SEGMENT REPORTING

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

SEGMENT REPORTING

6) SEGMENT REPORTING

The Company has identified two operating segments, Direct Sales and Distributor Sales, based upon their different distribution channels, margins and selling strategies. Direct Sales include retail sales in the tasting rooms, wine club sales, internet sales, on-site events, kitchen and catering sales and other sales made directly to the consumer without the use of an intermediary, including sales of bulk wine or grapes. Distributor Sales include all sales through a third party where prices are given at a wholesale rate.

The two segments reflect how the Company’s operations are evaluated by senior management and the structure of its internal financial reporting. The Company evaluates performance based on the gross profit of the respective business segments. Selling expenses that can be directly attributable to the segment, including depreciation of segment specific assets, are included, however, centralized selling expenses and general and administrative expenses are not allocated between operating segments. Therefore, net income (loss) information for the respective segments is not available. Discrete financial information related to segment assets, other than segment specific depreciation associated with selling, is not available and that information continues to be aggregated.

The following table outlines the sales, cost of sales, gross profit, directly attributable selling expenses, and contribution margin of the segments for the three and six month periods ending June 30, 2022 and 2021. Sales figures are net of related excise taxes.

	Three Months Ended June 30,
	Direct Sales						Distributor Sales						Unallocated				Total
	2022			2021			2022			2021			2022		2021		2022		2021
Sales, net	$	3,830,195		$	3,149,624		$	4,870,666		$	5,800,327		$	-	$	-	$	8,700,861	$	8,949,951
Cost of sales		1,080,634			850,949			2,792,970			2,959,279			-		-		3,873,604		3,810,228
Gross profit		2,749,561			2,298,675			2,077,696			2,841,048			-		-		4,827,257		5,139,723
Selling expenses		2,308,270			1,591,640			484,445			454,244			226,898		189,240		3,019,613		2,235,124
Contribution margin	$	441,291		$	707,035		$	1,593,251		$	2,386,804
Percent of total sales		44.0	%		35.2	%		56.0	%		64.8	%
General and administration expenses														1,363,201		1,367,005		1,363,201		1,367,005
Income from operations																	$	444,443	$	1,537,594

	Six Months Ended June 30,
	Direct Sales						Distributor Sales						Unallocated				Total
	2022			2021			2022			2021			2022		2021		2022		2021
Sales, net	$	6,787,502		$	5,455,807		$	8,155,677		$	9,259,482		$	-	$	-	$	14,943,179	$	14,715,289
Cost of sales		1,828,926			1,388,680			4,566,967			4,693,319			-		-		6,395,893		6,081,999
Gross profit		4,958,576			4,067,127			3,588,710			4,566,163			-		-		8,547,286		8,633,290
Selling expenses		4,100,561			3,082,383			962,950			924,725			433,829		344,681		5,497,340		4,351,789
Contribution margin	$	858,015		$	984,744		$	2,625,760		$	3,641,438
Percent of total sales		45.4	%		37.1	%		54.6	%		62.9	%
General and administration expenses														2,741,735		2,567,898		2,741,735		2,567,898
Income from operations																	$	308,211	$	1,713,603

Direct sales include zero bulk wine sales for the three months ended June 30, 2022 and June 30, 2021. Direct sales include $10,500 for bulk wine sales for the six months ended June 30, 2022 and zero bulk wine sales for the six months ended June 30, 2021.