Throughout the world we are coming to terms with a new reality. Entire industries that were once thriving now have giant question marks over their existence. We know we will survive, but we are not sure how to adjust to a “new normal” that will change ever facet of our lives. The impacts will be felt everywhere, but one such place that is near and dear to me are the thousands of small wineries who are staring down the abyss. Small wineries are the backbone of the wine industry, they are the wines they make the wines that excite us and ignite our passion, and we need to get together to save them!
A dire landscape
Alcohol consumption in the United States is up during the pandemic. As a people we are drinking more in isolation than we did with friends. We drink alone, we drink during Zoom meetings, we drink because we are bored. Wine, beer, and spirit sales are all up but those sales are all at liquor stores. We hit the sauce almost as hard as we hit the toilet paper aisle at Costco and that was fantastic for liquor stores and wine shops but the most important part of this chain was forgotten about. The wineries who make these awesome wines that we love had made those sales to their distributors long ago, some as far back as a year. So even though we have experienced an uptick in sales, it is not the winery that is benefitting from this growth. That sale was made, accounted for, and done in their eyes.
On the other side of the the distribution coin is the restaurant industry, an industry that is going to change forever. We cannot know the full impact of pandemic on this industry. Even if restaurants are allowed to operate at 100% in the near future, which may be wishful thinking in and of itself, we have no idea what the cultural shift will be once we are allowed outside again. What happens if restaurants open and the patrons just aren't there? All of these questions, all of this uncertainty is killing business. Restaurants are a massive chunk of wine sales for any distributor and the growth in off-premise (retail) sales cannot make up for the total loss of this segment. Distributors are at this very moment telling wineries that they want to take stock of their wines, but they cannot promise to pay them on their agreed terms if they are able to pay them at all! Ouch.
For small wineries this is deadly. Although current direct to consumer models are fairly robust with wine clubs, tasting rooms, and mailing lists, they rely heavily on the purchaser being in the know. That knowledge comes from the rigorous hand selling of restaurant and wine store staff who should have in depth knowledge of the product to begin with (although often they do not, which is a whole other story). Small wineries could be selling anywhere between 70% to 90% of their wines through distributors meaning the a large share of their wine is eventually sold through restaurants. This puts a massive question mark over whether or not these wines will be sold, and if they are when will the winery get the money?
If you want to save something, you have to be direct!
If you love wine and love small wineries then the best way to support them is to buy your wine directly from them. It is a no brainer if you think about it. In these uncertain times the best way you can be sure you get the wine you want, the wine you love, is to get it from the source.
There are dozens of benefits for the wineries, number one being the immediate cash injection that your purchase gives them. It may be small but you are giving these businesses operating capital to work with, money to pay employees, vineyards and other suppliers. At this point in time there is nothing more crucial. Hundreds of wineries around the country are launching their Spring releases with lots of fresh, light, crunchy wines ready for summer drinking. The wines are made, they are ready to go, and they need to get out the door.
By buying direct you are not just helping a small winery but helping them flourish. Buying directly gives the winery a greater margin than selling through a distributor. The price you pay when buying from a winery is close to what you would pay retail, only that wine has passed through a number of hands and been marked up at every step. For the wines to actually sell in a restaurant or retail the winery has to let those wines go for a lot less. The bottle of wine that costs $25 on a retail shelf probably left the winery for around $10. In these times that money is crucial to run their business.
So whats in it for me?
As a consumer in Boston, a city that has a fairly decent wine scene but nothing to really write home about, buying from wineries directly has been a great way to see more, taste more, and learn more about wine. I have tasted great wines in different styles, drank different grapes, and from different places. I have also had access to the full offerings of some of my favorite winemakers, something that you will never see at a restaurant or wine shop. A full range of wine is literally available at your fingertips, you just have to know how to look and where to look. If you know a good wine that you like get on to the winery’s website and you will find many more wines available to you, some similar to what you like and some vastly different.
In buying directly from the wineries consumers are no longer restricted by what may or may not be readily available to them. Retail stores and restaurants are highly curated, and if a winery is represented at all in any location it may be with just one wine. In buying directly from the winery we open ourselves up to the myriad of choices that are available, and to wines that suit our every mood, need and desire. One of my favorite wineries, Kelley Fox Wines is a story of magnificent, elegant, and distinct wines. If you do happen to find her wines at a store you will likely stumble across one of her Pinot Noirs. While magnificent, there are so many other wines that Kelley Fox has on offer including a skin contact Pinot Gris, tasty Chardonnay, and even a Pinot Blanc. If you want all of those wines the best way is to buy them directly from her winery!
One of the things I hate most about buying from retail stores is the price of wine. I am okay with paying a little more for a bottle wine, but there are too many instances of retail stores pushing up prices for seemingly no reason other than a little bit of greed. Retail stores struggle with great inconsistency in pricing. Often times different stores in different cities will charge different prices but sometimes even different stores within the same city having vastly different prices for the same product. In one case I can remember a neat, brisk, fresh Chardonnay that was priced at $25 at one store was on the shelf for $32 at another store just 3 blocks away. Buying directly from the winery gives you a true sense of value for the wine that you are buying. You know what it is really worth because you know exactly what the winemaker places its value at. Sure, some may overcharge, but the price will be consistent no matter where you buy from.
But there are still challenges
Patience is a virtue, and right now shopping for wine online requires a great level of patience. With the current pandemic lengthy delivery times (usually a week to 10 days) are now close to two weeks. UPS and FedEX are overwhelmed as we shift towards buying every little essential and non essential item available. A combination of need and boredom is overwhelming our delivery system.
But more than the time involved it is the cost of shipping wine around the country that proves a challenge. Wine is cumbersome after all, it is heavy and fragile. The materials used to ship wine are also unique and expensive. It can easily cost up to $30 to ship between three and six bottles from a winery on the West Coast to a consumer on the East. It makes more sense to buy 3 bottles or more from one winery. This could limit your choices to whatever the winery has available, but you will be surprised by the variation that some wineries have. If I take one of my favorite Oregon wineries, Teutonic Wines, having worked with their wines in a retail setting I only ever got to know about one Riesling and one Pinot Noir. Jog on over to their website and I discover a brand new Viognier, a Sylvaner, a white blend with Pinot Noir and Chasselas, a red blend of Gamay and Pinot Noir, and a white Pinot Noir. Yes, you read that correctly, they make a white wine from Pinot Noir! Just one shipment from them is more than enough to keep me excited and hydrated through summer.
But at the end of the day this is one purchase from one winery. Yes it makes a difference, but there has to be more to connect the winery and the wine drinker. We may not have too much opportunity or desire to walk into a winery tasting room any time soon, so the best way of being able to communicate directly with the curious wine drinkers is not as effective as it once was. Luckily today’s technology landscape has given many wineries the ability to think outside the box and create new and innovative ways of reaching customers. Wineries around the country have created Zoom tastings ranging from private and dedicated tastings to larger and broader audiences. They do join wine retailers, distributors, and critics in presenting these tastings, but they have proven to be a great way of not just getting face time with customers but cementing a place in their homes.
Our challenge at this time when it comes to technology is to figure out how to make it effective. A lot of what we are doing in this moment is trial and error, using programs that are not necessarily designed for this kind of use. They do work, but our extended use with these programs will begin to uncover pain points that make our work more annoying or even downright difficult to manage. If wineries can continue to turn the winery experience over from physical to digital we can open up a whole new host of opportunities to engage with consumers and expand their reach to a broader audience when they need it most.
So what do we do?
We have no idea what the “new normal” is going to be just yet, so it is hard to come up with concrete solutions that will las a long time rather than paper over a small crack. But we do know that technology holds the key. The best way forward is to embrace technology, experiment and learn. People will come back to the winery and to the tasting room, but we can use this time and the opportunities that technology gives us to bring the winery experience to people’s homes. In doing so wineries have an opportunity to create a much broader following, a following that in the future will visit the tasting room when they can, and buy a lot more wine till then.