FLAT-OUT REFRESHING: Still Wine's Coronavirus Boost

An earlier blog post addressed several, creative initiatives some craft breweries were employing to combat the sharp loss of in-person beer sales as a result of the COVID-19 pandemic. Some were even repurposing their facilities to produce hand sanitizer in an effort to join the fight against the deadly virus. In a few cases, furloughed staff were asked to pull on their aprons and begin drawing a salary again. The news was a welcome ray of light in an otherwise dreary economic beverage industry climate, but uncertainty over what the future held remained an ever-present cloud.

Maybe it’s time for another ray. Recent wine market reports suggest that the coronavirus pandemic may actually be indirectly responsible for salvaging the heretofore declining still wine market. Last year, still wine volumes shrunk by 1.0 percent, marking the first decline in twenty-five years. It’s no secret that wine consumption growth has been experiencing a gradual slide as an increased interest in spirits like hard seltzers draw their share of changing wine demographics.

The pandemic has provided a chance for the US wine industry to connect with a demographic that has been previously lacking in wine participation. The last twenty years of growth was mostly supported by engendering strong consumer bonds with wineries and tasting rooms. Creating an environment for more intimate personal relationships with wine enthusiasts played an important role in wine’s continued growth. Out of this period was born wine memberships, carefully curated subscriptions, and services that took full advantage of widespread still wine shipping.

Then came 2019, and suddenly wine’s unfettered good fortunes looked under direct threat. Along with the spirits market, the wine-tasting experience gave way to an explosion of on-site craft beer breweries. Direct to consumer services also began including spirits products and younger markets were starting to be courted and take notice. And then COVID-19 showed up, fashionably late and dressed to kill.

As events related to the virus began to encroach upon the U.S. economy at large, on-premise closures sent shockwaves through beverage business models, with wineries at their most vulnerable in two decades. This forced them to quickly rethink their approach and consider the disruptive events opportunities to bring back their wayward demographics. Similar to package beer sales in early April of this year, total wine volumes have enjoyed a boost as consumers are purchasing more wine to add to their dinner tables. Whether the volume increase will continue as on-premise services slowly reopen remains to be seen, in particular with smaller brands with less retail distribution that have implemented online strategies to make up for on-premise losses.

As always, change—regardless of losses and gains—comes with the opportunity to capture new market share. As people were forced to stay at home and do more cooking, interest in wine pairings has raised the still wine profile. This has also led to experimentation with a greater variety of wine brands at a broader range of prices, making buying a discounted yet still somewhat expensive vintage seem more of a bargain in comparison to high, on-premise glass prices.

What’s more, if low shipping prices stick around after the pandemic, online ordering may continue for the newfound convenience. All of this could mean winemakers are headed back to when their growth phase was uncorked so many years ago. The wine industry has always been about the experience, and building relationships with customers – especially new and younger generations who are more likely to connect and respond to digital marketing and social media.

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