Wine Sales Have Surged During The Pandemic: But Not For Small Producers

Posted: Jun 25, 2020

The news sounded rosy. Since the coronavirus pandemic hit and led to stay-at-home orders imposed around the country in mid-March, wine sales were booming. The Silicon Valley Bank, which issues an annual state-of-wine report, released figures in late May that showed retail wine sales increasing 30.7 percent by value and 27.7 percent by volume as an effect of the pandemic, based on statistics compiled by Nielsen.

And the way wineries were selling their wines was changing rapidly. Just as restaurants “pivoted” to takeout and delivery orders, and retailers of all stripes to curbside pickup and e-commerce, wineries were exploiting new sales channels to get their wines to market. And consumer habits were changing as a response to the pandemic, too — SVB analyst Rob McMillan, the most prominent crystal-ball gazer of American wine’s future market prospects, heralded the return of the family meal, as working couples who now work at home no longer have to commute or meet at restaurants for some time together. Now, they clock off at 5 p.m. and cook dinner. With wine.

But the situation is not all rosy. Statistics and sales figures give a simplistic view that belies the stresses felt by wineries, importers, and retailers throughout the wine industry.

I reported here about the initial surge in direct-to-consumer sales immediately after the pandemic hit, as well as how retailers were adapting with deliveries and curbside pickup.

Retail wine sales surge as shop owners adjust to online selling

Small wineries and importers felt the impact early. Independent wineries and small, specialty importers that depend on restaurant sales found themselves fighting to stay afloat.

Some of these businesses still may not survive, even as the country tentatively begins to lift coronavirus restrictions. Others find themselves tearing up their business plans and adapting to circumstances as they can.

Matt Bonanno found himself adapting in unexpected ways. As he prepared to bottle his 2018 BonAnno Napa Valley Cabernet Sauvignon at a custom crush facility in Rutherford, Calif., “in the middle of this whole mess,” he decided to change plans. He had 8,000 cases worth of wine, about 70 percent of which would have been slated for restaurants in good times. That market was now shuttered by government decree, and it was clear that reopening would be a slow process. So he decided to siphon off 2,500 cases’ worth of wine to create a new label aimed at the retail market. He called it Four Suits, after a deck of playing cards, and priced it to sell at retail for considerably less than his BonAnno label.

Uncork a fine bottle of wine. You just might help save a small business.

“The margin’s not what I would like it to be, but I would like to make a little money and turn my inventory over, as well,” Bonanno told me in a phone interview.

By Dave McIntyre 
June 19, 2020
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