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Friday Read: UK wineries battle coronavirus crisis with British determination

Published:  20 March, 2020

Rapidly slowing exports, a pivoting to direct to consumer sales as on-trade sales stall and vineyards on lock down – such is the picture of the UK wine industry today as it grapples with the ongoing disruption from the spread of the coronavirus (Covid-19).

In order to get to grips with the impact of the spread of the virus on the English and Welsh wine sector, Harpers reached out to wineries across the UK this week to find out how they are coping in these unprecedented times. And it is clear that the industry is facing a very real and very different set of pressures than it was even last week or a few days ago.

Reports of mass cancellations of events and postponed on-site tastings began at the beginning of the week as vineyards made safety of staff and customers their top priority.

From there, businesses then turned their attentions to coping with an upswell in demand online as shoppers moved from stocking up on essentials (toilet roll and pasta now roughly being equal to the price of gold) to feathering the nest with comforts like wine.

However, this sudden uplift from bulk buying is only half of the picture. The other is of an industry that is grappling with uncertainty around freight exports (WineGB has called for more clarity), the loss of workers and therefore slowed production, and also declining exports. (According to various reports, an initially difficult export market in China is now spreading to the USA where the wine industry was already under pressure from European tariffs.)

But perhaps the biggest impact is the loss of trade customers.

According to WineGB, 53% of English and Welsh wines are sold through the UK trade (retail and on-trade), meaning wineries are now having to pivot to direct to consumer sales, using online databases of customers and offering free home delivery in an effort to maximise direct sales.

As social distancing kicks in and the public heeds official advice to avoid bars and restaurants, Duncan Schwab, head winemaker at Devon’s Sharpham Wines, said they are “Losing orders left right and centre” while Ruth Simpson, co-owner at Simpsons Wine Estate, said “key trade accounts are cancelling orders or severely reducing them”.

Many of these wineries are also on-trade operators themselves – something that WineGB responded to in its first release since the first of PM Boris Johnson’s daily briefings.

Mid week, WineGB called for more government support for UK winemakers, most of which “have cellar door facilities, restaurants, cafés, tours and even accommodation and are likely to suffer a significant loss of income over the coming weeks”.

Shifting distribution to consumer sales suddenly became the thing, though as Lynsey Verrillo, co-owner of urban producer Blackbook Winery points out, some direct to consumer marketing channels are “not as strong as they could be, so we’re worried we won’t gain enough sales to plug the gap.  The cancellation of tastings, events and trade fairs is also restricting our ability to showcase our product.”

Meanwhile, some are still trying to come to terms with the government’s overall response to the crisis.

“It’s a bit of a nightmare and I find myself wishing Macron was in charge,” says Essex farmer Pete Thompson, MD of Reliquum Spirits and producer of the UK’s first homegrown Baiju. “At least if staff are laid off you know they will have the guaranteed monthly income. The disconnect of UK government from small business mindset is astounding. I doubt many will take the opportunity to take on a big lump of borrowing just in case it turns around in two to four or however many months.”

This is a feeling echoed by WineGB. While the chancellor’s £330bn bailout package of financial aid was welcomed, the package of support to the hospitality industry is in reality a loan “and given the margins this sector works on, it is unrealistic to expect these loans to be repaid” WineGB said.

Others are expecting a “seismic change” to the landscape in the UK once the situation eventually de-escalates.

Dan Cahill, MD at Sussex-based Fitz winery, said: “From our point of view, as Fitz sparkling wine is predominantly an on-trade brand, the effects on sales are likely to be an almost complete shutdown of sales over the next few weeks / months. It clearly remains to be seen how quickly we can emerge from the current crisis and what the landscape will be when we do emerge on the other side.”

Clearly the long, medium and even short term impacts of the situation are still being puzzled out.

In the short-term, events like the Wine Sensory Symposium scheduled for April 20 at Plumpton have been postponed, with plans for it to return “hopefully this summer”.

In terms of production, there is a collective sigh of relief that harvest is isn’t until September – though with much sympathy for southern hemisphere colleagues who are currently trying to deal with the situation and critical timings in vineyards.

However, there is still the expectation that the disruption will hit UK winemakers’ production and releases, as the “usual staff and volunteers who support us cannot come for bottling,” says Verrillo.

Many workers also have returned to their homes in Europe as the virus takes hold.

But despite everything, there is optimism.

As disruption bears down, the British backbone of camaraderie and determination that creeps in during times of crisis is clearly on show at the moment, as colleagues rally around their local communities, including going the extra to help with home deliveries for elderly, vulnerable and isolated people. 

There is also hope that in the wake of a global pandemic, there will be a greater focus on eating and drinking local and supporting local businesses.

A number of PRs are also offering to help out wineries by volunteering their services pro bono, including Rachel Davey at Rachel Davey PR, who works closely with Plumpton Wine Division.

“I’m offering my services to anyone in the business if they need support with PR/Marketing or social media strategies or a plan of action in the coming weeks," says Davey, who has done a "number of creative things over the past few weeks", including making hand sanitisers for the community with Circumstance Distillery.

Export-wise, Red Johnson, founder and CEO The British Bottle Company (Hampshire-based exporter with a network of international distributors) reports that while China has been very difficult since the end of January, “the situation there is gradually improving”.

China is also starting to wake from economic hibernation, giving us a glimpse of the other side of this truly out-of-body experience of a situation, which is testing the limits of the UK trade, but is also allowing for a fair amount of introspection, whereby the industry can re-group, re-assess and come back, (eventually) on even better form.

As Tamara Roberts, Ridgeview CEO and board member of the WSTA and WinesGB, says: “Every day presents us, our customers and our suppliers with overwhelming challenges which we must face together. Now is a time for planning, not panic, and being focused on what we need to do short-term to survive in the long term. Our priorities are to keep our families and employees safe whilst keeping production going in order to get our wonderful 2019 vintage into bottle and keep our supply channels open. When the time is right, we will be ready to celebrate making it through these uncharted waters.”

Top photo shows staff pulling together at Devon’s Sharpham Wine