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How the coronavirus, wildfires are changing how California fine wines are sold

2020 review, 2021 preview

As the “year like no other” draws to a close, the Business Journal examined how the coronavirus pandemic has been impacting “essential” and “nonessential” businesses differently, looking specifically at these areas of the economy:

• Wine business

• Restaurants

• Hotels

• Health care

• Banking and finance

• Job market

And we also explored how the massive Walbridge, Hennessey and Glass wildfires not only worsened the woes of businesses already reeling from pandemic shutdowns and virus-wary customers but also added to the backlog of burned North Bay properties still needing to be rebuilt since the 2017 blazes.

The North Coast wine business had been facing slowing sales growth and increasing competition from other premium adult beverages even before this year’s coronavirus pandemic response led to months-long stretches of closures of key sales channels in tasting rooms and restaurants and wildfires caused tens of thousands of grape tons to not be harvested.

A drier winter led to a North Coast crop that already was on track to be 10%–20% smaller, even before the year’s two major North Coast wildfires, LNU Lightning Complex and Glass, burned over 440,000 acres as the bulk of the wine grape harvest was about to begin. Grape and wine brokers Ciatti Co. roughly estimated the concerns about smoke damage may have left a significant portion of the North Coast crop this year unpicked.

Market research on consumer sentiments, particularly those of wine lovers, toward venturing out to eat in the months ahead is troubling for restaurateurs and vintners dependent on selling wine in restaurants, bars, hotels and other places where it’s consumed on the premises, according to Christian Miller, research director for Wine Market Council and proprietor of Full Glass Research.

He pointed to a recent survey of holiday plans noted that frequent wine consumers trend toward being more cautious in their plans to venture out of their homes in the months ahead than the public at large. That’s based on 2,331 responses to a Civic Science survey late October and early November that found 47% were willing to shop in stores, eat in restaurants and attend large events as the year closed, while over one-third said they planned to wait six months before doing so.

“This indicates that the tasting room Wine Country visitation platform for business of wineries is really a long way from recovering,” Miller said at Wine Industry Network’s Bold Predictions virtual conference on Dec. 16.

Almost one-quarter in the Civic Science survey said they weren’t planning on attending any holiday celebrations where wine would be served. But 12% said they were going to purchase special bottles for celebrating at home, and 8% said they had wine saved for the occasion. Yet only 9% would be buying less wine because of smaller holiday celebrations.

While online shopping for wine has increased in the past few years, wineries got a larger share of the business than in past year, as they were forced to shift sales online and to retail as because of closed tasting rooms and restaurants in the pandemic.

“Our research indicated that a lot of this business was being picked up by ‘bricks and clicks’ and virtual retailers,” Miller said. “Now, perhaps, the wineries are engaging a little bit more, (getting) a little bit bigger share of the on-premise channel.”

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

2020 review, 2021 preview

As the “year like no other” draws to a close, the Business Journal examined how the coronavirus pandemic has been impacting “essential” and “nonessential” businesses differently, looking specifically at these areas of the economy:

• Wine business

• Restaurants

• Hotels

• Health care

• Banking and finance

• Job market

And we also explored how the massive Walbridge, Hennessey and Glass wildfires not only worsened the woes of businesses already reeling from pandemic shutdowns and virus-wary customers but also added to the backlog of burned North Bay properties still needing to be rebuilt since the 2017 blazes.

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