California North Coast winemakers see visitors, restaurant sales return
What a difference it is in the North Coast from a year ago, when local wineries and restaurants began to reopen from the first shelter-at-home order that went into effect statewide in mid-March.
This was reversed in early July 2020, less than a month later, followed by the color-coded tier system in late August which limited customer capacity based on county metrics.
Napa County rose to the least restrictive yellow level on Wednesday. Wineries, restaurants, breweries and distilleries can expand their indoor capacity to the lesser of 50% or 200 people. Outdoor activities had already gained momentum as Memorial Day visitor numbers matched pre-pandemic levels, according to reports.
âThere is certainly a lot of life in the valley right now – lots of guests are having fun,â Trefethen Winery president Jon Ruel told The Business Journal.
Demand for wine in barrels is picking up
A proverbial canary in the mine that Ruel has guarded is the Trefethen Cask Business, which is a small subset of the wine from the winemaker that goes to restaurants. Because the kegs go straight to restaurants, it’s a faster measure of restaurant demand than the depletion of cases stored in distributor warehouses, he said.
âOur keg orders have grown faster and more sharply than I expected in February and March,â said Ruel. “And then as we go into April and May, I could see that they were going not only to our accounts in Florida and Texas, where I would expect them, but also to accounts in California.”
According to Heather Clauss, chief commercial officer, Sonoma-based company Free Flow Wines got a double punch following the closure of restaurants, bars, major events and other on-site consumption spots during the pandemic. The Sonoma-based company serves the on-site market with casks and cans of wine.
An oxygen-free process transfers the fine wine into 19.5-liter âbullet casksâ, the equivalent of 26 standard 750-milliliter bottles, destined for on-site sites for the glass programs. That almost hit half in the first few months of the pandemic, as distributors sold through existing inventory to support the few open sites, Clauss told the Business Journal.
“When we originally planned for the 2021 keg, we expected a slow recovery from 35% of ‘normal’ volumes in (January) to 75% by the end of the year,” Clauss wrote in an email, noting that the company sees 2019 as a “normal year for sales volume.” We were, however, pleasantly surprised to see a much faster recovery than expected … “
Drum fill requests jumped in April and May to 85% of 2019 levels, and June and July volumes are now approaching pre-pandemic levels.
“Drum shipments follow in a similar fashion,” she wrote.
Event concessions and other on-site venues are a major market for wine in individual aluminum cans, and Free Flow Wines reports a decline in jobs in mid-2020 as orders from dealerships at events and sales other places on site have dried up. in place, says Clauss. But demand for canned wine has picked up and the company is experiencing “strong demand” for jobs in the third and fourth quarters of this year.
âIn summary, we hope the on-site recovery will be better than expected, as there have been fewer permanent closings than initially expected and consumer enthusiasm to go out and drink is strong,â said Clauss.
Florida and Texas, which are among the key states for fine wine consumption, began easing pandemic restrictions on indoor dining months ago. Most California places have been banned from eating indoors for the third time from late November to the first two and a half months of this year.
Wholesale orders bounce back
At Schramsberg Vineyards on Diamond Mountain in Napa Valley, owner Hugh Davies has watched massive burnouts for on-site accounts rebound from pandemic lows.
From January to April 2020, which includes a month and a half of restaurant closures across the country, distributors delivered 4,426 cases of wines from the Schramsberg portfolio to restaurants, including an “insanely low number” of just 155 in April. . In the same four months of this year, including the closure of California restaurants in January, 5,614 cases were sold out among wholesalers, including 1,920 in April alone.
He’s eager to see what May’s runouts look like as more restaurants open at higher capacity.
âIt’s so exciting to see the (market) on-site grow, because for a while, the only thing you could really do through wholesalers was go more retail,â Davies said.
Jim Pedroncelli, owner of Pedroncelli Winery in Sonoma County’s Dry Creek Valley, can’t wait to put his wine back in restaurants.
âGenerally speaking, it’s always more off-sale than on-sale,â Pedroncelli said, referring to off-site and on-site consumer accounts, in other words, retailers and restaurants. “As for the restaurants, it hasn’t caught up with us anyway.”
But the good news for North Coast winemakers is that the economic pain for restaurants – the main buyers of their wines – could end up being less than expected even six months ago. The National Restaurant Association‘s latest survey of operators, conducted in mid-April and released last month, found that 90,000 restaurants across the country have closed permanently or long-term, less than 14% of the total. restaurants, down from the December estimate of 110,000, or 17% of establishments, reported Bloomberg.
Wine events return as restrictions ease
At Barra of Mendocino, events are a key source of income, according to owner Martha Barra. The 20,000-case-a-year winery in 2019 hosted 63 events, about a third of which were non-profit, at the Redwood Valley estate north of Ukiah. But none took place between mid-March 2020 and when Mendocino County entered the yellow category at the end of April of this year.
âWe had a few very small events in the garden, but nothing inside, but now that is changing,â she said.
Since events resumed at the property in late May, the summer schedule for the outdoor grounds and garden has started to fill with weddings and quinceanera events.
In Schramsberg, Davies is happy to see cellar visitors again, as over the past 14 months the number of visitors has been on average 40% lower than typical cellar seasonal trends.
âBetween the fires, COVID, the power outages, they didn’t make it easier,â Davies said.
Jeff Quackenbush covers wine, construction and real estate. Prior to Business Journal, he wrote for Bay City News Service in San Francisco. He graduated from Walla Walla University. Contact him at [email protected] or 707-521-4256.