It’s a good time to buy wine.
Responding to the coronavirus situation, the state has closed bars and other establishments that sell drinks. It has turned sit-down restaurants into take-out only businesses.
As for wineries? The new rules change the business model. But revenue had not completely gone away, as winemakers may still sell bottles at the counter.
Several wineries are offering their wares at 20% to 40% off, said Ed Embly, the winemaker who leads the San Diego County Vintners Association. Many are turning to social media to alert their customers.
Carruth Cellars of Solana Beach and Oceanside said it is offering 40% off for wine club members and 25% off for the general public. It’s offering wine for pickup and something more, partnering with Prager Brothers to provide fresh bread and Aniata Cheese to provide cheese and cured meats.
Regular patrons are stepping up to help their favorite wineries, said Embly, who is also owner of the Hungry Hawk Vineyards & Winery in Escondido.
“Existing customers want to help out,” he said. “It’s really great to see that,” said Ross Rizzo, president and winemaker at Bernardo Winery.
A Hand from Sacramento
During the crisis, the state has loosened requirements on wineries, permitting them to deliver to customers.
Wineries are also still permitted to make their product, though March is typically slow on the manufacturing side of the business. Some wineries may still be bottling last year’s product, Embly said.
These are interesting times, but some things remain the same.
“People still want their wine,” said Justin Mund, winemaker and general manager of Orfila Vineyards and Winery in Escondido. The company recently opened a tasting room in Oceanside.
Mund said he has seen a 40% bump in business. The Escondido location usually does $50,000 per week and made $70,000 in the last week, he said in a March 25 interview.
Whether the increase in revenue will continue is unclear. It could be that people feel an immediate need to stock up.
Orfila management also made the decision to lay off 25 of its 40 employees with recent changes in the law, Mund said. The concern is over a law requiring businesses to pay 80 hours of sick time beginning in April. Penciling that out, Orfila figured the law would cost the business tens of thousands of dollars.
Mund is not happy about the decision. “It hurts you,” he said.
Business Development on Hold
Embly said his winery has applied for a small business disaster loan through the U.S. Small Business Administration. It’s a 30-year loan at a fixed rate.
“We could probably stand one to two months as it’s going now,” he said.
If this was a normal second half of March, visitors would be showing up at the region’s wineries, touring the grounds and getting a sense of how the product is made. In that scenario, Embly said, winery staff members build personal relationships with potential customers.
It’s how a winery grows its business.
“Like most industries, you need to grow a certain amount to stay viable,” Embly said.
With extended visits no longer possible, business development is taking a break.
The San Diego County Vintners Association has 67 members.
There are about 110 wineries in San Diego County, Embly said. The number grows to 130 when the count includes cider makers.
A Welcome Rain
Looking toward the next several weeks, Carruth Cellars plans to stay positive, said business owner Adam Carruth.
And it plans to angle for more business. Carruth is thinking of a Wine Wednesday bundle every week “to keep our community engaged and inspired.” There will be a Monday bottle of the week (available for pickup or ordering online) as well as Free Shipping Fridays.
“We’re starting a Pay it Forward fund for our staff, in which a portion of the proceeds from our 2018 rosé will help support our hardworking staff during this difficult time,” Carruth said in a statement.
Did anything good happen during March?
Embly said a rainy month has been a blessing. Rain leaches salts out of the soil in the vineyard and builds up moisture in it, meaning Hungry Hawk and its San Diego neighbors can delay irrigation for a while.
Rainwater is better for grapes than irrigation water any day.
The Business Journal is the premier business publication in San Diego. Every day online and each Monday in print, the Business Journal reports on how local business operate and why businesses leaders make the decisions they do. Every story is a dose of insight into how to run a better, more efficient, more profitable business.