Last January, trying to divine the future in the blood-red wine dregs at the bottom of my glass, I wrote of oversupply and weak demand pressuring independent grape growers and small family wineries. Compounded by reduced tourism after consecutive years with wildfires and trade tariffs on some wine imports hurting the entire industry, 2019 was tough, and 2020 looked to be another difficult year.
Of course, 2020 turned out to be worse than anyone imagined. The coronavirus pandemic and lockdowns closed tasting rooms and restaurants, two major revenue streams for small wineries. Wildfires hit several wine regions of Oregon and California, including the northern Napa Valley, just before and during harvest. The wine world was also engulfed in the national debate over systemic diversity issues and sexual harassment.
A year ago, I quoted Alison Smith Story saying 2019 had been “the hardest year” of her career in wine, including years in retail and as co-owner of Smith Story Wine Cellars, the brand she established in 2013 with her husband, winemaker Eric Story. So I checked in to see how they fared this year. Turns out, the first quarter of 2020 was their best ever, before the bottom fell out.
“The highs felt like flying over the tops of a redwood forest,” she said. “The lows — well, the grief of the year coupled with a dark red sky and ash falling — dropped us to our knees.”
Smith Story traveled the country for years trying to build a wholesale market for the brand, and she was poised to enter a dozen new markets this year, selling mostly to restaurants. That channel evaporated instantly under the pandemic rules, as it did for wineries across the country. And with their tasting room in Philo, Calif., in Mendocino County’s Anderson Valley, closed for the spring, the couple shifted to online sales.
Once a week or so, the Storys rented a van, loaded it with wine, and along with Lord Sandwich, their goldendoodle and official winery mascot, personally delivered more than 500 orders throughout the San Francisco Bay area. In July, with pandemic restrictions eased, they opened an outdoor “weingarten” at their tasting room “and hosted hundreds of brand new guests steadily, even through days of extreme temperatures, smoke-filled air and ash falling on our shoulders.”
Oh, and those fires: “Due to smoke taint, we didn’t pick a single grape this year,” Smith Story says, reflecting a dilemma faced by small wineries and growers in several parts of California this year. Their business for 2020 and 2021 will rely on inventories from abundant vintages over the past few years; the glut that loomed ominously a year ago is now a lifeline.
We consumers have helped, of course. Retail sales spiked at the start of the pandemic, as we stockpiled wine and toilet paper. We favored familiar, inexpensive labels, so while retail stores benefited from increased sales at a time when other businesses were shuttering, the spike primarily helped larger wineries. Sales have moderated a bit, and the annual Thanksgiving bump was smaller than usual as we held more modest celebrations, according to data released in late December by Sovos ShipCompliant and Nielsen. But online sales continue to be strong, as we become more accustomed to buying wine and other alcoholic beverages to be delivered to our doors. That pandemic effect is likely to continue.
The 25 percent tariffs imposed by the Trump administration in late 2018 on certain European wines and foods also played a role the past year, and hopefully they will not continue. We saw slightly higher prices, especially on French and Spanish wines; the tariffs’ effects were felt more keenly by importers and restaurants — at least, until the pandemic overwhelmed all other factors. When the year began, the administration was rumbling about imposing even higher tariffs, which thankfully never happened.
Now, an alliance of restaurants, retailers, importers and distributors is urging President-elect Joe Biden to repeal the Trump tariffs “on day one” after inauguration. The Coalition to Stop Restaurant Tariffs, launched in mid-December, includes top chefs Thomas Keller, Alice Waters, Daniel Boulud, Nina Compton and Kwame Onwuachi.
“Our formula for survival through this economic crisis is simple: For each customer, we need to maximize sales of profit drivers like wine, and minimize the cost of inputs like cheese, olive oil, meat, and other food. These expensive tariffs make that impossible,” the coalition wrote to Biden in a letter dated Dec. 14.
“The restaurant tariffs have been a failure,” the letter continued. “In place for over a year, they have in no way pressured the European Union to end its aircraft subsidies, yet the Trump administration has kept the restaurant tariffs in place even through the greatest crisis our industry has ever faced.”
Biden has indicated revoking the tariffs may not be high on his trade agenda. The coalition is hoping he will see it as a small but effective part of covid relief he can provide quickly without an act of Congress.
What will happen this year? As I look into the bottom of my glass, darkly, I realize my powers of divination are limited. It has to be better, doesn’t it?