How key players of the Fine Wine trade are getting ready for the last quarter of 2020.
Tuesday 22nd 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.
First and most reassuringly, our experts have discovered that Zoom tastings have tapped into new and diverse audiences eager to learn more about wine. To keep them engaged, make sure there are 15 people or less on the call, to keep the tastings intimate.
Our experts were generally confident that corporate businesses would find online tastings an attractive Christmas gift for clients, particularly if the tastings involve something special. Suggestions include offering rare and expensive wines in formats small enough for them to be affordable.
Second, the middleman is back. Although direct-to-consumer is booming, most producers find it difficult to implement, because building an audience from scratch is not easy. This means buyers, digital platforms and so on are set to become more important in the future, not less.
Third, the principles of good business are always good, even in a year this 2020. Those companies which were flexible, and which had good relationships, good buying practices and logistics in place, were able to thrive and even pick up new business and employ more staff.
Below you will find some edited highlights of the conversation from the UK and French experts. See here for a recap on the US and Asian 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.
Regine Lee MW – Head of Operations – Liberty Wines – UK
In the UK we had a furlough scheme whereby the government covered the payroll expenses for people who would otherwise have been made redundant. Very quickly, we and other wine merchants decided to use the furlough scheme but we needed to still provide excellent service for the customers. The agility in terms of planning our workforce and how we organised our business was crucial. And also the flexibility that we had amongst ourselves to take on roles that were not what we would normally do on a day to day basis. Number one was our flexibility and agility.
Number two was looking at how we handle logistics. We had to adapt what we did logistically to meet our customer demands. A lot of restaurants became retailers and a lot of customers had to change their opening hours to fit Covid requirements and also to help their staff stay safe. We had to change how we did deliveries and logistics.
Our core functions are still functioning well; we are managing our stock properly and we have adequate cash, but every single week we are adapting to changing circumstances, from Covid to Brexit.
Alistair Viner – Head buyer – Hedonism & Hyde – UK
From the outset it was about being able to deliver the same sort of service we’ve always delivered and finding a way to do that; in closing the shop we were operating behind closed doors. We were doing more internet orders, which increased ten-fold, though it is still a very small part of our business. We were also contacting customers over the phone. What we found was we had more time to talk to our customers. It wasn’t dash in and dash out for a bottle. There was more communication over social media and over the phone and, actually, you get a better understanding of [your customer].
We changed the range of wines that we were selling, particularly on the internet. Tried and tested names seemed to be far easier to sell – people were less adventurous. They were going for the safe options, but there were unbelievable increases in the sales of rose and half bottles; the reason we did more half bottles was because we introduced Zoom tastings which were unbelievably successful.
We kept to a very small number because we wanted to keep things very personal. We find that with tastings bigger than 15 people, people tend not to engage.
We sold out tickets that were more than £1,000 per person. We were very surprised, but getting to taste a range of first growths in a Zoom tasting was a fascinating experience for people. To be able to have them at home and still have the interaction with an expert was very enticing. People really wanted to learn more about the wines rather than just have a tasting.
Tom “Wine Chap” Harrow – Co-founder – Honest Grapes – UK
We were quite fortunate in that it’s a young and a tech savvy team. We made sure we had enough people to staff the warehouse in a compliant fashion, but everyone else adapted quickly at working from home. I think we took on five or six new people over the last nine months. The impact on online sales was very significant; they were up 150% to 250% and that went on for three months solid.
We didn’t have all the logistics in place to deal with that demand, but we were able to take on new people, and did a good buying strategy in regards to going to regular growers and new growers – offering them cash on the nail for nice parcels that we could get quickly across the water to service this demand. That’s something we’re really quite proud of.
One of the other pleasant surprises was the tremendous interest in online tastings program. We’ve hosted at least 60, if not 70, virtual tastings since the end of March and it’s been really interesting [to see] the broad demographic of people who have been interested. The educational aspect has been key. It was fascinating how important being prepared logistically and also online was.
I think 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. We’ve been experimenting with formats – using full bottles all the time can be limiting. Not all our clients can afford £1,000 a bottle for First Growths.
Our average order value went up 20%; mixed cases up 400% and new customers up 400% per month.
Corinne Richard – Owner – Maisons Richard – France
The B2B busines was closed until June 11, so the B2C business has stayed open since the beginning of the crisis. We’ve been concentrating on the business that are open, which means the wine shops. We were adaptable. We adapted the hours, and click and collect worked quite well. During this period, small food businesses were having quite a lot of success. The good thing about this confinement is that customers rediscovered those small food businesses. They were the light in the village that were still on. People were cooking at home and drinking aperitifs and meeting with the family, so they were drinking quite a lot. They wanted to save time, so instead of buying small quantities they were buying large quantities. The Bag-in-Box format was really a format they prioritised. People have rediscovered how good the wines can be in those kinds of formats.
Andre Ribeirinho, founder, Adegga (including, AdeggaMarketPlace, AdeggaWineMarket and Portugal Wine Week), Portugal
Nb – Though not a part of our initial panel, André was in the audience and enriched the conversation with his insights and experience.
How do we use the digital opportunity to make sure that we squeeze that margin and get more value from what we’re doing? I know marketplaces have a bad rap for cutting out the middle man, but I think marketplaces are the middle man; they use technology to make the middle man more efficient. One of the things we did when we launched the marketplace in the middle of the pandemic was invite distributors who didn’t have an online shop to be on our platform. What we had was very valuable to them in two different ways. One is an audience. Adegga was built in 2005 and so we were able to get an audience that most of these people didn’t have. What they needed was an online audience and for most people this means building a social media audience, or a newsletter, or an email marketing audience. These things are so hard to do.
If you’re not online than, for many consumers, you don’t exist. 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.
Adegga was born by doing events and the reason we became successful in Portugal was by making sure producers were in front of consumers. The event has had an online shop since 2009 and I cannot see a future for wine marketplaces without a physical connection. We’re augmenting the experience of wine, but the events are crucial.
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