What has the wine industry learned from the Covid-19 pandemic so far? Four key insights
Times of crises and rapid change force us to find new ways to adapt and innovate. Just as the world has shown incredible resilience to the pandemic, so too has the wine industry. Hanna Halmari reports on what some wine industry insiders say are key lessons to be learned so far.
fear and confusion around a deadly virus, lockdowns and closed borders,
uncertainty and mixed messages, 2020 has certainly been an incredibly
challenging year on both a personal and professional level.
Covid-19 pandemic has hit the global economy hard and the wine industry has
been no exception. The industry has been faced with labour shortages, impacting
production, distribution, and the livelihoods of seasonal workers.
hard stop in the hospitality industry has resulted in a massive downturn in the
on-trade business and wine tourism. On the other hand, the rise in off-trade
demand has been met with logistical difficulties.
top of that, add a looming uncertain Brexit and increasing wine tariffs and no
wonder the outlook has often appeared gloomy.
As many of these challenges remain and the pandemic unfortunately appears far from over, it is important to consider what we have learnt so far. Just as the world has shown resilience by adapting and innovating during the pandemic, so too has the wine industry.
In the spirit of the saying ‘never waste a crisis’, what are the key learnings the wine industry can take away from the pandemic so far?
To get a better understanding of the positive trends, changes, and learnings that have emerged from Covid-19 in the world of wine, Sustainable Wine spoke to a few experts from different sectors of the industry. These interviews produced four key insights:
Insight one: The Importance of rapid digitalisation
global lockdowns enforced and social distancing measures in place, businesses
had to quickly turn to digital solutions for business and communication. This
forced the historically traditional wine industry, significantly less
digitalised than other industries, to rapidly realise the importance of
the sector’s pre-existing lag, “[it] has been incredibly quick to adapt to this
new digital world we are in,” shares Lauren Holman, export sales manager for
Château Léoube in France. Whilst “the agricultural work remains somewhat the
same, the [form of] communication has definitely changed,” agrees Heidi Mäkinen
MW, importer/distributor for Viintie Ltd in Finland.
With face-to-face contact no longer a possibility,
online channels became vital for communicating with customers. Social media
channels stood out as especially important.
UK based wine educator Richard Bampfield MW notes, the pandemic even saw the
creation, marketing, and selling of a new rosé brand solely through social
media. To successfully connect and engage with customers through digital
channels, businesses needed to come up with more creative and innovative
approaches to content.
example, Sally Evans, owner of Château George 7 in France, turned to engaging
customers stuck at home with topical content around food and wine pairings
on her website.
revolution in wine tasting
Similar to other industries, Zoom rapidly emerged
as a major platform in the wine industry. With no vineyard or wine club visits
possible, wine tasting events went virtual.
pandemic has revolutionized wine tasting as now anyone can join a wine tasting
from the comfort of their own home. This incredible increase in accessibility
to wine tastings is certainly one of the key benefits of online tastings. With
the possibility to deliver wine samples across the globe, virtually anyone can
join as potential guests are no longer restricted by location or travel
only are wine tasting more accessible to customers, but the variety of wines on
offer has also increased. As Holman points out, “many ‘old school’, traditional
producers – the ones that are usually strictly off the books to anyone other
than true wine investors and trade – [have pivoted] their business operations
into opening up their cellars and doing virtual tastings.”
proven to be highly successful, many plan to make virtual wine tastings a
permanent offering. For example, London wine club 67 Pall Mall plans to continue providing a series of virtual events
in the future.
rise in e-commerce
According to Nielsen research, off-trade alcohol sales in the US were among the “fastest
growing categories in e-commerce channels.” The massive increase
in demand for online alcohol sales was met by rapid investment in e-commerce
channels by many wine retailers.
such as Wanderlust Wine
with business models built on direct-to-consumer e-commerce sales seem to have fared
especially well during the pandemic. Relying solely on technology to power
their operations, Wanderlust sells a range of sustainably produced wines
sourced directly from small winemakers to consumers, the off-trade and the
spike in off-trade demand and sudden halt in the on-trade sector forced many
on-trade distributors to target the consumer market. “It’s been great to see
some on-trade focused distributors open up their portfolios to general consumers
via e-commerce sales and other forms of B2C models sprouting up all over the
industry,” Holman says.
the dominance of online shopping habits persists beyond the pandemic remains to
be seen, but Evans believes that “many businesses will emerge [from the
pandemic] with more advanced technology and better B2C selling capacity.”
Insight two: The potential for creativity and resourcefulness
From labour shortages to premises closures, logistical difficulties to wine surpluses, the pandemic posed several significant obstacles in the wine industry. However, as evidenced by the industry’s rapid digitalisation, businesses did not come to halt. Instead, they looked for innovative and alternative ways forward, unlocking endless creativity and resourcefulness.
Adaptation and perseverance
Heidi Mäkinen notes how the pandemic forced the wine industry to “[re-think] many past habits” and how “we [have] all had to accustom to new ideas very quickly.” The importance of adaptation and perseverance in overcoming the challenges of the pandemic is further highlighted by Evans.
with labour shortages, she went ahead and sprayed organic fertiliser by hand
throughout her vineyard (by no means an easy or pleasant job). In response to
social distancing measures, she came up with a new way for customers to
experience a vineyard in the Covid-19 era, offering a ‘private vineyard
for a day.’
she points out how the size of winery makes a massive difference in the types
of challenges faced and the possibilities for navigating these. She notes how
as a small vineyard owner, she was fortunate to not have to worry about costly
social distancing workplace measures or furloughing of staff, for
also shares her experience of decorating the tasting room during the lockdown,
reusing and upscaling furniture and fabric, noting her amazement at how
resourceful you can be: “When we can’t get hold of certain things, we become
more creative to make the most of what we have.”
industry is certainly abundant with examples of creativity and resilience. For
example, in Italy, the city of Florence saw the resurgence of historical ‘wine
windows’ for socially-distanced wine sales, and in the UK
some wineries offer
a drive through wine service.
April and July of this year, UK wine supplier Berkmann Wine Cellars ran a
fantastic initiative called Help 4 Hospitality. Consumers were given access to
wines they would otherwise consume in restaurants and bars, raising £75,136 in
donations to help the struggling hospitality industry.
should aim to carry over such open-mindedness and resourcefulness into the
post-pandemic world. As Mäkinen says, “we should keep thinking if we could be
yet more efficient and imaginative, and not just act in a way that’s always
been done without questioning the habits or searching for new possibilities and
the longer-term, the impacts of the pandemic will no doubt be felt for years to
come. Holman believes that “safety will [continue to] be one of the major
deciding factors in doing business for quite some time.” Mäkinen also believes
that “the different parts of the industry will likely be much more cautious
when making investments in the long run.”
Opportunities for innovation
Among the key opportunities brought on by the pandemic have been those of innovation. Holman shares how at Château Léoube, “[the] situation helped [them] to really highlight [their] weaknesses and afforded [them] the time to strengthen [them].” She notes how the “slower than usual period of business” enabled them to “[explore] new sustainable product innovations.”
for innovation have also extended across other industries. For example, as
cooking became increasingly popular, many tapped into the rising trend. Among
these was Evans with her food and wine pairings, who emphasizes how “wineries
should continue to look into how to innovate across other industries.”
Insight three: The Importance of diversification
need for diversification stands out as a key learning from the pandemic:
businesses should never be too reliant on one market segment.
this, Richard Bampfield believes that in the “longer term, businesses have a
decision to take. Do they specialise in a particular area in which they believe
they can add value and be profitable? Or do they spread their risk by trying to
supply different sectors?”
Either way, businesses must ensure that they remain
agile and are equipped with sufficient technology to be as flexible as
possible. On emphasising the importance of technology, Bampfield points out how
“businesses that had the technology in place responded quickly and admirably.
in the way they communicated with their clients and partly in the methods they
found to keep some sort of business going.” For example, on-trade suppliers
worked with restaurants and hotels to sell wine online to the restaurants’
customers, “thus making the most of the take-home opportunities and also
Do not take wine sales for granted
Overall, this year has taught us not to take anything for granted, including the sale of wine. The pandemic has reinforced how hard it is to sell wine and as Evans stresses, “never take it as a given that wine will sell.”
Discussing the future of wine sales, Mäkinen
notes how prices will likely be reduced due to grape surpluses. “This is
already partly seen in Bordeaux where 2019 prices are much less compared to
some of the previous vintages,” she says.
Insight four: Sustainability
takes a leading place in the agenda
On a more positive note, the crisis has
highlighted the importance of protecting the environment and creating a more
sustainable future. As we stayed indoors to protect ourselves and others, we
were forced to slow down. During this time, we saw nature re-heal as we stopped
overusing it, with countries seeing a significant reduction in carbon emissions
during periods of lockdown.
It is no doubt that
the pandemic has united us together on a global scale. It has also re-shaped
and strengthened many local communities, with people coming together to support
one another both personally and professionally.
During the pandemic we have realised
how much of the travel we do is unnecessary and, as Evans says, “that we don’t
need to travel to the ends of the earth to get what we need.” With global
supply chains disrupted, many businesses have seen the benefits of supporting
local supply chains such as greater agility, increased transparency, and not to
mention – sustainability.
Here to stay
The pandemic is challenging governments and businesses to reconsider ways of
working for a more sustainable post-pandemic world. Sustainability has been a
growing focal point in the wine industry over the last few decades and is
certainly here to stay. “People are caring more for the provenance of products
and where they buy their produce and wine from,” says Holman. “This focus was
slowly happening before the crisis, but most definitely increased since.”
She also points to the fact that “the
wine industry has seen an increased amount of sales on higher value wines than
before, the theory being that people are drinking less and in moderation, but
they are choosing to drink better,” opting for organic and sustainable choices.
Bampfield too believes that
sustainability is here to stay. However, he raises the concern of price. “If
many wine drinkers are having to watch how much they spend, there will be added
pressure on price – and that might make sustainable and organic initiatives
look like an expensive luxury.”
Mäkinen hopes that “seeing how our
nature…re-healed after we stopped over-using it will…stay in our minds for
a long time.” “We are in no way doing what’s enough yet to preserve our
planet,” she says, “but I hope our industry will keep making better choices
understanding there are consequences in everything we do.”
If you’re interested in
sustainability in the wine industry, join Sustainable Wine’s free virtual interactive
business conference on 26-27 November, 2020. The Future of Wine event will analyse the big issues facing the wine value chain with a focus on
how the industry can respond with practical solutions. Register here. Places are