• Areni Global: how fine wine buyers have coped with Covid-19

    If there is any consolation from the fallout of Covid-19 across the hospitality sector is that we are all in this together – right around the world. Any experiences we have in any particular country can potentially be shared with other wine and drinks teams and restaurateurs in other cities. This was very much the spirit of the recent debates held by Areni Global with fine wine players from four different markets that saw them sharing their stories and solutions. Here Pauline Vicard, Areni’s executive director, summarises what was said.

    If there is any consolation from the fallout of Covid-19 across the hospitality sector is that we are all in this together – right around the world. Any experiences we have in any particular country can potentially be shared with other wine and drinks teams and restaurateurs in other cities. This was very much the spirit of the recent debates held by Areni Global with fine wine players from four different markets that saw them sharing their stories and solutions. Here Pauline Vicard, Areni’s executive director, summarises what was said.

    By October 23, 2020

    Covid-19, Brexit, US elections, restricted travel, cancelled trade shows, drops in tourism and wavering consumer confidence – you name it, 2020 has seen it. Areni Global asked key fine wine figures to share any glimmers of hope that they have. Here are their five reasons for optimism.

    One: Wine buyers are still looking for new wines and wineries

    Wine buyers still need to keep up with trends, which means they are still open to pitches from new wines and wineries.

    “Throughout Covid, we have been able to go through the cellar and put together special offerings and packaging for people, so we managed our inventory really well,” said Tonya Pitts, the wine director and sommelier at One Market restaurant in San Francisco. “Consumers expect us to have new wines – that’s also why they are coming.”

    Tonya Pitts says it has been crucial to keep finding new wines to excite and interest consumers who have been coming to One Market in San  Francisco throughout Covid-19

    Buyers don’t want to be trendy for the sake of it, however, and classic regions are still doing well, particularly in Asia. “The classic fine wines are doing extremely well in Mainland China at the moment. Wineries from Bordeaux, Burgundy or the Rhône Valley can by all means contact us” said Alex Caillard, head of sales for Pudao, a Shanghai-based wine retailer.

    When it comes to price, growth is happening at both ends of the spectrum. “Across the different categories, we’re seeing much more everyday consumption,” says Joe Fisch, chief executive of Wine Access, one of the top five online retailers in Wine Enthusiast’s America’s 50 Best Wine Retailers. “We’ve seen a slight down tick in our bottle price – under $30 is doing amazing, but so does over $300.”

    Some buyers, including Tonya Pitts, are going the extra mile and using their buying power to support causes, now more than ever: “We have to support our community, so we will continue to help and source as much as we can through regions devastated by (Californian) fires and underrepresented communities.”

    2 The middle man is back

    André Ribierhino says if you are not online and are trying to sell wine to consumers then you effectively “don’t exist”

    While direct-to-consumer sales are booming, most producers find the online world difficult to navigate, because building an audience from scratch is not easy.

    “If you’re not online then, for many consumers, you don’t exist,” says André Ribeirinho, founder of online platform Adegga. “Yes there’s a place for wineries to work direct and there is a place for wineries to work with curators. But there is also a place for platforms like marketplaces to make this information well-structured and easily available.”

    However, brands should be careful when pivoting to online direct-to-consumer sales, he stresses. Competition is fierce, and building an effective e-commerce platform requires both skill and time. For those without deep pockets, building digital partnerships may be the best investment.

    3 Online tastings to connect people through the holidays

    Since the pandemic began, the growth in online tastings has tapped into a new and diverse audience eager to learn more about wine, across a wide range of price points.

    “We sold out tickets that were more than £1,000 per person,” says Alistair Viner, head buyer for high-end London retail store Hedonism. “We were very surprised, but getting to taste a range of first growths in a Zoom tasting was a fascinating experience for people.”

    Fine wine retailers like Hedonism in London have done exceptionally well with online tastings – in Hedonism’s case hosting events that cost up to £1,000 to take part

    Demands for private and corporate Zoom tastings are expected to be strong over the holiday seasons, according to Tom Harrow, co-founder of Honest Grapes, the winner of Decanter’s Outstanding Retailer of the Year 2020. “We will see a second spike of demand for online entertainment because it is going to be an easier way to engage friends, family and clients and we are very prepared for that.”

    4 The rise of gifting

    Gifting, both for individuals and corporate, offers one very bright glimmer of hope. All of our experts expect that people will want to treat themselves at home this year – and companies will also want to use some of their left-over travel expenses to reward employees. This could mean wine, hampers, and online tastings (for corporate Christmas parties for example), including offering rare and expensive wines in small formats.

    “We are expecting more corporate type orders come Christmas, and we are changing our operations behind the scenes to be able to propose a large range of products and services,” says Hedonism’s Viner.

    5 While online sales are strong, analogue works too

    Although most people think of fine wine as being part of traditional culture, it was able to migrate online surprisingly rapidly, appearing everywhere from e-commerce platforms to Instagram live, and at virtual tastings and educational webinars.

    Yet while the new digital world represented a huge opportunity for fine wine engagement, it also opened up opportunities for more traditional marketing.

    “We found some pretty good success in the direct-to-consumer channel by going analogue in addition to digital,” says Ryan Pennington, senior director of communications and corporate affairs for Ste. Michelle Wine Estates. “We invested heavily in a phone sales programme with our current club members, reaching out to them and seeing how they’re doing. We’ve had good success doing that.”

    However, marketers need to be careful and pay particular attention to tone. As Joe Fisch, of Wine Access, says: “We have to be careful and sensitive in the way we will be promoting wine. What we wouldn’t want to do, for example, is sell a Burgundy premier cru to a non-segmented audience, with the message, ‘this is a wine that everyone has to have’.”

    The key is to understand the audience and to acknowledge what they are going through, he adds.

    “The good thing about this confinement is that customers have rediscovered those small food businesses. They were the lights in the village that were still on,” says Corinne Richard, chief executive and president of Maisons Richard, one of France’s biggest wine group, talking about the way that small businesses became a lifeline for people, because they kept the food, wine and community flowing.

    It wasn’t just consumers in France that felt the need to bring the food-and-wine experience back into the home on a regular basis.

    “The silver lining is that consumers are enjoying better quality wines at home on a regular basis and it’s going to become part of their regular lifestyle,” says Michael Mondavi, founder, Folio Fine Wine Partners.

    • Areni Global is a research and action institute dedicated to the future of Fine Wine.
    • You can follow its work on Twitter: @areniglobal; Facebook: @FM4FW; Instagram: @areniglobal.
    • Pauline Vicard is on @labelsandgrapes.

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