[ad_1]
In Montes Wines, a tasting usually involves drinking cabernet sauvignon in its feng shui-inspired building nestled among green rolling hillsides in the Colchagua Valley in Chile.
Now, with much of the world locked up, tasters in Brazil, Mexico, and Germany move and spin in front of laptops as the winery joins the global trend of using meeting apps like Zoom to connect with customers.
“They have the same wines that I’m testing, so we go together and discuss the flavor and color and how it’s performing,” said co-owner Aurelio Montes.
It is a scene that unfolds around the world, from California to Cape Town. Centennial wineries and vineyards are reevaluating their businesses at every turn as the pandemic shakes up everything from labor and transportation to vital tourism and hospitality industries.
Undoubtedly, home alcohol consumption is on the rise, boosting retail sales. But overall consumption is expected to be affected as bars and restaurants, which in Europe account for around 30% of volume, remain closed. The EU has forecast that consumption this season will be 8% below the five-year average, with most high-value and sparkling wines affected.
Many in the industry have already lost their jobs, and some producers may not survive the turmoil, despite the rapid drive to innovate.
“There will be a lot of small operators that won’t come out on the other side of this,” said Tony Battaglene, who heads the industry group Australian Grape and Wine.
In California, the spread of the virus closed tasting rooms and restaurants in the heart of the wine region, just as spring season was the start of a wave of tourism and festivals. While many wineries are shifting their business to focus on direct sales to consumers, it is not enough to offset losses.
Many wineries rely on direct consumer sales through membership websites or clubs. For PlumpJack in Napa Valley, which relies on restaurants for two-thirds of its business, that means FaceTime tastings and virtual question-and-answer sessions.
In South Australia, home to the wine tourism areas of the Barossa Valley and Adelaide Hills, some wineries had already been hit by forest fires and were contaminating this crop, before the coronavirus closed the doors of tourism and wineries. Since then, the government has eased restrictions to allow wineries to sell take-out products.
Retail, online and mail order sales are showing signs of improvement, said Brian Smedley, executive director of the South Australian Wine Industry Association.
“We have had a significant increase in alcohol sales in this country,” said Smedley. But it will not replace the possibility that consumers will come to the cellar door, “savoring and experiencing the things that wineries have to offer.”
The Cantina Tramin in Italy sells most of its wine to restaurants and bars in its home country, all of which remain closed. The wine cooperative is active on social media and sells its flagship Gewurztraminer and other varieties online.
“That fraction is working very well and delivering great results, but it is a fraction of everything,” said Wolfgang Klotz, director of marketing and sales.
Export concern
In terms of exports, prospects remain bleak as closings frustrate demand and disrupt logistics. The EU expects wine exports to drop 14% in 2019/2020, while in Australia, first-quarter shipments fell 7%, including a 14% drop to China, according to Wine Australia. Australian exports to the United States and the United Kingdom also slumped in the first quarter, 2% and 6% year-on-year, respectively.
The impact on prices is also unclear and is likely to differ from country to country, depending on consumption patterns and types of wines grown.
In Quinta do Vallado, in the Douro Valley of Portugal, around 25% of sales are made to tourists who visit the estate. That segment completely dried up when the wine store and hotel closed, CEO Joao Alvares Ribeiro said. Meanwhile, exports to key markets such as the United States, the United Kingdom, Brazil, and China plummeted, reducing total sales by approximately 60% in March.
“No one is really sending orders,” he said.
There are positive signs from China, with restaurants starting to reopen and movement restrictions eased. “If the Chinese market can recover quickly, that can actually fuel our recovery,” said Battaglene.
The blockade also presents problems in the vineyards, as winegrowers face logistical obstacles to bring temporary workers from other regions and countries. In California, now is the time for many seasonal workers to come to the wine country to do everything from securing irrigation jobs, training vineyards, and setting the grape growing strategy for the year.
“There is a lot of uncertainty,” said Karissa Kruse, president of Sonoma County winegrowers, noting that some guest workers have faced delays in reaching the United States due to travel restrictions within Mexico and hotel closings. “That is where we have seen the greatest impact.”
In Australia, Argentina, and Chile, virus-related movement restrictions came in the mid-2020 harvest, meaning a quick response was needed to allow work to continue. The three countries consider the industry to be essential, which means that harvesting and winemaking can continue, albeit with challenges.
“Everything has been slower and more complex,” said Patricia Freuler de Ortiz, CEO of the Fincas Patagonicas winery in Mendoza. All non-production related industry jobs are done from home. Face masks, distancing protocols and measures to reduce worker concentrations have been introduced, he said.
On the business side, the industry remains optimistic that online tastings, classes, and promotions will help you overcome interruptions.
“It challenges us to sell our brands with different methods, to be more creative, to use technology,” said Angelica Valenzuela, sales manager for Wines of Chile. “In the end, when things return to normal, we will have our regular channels and new ones developed during the coronavirus crisis.”
-With the help of Felix Njini and Jen Skerritt.
