Napa Valley restaurants received approval to begin offering indoor dining last week. Now, some of the region’s wineries are poised to reopen, in hopes that stir-crazy local tourists will emerge from isolation looking for a wine country adventure.
The state’s wine industry has been hit hard by Covid-19, which not only shut down wineries to visitors (though, as essential businesses, they are still allowed to produce wine), but also restaurants and hotels as the region approached its most popular time of year among tourists.
According to Visit Napa Valley, May and June are the start of Napa Valley’s peak season, when the region attracts an average of 3.8 million visitors who spent more than $2.23 billion in 2018.
“It’s been very difficult,” said Stephanie Honig, director of sales and communications at Honig Vineyard & Winery. “We try and be optimistic and stay positive for our children and employees, but it’s unsettling to have so much uncertainty.
That uncertainty extends beyond the shelter-in-place restrictions that have been in place since mid-March. Honig said while the winery has benefited from an uptick in sales at grocery stores, its overall sales were cut in half last month, due largely to the crippling of the restaurant industry.
The Wine Institute projects the U.S. wine industry will lose nearly $6 billion as a result of the pandemic. Rob McMillan of Silicon Valley Bank said one bright spot for the industry overall is the spike in retail sales of wine, which he said are up nearly 30%. However, he said larger wineries with scale benefit most from those sales, while smaller wineries have struggled more.
“The typical smaller winery lost 20% of their sales to restaurants, and 28% of sales from the tasting room; close to 50% on average,” said McMillan. “Some of that has been made up by some of the other sales tactics, but nothing close to normal.”
Many wineries, like Fontanella Family Winery and St. Supery Estate Vineyards & Winery, have launched virtual tastings.
“Our goal right now is retention,” said Karen Fontanella, owner of Fontanella Family Winery, which produces four thousand cases of wine per year and has seen sales dip slightly during the pandemic. Fontanella credited the virtual sessions to keeping club members engaged and purchasing wine.
Challenges will remain once the region’s wineries are allowed to reopen. St. Supery Estate Vineyards & Winery CEO Emma Swain said it’s hard to predict how many tourists will choose to venture out before a coronavirus vaccine is available. Once they do, Swain says they may find the new reality of wine tasting in a post-pandemic world jarring.
Almost all of our tastings will be taking place outside,” said Swain. “But, you’re going to be spaced further apart, we’re going to ask you to wear a mask when you’re not tasting, we’re going to have our team wearing masks, and so it’s a little harder to be as friendly as we want to be.” Swain added the tastings will be poured for visitors to minimize close contact with their hosts, and the wine will be poured in “disposable materials.”
“We think it’ll still be fun, but it’s a little bit of a change,” said Swain.
In some cases, the business lessons winemakers have learned during the pandemic will endure even after physical tasting rooms reopen. About one-third of the participants of virtual tastings at Francis Ford Coppola’s Inglenook Estate are newcomers, according to the winery’s president, Catherine Durand. She credited those tastings and robust online sales for keeping the winery’s overall sales steady during the pandemic. Even after shelter-in-place practices end, Durand said the winery will continue the virtual tastings for those hesitant to go to public spaces or travel by air to Napa.
Reopening could even present new opportunities for the wine industry, which is struggling to gain traction among millennials. McMillan said Napa’s bucolic beauty and iconic wines could win over younger Americans who typically prefer craft beer to cabernet sauvignon.
“During early opening – the opportunity will be there to deliver to the younger consumers because it’s likely older consumers will be sheltering largely,” said McMillan. “Younger consumers will be more adventurous and with no sports or concerts, there has never been a better opportunity to get their attention!”
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