The impact of Coronavirus on the wine market. How to turn the problem into an opportunity (and a song).

The impact of Coronavirus on the wine market.

How to turn the problem into an opportunity (and a song).

We must accept it: the keyword for 2020 is Coronavirus, it can be found in sentences such as “the impact of the Coronavirus on…” and so on. As you have probably noticed, we used it as well, and completed the sentence with “the wine market“. But let’s take a step back: in the early days of this year, when China alerted the WHO about strange pneumonia that was circulating Wuhan, their first steps were to close markets, then schools and universities, finally, they cancelled the Chinese New Year celebrations in Beijing.

The disease was given a name by this point, CoViD19, and if human behavior teaches us anything, it is that when an issue gets serious, it is given a name. The greatest danger lies in how contagious it is; within a month, every nation would confirm this fact, and as it spread around the world -Europe included- suddenly, everyone was forced to stop. Some  hoped and waited until the last moment before cancelling scheduled events, while some other stopped all activity sooner, voluntarily, either way, by the end of March, with the restrictions imposed by every government: everything stopped. If this first phase was a song, it would be: She’s lost control (by Joy Division).

Stop, then. But what exactly does “stop” mean in 2020? This is a paradox, something that has never been experienced before in the course of our history, that of having received the order to stop, especially in a world that, according to our current nature, requires quick movement to exist and thrive.

The food and wine industry are one of the many sectors that embraces movement, they require action, and HoReCa sector  struggles without the physical movement of its consumers, or at least this is what people used to believe until a few weeks ago.  A change of perspective became necessary.

To start, let’s quote Rob McMillan, one of the top wine-business analysts in the United States, in an interview by Liza B. Zimmerman for Forbes, “We have to start the conversation by recognizing that people enjoy wine in good times and stressful times. Wine is not recession- proof, but it is recession- resistant. In the same way, it might not be virus- proof, but it will prove virus- resistant from an economic perspective”.

Wine is considered a commodity by so many people, not only by experts in the field. It is therefore difficult, if not impossible, to stop this wheel turning completely. As I wanted to illustrate, this has not yet happened. In recognition of the economic crisis being suffered by the wine sector, we would like to give you the following examples of how in some circumstances, an alternative perspective has turned this crisis into an opportunity. At this stage there is conscious hope and the song to accompany this sentiment would be We can work it out (by The Beatles).

To date, in terms of being seriously affected by the current virus, China was hit first and hardest, thereafter, Italy felt the blow, and now it seems Spain is fast approaching critical status. With the enormous impact of CoViD19 on both Italy and Spain, the wine markets are struggling: many brands  continue  to operate from their homes, cellars and estates. Wine academies have moved to the internet, offering online tastings and virtual lessons. Those who work in communications are really coming to terms with the meaning of the words “digital” and “smart-working”, learning to take nothing for granted, regaining their footing in a world saturated with online traffic, working fervently, thankfully, having had the good fortune of never needing an “emergency plan”.

Many Italian and Spanish wineries, as long as they can, have begun providing home services by appointment. In many cases, sales have even increased. Others, entertain their customers on social networks, through ad hoc campaigns and themed stories. The more traditional stories -those that last more than 30 seconds- are being appreciated again. In Portugal, a winery took initiative in response to the cancellation of the ProWine fair, creating Portugal Wine Week, a week dedicated to wine, all digital: interviews with producers, presentations of new products, virtual tastings; each viewer will have the opportunity to interact and intervene through a shared chat. By the same token, farmers never stopped doing what they always have : taking care of their vineyards, perhaps today, a little more than yesterday.

In California, a family-owned winery, after voluntarily closing their business to the public, thought about how to continue. So, they turned themselves into a delivery service, bringing their wines directly to customers’ homes, going as far and wide as possible. They brought heart and courage to small businesses, and speaking to Los Angeles Times  they imparted some good advice through their message of hope; “We sent a message to our customers that said, ‘Help, we need business,’  and we had a stunning response. Customers who typically bought single bottles of wine, which ranged in price from a $28 Zinfandel to a $60 Syrah, bought cases of it instead”.

As far as China is concerned, wine-searcher ‘s views on their ordeal have come to pass. People have come to the understanding that, businesses somehow related to wine have suffered a huge loss: “The China Culinary Association reported that 78 percent of enterprises saw a 100-plus percent drop in operating income: venues have zero revenue but are still burning cash on rent, labor, insurance and other costs”. However, regardless of these losses, there is a recognition that this sector was among the first to get back into play by other means: “cloud wines”, or virtual tastings. These are just a couple of examples reported by CHEERS, a chain of 60 stores.

In conclusion, on a global level, we are not just looking for a medical vaccine, but also for a “digital” one, trying to bridge the divide on an economic level.  There are no new magic tools to fix the situation, but now more than ever, so many are using the means at our disposal in a more effective way, creativity has become synonymous with strategy, not novelty. There is a desire (and a need) to copy, reinvent, collaborate, and ask for help.

We don’t deny the fact that despite all our efforts, communicating has become one of the most difficult things during this period: some prefer not to give interviews, and then there are those who merely put forward positive premonitions: “People don’t expect a quick recovery for the wine business but there is some hope. Maybe we’ll see a sales boom in nine months when banquets are held for all of those newborns.” Explains Ma Huiqin, marketing expert and professor at the China Agricultural University. Also our hero, the Italian professor Attilio Scienza, gives his point of view during a long interview for WineNews:  “Just like after a war,” says the professor, “sociologists of consumerism explain behavior that takes place in society under these circumstances …after the collapse of consumption and activities, having reached the bottom, they begin again, with great vitality and vigor. And it is expected that at the end of this crisis [in the wine sector] there will also be an acceleration, firstly, in investments, because if there is financial availability, many companies will take advantage of it to start again, improving production. Wine is a product  that goes against the general trend, because consumption is increasing so far, and if we don’t drink it at the restaurant, the hope is, we will drink it at home”.

But among all the different opinions, there is one certainty we are allowed to believe: we will heal, One way or another (Blondie).

This crisis, despite everything, has made us rethink the future, requiring us to consider more than one perspective. In some ways, Italy and Spain, like the rest of the world, have found themselves disoriented; like two teenagers forced to grow up too quickly, having to adopt “new” working methods, because, until yesterday, today’s methods were alien to most people. Our situation brought out fear, but this fear also spurred improvement and creativity. For these reasons, it is possible to interpret the impact of the Coronavirus on the wine sector as an opportunity, thanks in good part to the technology we have at our disposal today, and ça va sans dire, the people. 

Here is one last question for you, a pop quiz of sorts (which should also be taken into consideration): Is there a country at the moment that is boosting demand for Italian wine? in particular certain fine wines from the Dolomites… do you have any idea which one it might be?  We’ll give you a clue (which doubles as hope): it’s the first country to be hit by this virus, and, today, the one country that is doing the most healing work of all. How fortunate we are, and let there be more positive Changes (by David Bowie) come our way. 

What did you think of this article? If you want to share your opinion about it, or perhaps there are some points on these topics that you’d like to discuss, write to us! We’re here, ready to answer you – now more than ever.