Wine Industry Survey Indicates Resilience
WineAmerica is a trade organization based in Washington, D.C., that lobbies the federal government on behalf of the wine industry. Despite soaring supermarket sales, many wineries have been impacted by the near nationwide shutdown due to COVID-19.
To assess the damage, WineAmerica conducted a survey of member wineries, asking for information between March 15 and April 15 of this year. There were 727 responses from 727 wineries across 45 states. The vast majority of respondents (70%) were small wineries producing fewer than 5,000 cases annually.
Small wineries are potentially the hardest hit by lockdown because they are more dependent than larger wineries on tasting room revenue. But WineAmerica characterized what it found as "resilient and creative."
Some examples gleaned from an email from WineAmerica President Jim Trezise: "Most inspiring were the innovations wineries adopted to help offset the losses caused by having to close their tasting rooms. With many states relaxing regulations to allow new marketing opportunities, 84% of respondents initiated curbside pickup, 63 percent reduced shipping costs, 60 percent special Direct-to-Consumer promotions, 54 percent home delivery by winery personnel, 53 percent wine club specials, and 28 percent virtual tastings -- with only 5 percent saying 'none of the above.'"
That said, WineAmerica painted a bleak picture of the overall financial damage.
More from Trezise: "Still, it's been a tough time. Production has continued at 85 percent of wineries, but slowed at 62 percent of them. The average winery normally employs 12 people, but has had to lay off 5 (though 25 percent said they didn't have to lay off any). Tasting room visitors dropped by 90 percent, and sales by 75 percent, with an average loss during the period of $51,201.
"Worse yet, if the current situation continues through the end of May, the average winery expects to lose $134,626 in that month alone, and believes it would take over four months to return to normal business levels in terms of employees, visitors, sales, and other factors."
There's an old joke about the wine business that's never been more appropriate. It goes something like this: How do you make a small fortune in the wine business? Easy. Start with a large fortune.
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