The Crush - April 2020 - 7

COVID-19 * INDUSTRY
Stay-at-Home Orders Affect CA Wine Business
CAWG MEMBERS SHARE THEIR THOUGHTS ON THE IMPACT OF COVID-19
By Steve Adler / Associate Editor of Ag Alert
Published April 1 in Ag Alert. Permission to reprint granted by
California Farm Bureau Federation.
In moves aimed at continuing to sell wine during this time of
restrictions intended to slow the novel coronavirus, California
wineries are resorting to creative new ways to provide wine to
customers - including virtual wine tastings, curbside delivery
and free or low-cost shipping for online orders.
Watching these developments with fingers crossed are California
winegrape growers, as they monitor vines that have started to
bud for the 2020 crop.
Allied Grape Growers President Jeff Bitter said the disruption in
the wine business comes at a time of oversupply.
"Market pressure will filter down to growers, but growers were
already in an unfavorable position, regardless of COVID-19,"
Bitter said. "Most growers had already considered their future
and were making plans to adjust to a difficult market."
Bitter said he believes the coronavirus will cause disproportionate harm to smaller wineries, whose livelihood depends on foot
traffic and events at places of business - and that will have a
direct impact on farmers who supply grapes to those wineries.
"Many times, these small wineries do not have the market power
or even staffing capability to effectively break into the broader
market with their products, so they rely on local consumers," he
said. "There will be a trickle-down effect on growers, as these
smaller grape buyers lower their supply needs in response to lost
wine sales."
Bitter said wineries have been taking a cautious approach when
it comes to offering new contracts to growers.
"Many wineries have favored a more conservative buying
stance," he said. "However, we are also seeing that wineries are
using the opportunity to 'upgrade' their supply and cull out
weaker vineyards, while making moves on superior vineyards
at prices that are favorable to them. We have signed thousands
of tons of grapes to contracts since January based on certain
wineries filling needs in this manner."
As tasting rooms have closed and wine tours have been
suspended due to stay-at-home protocols, wineries and growers

hope people will shift from drinking wine with their meals in
restaurants to purchasing bottles of wine for home consumption.
"If you assume many consumers will now be considering
enjoying wine at home versus in a restaurant or other social
venue," Bitter said, "I think that behavior could be coupled with
being cost-conscious. I believe consumers may experience a newfound appreciation for affordable wines."
A Nielsen survey shows U.S. off-premise wine sales grew 27.6
percent in the week ending March 14 compared to the same week
a year earlier.
Efforts to bolster sales include a series of video tastings on
Facebook by Comstock Wines in Healdsburg and other virtual
tastings. In many locations, wineries offer discounted prices,
onsite pickup for online orders and free shipping or local
delivery for a minimum bottle purchase.
Aaron Lange, of LangeTwins Family Winery and Vineyards in
Lodi, said wineries are adapting in different ways.
"Some have closed entirely, some are open for deliveries and
pick-up orders, and I imagine some are working on ways to
do 'virtual tastings.' I am concerned about wineries which
rely nearly 100% on tasting room traffic to sell their products,"
Lange said. "We all need to think outside the box to work within
the 'shelter-in-place' order but still support our customers,
employees and community."
LangeTwins, for example, is one of many wineries offering free or
low-cost shipping on online orders and curbside pickup.
Glenn Proctor, of Ciatti Co., said it is too soon to determine how
COVID-19 will affect the overall wine and grape markets.
"We have seen many buyers and sellers acting as if it is business
as usual, and we have seen others who have said they are
holding off on all buying and selling until they get a better
understanding of the current situation," Proctor said. "As we get
a better idea of how consumer buying habits will change because
of COVID-19, we will have more information on what areas may
be affected."
A survey of U.S. wineries conducted in late March by
WineAmerica, a national association of American wineries based
in Washington, D.C., showed participating wineries had suffered
Continued on page 11

APRIL 2020 / 7

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