Wine in the U.S. in 2020 — The Top Takeaways
I can’t stress enough just how unique 2020 has been. From a historical perspective, it’s arguable that this year is among the top two or three most eventful and impactful 12 months in 100 years. And keep in mind, those past 100 years included the 1929 stock market crash, the worst years of the depression, the beginning and end of World War II, the Cuban Missle Crisis, two presidential assassinations, the passage of the Civil Rights and Voting acts, 1968, the fall of the Soviet Union, and the election of the first black president.
My son is 6 years old. When he is fifty years old he will still talk about 2020.
The impact on the U.S. wine industry has been monumental. In my 30 years in this industry, no year has delivered up so much in the way of disruption. And even with these 12 months nearly behind me, It is still difficult to use hindsight to make any definite predictions about the coming 12 months. One intriguing possibility is that of a “reset” in the wine business, but let’s leave that interesting possibility for another day and consider the most important takeaways for wine in the U.S. in 2020 that can guide us in looking forward.
1 – Restaurant Wine Sales Have Been Devastated
On-premise sales of wine in bars and restaurants represent somewhere in the neighborhood of 25-30% of wine consumption in the U.S. COVID has destroyed a large swath of restaurants and drinking out opportunities. This is particularly true for fine dining establishments where high-end and small production wines often find a receptive audience. As I write, it appears that fully 1/6 of all restaurants have or will close with a hefty portion of those being in the fine dining category. Quite literally this turn of events will put a number of wineries out of business also. Moreover, it looks likely that restaurants will be hit hard until the spring. Bars are faring no better, even with the “drinks to go” laws. I DON’T EXPECT RESTAURANT WINE SALES TO RECOVER TO THEIR PRE-2020 LEVELS UNTIL WELL INTO 2022.
2- Direct Shipment of Wine Jumped in Volume in 2020
As wineries were shut down and turned to eCommerce is a way they had not previously and as retailers begin to receive a large increase in online orders with shipping requests, the amount of wine placed on the back of UPS and FedEx trucks increased significantly. Consumers may have been staying in their home and not going out to eat, but they were not going to forgo their wine. They’d get it by any means that made sense. The question on the minds of many in the industry is would this reliance on shipping remain as the pandemic waned? THE ANSWER IS YES. NOT ONLY ARE WINERIES AND RETAILERS GOING TO CONTINUE TO EMBRACE WINE SHIPPING AND E-COMMERCE, BUT CONSUMERS ARE GOING TO BE WORKING FROM HOME MUCH MORE COMMONLY IN THE FUTURE. PEOPLE WHO WORK FROM HOME ORDER MORE WINE. THE FUTURE OF E-COMMERCE WAS ENHANCED BY THE IMPACT OF THE PANDEMIC.
3 – Wine Industry Decries Racial and Gender Disparities and Embraces Remedies
Even before the BLM movement that exploded in the wake of George Floyd’s death, the wine industry was beginning to embrace social justice themes, particularly as they related to gender disparities but with regard to race also. But with Floyd’s death, the uprisings and protests and the calls for reform, the wine industry joined the call. Significant projects were launched to draw attention to BIPOC in the industry, lifting their voices and their profile while women’s place in the industry was also focused upon. It’s unclear what impact the various programs to pull more minorities into the industry will have. It’s unclear if the commitment will continue. What’s not unclear is that there is a genuinely new attitude and introspection within the wine industry. IT APPEARS TO ME THAT IF THE GOAL OF WINE’S NEW ATTITUDE AND INTROSPECTION IS TO DRAW MORE MINORITY AND WOMEN INTO THE BUSINESS AND TO SEE THEM PROGRESS UP THE LADDER, THEN THE CURRENT EFFORTS TOWARD OUTREACH AND UPLIFT ARE LIKELY TO WORK. HOWEVER, EXPECTATIONS ON THE SPEED AND DEGREE TO WHICH THESE THINGS WILL HAPPEN WILL DETERMINE WHETHER THE EFFORT IS A SUCCESS.
4. Wine Country Fires and COVID’s Closing of Tasting Rooms put Wine Country Visits On Hold
You can count the destinations on earth that match the uniqueness of Napa Valley on two hands. The beauty, the embrace of high-end culinary pursuits, world-class accommodations and some of the finest wines made in the history of the world make this small region a magnet for aspirants and luxury travelers from around the world. But the fires that engulfed both Napa Valley and Sonoma County and Oregon’s Willamette Valley, perhaps the three most important wine destinations in America put a stop to visitation. The jobs, careers, and businesses that depend on this wine country tourism are significant and when dislodged have significant ripple effects. My family was not unaffected by these events. BY MY ESTIMATION WE ARE LOOKING AT A GOOD YEAR BEFORE THE NORTHERN CALIFORNIA WINE COUNTRY AND OREGON WINE COUNTRY RETURN TO NORMAL. MUCH WILL BE DETERMINED BY THE PACE AT WHICH THE VACCINES ARE DISTRIBUTED. BUT ALSO, MUCH WILL BE DETERMINED BY THE IMPACT OF FUTURE FIRES.
These are not the entirety of notable and important wine events in 2020. Yet, every other one pales. The Court of Master Sommelier Scandal. The China and U.S. Wine Tariffs. These and other events are important but simply don’t rank in consequence to the four mentioned above. Those folks looking for good news in wine in 2020 will search desperately with little success. The silver lining of course is that the coming year can’t possibly be as bad.