Gauging the Economic Impact of the Current Crisis on US Wineries
WineAmerica released results from a survey yesterday of wineries across the country to assess the initial economic impact the pandemic has had on their businesses.
The survey was sent to all US wineries on March 19 with a deadline of March 23. More than 10% responded (about 1,085 wineries) across 49 states.
Below are some highlights from the survey.
Nearly all wineries have been forced to shutter tasting rooms by government mandate. As such, the average winery expects a 75%-80% decrease in visitors in March.
About 80% of respondents have continued production, 67% of which reported producing at a slower rate than normal.
On average, respondents expect a 63% decrease in sales during the month of March, and a 75% decrease in April.
With that kind of drop in sales and closed tasting rooms, layoffs are likely not too far behind. Indeed, the average winery reported having 10 employees under normal conditions, and have laid off about four, so far.
The survey also asked what recovery time would be, if normal operations were resumed on April 30. The average winery said it would take about three months to get back to business as usual in terms of employees, visitors, sales etc.
“In a remarkably short period of time, the COVID-19 has already had major negative impacts on wineries of all sizes in all states, undoubtedly with more to come,” per WineAmerica. “The American wine industry is comprised primarily of small, family-owned businesses that have very limited resources in the best of times, so this period is particularly trying.”
HOUSE PASSES COVID-19 STIMULUS PACKAGE
The House of Representatives officially passed the $2 trillion coronavirus stimulus package today after the Senate passed it late Wednesday night.
You may recall, a few highlights of the bill include: $349 billion for Small Business Administration loans; up to $1,200 payments to Americans who make $75,000 or less; and a retention of tax credit for employers to encourage businesses to keep workers on payroll.
“We are grateful that Congress recognizes the significant contributions of the nation’s distillers in producing hand sanitizer to help fight COVID-19, and for waiving the federal excise tax on these much-needed products so that these distillers are not subjected to a tax bill for their goodwill,” says Distilled Spirits Council chief Chris Swonger.
Indeed, the TTB issued new guidance last night saying that “alcohol, whether or not denatured, may be delivered tax-free” to governments, hospitals, labs, etc. for “non-beverage purposes,” i.e. hand sanitizer.
“The hospitality industry is one of the hardest hit by COVID-19, and many craft distilleries are facing the very real possibility that they may not be able to open their doors again when this crisis is over. There is more to be done, and we look forward to working with Congress and the administration to ensure future success for distilleries across the United States,” adds Chris.
The bill now heads to the president’s desk.
To keep track of what all goes into the stimulus package, trade orgs have put together fact sheets; the Wine Institute has put together a summary here, and the Wine and Spirits Wholesalers of America has posted fact sheets about business loans and grants here, paid leave here, and tax incentives and credits here.
PLCB CONSIDERS ONLINE SALES, AS BRICK-AND-MORTAR STORES REMAIN CLOSED
Last week, Pennsylvania Gov. Tom Wolf ordered the closure of state-run liquor stores including ceasing online sales in an attempt to help stop the spread of COVID-19. Earlier this week, the governor was rethinking the decision.
Yesterday, the Pennsylvania Liquor Control Board’s Sean Kelly said the agency is not planning to reopen its 600 wine and spirits stores, but it is considering limited online sales, reports a local news outlet.
That’s not exactly a win, but it’s a start.
REMY ANNOUNCES CHANGES WITHIN EXECUTIVE COMMITTEE
Remy Cointreau has reshuffled its new leading management team, per a release.
The Executive Committee will be comprised of three market directors (group, Greater Chain, and Americas), three brand directors (ceo House of Remy Martin, ceo Liqueurs & Spirits, and ceo Whisky Business unit) and three cross-functional directors (cfo, Human Resources, and operations director), all reporting to ceo Eric Vallat.
Current ceo of Europe, Middle East & Africa, will be managing all domestic markets around the world, global travel retail as well as e-commerce. In addition, ceo of Greater China Nicolas Beckers will join the Executive Committee and report directly to Laurent Venot as will ceo of Americas Ian McLernon.
“As announced, I will share in June our strategic vision for the years to come,” says Eric. “However, it all starts with a tailored organization, the reason for which I am pleased to formalize this new Executive Committee, narrowed and structured to reinforce the coherence of our actions with the nomination of a head of markets for the Group. Integrating Greater China to the Executive Committee is also essential for me, due to its strategic importance and its market specificity.”
JACK DANIEL’S LAUNCHES AD SPOT AROUND SOCIAL DISTANCING. Brown-Forman’s Jack Daniel’s Tennessee Whiskey released a new creative spot, the first work to come from B-F’s new creative agency partner, Energy BBDO. The spot, called “With Love, Jack,” shares connections in a time of social distancing. It is created from user-generated footage of people interacting all from the comfort of their own homes. Check it out here.
BOGLE VINEYARDS HIRES NEW VP OF SALES. Bogle Vineyards has appointed Dan Ewer as vp of sales. In his new role, Dan will lead sales teams responsible for the Bogle, Phantom and Juggernaut brands, while working under the direction of the company’s third generation owner-managers, Warren, Ryan and Jody Bogle.
NATIONAL ASSOCIATION OF CANNABIS BUSINESSES TAPS DISCUS VET AS EVP. The National Association of Cannabis Businesses has appointed Mark Gorman as its new evp and coo. Mark joins NACB from the Distilled Spirits Council, where he served 20 years as the svp for government relations. Under his direction, the NACB will work to broaden support among other cannabis groups, consumer protection agencies and government policy makers for its responsibility standards and best practice guidance, per a release.
A COUPLE HOUSEKEEPING ITEMS: We are in the process of fixing and updating our Apple and Android SchuPub app. We know our app has been plagued with bugs for a long time. (If you’ve ever dealt with software developers, you know the special level of hell you endure.)
So we made the painful and expensive decision to throw out all the old code and just start from scratch. Our new app will be free of bugs as well as having cool new features, including the ability to read our publications on iPads and tablets both vertically and horizontally. The coolest feature in my view: Every time we publish, you’ll hear a champagne cork pop (if you enable alerts, which you should).
But hold your horses, it’s not ready yet. We’ll let you know when we go live. In the meantime, please delete our current app if you have it because it sucks and you will need to completely re-upload it once we go live with the new and improved version. Stay tuned…
ON ANOTHER NOTE: In light of these crazy times, we are extending the temporary suspension of our copyright and leaving our website paywalls open for another month, through April 30.
Be safe out there, and have a good weekend.
“Vitality shows in not only the ability to persist but the ability to start over.” – F. Scott Fitzgerald
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