22 minute read
What’s next for the wine industry?
Socially-distanced harvests? Discounted yet delicious bottlings? Virtual wine clubs? Sunset spoke to the wine industry's heaviest hitters to find out what awaits us in a post-pandemic world.
By Matt Bean Photo by Thomas J. Story
Silver Oak's Healdsburg tasting room - Photo: Damion Hamilton
David R. Duncan - Photo by Damion Hamilton
The wine industry is no stranger to adversity. Fire, flood, pestilence, and drought are just a few of the hardships vintners have had to endure in the past few decades. Now comes the coronavirus crisis, which has brought vino-tourism to a grinding halt even as wine seems more vital than ever. What will the winemaking landscape look like when all this is over? Will it ever be over? We approached a few of our most trusted prognosticators to give us a glimpse into not just the future of wine tasting, but also as to how wine will be marketed and distributed, and the ways in which our drinking and purchasing habits may change. The Source: DAVID R. DUNCAN, Chairman and CEO Silver Oak, Twomey, and OVID wineries in Northern California; member of the Board of Directors of the California Wine Institute, which has worked closely with California ABC (Alcoholic Beverage Control) to ease restrictions on winery-direct purchasing and shipping in response to COVID-19. The Predictions: As we re-emerge, we’re likely to see a large increase in regional Bay Area visitorship. In return, wineries will have to get creative to accommodate that demand. The way we receive small groups or even set-up standard tastings is likely to change in the foreseeable future. Coronavirus shouldn’t change wine style, but we are thinking about vineyard management through the lens of social distancing. Specifically, Napa Grapegrowers has done some great work to help educate the local vineyard community, including revised safety protocols, bilingual public health campaigns and distributing face masks. Virtual tastings are also here to stay, and with that there will be a greater onus on brands to deliver interesting, structured content. It’s important to remember that without the vibrancy of a winery and tasting room to enhance the enjoyment of wine, we need to come up with new ways to make these in-home experiences feel personal and special. There was a lot of forgiveness the first few weeks of virtual tastings while everyone was figuring out new platforms and formats, but now brands need to deliver engaging and educational content to stand out and hold people’s attention. Finally, this is a digital tipping point. Brands are prioritizing e-commerce and DTC, as well as wine tasting and delivery apps such as Vivino and Drizly. At the same time, consumers are turning to each other more than ever for social proof while getting accustomed to these new conveniences. As a result, the wine industry will prioritize digital marketing, social media and e-commerce skills, and compete with other lifestyle industries for these talents.
Theodora Lee, Founder, Theopolis Vineyards.
The Source: THEODORA LEE founder of Theopolis Vineyards and winner of multiple gold medals in the Sunset International Wine Competition for her Pinot Noir and Petite Sirah The Predictions: The future of wine is bright for those who are nimble and fully embrace direct to consumer marketing. I’ve always considered myself a mobile and digital winery. During shelter-in-place, virtual tastings and seminars with wine journalists and wine shops have truly helped me grow my business. Recently, I participated in one with about 300 people on Zoom and Facebook Live. Those people didn’t know me before. But afterward, they bought my wine. It has just been wonderful. Our business model has never been based on tasting room sales. However, I do have a funky little tasting room that’s open during our annual harvest and bottle release party. Even though the State of California has allowed tasting rooms to open, I am canceling the harvest party this year. Until there’s a vaccine, there’s a risk. I’m not willing to risk the lives of my customers. Our wine sales have doubled, and on Blackout Tuesday, sales skyrocketed even more as there was a social media movement to support black businesses. Since then, I have processed more than 300 orders. My fellow black winemakers and I have received tremendous support. New wine lovers are discovering the love, compassion, and dedication we give to each and every order we have been blessed to receive. The wine industry as a whole has a real opportunity to create systemic change, to serve as a catalyst to promote justice and equality. The BLM movement isn’t just about the black community, it’s about everyone. We all eat and drink good wine. What better way to have a conversation about racism than to sit and break bread together? Let’s hope this is not just a moment, but a movement.
Eugenia Keegan, Oregon General Manager, Jackson Family Wines
David Adelsheim, Founder, Adelsheim Vineyards. Photo by Tim Sanchez
The Sources: EUGENIA KEEGAN, Oregon General Manager Jackson Family Wines, and DAVID ADELSHEIM, founder, Adelsheim Vineyards. The Predictions: We’re going to see an interesting generational shift occur. It’s a question of when does a generation have enough money to support a lifestyle, but it’s also the question of what does a generation choose to spend its money on. People will make less of the expensive wine, but they still have the grapes—and that will trickle down into lower tier markets. What that means is we’ll gain a group of consumers because we’re training them to drink better wine. People paying $20 are getting $50 juice. And this will be a significant shift, just like it was in 2001 and 2008 and even 1982. The sales paradigm will also shift dramatically, away from meeting with distributors and retailers and restaurants and over to [places like] Instagram. There will be celebrity wines, [like the Ashton Kutcher / Mila Kunis “Quarantine Wine”] and that part of commerce will continue. There are 30,000 wineries in the United States, and most of them are never on the shelf anywhere—they focused on on-premises tastings. How are we going to sell wines that are all about place, that are special that might require a visit to the vineyards to really understand them?
Ashley P. Snider, Owner and Proprietor, Fess Parker Winery & Vineyard.
The Source: ASHLEY P. SNIDER, Owner and Proprietor, Fess Parker Winery & Vineyard The Predictions: Post pandemic people will continue to enjoy wine because it adds a nice element of elegance and celebration to their daily lives. I do believe, however, that the way people purchase their wine, and the places they enjoy it will shift. During this pandemic period, consumers became much more comfortable with buying on-line—whether directly from the winery or third party “e-tailers”—and that won’t change. As we begin to socialize again, we’ll choose to do so in places where we feel safe: our homes, friends’ homes, block parties, etc. Space and distance will remain important in our society for some time to come and that will influence consumer behavior for wine, dining out, and many other things, including visitation to winery tasting rooms. We're planning to focus on more seated tasting experiences, capitalizing on both indoor and outdoor spaces that allow for social distancing. Close ties between wineries and existing customers (wine-club members) will be strengthened because of a comfort level with staff and the wines produced and the positive memories they evoke. Other than the addition of temperature checks, face masks, and social distancing efforts in the cellar, we don’t foresee any big changes to our normal harvest routine.
Craig Becker, Managing Partner and Winemaker, Somerston and Priest Ranch Wines
The Source: CRAIG BECKER, managing partner and winemaker at Somerston Estate, a grower for high-end wineries and the producer of Somerston and Priest Ranch wines The Predictions: As a grower, we have a bird’s eye view of the industry. Cash flow is everything. Some wineries are taking a conservative route—for instance, we lost a few grape buyers for the 2020 harvest because these wineries are planning to lower their production. We’ve since replaced these buyers with similar or better producers who are seeing this time as an opportunity to gain market share. For our own brands, Somerston and Priest Ranch, we are looking to get more creative and try to improve cost savings while maintaining our high quality wine production. This spring, we’ll release 100 percent estate canned Rosé and Grenache Blanc from our property, which should be fun. The wine industry is often slow to try new things but necessity is the mother of invention, so we hope to continue to see many creative ways to make and sell wine post COVID. On the employee side of things, it has always been very competitive in Napa to find great employees, and now we expect to see more talent, which is positive for a company like ours that is trying to grow.
Thomas Savre
The Source: THOMAS SAVRE, Winemaker Lingua Franca Wines in Oregon, board member International Pinot Noir Celebration (IPNC); worked at French powerhouse Domaine de la Romanee Conti during his winemaking education at the University of Burgundy The Predictions: Even winemakers are benefitting from this increase in connectivity. Anyone with a connection to other parts of the world is learning to use things like Zoom instead of hopping on a plane. For example, Dominique Lafon [a celebrated French winemaker and consultant who works with Lingua Franca and other vineyards], typically comes three times a year. We needed to reproduce the way we taste when we’re all together in a room—but individually in our rooms. Instead of our usual corks we used neutral cork. And we had everyone open all 21 pinots and all 21 chardonnays at the same time. And everyone, from Dominique to our winery staff here in Oregon were on the screen. The hardest part was dealing with the 9 hour time difference: If we were tasting at 10 a.m., Dominique was tasting at 7 p.m. his time. But we figured it out. As for events, we’ll need to find a responsible way to eventually resume them. It’s the first time in 34 years that IPNC [a pioneering wine and culinary festival each July in McMinnville] won’t be held. It’s going to take a lot of energy and creativity to make it happen.
Jasmine Hirsch
The Source: JASMINE HIRSCH, General Manager and Winemaker, Hirsch Vineyards The Predictions: The two tasks in our winery that require folks to get close to each other are bottling and fruit sorting during harvest. We're getting ready to bottle, and we’re resolving these challenges by spacing out work stations, using face shields, and alternating worker positions when needed. We estimate we’ll have to slow down the bottling line by about 10-15% to keep everyone safe. We normally only sell wine during short allocation periods a few times a year. But when the COVID crisis started, we received so many requests to purchase wine to drink at home we decided to open the cellar and move to a more relaxed allocation model. Our mailing list members can now go to their online Hirsch account anytime, and they will always find something delicious there to purchase. We’re keeping a few wines available to them at all times. When it’s safe and legal to reopen, we’ll host appointments outside, and one at a time. We expect most tourism to wine country this year to be local, as people will likely be more comfortable traveling by car than airplane. There is going to be pent up demand for human connection, nature, and just getting out of one’s home. So as soon as it’s safe to do so, I expect we will see local visitors coming to wine country by car. The deliciousness of our wine and food and the beauty of our landscape are unaffected—we just need to find a way to share it safely.
Andy Peay
The Source: ANDY PEAY, pioneer of cold climate grape growing and winemaking on the far West Sonoma Coast The Predictions: In the next 6-12 months we will travel less nationally, and more locally. We will crave experiences with friends and family. Outdoors. Our parks and coastline will be crowded and heavily managed. People will revert to the tribalism of the early 2000s where groups of friends and families banded together. Instead of heading to Burning Man and throwing parties as a collective, however, they will create “safe” communities where they can interact with one another in their compounds. Wine tourism—locally—will see heavy demand but the awkwardness of tasting 6 feet apart with a mask, talking through plastic shields, and eating only prepackaged food will diminish the experience to a sterile-feeling outing perhaps not worth the effort. As a result, wineries will adapt their typical tasting offering and create more outdoor tasting experiences which aren’t good for assessing wine but are a lot more fun—which is the point. As for the future of virtual tastings? Ours have been great and will continue for the foreseeable future as we interact with hundreds of customers—see their faces, crack jokes, relate—across the entire country. This is way more intimate than in pre-COVID days where that simply did not happen unless we were in town or people visited. The virus pushed us into finding the good in technology where I only saw the bad (“dammit, what is my password?”). Too predictable, I could posit locusts in the fall but that is also obviously on deck. After the massive earthquake hits SF. And a massive comet crashes into Earth. Wanna go skiing in upstate New York tomorrow?
David Ramey, Winemaker
The Source: DAVID RAMEY, Past winemaker for Simi, Matanzas Creek, Chalk Hill, Dominus, Rudd, Ramey Cellars, and Sidebar Cellars, based in Healdsburg, California, since 1996. The Predictions: Combine virtual tastings with general anxiety over flying, and winery personnel will be doing much more business remotely rather than in person. On the restaurant side of things, that channel will take several years to recover, and many may not come back. Those of us who’ve had strong on-premise business will be cultivating other avenues. Ditto for small, aspirational wineries, or those over-leveraged. Remember Warren Buffet’s great quote, “Only when the tide goes out do you discover who’s been swimming naked.” There will be many new bargain-priced labels as some bottlers take advantage of depressed bulk wine prices. These will not last; everything is cyclical. Those of us who make classically-styled, food-friendly wines will always have a market.
Vanessa Conlin, Head of Wine Access
The Source: VANESSA CONLIN, head of wine for Wine Access, a national e-commerce wine retailer with a leading wine education platform for consumers. Conlin became the 52nd Master of Wine in the United States in February of 2020. The Predictions: For the last several years, there has been a lot of talk about how millennials want a story and a personal connection to wine and the people behind the labels, but COVID-19 has proven everyone else does, too. We created The Wine Access Experience on Facebook, which is open to our members as well as any wine-lover. We've virtually hosted winemakers and vintners, and talked to folks outside of the wine industry such as film director Jason Wine of the SOMM movies, and Chef Casey Thompson of Top Chef. These virtual meetings have been a fantastic way to step behind the curtain and to ask questions not only about wine, but to find out if Julia Child ever made a dish that Tor Kenward (of TOR Wines) had to pretend to like or if being the father of triplets makes Chris Cooney (of Dana estates) a more patient winemaker. These real conversations are what wine drinkers want to hear, and we will continue to have these post-COVID as part of our core offerings. Another thing we’ll continue to do is host tastings for groups of business associates who normally would connect at mixers and conferences. We are responding to that demand by creating formats that can appeal to a wide range, with themes such as How to Assess Quality in Wine or Comparative Tastings of the Right and Left Bank of Bordeaux, for example.
John Grochau, Grochau Cellars
The Source: JOHN GROCHAU at Grochau Cellars The Predictions: The first challenge I see is a pos- sible labor shortage in the vineyards. The labor shortage is already an issue now with the rapid shoot growth in the vineyard, but will get more acute during harvest as weather can hasten picking decisions. Everybody seems to want to pick on the same day when a heatwave or large rainstorm is in the forecast. Working proximity is going to be an issue in the winery during harvest, when we usually have 4-6 people working on our 8-foot long sorting table. In order to maintain proper distancing, we will have to work with fewer people on the sorting table and will thus have to run our equipment at a slower rate of speed to ensure we are removing all underripe or overripe grapes. We are a medium sized winery where our workforce largely works independently; we will have to look at all procedures to make sure we are keeping our staff safe. Labor cost will go up and productivity will go down. There could be a lot of vineyards who won’t be able to find homes for their grapes this year. I don't own any vineyards, so I buy all of my grapes from many different people, all of whom are small, family owned farms. I have seen a 50% drop in sales since mid-March as we lost all of our restaurant business and I simply can't make the same amount of wine as I did last year. I will honor every contract that is in place, but I can't renew any contract that isn't cur- rently in place for the 2020 harvest. I think a lot of winemakers and vineyard owners will find them- selves in the same position.
Josh Phelps, Associate Winemaker, Inglenook
Chris Phelps, Associate Winemaker, Inglenook
The Sources: CHRIS PHELPS (father), associate winemaker, Inglenook, and JOSH PHELPS (son), winemaker and owner at Grounded Wine Co. The Predictions: Chris: We now exist in a liminal space, caught between what was “normal,” and what some say will be the “new normal.” The truth is that everything will be different. With people staying at home, there is less pollution. In the future, we’ll re- spect our environment more—good news for grapes. Virtual tastings are a little surreal. Moving forward, we’ll integrate our estate chef and other winery personalities into this virtual space. [Once restrictions ease] Inglenook’s Chateau has ample space for private tastings in cellars and salons, as well as fresh-air, naturally-distanced outdoor op- tions. We will see that we always had the inherent ability to “reinvent” rather than just settle for “nor- mal.” Josh: Napa relies on tourism. I believe we will return to a revised normal, with restaurants and tasting rooms slowly reopening. Many are anxious to travel and dine out, while locals rely on the wine and hospitality industry as their livelihood. People want, and need, to get back to work. Brands strong in retail have increased sales during the pandemic and will likely increase production. Other wines that have historically been restaurant-focused may decrease production or revise distribution channels. When money gets tight, people will gravitate toward affordable wines that they trust and know. However, there will always be creative methods for smaller, lesser-known brands to build their audience and find their niche.
Robin Daniel Lail, Founder and President, Lail Vineyards
The Source: ROBIN DANIEL LAIL, founder and president of Lail Vineyards, part of a six-generation Napa Valley family The Predictions: When thinking about the future, I believe we will seek recognizable habits that will continue. At the top of the list is the enjoyment of wine, deeply embedded in our culture. Wine is about exhaling, delight, deliciousness, elegance, magic, art, friends and pleasure. I anticipate that establishing a new wine custom will take time. Online wine purchases remain critically important for small, quality wineries. At Lail Vineyards we will continue to engage and seek to delight our fans, to build an evergrowing, active following. For us the personal touch is paramount, and the authentic story behind the wines even more important. Wine, at best, is about people.
Retail wine sales at grocery stores and wine shops will continue to be strong, with discounting likely among value brands. Restaurants will come back slowly. I anticipate a positive wine future. We are grateful for everyone’s robust, direct support.
Ryan Harris, President, Evenstad Estates
Michael Fay, Director of Viticulture and Winemaking, Evenstad Estates
The Sources: RYAN HARRIS, President, and MICHAEL FAY, Director of Viticulture and Winemaking at Evenstad Estates The Predictions: Ryan: We have put even stronger efforts behind connecting with and relating to guests and customers. Interactive video tastings allow us to really focus on the customer and their specific taste preferences and interests, as well as to present wines that we feel will enhance their personal experiences. We are actually very excited about the future, as this crisis has not diminished the need for us to engage with each other, but has taught us that there are new and innovative ways to do so. Michael: As for the winery and vineyards, we are grateful that we’ve only had to modify our working methods, i.e. allowing for social distancing and providing PPE, but still are able to perform necessary duties such as bottling and the green work in the vineyards. When harvest arrives in September, we will hopefully have a better idea of what the future holds. Harvest efforts in the vineyard are the least likely to change as social distancing is perhaps most easily accomplished in rows of grapevines.
The Source: KAREN WILLIAMS, Owner of ACME Wine shop, Napa Valley The Predictions: Since ACME has the unique position of being based in the Napa Valley, our colleagues, friends, and neighbors are winemakers and winery owners, and we are among the first to learn about—and get access to—debut projects, micro-production wines, bottlings from historic vineyards, and coveted cult classics. Our lives are intertwined in so many ways, not just the buying and selling of wine. Now more than ever, we feel greater partnership with the small producers we work with who have been struggling without visitation and restaurant sales since March 15. They have been offering us wines that are usually allocated to and designated for restaurant wine lists only. We feel fortunate to be able to support our winery friends and partners by having a vehicle to market and sell their wines, and simultaneously our clientele are excited to have access to these wines that they have wanted in the past. These times are GREAT for the consumer.
Noah Dorrance, Co-Founder and Winemaker, Reeve Wines
The Source: NOAH DORRANCE, co-founder and winemaker, Reeve Wines The Prediction: As far as this crazy virus has pushed us apart, I think we will come back together in the future with even greater magnetism. Wine is fundamentally about connection. Connecting humans to nature. Connecting humans to each other. Connecting the past with the present. Connecting our outer self to our inner self. That’s what makes wine the greatest beverage in the world. It really can be the catalyst for all of that magic. I believe that local wine tourism will come roaring back as people get out of their houses and breathe in something more natural and less digital. Even before this all happened, we could sense the restorative experience people were having on our patio as they drank our wines and bathed in the vineyard view. If anything, demand for that experience will be even higher. There are some ideas that we developed as a result of shelter-in-place that will carry forward. For example, we will continue to incorporate practices like free weekly personal deliveries. I have had the best time showing up on our members porches with wine. I’ve received homemade kombucha, cookies, chocolate bars, hand lotion, and much more in return. It’s been amazing. We are going to triple down on activities that enhance that connective fabric
Andy Beckstoffer, Founder, Beckstoffer Vineyards
The Source: ANDY BECKSTOFFER, founder of Beckstoffer Vineyards including the 100-point perennials To Kalon, Dr. Crane and George III; instrumental in Napa’s Winery Definition Ordinance The Predictions: The premium table wine business runs in cycles, like most other businesses. Fortunately for us, the “up” cycles historically last from 6-8 years, while the “down” cycles run 1-3 years. We are currently about one year into a “down” cycle. Things could be different this time due to the COVID-19 pandemic and the change in drinkers’ demographics: fewer baby boomers and more millennials. We could see an extended “down” period and depending upon on how the wine marketers react, a following longer “up” period. The grape glut is all about demand. The grape supply stayed at its recent percent increase, while demand slowed significantly. Winery and vineyard operations with good brands and strong management will experience some pain, but in the end, will be fine. This pandemic may turn out to be like the early 1990’s phylloxera infestation in Napa. Phylloxera forced the farmers to become modern viticulturists. COVID-19 may force the wineries to adjust to the new market realities. In the meantime, consumers can enjoy some excellent wines at less expensive bottle prices while the growers suffer.
