Wineries explain the fallout from Covid-19

Although wine sales have been strong in relation to other retail categories, the world of wine has still been hit hard by the pandemic and subsequent lockdowns. Wineries with no distribution through retail have been particularly hard hit. Jason Sych asks four wineries how they have navigated the crisis.

Antoine Caparros, Jocelyn Hogan Wilson, Mark Barth, Alice Rule
Antoine Caparros, Jocelyn Hogan Wilson, Mark Barth, Alice Rule

Jocelyn Hogan Wilson,
owner and winemaker, Hogan Wines, Stellenbosch, South Africa

Hogan Wines’ business is about 60 percent export, and 40 percent local. The tough part on the local front is that I’m predominantly in high-end restaurants. I’m small, I’m niche market, and I only make 1,000 cases of red and 1,000 of white. 

I have fantastic distributors in Ex Animo Wine Company, which has been quite dynamic in shifting the business model to try to move even more towards direct-to-consumer (DtC) sales. 

Direct to consumer is important for me. As an independent winemaker  I have a mailing list that I’ve grown over the years. I only started Hogan Wines in 2014, so it’s a small customer base, but something I’m going to have to focus on a lot more. I’m communicating more with my customers and speaking with fellow independent producers. But the DtC market has shrunk tremendously, because we’re all trying to sell to the same people. 

I will offer my customers discounts, but I think free shopping is not enough. We have to think further than that, about what we can offer our direct customers. My distributor is doing a lot of podcasts with different wine estates, and I’m listening to them, trying to educate myself as much as possible on what’s happening in different countries. I’m trying to get in touch with my importers and find out how the coronavirus shutdown is impacting various countries and how I can help strategise from that point of view. 

My distributor has set up an online platform on his website which is pretty seamless in the purchasing process. I’m not going to do that on my side, on my website. I’m too small and niche and I prefer to have that personal contact with my mail-order customers. I’d rather channel online business to my distributor and have the option to sell my wines through his website. It’s kind of trying to take care of him and trying to take care of myself at the same time.

Alice Rule, owner and winemaker
3Sixty2, Marlborough, New Zealand

You won’t need to be big to be successful. Often what we have seen here in New Zealand is the companies that have embraced technology, have embraced e-commerce, built really smart websites and know how to do digital marketing, and have been working through email marketing and building direct relationships with customers, are now the ones that are winning in the marketplace. We’ve also seen bigger companies here in New Zealand that thought they had these systems set up, but in reality didn’t, so they have not been able to maintain the influx of sales through those channels. And I anticipate Covid-19 will bring a lot of change away from big supermarkets and potentially back to the grass roots of how things used to be, where people had a relationship with the producer, they would go and support them. It will need to be easy for people to know who you are, find your website and buy your wine. That will be the most important thing.

I have not started exporting but that’s where keeping and maintaining my relationships with those merchants I distribute to matters even more. I have a lot of empathy for restaurants and merchants that have been shuttered. I’ve sent them little care packages and called them and checked in on them. Again, it’s going back to that grass roots of being a good person. That’s half of marketing and it goes a really long way.

We often think of ourselves but we often don’t think of our company or those that are supporting us, in terms of holistically making our business work. There has to be a synergy between us as a producer and those who move our product, which is no different to how it needs to be for direct to consumer. Give them a good experience, make sure it’s enjoyable to go on the website. I always handwrite custom notes to each of my customers, and say “thank you for supporting my business, it does mean a lot to me”. It’s the little things that will go a really long way.

Mark Barth
owner and winemaker, Wein- und Sektgut BARTH, Hattenheim, Germany

We’re heading more or less in the direction of going more online and trying to advertise or make more sales online with our e-commerce platform, as well as bringing more information to people at home. We also increased our social media activities during the lockdown, to motivate people to drink and enjoy our wines at home. Now the lockdown part has been stopped — and the traditional markets for us can open under restrictions — of course we have to see how this works and goes on. We hope the restrictions will be successful so we can go back to the more traditional way where restaurants will once more be a platform to present our wines.

We’ve done a lot of online tastings the past two months but we will slow them down for two reasons. One reason is that there are so many tastings available for people and, once they have done them one or two times, the interest goes down. On the other hand we think that once the restaurants have opened again, it is better to communicate to let the people know that we are happier if everyone goes out again, rather than staying at home to enjoy our wine. But we will continue to do online tastings once or twice a year, or when a customer is interested to book one.
We have steadily increased the amount of likes on our social media pages, so our reach is getting bigger. We will mix our social media more frequently with stories to show people how we work, what we are doing here, giving them more insight on how we make sparkling wine, for example. Or how we do our organic farming. These are some things that people are showing interest in. We will mix that with the promotion of events, which has over the last months stopped because of the lockdowns. But they will come again.

Antoine Caparros 
commercial director, Le Brun de Neuville, Champagne, France

We can’t really talk about a topic like post-Covid-19 marketing because this is just the beginning. It is very difficult to give any guidelines or detail of where we are because we are still in the process of thinking how to react to this crisis, and what marketing or approach we should have with any of our markets, home or export. 

In France we are just starting to go back to work. Restaurants and bars are still shut and that is a huge part of our business. We do business in Japan, which is very much still affected, the UK is still under lockdown, all restaurants pubs and bars are shut. Only a small part of the retail business is still alive, a bit of ecommerce, but apart from that almost everything is on standby. So far, we are simply trying to adjust our production line so we are sure we are not going to overproduce.

Champagne isn’t on the top of everybody’s list at the moment. It is very much a celebration drink, so if you don’t have anything to celebrate, it is difficult to make a short-term plan. And it is too early to have a long-term view on what to do and how to adjust. Investment has been put on hold, all advertising campaigns are on hold, all communication is as well on hold. So we will have to see. If tomorrow, or in a week or in six months a company comes up with a vaccine, then we are out of the crisis. 

But if there is no vaccine or cure coming along in the short-term, all our lives will be affected. All the luxury industry will be affected. If you cannot get together and share a moment with your family and friends, there is less opportunity to open a bottle of Champagne.

Interviews by Jason Sych

Perspectives first appeared in Issue 3, 2020 of Meininger's Wine Business International magazine, available in print or online by subscription.

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