Beer & Wine Wine

How California Wineries Are Adapting During COVID-19

Hello, direct-to-consumer sales and large online platforms.

photo composite of wine bottles
Image:

Liquor.com / Laura Sant

Even during this unprecedented moment in which our ever-connected, busy-all-the-time lives have come to a screeching halt because of the COVID-19 pandemic, life goes on in the vineyards of California wine country. Fields of green vines crisscross and cut the land in Napa and Sonoma in vertical and horizontal waves, and it’s as beautiful as ever.?

?Only now it’s eerily quiet. There is no rush hour—no long trail of cars stretching for miles as winery workers and wine country enthusiasts travel up or down the valley to homes and hotel suites.?

Pivoting to Online Experiences

Despite the shelter-in-place decrees that have shuttered wineries, even as the rules are just now starting to relax and some wineries are preparing to reopen (or have even begun to reopen), all are learning to adapt to current times. Those who traditionally have relied on sales of their wine to restaurants and retail shops are learning to pivot. It’s safe to bet that more online tastings took place in March and April than have ever taken place in the history of online virtual wine tastings.?

“Eight weeks ago, I wasn’t really on Instagram,” says Louis M. Martini winemaker Michael Eddy. “Now I’m hosting a weekly live show.” The Gallo family, the owners of Martini, spent nearly a decade painstakingly restoring the Louis M. Martini winery, which opened in St. Helena, Calif., in March 2019. But when putting the health and safety of its employees and guests as well as the community first, the doors at Martini closed this past March, merely a year later. “We were seeing so much interest in our new spaces, culinary pairings and tasting experiences,” says Eddy. “So we anticipated a very busy and successful spring season.” The silver lining, if you can call it that, is the winery is diving into new online programs and digital experiences.?

Sales through online direct-to-consumer platforms are helping, and Martini has also launched private virtual tastings for wine club members who purchase $300 or more from the winery. Eddy himself has taken to hosting a weekly Friday Happy Hour on Instagram Live, while Martini’s executive chef, Jeffery Russell, started hosting a Saturday Supper series, a live cooking demo during which he offers tips on unexpected pairings and makes the recipe and pairing available on the Martini website.?

Justin winery in Paso Robles jumped right in with virtual tastings. Several are hosted by founder Justin Baldwin, and the winery has pulled out all the stops, even enlisting celebrity guests such as professional basketball player Josh Hart and former professional football legend and Hall of Famer Jerry Rice. While Justin, like many other family-owned wineries, declines to disclose numbers, a spokesperson for the winery says the virtual tastings “have been really successful.”?

Saved by Direct-to-Consumer Sales

Back in Napa at Rudd Estate in Oakville, owner Samantha Rudd says that having been a private winery with an allocation list has meant Rudd experienced little in the way of losses. Still, Rudd is having to connect with its customers in new ways because when the pandemic essentially halted the restaurant industry, the chance for a new potential fan to discover Rudd at a restaurant temporarily disappeared (although as of mid-June, Napa County has begun allowing restaurants to reopen).?

One notable pivot for Rudd was to shift its recently introduced Crossroads wine, an entry-level $75 label usually reserved for wholesale accounts, to its mailing list, the members of which snapped up 300 cases in an instant.?

Rudd also owns Press restaurant in St. Helena, Calif. “The beauty of not being part of a large restaurant chain is that we were able to quickly shift our entire business model,” she says. It’s the same shift restaurants around the country have had to make: toward curbside pickup and, if possible, delivery. But at Press, the Rudds and chef Phil Tessier got creative and launched a drive-through model, then added a “Wine Thru” to showcase new releases of wines from Napa Valley offered at retail pricing, rather than at the higher typical restaurant markup. Even as Press becomes one of the first restaurants in Napa to reopen, Rudd says, “We will continue to do what we are currently doing as long as it fits in the circumstances of the moment”—which is to say, meeting the moment with further creativity and innovation.

Press has also partnered with the Boys & Girls Club of St. Helena and Calistoga to create the Feed Our Families program via a donation campaign alongside other St. Helena restaurants including Brasswood, The Charter Oak and Gott’s Roadside. “Collectively, we’ve raised $100,000 to date to feed families affected by COVID-19 and support the growing needs of the community,” says Rudd.

Another direct-to-consumer powerhouse is Kosta Browne, which has a mailing list with a notoriously long waitlist. Since the winery currently is unable to host guests in its beautiful hospitality and dining spaces in Sebastopol, Calif., it has launched The KB Kitchen Series, an online video series featuring former contestants from television show “Top Chef.” Celebrity chefs such as David Viana, Edmund Konrad and Michelle Minori each craft and prepare a dish in their home kitchen to be paired with a Kosta Browne pinot noir or chardonnay.?

Embracing Large Online Platforms

In wine country, the story that seems to be developing is one of the haves and have-nots. For those that don’t have robust mailing lists and thus have more difficulty pivoting to direct-to-consumer sales, a primary avenue of opportunity is in online direct-to-consumer platforms with big mailing lists like Vivino, SommSelect, Wine Access, First Bottle and Last Bottle, in addition to online retailers who cast a wide net such as Wine.com and K&L, or high-end local outlets like Wally’s in Los Angeles and Sherry Lehmann in New York City.?

?Owners and partners Stefan Blicker and Cory Wagner of Last Bottle and First Bottle have seen interest in their platforms skyrocket. “We’re experiencing a 200% to 300% increase in wineries reaching out to us,” says Blicker. But it’s not just wineries that are knocking down their doors. “Distributors and brokers who are trying to pivot are sending us wines too,” he says, adding, “Our sales have close to doubled in the last month.” Blicker says they’re selling up to 35,000 bottles of wine each day.?

?“We consider everything,” Blicker says of their selection process, tasting upwards of 60 wines a day some days with one determining factor: “Do we like it and will our clients like it?” Many higher-end brands tend to focus on the wine list and being on as many wine lists as possible, which Blicker believes is now “a thing of the past.”?

?For some of wine country’s bigger companies, pivoting straight to online sales isn’t so simple and doesn’t quite make up for the loss of sales via the usual channels. Judd Wallenbrock, the CEO and president of C. Mondavi & Family, says that the on-premise sales channels are 25% of its business and it “basically went away” overnight. On the flip side, however, the 75% retail side has increased more than 10%, he says. It doesn’t fully compensate for the loss of on-premise, he adds, but it gets close. Wallenbrock is extremely empathetic for the company’s restaurant partners. “But we know so many are not coming back, and that’s a tough pill to swallow,” he says.

?The C. Mondavi & Family portfolio includes Charles Krug, its high-end brand; Flat Top Hills, a new middle-of-the-road wine that rolled out across the U.S. just before the pandemic took hold; and CK Mondavi, the “workhorse” value tier of the company. The company produces 1.2 million cases of CK wines, and Wallenbrock notes that for the last three years straight, 50% of on-premise sales were from 750-milliliter bottles to mostly banquets and caterers. “So that was impacted immediately and dipped. But the 1.5-liter (magnum) category, which was in steep decline, is back,” he says.?

?That 10% increase in retail sales has been mostly through grocery and club stores and outlets such as Walgreens and Target. Although a notable financial increase, it doesn’t quite offset the losses. Still, “no one saw this boom in the grocery biz, and the pantry-loading is not slowing down,” says Wallenbrock.

?For the time being, it seems that wineries are hopeful about new sales channels emerging as old ones fade. There will be some return to normalcy eventually. Of course, what will emerge as “normal” is anyone’s guess.?

How You Can Help

There are a number of ways wine drinkers can help: Call your favorite winery and inquire about its plan for reopening to visitors; sign up for wine clubs; sign up to receive wine newsletters; join allocation lists; and continue to buy wines online and share news of virtual tastings with wine lovers in your family and among your wine-savvy friends. Above all, do what you can to support restaurants that carry your favorite wines. Many currently are offering bottles at retail pricing, but don’t expect that to last once restaurants get back on their feet. As of June 2020, Napa County is beginning to allow restaurants to reopen with limited seating, mostly outdoors.?

?The wineries we spoke with offered specific suggestions for how to help each.?

Inman: “We hope people continue to buy our wine online and customers share about our virtual tastings with their friends. Joining our wine club is a great way to save money on wine while also supporting us. We’re also donating a portion of the proceeds from our virtual tastings to local chapters of Meals on Wheels, which provides elderly Americans with meals as well as assistance with errands—a critical service during this pandemic.”

Justin: “Our Justin Wine Society and virtual tastings are a great opportunity for consumers to continue enjoying our wines. For those interested in joining our virtual wine tastings, we will be announcing each one in the coming weeks on our Instagram account.”

Martini: “Supporting our community is something that’s very important to us as a winery. We’ve made donations to organizations that needed help, some that focus on the wine or restaurant industries, some more local. We’ve supported GuildSomm, which is helping provide educational opportunities. We also did a local food drive in Napa in partnership with OLE Health. We’ve empowered our sales teams to buy meals at local restaurants and donate them to food banks, first responders or even those in their community they know could use some help. We’re trying to do our part. “The best thing people can do to support us is to stay positive and enjoy a glass of wine. If you have some free time and would like to get to know us a little better, tune into our Friday Happy Hour and be sure to check out chef Jeffery Russell on his Saturday Supper series. We’ll get through this together. When we’re able to safely gather again and our tasting room is open, just know that our team can’t wait to share our Martini hospitality with you.”

Rudd: “Join our allocation list, get to know us, and purchase our wines. If you’re local to the Bay Area, please support Press via our Drive Thru, Wine Thru and Curbside pickup options, and most importantly please donate to the Feed Our Families initiative if you’re able. I’m incredibly proud of what chef Phil Tessier and our entire staff is doing at Press right now to support the community in so many different ways.”