Newsflash – The Wine Institute reported today that revenue losses for the nation’s more than 10,000 wineries and more than 8,000 wine grape growers due to COVID-19 could reach $5.94 billion.
Fortunately, there appears to be a silver lining for the US wine industry amidst all the doom and gloom. Direct to Consumer (DTC) wine sales are soaring sky high! With so many people ordered to stay home, more wine lovers are turning to online wine purchases. Case sales have increased four-fold and many wineries are offering deep discounts and free shipping to move their wine.
This week, Michelle Metter, Co-Founder and Partner of SommCon, hosted US Wine Market Update: A Regional Perspective with a fantastic guest panel of wine leaders from California, Oregon, Washington, Ohio and Virginia. Not surprising, the general consensus from these leading industry experts was to be innovative and “think outside the bottle.” But, how?
With all tasting rooms shuttered across the US, the big shift in wine sales is moving toward a digital presence with a goal to add new consumers to the database and to lessen the reliance of tourism in tasting rooms. Webinars, new social media platforms, in-depth wine education, local campaigns and virtual wine tastings have become the “new normal”.
Panelist Connor Best spearheads the International Marketing efforts on behalf of Napa Valley Vintners for its 550-winery members and winegrowers. He notes that there has been a huge transition to e-commerce sales, even with top-end producers. Best also encourages wineries to utilize their front house workers for phone sales, shipping, bottling and other vineyard work to keep staff employed during the shutdown. “Surprisingly, wine club memberships in Napa remain strong with fewer cancellations than predicted,” remarked Best. Despite the 2014 earthquake and the recent Sonoma-Napa wildfires, Napa remains resilient. NPV has a concentric plan in place to start rebuilding the wine tasting room experiences with outreach to local San Francisco Bay area visitors first and will then expand marketing efforts outward as California relaxes the stay-in-shelter orders.
Sonoma County Winegrowers’ President Karissa Kruse, who actively supports the hospitality industry during these difficult times, expressed a similar sentiment. Other than an earlier than usual bud break, the growing season seems to be on track. “Agriculture continues to give and doesn’t understand the COVID-19 pandemic,” said Kruse. She feels positive, however, that Sonoma County is well poised to welcome Bay area day-trippers into wine country soon and that the wine industry will eventually recover. In the meantime, local eateries are pairing take out food with Sonoma wines by the glass and bottle, in the “Keep Restaurants Alive” campaign, which has been well received.
Another panel contributor, Joel Peterson, Executive Director of the Paso Robles Wine Country Alliance is closely aligned with over 200 wineries in Central California. Again, the big shift was to quickly pivot and go to digital marketing. Many distilleries in Paso immediately ramped up to produce hand sanitizer for the first responders, while wineries delivered wine care packages to those on the front lines. Peterson is working closely with the county on the anticipated roll out plan to re-open the region’s wineries. He also supports the “Home With Paso Wine” campaign and invites wine lovers to connect with local winemakers via Zoom for weekly virtual tastings, vineyard updates and interviews.
Elsewhere in the state, Temecula Valley Southern California Wine Country’s Brand Marketing Partner, Devin Parr, expressed great concern over the lack of distribution and wholesale market for the 40+ wineries. Largely founded by DTC sales, Temecula’s target market caters to the 23 million visitors within a one to two hour drive from wine country. Parr believes that the valley’s “Sip From Home” packages are key to garnering wine sales at this time and has reported moderate success feedback. Many wineries are being more innovative and have reached out to wine club members via various social media platforms to offer free local wine delivery or curbside pickup. And, a big shout out goes out to Wilson Creek Winery for donating 50,000 tasting tickets to Southern California wine lovers.
Washington State Wine Marketing Director David Flaherty had some interesting insights, as Seattle was six weeks ahead of the COVID-19 curve. Unfortunately, one of the largest revenue producing wine events, Taste Seattle, had to be cancelled with short notice. However, on the positive side, Flaherty received huge support from regional wineries with his quick call to action. “We all need each other. The spirit of collaborative union creates a sense of urgency to shake off stodginess of the industry and break down walls,” said Flaherty. A noteworthy digital campaign recently launched by Washington State Wine is SIP GLOCAL, a global movement that rallies around a local bottle of wine, with the hope of closing the social distance between communities near and far.