The Kentucky wine industry has grown rapidly over the past decade as farmers diversify from tobacco to alternative enterprises. The objectives of this paper are to; (i) describe the conversion of a family-owned tobacco farm into a fledgling wine enterprise (ii) identify market competitive and coordination strategies being used by an emerging winery, (iii) determine key challenges facing the development of a small winery and (iv) recommend future studies for improving the performance of local wine supply chains. The paper is based on a case study of Acres of Land winery in Kentucky and it uses qualitative data collected during visits to the farm in 2007, 2008 and 2009. The case study shows the development of the winery and the organization of the local wine supply chain. Results indicate that Acres of Land winery is fully vertically integrated and actively pursues both competitive and risk management strategies. The winery faces challenges such as “dry county” restrictions, government licensing requirements, changing consumer preferences, and growing industry competition.