“Nobody is ordering wine,” says Joe Swick. His eponymous label, Swick Wines, is based in Oregon’s Willamette Valley, and sources grapes from both Oregon and Washington. Swick is represented by the influential natural wine importer and distributor Jenny and Francois Selections, and his wines — often with ludicrous, memetic names like “WYD? U UP?” and “P. Chill” — are sought after for natural wine restaurant lists and in bottle shops across the country. Or at least they were before coronavirus. “I’d say 80 percent of my wine is sold in restaurants and bars,” Swick says, “and my distributors — especially in places like Seattle, which was hit hard early — are starting to cancel orders.”
“We send wine to 14 states, and now seven of those orders we were expecting to send out are on hold,” says Emily Towe, co-founder at J. Brix Wines of Escondido, California. J. Brix is a family winery: a husband-and-wife duo handling everything themselves, from winemaking to marketing to exhibition, with kids and the family dog listed on the about page. “It’s been a kind of whiplash, for sure.”
Winemaking is an industry and art form that measures itself in months and years, not days. Yet in the first few weeks of government measures to stop the spread of COVID-19 in America, winemakers are beginning to worry. Small, independent winemakers that make only a few thousand or hundred cases per year are asking themselves if orders will be filled, whether distributors will be able to move their product, and how they’ll fit into a drastically changed restaurant and bottle shop landscape. As they fear an irreparable breakdown of the system that gets them paid, many are turning to direct-to-consumer sales — but selling the bottles they have now is just the first hurdle.
Fall out from the novel coronavirus poses longer-term challenges for winemakers as they make decisions in the here and now. Lost orders don’t just represent a loss of income; they affect every facet of the winemaker’s decision-making process in the months to come. Financial uncertainty breeds conservatism, and for winemakers, a disrupted wine market in spring, stemming from a pandemic with no discernible end in sight, begs serious questions about what to do come fall.
“We have a deadline in the wine industry, and that’s harvest,” says Adam Vourvoulis, of Los Angeles indie wine brand Vin de California. “If you don’t have your shit together by harvest, that means another whole year of waiting for product to sell.” His situation is especially tenuous: Vourvoulis and his business partner, Kate Vourvoulis (another husband-and-wife duo), are in the middle of building a new winery and tasting room in Pasadena. “We’re like, ‘Fuck, are we going to be able to get his winery ready to go by harvest?’ Permitting and all that stuff from the city can take months,” says Adam, “and if they’re on pause, there’s a big asterisk for that.”
Many winemakers are hesitant to fill existing grape contracts or sign prospective grape contracts at vineyards in their region. Without invoice fulfillment from distributors or enough direct sales to make up the difference, small winemakers may lack the cash flow needed to buy grapes for this fall’s harvest. “My New York distributor was like, ‘Obviously, don’t ship here,’ which makes sense because everything is shut down,” says Martha Stoumen, a well-regarded indie winemaker in California with national distribution. “But wineries are on a cycle where you don’t get to flex your production with the market, because you’re only making wine once per year: at harvest. That’s what you sell to support your business and family, but also to be able to buy grapes from farmers. There’s a kind of yo-yo of economic states, and it makes it really hard to understand what’s going to happen down the road from this.”
Ordinarily these winemakers would be spending the spring traveling to wine fairs to promote their wines, meeting with distributors, hosting tastings with wine buyers at bottle shops and bars, and wooing restaurant sommeliers. Those trips aren’t happening anymore. The cancellation of international wine fairs like RAW London and Third Coast Soif in Chicago have had an especially pronounced impact on winemakers, who often combine travel to fairs like these with additional travel to adjacent markets. “A lot of these cancellations were three to four days before the events,” says Swick. “After London, I had a sales trip scheduled in Copenhagen and then to another place in Europe, and I like to prepay hotel rates to lock in the best possible deal.” Swick estimates he’s out $4,000 in nonrefundable travel costs along with lost sales. “The financial impact on me has been significant.”
With distribution chains disrupted, all winemakers can do now is shift focus to direct-to-consumer sales, which offer a potential lifeline for these businesses; indeed, direct sales are booming, just when wineries need them most. “Direct sales in the last two weeks has definitely increased exponentially,” says Towe of J. Brix Wines. “It’s gone up three to four times from normal.”
Winemakers who have made prior investment in direct-to-consumer sales over the past few years are now relatively well positioned. Krista Scruggs, founder and winemaker at Vermont’s ZAFA Wines and co-founder of Co Cellars, a collaborative tasting room with Shacksbury Cider, says that 98 percent of her wine sales in 2019 were direct-to-consumer. “This is the foundation of my business structure,” she says. “Financially that’s been one of the best decisions I’ve ever made.” In 2020 she’ll launch a delivery wine club called Counter Spell, focused on selling her new 2019 wines.
Scruggs isn’t alone in depending on wine clubs, which ask customers to sign up for regular wine shipments, to move the latest vintage. “Our spring releases will be totally absorbed by our wine club,” says Andy Young, an Oregon-based winemaker and founder at St. Reginald Parish and sub-label the Marigny. “But it’s a double-edged sword: we’re recouping from direct to consumer, but at the same time the people we normally sell our wine to are suffering. What happens to the wine shops? The restaurants? The ecosystem is eroding, and to me that’s terrifying.”
Direct-to-consumer sales aren’t a catchall solution for indie winemakers. Interstate commerce laws regarding wine sales require expensive and slow-moving permits and licenses. “If a winery doesn’t already have this in place, it’s really hard to just turn that on and ship outside of your home state,” says Stoumen.
And while relationships with wine distributors make it possible for independent winemakers to sell their product across the country, direct-to-consumer sales are often limited to in-the-know locals. “If I have a customer who wants to buy my wine in Maine, I have to have a specific license for Maine, and charge them taxes according to that state,” says Swick. “It’s a huge commitment.” However, as liquor laws open up to support restaurants that have closed dining rooms because of COVID-19, some winemakers are left hoping for a similar relaxing of the tolls on direct-to-consumer sales. “The big hurdle is compliance,” Swick says. “I need to be able to get my wines to customers, and direct-to-consumer is the only way to do it.”
For indie winemakers in America, life is already a strange pairing of the joys of creative winemaking and travel with the frequently ugly realities of small-business ownership. It leaves them precariously positioned for what comes next — safe, perhaps, from the first wave of the financial disaster, but with an uncertain outlook. “Everyone is thankful to have work, and I will plan on taking on more work myself doing order fulfillment and sales,” says Stoumen. “But I’m hoping that as more people learn there are wineries selling online, those who have the funds to buy wine right now will start switching their behavior [to direct-to-consumer sales]. This would increase our runway — and that’s our one big hope right now.”
Jordan Michelman is a freelance food and wine journalist in Portland, Oregon, and the co-founder of Sprudge and Sprudge Wine.