How California North Coast wineries are surviving during shelter orders that shutter big sources of sales
“There is always something new happening at Charles Krug.”
That's what co-proprietor Peter Mondavi Jr. said just four weeks ago as Napa Valley's oldest winery and home to one of the region's first tasting rooms was rolling out a calendar spring and fall wine, food and entertainment events that would bring hundreds of consumers to the property.
Now entering the fifth week of shelter-at-home orders in California Wine Country and more recently across much of the nation, Mondavi instead will be leading a video conference tasting with members of an East Coast country club who buy the luxury-tier Charles Krug wines through that organization.
And the vintner's sales professionals in major wine markets across the country are doing likewise with trade accounts such as wholesalers and grocers.
It's the social-distance or no-contact nouveau statut of wine marketing during the global coronavirus pandemic, as vintners quickly have had to get creative to reach consumers who early evidence shows are eager to stock up on beverage alcohol.
But “high-touch” marketing methods that the Mondavi families made California Wine Country status quo over 7 decades for producers of premium wines morphed overnight in mid-March by public health necessity to video conference tastings, curbside pickup of wine orders, increased direct-to-consumer sales by phone and website, and a surge in sales at brick-and-mortar stores.
Closed tasting rooms requires being nimble
“We're trying to be really fluid,” said Judd Wallenbrock, CEO of C. Mondavi & Company, which produces the Charles Krug (suggested retail price $21-$125 a bottle), Flat Top Hills ($14) and CK Mondavi ($8).
When C. Mondavi closed its St. Helena tasting room in mid-March as did other wineries at the time, the company shifted the seven full-time employees to other wine and grape production tasks still allowed to continue under state and Napa County shelter orders, such as the bottling line and taking inbound phone calls for orders.
There were about as many part-time workers who mainly worked during the busier weekends.
Soon to come will be virtual in-home tasting parties for Charles Krug aficionados that had been done previously by flying out key winery personnel to meet with groups of eight to 10 couples, who would then spur future tastings. That obviously doesn't work with current social-distance guidelines.
While current direct-to-consumer promotions such as “shipping included” likely won't outlast the lockdown, virtual tastings likely will, Wallenbrock said.
“They are less costly, and we can do them a lot more frequently,” he said. Shipping costs, however, can be steep for a vintner to eat: up to $50 a case for packaging, labor and couriers.
Wineshipping is part of the DTC Logistics company that through a recent acquisition of 24Seven Enterprises now has 21 temperature-controlled warehouses nationwide, able to deliver wine to consumer doors in more than 90% of the country in one or two days.
The Napa-based company handles C. Mondavi's order fulfillment and has been working with its courier partners on creative approaches to shipping costs, which alone normally are $20-$40 a case, according to Darren Plewes, vice president for sales and business development.
“We're following the Amazon model as consumers are shopping more on digital,” he said. “It' a thriving channel now for wine, with tasting rooms and restaurants down.”
The use of social media, email and telesales to communicate more frequently with consumers about where they can still buy the wine also will be key going forward, Wallenbrock said. Some wholesalers are employing telesales and business-to-business e-commerce to reduce costs for supplying smaller, farther-flung stores and restaurants.
Call centers for wine buzz
Wine outbound marketing firm VinoPro has been hiring dozens of former casino and hospitality workers to make the 8,000–12,000 calls from call centers in Rohnert Park, Las Vegas and Arizona to talk with thousands of current, former and prospective customers of wineries large and small.
“We're going to get wine club consumers cancelling because their 401(k)s were hit,” said Jeff Stevenson, who founded the company in 2008. “The time to get as much wine into consumers' hands is now.”
On March 15, Gov. Gavin Newsom took an early step in the U.S. effort to slow the health care system impact of the COVID-19 virus, calling for Golden State's restaurants, wine tasting rooms, bars and similar “nonessential” gathering places to close.
Local governments followed suit in a few days with increasingly restrictive shelter-at-home orders. Those currently have three more weeks to go, and there's talk among federal public health officials of some restrictions on public gatherings stretching until a vaccine enters circulation perhaps sometime next year.
