Looking back at winery clients during the pandemic, we are able to identify several actions and strategies which not only helped them weather the storm, but also laid the groundwork for continued success in 2021.
What springs to mind first is the quote attributed to Sir Winston Churchill:
Never Let a Good Crisis Go To Waste
So what does this really mean in terms of day to day winery operations? Here’s our list of what worked and we think will continue to work, broken down by Distribution, DTC and Operations:
Distribution: Kathy Byrd
The most successful wineries provided clear communication and support to their distributors - collaboration was the key to their success.
Additionally, some wineries were able to pivot and double down on chain retail IF they already had a foot in that door.
Others were able to increase cash flow and reduce excess inventory (sometimes at reduced prices) by selling to online retailers usually at a discount. Price point rules went out the window, and wineries were able to use the pandemic as an excuse to correct oversupply issues.
High profile brands were able to market online events and create more brand awareness.
Overall, wineries who were actively pursuing new strategies working in tandem with their distributors did better than those who sat on the sidelines.
As we recover from the pandemic, creativity, flexibility and collaboration with your distributors will continue to be the key components to your success in the distribution channel. The dynamics will continue to change and no one has a crystal ball. Find out what your distributors need, help them get what they need by providing brand value (communication, creative programs, strategic pricing, etc.), and you will both win.
Things may never go back exactly as they used to be. Use the pandemic and it’s recovery as an excuse to reinvent your winery and put your best, most creative, resourceful, and detail-oriented foot forward.
DTC: Ann Tucker
Ecommerce: Wineries who fully engaged in weekly ecommerce were able to replace much of their lost tasting room revenue and can feel optimistic about continuing. Looking ahead, the 2021 Direct to Consumer Shipping Report predicts three factors which “could lead to a doubling of the volume of winery DtC shipments over the next five years.”
1. First-time purchasers discovered the convenience and greater choice available via the DtC channel.
2. More professionals permanently working from home suggests online purchases will become more commonplace.
3. Wineries who saw the positive impact of aggressive online marketing will devote more resources to this channel.
Online tastings on a weekly, bi-weekly and monthly basis meant consumers anywhere could enjoy a tasting room experience. This action of “taking your show on the road” is exactly what industry experts have been advising for years.
Affordable tasting kits (another version of taking your show on the road) proved very popular. With a lot more wineries doing this, it will be important to be a leader in packaging and marketing strategies.
Telesales, not to be confused with cold-calling, were a game changer. “Phone sales, which didn’t even register as a sales channel in 2019, became a meaningful source of revenue for many wineries that tried it in 2020.” (SVB 2021 State of the US Wine Industry)
As with distribution, the landscape is changing and you should continue to innovate with new DtC processes. Once your tasting room is fully reopened, if you have created new sales channels you’ll need to remain focused on maintaining and refining them. And, if you opted to “wait it out”, there is still opportunity to adopt new processes. There are an abundance of resources and data available to you; it’s important to stay on top of new information.
Operations: Kelly Tucker
Wineries who articulated a clear vision, plan and path - which was shared by all - were able, even under stress, to keep everyone rowing in the same direction.
Wineries who assigned the “right people to the right roles” could change course more quickly and confidently. Speed to action was more important because the landscape changed often.
Clearly defined core values meant the team could make decisions based on the wineries core values.
Reacting to weekly change meant new processes were developed in an effort to keep sales going. Many of these new processes, such as online, virtual and phone sales will continue to be very important even after the pandemic ends.
Overall, even if a change of course seemed like a weekly occurrence for you, if you had a clear vision of your goals and communicated them with your team, you will have fared far better because everyone kept the endgame top of mind.
Successful wineries are often run using a handful of metrics and an organized structure and documented process. Distribution and DtC move together like a doubles team in tennis. If your winery didn’t perform well in 2020, or you're worried about catching up in 2021, we can help your team solve the issues that are holding you back.
Call us and let’s chat. We’ll set up a 60 minute complimentary zoom meeting with you and our team.
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