting room, and Brian Hamm was appointed as the winemaker. As the staff began to research which wines should be produced in order to meet Plantation revenue objectives, they uncovered some very important advice from the local wine-making community. Simply stated, they were told that if the objective was "ego," then dry wines should be the target. However, without a doubt, "sweet wines" were the choice if you wanted to make money. It is no secret, then, that Belle Meade's current portfolio of wines leaned heavily to the sweet end of the spectrum.

Visitors to the winery observed that the tasting room counter was of medium dark wood and was supported by a stone base. A wood-burning fireplace adds to the ambience of the room, while glass windows allowed visitors direct sight lines into the tank room where the wine was stored prior to bottling. The room also included a dessert counter with Peanut Butter Pecans, artisanal chocolates, and other confectionaries. A wine garden was also available just outside the doorway for visitors who wanted to purchase a bottle of wine and then enjoy it on the premises. Visitors in late spring were greeted by the aroma and visual beauty of large magnolia flowers, which came into blossom in late May and offered a stunning contrast between the large white flowers and surrounding shiny, dark green leaves.

An additional start-up hurdle turned out to be the issue of where to store the bottled wine. Ideally, the location needed to be near point-of-sale, secure, of sufficient size to accommodate growth in volume over time, and "climatefriendly" in order to minimize significant variations in temperature in order to protect the product. The best solution turned out to be the historical dairy located right there on the property. It was located relatively close to the mansion, large, and made out of stone, which created almost the ideal environment for storing the cases of wine. This would then become Belle Meade's bonded storage facility.

When Alton and Sheree had first conceived the idea of a winery for Belle Meade, they immediately realized that the existing 250,000 annual visitors to the historic property were going to be the primary initial market for the wines produced at the winery. Property tours were redesigned to conclude with an opportunity for guests to be escorted to the tasting room for a complimentary tasting. Each wine would be presented to include background on its composition and properties, along with any relevant historical facts that aligned with what had been presented on the earlier tour. Because of the unique vintages produced at the winery, along with the Belle Meade-specific packaging (i.e., thoroughbred horse designer labels), tourists typically purchased multiple bottles, and often, cases of wines to take back to their family and friends.

According to Sheree Kelley, Belle Meade Winery Manager, "We are different because people come to see the plantation and then discover the winery." As a Tennessee non-profit organization, unlike other commercial wineries, Belle Meade's winery profits were used for historical preservation of the Plantation and educational initiatives there on-site. One such educational focus was the hosting of summer camps for children. During the school year, the nonprofit also underwrote many school trips to the plantation, enabling children to experience and learn about the history of the 1800s.

SUCCESS BEYOND EXPECTATIONS: TOURS AND TASTINGS AND SOCIAL MEDIA

An official tour of the Belle Meade Plantation began as guests entered the front doors of the Mansion. The Mansion was maintained as closely as possible to how it was believed to have existed in the 1890s. Upon entering the Mansion, visitors discovered a dark, subdued foyer. The walls of the foyer were decorated with framed pictures of racing horses. As mentioned earlier. Belle Meade was well known for its racehorses bred and raised on the premises-the most famous of which was Bonnie Scotland. As the South's reconstruction era continued postcivil war, Belle Meade's reputation as a first-class breeding establishment attracted buyers from around the world for the annual yearling sales. Under the management of Hardin's sons-in-law, brothers William Hicks Jackson and Howell Edmunds Jackson, Belle Meade Stud flourished. The bloodlines of Belle Meade Plantation, primarily due to the success of the legendary foundation stud Bonnie Scotland, whose descendants included Secretariat, Funny Cide, Seabiscuit, Giacamo, Mine That Bird, Smarty Jones, and Barbaro-not to mention the most recent Kentucky Derby winner, California Chrome. Since the 1990s, every horse that had run the Kentucky Derby was a blood descendent of Belle Meade Plantation. When visitors reached the winery tasting room, they would not, surprisingly, discover a Bonnie Scotland wine, in addition to other branded wines with a variety of legendary horses gracing the various Belle Meade labels.

Curator John Lamb confirmed the venture's authenticity: "There were numerous invoices from the 1800s that show the Hardings purchased and served fine wines and also purchased empty wine bottles presumably to fill with wines made on the property."

Since opening in 2009, the winery had become an all-staff effort. "Some of the grapes were grown and crushed in Middle Tennessee, and the juice was brought to our tanks on site. Everyone on staff knew how to bottle wine - it's a great team-building exercise," Kelley said.

The winery had been an overwhelming success, exceeding the first year's 10,000-bottle sales goal with sales topping 54,000 bottles. But, Kelley noted, "Starting a winery was a monumental decision. It wasn't for the faint of heart!"

Determined to continue building visitation in spite of the economic downturn, the staff turned their attention toward the opportunities offered by social media for no-cost promotions with a quick turn-around time. "In 2011, we started a Groupon promotion in the third week of January," Kelley said. (Groupon promotes "daily deals" to its subscribers through Facebook or Twitter - www.groupon.com) "We offered two tours and two free wine tastings at halfprice and sold 1,300 tickets. That was 2,600 people who had 60 days to redeem their voucher."

Groupon's success prompted another discount voucher promotion through Living Social (www.livingsocial.com). "We had a coupon up for three days offering a chocolate pairing with wine and a mansion tour for a perfect Valentine's Day," Kelley says. "We sold 1,000 tickets - with no outlay of cash on our part. Those two promotions got us through January and February - usually our slowest months - with record visitation and record sales in our gift shop and winery."

Even with those successes, the staff s planning continued. "We were looking at travel trends, and we knew that people wanted to be more involved than just taking a tour," Kelley said. "Food was really a 'hot' part of travel at that point in time, so we were going to roll out our own Southern culinary experience. We planned to bring in graduate students from the University of Mississippi Southern Foodways program to create a tour called 'Our Biscuits Shall Rise Again.'"

Using the original kitchen and an 1889 oven that has been converted to a convection system, visitors would have a chance to taste Southern biscuits, beaten biscuits and combread. The experience would include a tour of the root cellar and smokehouse where visitors would leam why the South's heat and humidity created a need for food preservation techniques such as curing ham. Kelley also partnered with MBA students from a local university to develop a marketing plan. One of the activities suggested by the students was an event called the Progressive Wine Tour where guests would receive a tour of the historic Belle Meade Mansion and a personalized walking tour of historical points of interest on the plantation property. During this tour, guests would then be treated to five of the Belle Meade premium wines and paired with light appetizers at the focal points throughout the property (See Appendix B for full descriptions of the current wine assortment). "We would also stop in the herb garden to pick the herbs needed to make jambalaya," Kelley said. "This would be an important opportunity to talk about the slaves who lived and worked here."

As of late 2013, the winery's annual revenues had already grown to approximately $2.0 million, with an additional $200,000 in wine-related merchandise. Projected wine sales for 2014 should exceed $3.0 million. Table 2 presents a pro forma income statement summarizing the Winery's first four years of operations.

The winery sold all of its output each year at current prices, and could have sold more if storage and warehousing were available. The primary means of marketing the winery were through the organization's own web site (www.bellemeadewinery.com), tourists' visits, local press/media, social media, and word of mouth. Because of current demand for its products, the Winery had not yet undertaken any traditional advertising. Several local prominent restaurants in Nashville had requested that Belle Meade wines become their official wine of the restaurant, but due to excess demand, the Kelley's felt they were forced to decline. The Iroquois Steeplechase, a tradition in Nashville dating back to 1941, made a similar request. Again, the Kelley's felt they had no choice but to decline the request due to limited supply of wines. The Winery also sold its products online and was available in over 15 states. In addition, it hosted several events for the local community, such as Jazz on the Lawn during the summer, and the Tennessee's largest Kentucky Derby Party.

APPROACHING CHALLENGES FACING BELLE MEADE PLANTATION

While the winery had experienced phenomenal success since opening, the Kelleys were firm believers in the old saying "a rolling stone gathers no moss." The Winery had exceeded all expectations regarding revenues and profits, which had become a tremendous source of support for the plantation. But it had also created a huge challenge in managing future growth. In the past, the Winery was constrained by liquor laws that required the production of wine be onsite where the wine is sold. State laws had recently changed and now Belle Meade Plantation could open another non-profit winery in down town Nashville. Visitation to the Plantation was growing at a record pace, with 450,000 expected to tour the Plantation in 2014 alone. Coupled with predicted levels, increased traffic was producing some capacity concerns going forward. More growth meant crowd management would become an issue. In addition and closely related, more growth would also mean increased staffing levels. Alton and Sheree felt that another winery located in downtown Nashville would serve a real need since there are no other wineries in the city except for Belle Meade. They observed that a new downtown location could serve as a sales location for selling tours of the Plantation and could serve as a pick-up and drop-off point for tourists as they could travel by shuttle on a Belle Meade Plantation Bus Tour.

The Kelley's also knew the wine industry continued to grow in Tennessee. As shown in Appendix A, there were over 45 wineries in the state, 19 of which are in Middle Tennessee. Currently, Belle Meade Winery was the only winery in Nashville, but they wondered what the implications would be if another winery chose to locate nearby? How would it impact Belle Meade Winery? To date, the winery had done very little in the way of formal promotional spending due to the work of its excellent sales staff, outstanding products, captive audience, social media marketing efforts, and a lack of direct competition. There were also other historic properties in Nashville, such as The Hermitage, Camton Plantation, the Carter House, Glen Leven, and Belmont Mansion. Might they pursue similar social entrepreneurial ventures as Belle Meade?

The local food movement also had its epicenter in Nashville. It was difficult to pick up a magazine on food, wine or travel that did not mention Nashville as a hot bed of new age chefs and restaurants. Given the success of the winery, another decision looming in the future was whether or not to opening a restaurant on the property when the current lease expired with Harding House Restaurant, and pair local foods and wines within Belle Meade's operations.

SUGGESTED TEACHING / DISCUSSION QUESTIONS

1. Would you consider Belle Meade Plantation a form of social enterprise or a socially-entrepreneurial venture under the Kelley's leadership? Why?

2. Based the preparation of a SWOT analysis, what are one or more key opportunities that the Winery should consider as they seek to continue adding to the bottom line? What are the major strengths of the Winery and Plantation? What threats could adversely affect the future operations of the property?

3. Given the success of the Belle Meade Winery, what should the Kelleys and Belle Meade Plantation do in order to develop new revenue streams to support and sustain the operations of the Plantation? Should Belle Meade open another winery at a new location? What issues and challenges will this pose for the Kelley's? As the current lease comes to an end with Harding House Restaurant, should the Kelley's open a new restaurant owned and operated by the Plantation? What are the risks and rewards associated with this decision?

Note: Instructors interested in a full teaching note should contact the lead author via email at: [email protected].

References

REFERENCES

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