Wine Quarterly Q2 2020: Covid-19 and the US Premium Wine Market, Part I: The Challenges

Covid-19 containment measures, such as shelter-in-place and lockdown orders, have pummeled the on-premise channel. Being an important channel for small, premium wine brands, these challenges are weighing on winery revenues. Some in the industry are hopeful for a quick recovery of this channel, but Rabobank believes that sales in full-service restaurants and bars will not return to 2019 levels until after 2022. This will create a great deal of pressure for small, premium wholesalers in this market and, by default, for the wineries they serve.

Report summary

With these challenges in sight, premium wineries will need to find new ways to engage consumers. Digital strategies will become an increasingly critical component of success but must go beyond traditional direct-to-consumer models to engage the consumer across channels.

“Many of the wineries we’ve spoken with agree that e-commerce must be an increasingly important part of their strategy moving forward, but even those willing to make the investment have a myriad of questions about how to proceed,” says Stephen Rannekleiv, Global Sector Strategist – Beverages. Those questions revolve around how to create the e-commerce platform (buy or build), and how this new structure should fit in the organization.