Finishing strong – How to plan the last quarter of 2020 – US and Asian Markets
How key players of the Fine Wine trade are getting ready for the last quarter of 2020.
Tuesday 29th of September – 4pm-6pm BST – Online
As the wine trade enters the race towards Christmas, ARENI has been receiving questions from our network about how the supply chain is preparing for the end of the year. What can wine businesses do to make their sales?
We gathered experts from four key markets – the UK, France, China, and the USA – and asked them about what this year has taught them about doing business under pressure.
Below you will find some edited highlights of the conversation from the US and Asian experts. See here for the recap on UK and French markets.
This is only a taste of what was covered – to get access to the full recording:
These comments have been condensed and lightly edited.
Michael Mondavi – Founder & Coach – Folio Fine Wine Partners
The main change we had was to convert our business from being hotels, cruise ships and off trade to essentially 75% to 85% off trade. People sheltering in place are learning “hey, it’s Wednesday night and we’re having pasta, so let’s have some wine”; 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. The restaurant sector is suffering and we’re suffering with it, but we’re focusing on how to we do a better job with consumers.
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.
What’s really happening now is that with the winemaker doing a tasting with people on Zoom, we are bringing the vineyard and winery from Europe into people’s homes. It’s bringing the consumer closer to the winemaker and I think that’s a wonderful opportunity for the future as well. They’re not experimenting with new brands – they’re more conscious of value, as well – but we’re seeing an increase in wines over $50 a bottle. Before, the higher price wines were mainly sold to high end wine shops and restaurants.
Jamie Ritchie -Worldwide Head – Sotheby’s Wine
Our market has remained robust. We have had very successful sales in each of our locations – London, New York and Hong Kong. Our Hong Kong sales are doing very well, and that business is on plan for the entire year. The market is definitely a little bit softer in Europe and the US and it’s obviously challenging to move wine around because we have Covid restrictions; [the goods] have to quarantine and it’s not as easy to move our teams around to inspect things. But overall, we are very fortunate in our business to have willing sellers and buyers; our traditional buyers have been continuing to buy.
We’re trialling a new online format today [29 September 2020]. Today, we’re doing a new format, online bidding, but having a live auctioneer finish the auction.
As we’ve developed and transitioned from a live auction – last year we were 90% live auction and this year we will be 30% – we have been bringing in a lot of younger bidders. Fifty percent are under 50.
We’re getting a number of 30 and 40-year-old bidders. When I joined in 1990, the average was 65 and now we’re averaging more like 40 across our markets.
I think us being able to move around again is critical to success. We’ve been very smart and have literally transitioned our business to an online one and we’ll continue to refine and fine tune it – we will do things to make it a better experience. The issue for us is that wine is intensely social and getting together and drinking and enjoying it needs us to move around again.
Ryan Pennington – Senior Director Of Communications And Corporate Affairs, Ste. Michelle Wine Estates
We found some pretty good success in the direct-to-consumer channel by going analogue in addition to digital. We invested heavily in a phone sales program with our current club members, reaching out to them and seeing how they’re doing. We’ve had good success doing that.
An area we’re optimistic about in the fourth quarter is an aggressive outreach in corporate sales, gifting and corporate virtual entertainment. Companies are going to want to do something for their employees and we’re reaching out to see if we can offer assistance there.
We found some pretty good success in the direct-to-consumer channel by going analogue in addition to digital.
Tonya Pitts – Wine Director & Sommelier – One Market Restaurant San Francisco
We are open only for curb side pickup. I think what will pivot for us in the coming months is the fact that we are one of the larger restaurants in the city; we can only reopen at 25%, so we’ll probably have 100 guests in our restaurant. Gearing up for the holiday, it’s going to be a whole new world. We’re going to have to implement the virtual aspects of things; our guests are locals and tourists but also business guests. The business guest is not in the office, not entertaining, not working that way, so there are going to be virtual dinners. It’s a 27-year- old restaurant and we’ve seen everything come and go. This is different, but we just have to keep moving.
People can go into retail and buy wine, but people are hungry to have that social connection and that’s when restaurants will come into play.
It’s a 27-year- old restaurant and we’ve seen everything come and go. This is different, but we just have to keep moving.
Joe Fisch – CEO – Wine Access
Online hadn’t been the growth engine of the overall market. It represented a small portion of the market. Pre-Covid we were tracking along, probably 20-30% year on year – and then it moved into the low triple digits. [Covid] is more a catalyst than anything but, across the different categories, we’re seeing much more everyday consumption. We’ve seen a slight downtick in our bottle price – under $30 is doing amazing, but so does over $300.
Mario Aron – CEO – Sarment
China is a very interesting market to be in and where we have a lot of different channels we have been serving. We are now saying “post-Covid” – we are feeling very secure.
Chinese people have been able to travel and the travel patterns have changed over time, with more people going off the beaten track. The wine world is benefiting from that because our offering to the market is much more diverse than it was ever before. The key brands, whether it’s the Penfolds or the Mondavis, are in the minds of the people, but it’s not only them. So many more brands are out there, that everybody has to fight for their place.
The online channel is probably the most sophisticated in the world. What that means short attention spans, so nobody wants to read big stories about how beautiful the winery is. If you cannot attract the attention of the consumer, you have lost them. The online has an attention span of ten to 15 seconds. This is the time you have.
Once you have attracted someone with a one liner, then you go with a short description about what is going on. The person reading says, “yes, now I’m interested”. But you can’t start with the full story because people are overwhelmed.
Alex Caillard – Head of sales – Pudao
Covid has changed China, but there were already a lot of things changing and evolving that Covid accelerated rather than caused. China was already the country with the highest percentage of sales online, with a vast delivery and distribution network.
In the last three to six months, the biggest growth driver is the fact that we have closed borders. Without people leaving the country we’ve been able to capture a lot of that spend that would have been spent out of the country. It’s temporary. Once the borders so open and the borders return to normal there will be a lot of pent up demand for travel and experiences overseas.
The ecommerce market is so different from the West, as there are no Amazons or domain name sites. There are two platforms, Tmall and JD.com, but these are vast shopping malls – you have a people in the same marketplace selling the same products at the same price. People are not looking for brand names or even country names; the top searches are “wine”, “red wine”, “cheap wine”.