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UK Wineries Battle Against The Pandemic

24/03/2020

The Covid-19 outbreak causes disruption as wineries battle against it by shifting to DTC sales.

We’re all aware of the Covid-19 outbreak and its takeover across the UK. Along with other industries across the spectrum, the wine industry has seen itself take a large blow as well. Wineries are being shut down, and so are restaurants and bars.

On-premise on a downfall

According to WineGB, 53% of English and Welsh wines are sold through the UK trade (retail and on-premise), and due to the closure of bars and restaurants, sales have received a major downfall. Off-premise sales, meaning sales from retailers are still on, but we can’t predict the intensity of the outbreak and for how long can wineries sustain on off-trade sales.

According to Harpers UK, Duncan Schwab, head winemaker at Devon’s Sharpham Wines, said they are “Losing orders left right and centre” while Ruth Simpson, co-owner at Simpsons Wine Estate, said “key trade accounts are cancelling orders or severely reducing them”.

Events shutting down

A lot of events have also shut down across the UK due to the Covid-19 outbreak. Because of this, a lot of wineries are also losing their sales. Why? The thing is, a lot of wineries work on tasting rooms and events, but with those shutting down - sales is definitely an issue that wineries are facing.

Direct to consumer sales - a solution?

So if you look at it, wineries are going to have to find a different way of selling wines, especially to sustain and rid their stock. The main turn they need to take right now is towards direct to consumer sales. This means selling wines to customers directly through online portals and offering home delivery.

There are also retailers and wine merchants who are getting involved in this and offering wine delivery. The Wine Society in the UK has reported that online orders are almost at pre-Christmas levels - which is saying a lot. So DTC sales are definitely the sensible way for wineries to go.

However, not all wineries can move towards DTC sales, due to some being purely on-trade brands, such as Fitz Sparkling wine. According to Harpers UK, Dan Cahill, MD at Sussex-based Fitz winery, said: “From our point of view, as Fitz sparkling wine is predominantly an on-trade brand, the effects on sales are likely to be an almost complete shutdown of sales over the next few weeks / months. It clearly remains to be seen how quickly we can emerge from the current crisis and what the landscape will be when we do emerge on the other side.”

This definitely shows the downfall of sales, and Fitz winery is just one out of hundreds whose sales only work through on-trade.

A peek into production

In terms of wine production, the one good thing is that harvest doesn’t come around till September - but then again, we don’t know how long the pandemic is going to disrupt the world. However, wine releases are said to be pushed back due to the lack of staff available right now. There’s no one for bottling, labelling, etc. Many workers have gone back to their homes, and a lot of wineries have let go of their workers as well for the safety and cost reasons.

A hopeful lining

Even with everything going on, there’s hope across the industry. UK Chancellor Rishi Sunak has announced the extension of business rates holiday for businesses in the hospitality, retail, and leisure sectors.

PR companies are also offering their helping hand to wineries across the UK in terms of marketing, social media, and any other tactics wineries would need to build themselves up during this time.

There are companies which are helping out by keeping aside products for the elderly, and the spirits world is set on manufacturing hand sanitizers and cleaners. Along with that, there’s also hope for the hospitality sector to receive an immense amount of support once the pandemic blows over.

According to Harpers UK, ‘China is also starting to wake from economic hibernation, giving us a glimpse of the other side of this truly out-of-body experience of a situation, which is testing the limits of the UK trade, but is also allowing for a fair amount of introspection, whereby the industry can re-group, re-assess and come back, (eventually) on even better form.’

Information source:

https://harpers.co.uk/

https://www.jancisrobinson.com/

https://www.winegb.co.uk/