Tag: Covid-19

WineAmerica discloses how wineries are being “creative” in the face of adversity

The average US winery lost US$51,201 from March 15 to April 15 and expects to lose a further $134,626 in May, due to the latest survey by industry association WineAmerica.

There is some cause for optimism.

Having released bleak figures back in March, the industry association has said the results of its second survey has brought in some more “uplifting” findings.

Last month, WineAmerica revealed that US wineries lost a total of US$40,439,764 in March due to Covid-19, but warned that the figure could be far greater as only 10% of the nation’s wineries responded to the information request.

In its second survey, the industry association found that the average winery lost $51,201 between March 15 and April 15 and expects to lose $134,626 in May if the current situation continues through to the end of the month. Wineries estimate that it will take an average of four months to return to normal business levels.

This survey was returned by 727 wineries in 45 states, a smaller survey sample than the first.

It revealed that wineries have resorted to ingenuity in order to bring in money. The most popular new strategy was offering curbside pickups, with 84% of those surveyed saying they had done this. 63% said they had reduced shipping costs, 60% had offered special promotions, 54% had carried out local home deliveries, and 53% said they’d put out ‘wine club specials’.

28% revealed they had engaged in the growing trend of virtual wine tastings. Just 5% of those surveyed said they hadn’t tried any of these initiatives.

WineAmerica stated that it was “highly likely” that the marketing experience and willingness to adapt will “serve the industry for years to come”.

15% of those surveyed said they had been forced to stop production, however, 62% said that production speed had been reduced due to Covid-19.

Due to the global pandemic, the average American winery had to lay off five members of staff, although a quarter of those surveyed said they didn’t make any job cuts.

As expected, wine tourism has taken a huge hit. The average winery in America has 17,644 annual visitors, with 1,482 expected during the 15 March to 15 April period. Due to coronavirus, visitor numbers were down by an average of 90.5% and tasting room sales fell by 74.5%. However, direct-to-consumer (DtC) sales increased by 8%, with many wineries reporting sales rising by double or triple digits.

WineAmerica president Jim Trezise said that wineries and tourism “have a symbiotic relationship” and described visitors as being “the lifeblood of the industry”.

He said that marketing innovations “have mitigated losses due to closed tasting rooms, but not entirely”.

As some states start to lift lockdown measures, Trezise says WineAmerica is working to develop “best practices for tasting rooms” that will both protect the safety of visitors and employees.

https://wineamerica.org/

Pau Roca, Director General of OIV gives his overview of the 2019 global wine sector and the impact of Covid-19

Speaking from the OIV’s [International Organisation of Vine and Wine] headquarters in Paris, by web conference to over 3,000 international wine journalists, and trade, Director-General Pau Roca presented today [April 23, 2020] details of the 2019 wine production, consumption, and international trade. The impact of Covid-19 in the sector was also highlighted.

Here are the important facts and highlights of today’s Conference:

  • The surface area of the world vineyard is estimated at 7.4 mha, which has been stable since 2016;
  • World wine production is estimated at 260 mhl, a marked decrease, compared to 2018 historically high;
  • World wine consumption is estimated at 244 mhl, marking a +0.1% with respect to the previous year;
  • The world wine export market has expanded both in volume, estimated at 105.8 mhl (+1.7%), and in value with 31.8 bn EUR (+0.9%);
  • 2020 Harvest – first estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 (with the exception of South Africa and Uruguay).

Vineyard area stabilization

In 2019 the world area under vines, corresponding to the total surface area planted with vines for all purposes, including young vines not yet in production, is estimated 7.4 mha.

Starting with the Northern Hemisphere, overall stability can be observed in the European Union (EU) vineyards, which stands for the fifth consecutive year at 3.2 mha.

Within the EU, the latest available data for 2019 indicates an increase in the area under vines in France (794 kha), Italy (708 kha), Portugal (195 kha), and Bulgaria (67 kha). The vineyard surface area in Spain (966 kha), Hungary (69 kha) and Austria (48 kha), on the other hand, slightly decreased from 2018.

In East Asia, after over 10 years of significant expansion, the growth of Chinese vineyard (855 kha), second in the world by surface area just behind Spain, seems to be slowing down.

In the United States, the vineyard has been consistently decreasing since 2014, and its estimated surface area in 2019 is 408 kha.

In South America, developments in vineyard surface area between 2018 and 2019 showed a downward trend for the fourth year in a row.

The only exception in the continent is represented by Peru that increased by 7.1 kha (+17% / 2018) its vineyard surface area reaching 48 kha.

South Africa’s vineyard surface area remained stable with respect to 2018, at 128 kha.

Australia the area under vines remained stable at 146 kha in 2019; while New Zealand the surface area grew by 1.6 % reaching a record-high of 39 kha.

Production back to the average

World wine production, excluding juices and musts, in 2019 is estimated at 260 (259,0) mhl, marking a sharp decrease of 35 mhl (-11.5%) with respect to the exceptionally high volume recorded in 2018. Overall, after two consecutive years that can be defined as extremely volatile, 2019 brings global wine production back to average levels.

Italy  (47.5  mhl), France (42.1 mhl), and Spain (33.5  mhl), which together account for 48% of world wine production in 2019, saw a sharp decrease in their wine production with respect to 2018.

Other EU countries that registered a decrease in production with respect to 2018 are Germany (9.0 mhl, -12%), Romania (5.0 mhl, -4%), Austria (2.5 mhl, -10%), Hungary (2.4 mhl, -34%) and Greece (1.9 mhl, -8%). The only EU country that, in 2019, saw an increase in its wine production is Portugal with 6.7 mhl (+10% / 2018).

In Eastern Europe, weather conditions were favourable in Russia (4.6 mhl, +7% / 2018) and Ukraine (2.1 mhl, +6% / 2018), while in Moldova the harvest was less abundant in 2019 and the vinified production was equal to 1.5 mhl (-23% / 2018).

In Asia, the new data available for China indicate an estimated vinified production of 8.3 mhl in 2019, marking a decrease of -10% with respect to the already relatively low production level of 2018.

In North America, wine production in the USA is estimated at 24.3 mhl, a decrease of 2% compared to 2018. This slight decline in 2019 does not depend on bad weather conditions or the raging fires that occurred in California (harvest was just before), but it is a response to overcome an oversupply of grapes and wine.

In South America, the overall trend for wine production in 2019 is negative with respect to 2018. However, while in Argentina (13.0 mhl) and in Chile (12.0 mhl) 2019 vinified productions are lower with respect to 2018 but overall in line or even higher than their five-year averages, Brazil (2.0 mhl) registered a sharp decrease in its wine production in 2019 of more than 1 mhl (-34% / 2018).

In South Africa, 2019 production reached 9.7 mhl. This represents an increase of +3% with respect to the low volume registered in 2018, but it is still far from the average production levels recorded before the beginning of the drought that heavily impacted the country for three years in a row (2016, 2017 and 2018).

With regard to Oceania, Australian wine production registers a decline for the second consecutive year reaching 12.0 mhl in 2019 (-6% / 2018). In New Zealand wine production was 3.0 mhl in 2019, a slight decrease of -1% with respect to 2018.

Expansion of the international trade of wine

In 2019 the world wine export market – considered here as the sum of the exports of all countries – has expanded with respect to 2018 both in volume, estimated at 105.8 mhl (+1.7%), and in value, with 31.8 bn EUR2 (+0.9%).

Strong increases can be observed in exports from Italy (+2.0 mhl), Spain (+1.3 mhl), Canada (+0.4 mhl) and Chile (+0.3 mhl). However, significant reductions in exports are recorded for Australia (-1.1 mhl), South Africa (-1.0 mhl), Ukraine (-0.4 mhl) and Hungary (-0.3 mhl).

In 2019 the global value of wine exports is on the sustained growth path started in 2010 reaching a new record high. France was still the most important world exporter in terms of value, with 9.8 bn EUR exported in 2019. There were rises in the value of exports in many large exporting countries like France (+425 m EUR), Italy (+211 m EUR), and New Zealand (+84 m EUR). The largest declines include Spain (-234 m EUR) and South Africa (-73 m EUR).

In 2019 the international trade of wine in terms of volume was mainly dominated by three European countries – Italy, Spain, and France – that together exported 57.1 mhl, accounting for 54% of the world market.

In 2019 the top three importers in terms of volumes were Germany, the UK, and the USA, which together imported 40.4 mhl, reaching 38% of world total. These three countries represent 39% of the total value of world wine imports, reaching 11.9 bn EUR.

The first importer in 2019 is still Germany with 14.6 mhl, even if its wine import volume decreases by 0.6% compared to 2018.

China for the second consecutive year saw a significant decline in its imported volumes (-11% / 2018), reaching 6.1 mhl in 2019. In terms of value, the trend is similar, with an overall downfall of -9.7% compared to 2018, reaching 2.1 bn EUR. The only category that increased both its volume (+8%) and its value (+8%) is sparkling wine, although it represents only 2% of the total imported volume.

Early estimates of the 2020 harvest in the Southern Hemisphere

First estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 for the majority of countries, with the exception of South Africa and Uruguay.

In 2020 a decline in production volumes in all South American countries, with the exception of Uruguay, are expected. In Argentina estimated production is 11.6 mhl (-11%), in Chile 10.5 mhl (-12%) and in Brazil 2.0 mhl (-1%), while in Uruguay 0.65 mhl (+11%).

South Africa seems to continue its recovery path from the drought and expects +5% with respect to last year, reaching 10.2 mhl.

In Oceania, Australia expects a lower production level in 2020 estimated at 11.5 mhl (-4%) due to drought and bushfires while in New Zealand (2.9 mhl, -2%) expectations on wine production are by and large in line with 2019, or just below.

These are preliminary estimates and should be interpreted with caution,  given the current exceptional circumstances.

Impact of Covid-19 in the wine sector

At this early stage the information and statistical data available are insufficient to provide an accurate forecast and anticipate the scenario of the vitivinicultural sector in the future. However, due to communication with OIV members (“Member States”), the OIV has certain qualitative information at its disposal.

The feedback given by the Member States reflects a radical change or transfer between distribution channels. The expected overall balance is a decrease in consumption, a reduction in average prices, and therefore an overall decrease in total sales value, turnover, margins and finally profits of the wineries.

As far as exports are concerned, economies in recession are not a promising market to develop, and during this pandemic, the largest consuming countries have been the most affected. Trade flows may recover along with the economy, but some permanent changes could occur.

Alcohol consumption is also being debated. Messages on the positive effects of wine consumption are totally unacceptable and irresponsible.

The same applies to the issuing, under these circumstances, of general statements or biased messages that are the result of ideological concerns about wine consumption, such as abstention.

The OIV’s work follows the Strategic Plan approved by the General Assembly in October 2019 and covers a 5-year period until 2024. In the current context, the objectives and goals of the OIV go hand in hand with the needs that this crisis has highlighted.

The OIV is the intergovernmental organization of scientific and technical nature of recognized competence for its work concerning vines, wine, wine-based beverages, and other vine-based products. It is composed of 47 Member States. In the framework of its competence, the objectives of the OIV are as follows:

  • to inform its members of measures whereby the concerns of producers, consumers and other players in the vine and wine products sector may be taken into consideration;
  • to assist other international organizations, both intergovernmental and non-governmental, especially those that carry out standardization activities; and
  • to contribute to international harmonization of existing practices and standards and, as necessary, to the preparation of new international standards in order to improve the conditions for producing and marketing vine and wine products, and to help ensure that the interests of consumers are taken into account.

The Rémy Cointreau Group solidarity act to fight COVID-19

Rémy Cointreau releases the following statement last week –

Solidarity actions to fight the epidemic continue at our various sites. We are proud to share the local and spontaneous mobilization of our employees to help healthcare professionals. Their actions reflect our values: Terroir, People and Time.

As all alcohol-related logistics are subject to strict safety and taxation rules, all around the world, the Rémy Cointreau Group is happy to provide its expertise, as a response commensurate with the challenge. Therefore, alcohol donations and hand sanitizer production have been quickly set up and will continue over the long term.

 In France, every production site is mobilized

In France, the Group organizes donations of neutral alcohol (> 96°) and ensures a direct delivery to the users, in the areas we know best: Cognac (Rémy Martin & Louis XIII); Angers (Cointreau); Isère, land of the Domaine des Hautes Glaces; and finally, Paris. More than 10,000 liters of neutral alcohol has been sent to 13 hospitals, central pharmacies and local companies with urgent needs, in four different regions. We would like to warmly thank the Cristal Union cooperative, our supplier, and our forwarding partner Hillebrand, who graciously assisted us in the logistics of the operation.

Rémy Martin has responded to the call from the Houses of Cognac Syndicate which has set up a regional operation to produce, bottle and distribute a hydro-alcoholic solution, with the help of health professionals, elected representatives and the Qualyse laboratory. Rémy Martin has contributed 850 liters of wine alcohol (UNIFAB, now approved by sanitary rules) to this effort. GPs, pharmacies, retirement homes and personal care services in Charente and Charente-Maritime will beneficiate from this donation.

Since March 21th, our production site in Angers also supplies the Angers Faculty of Pharmacy with neutral alcohol (300 liters/day). Since the beginning of April, the objective -shared with the liquorist Giffard- is now to produce a ready-to-use hydro-alcoholic solution, in 2 or 5 liter containers, distributed to the local hospital, which is in charge of its redistribution to other actors in need.

In Europe, donations of alcohol and production of hydro-alcoholic lotion continue

In Scotland, teams at the Bruichladdich distillery are working hard to prevent any outbreak on the small island of Islay that would put enormous pressure on the already limited resources. Hand sanitizer with an alcohol content greater than 60%, then 80% -in accordance with the WHO formulation advisesis distributed to hospitals, emergency services, nursing homes and places where people interact, such as shops.

Although Greece has coped very well with the pandemic yet, the House of Metaxa has pledged to cover the needs for alcohol of the 13 hospitals taking care of coronavirus patients. Up to 35,000 liters of alcohol will be shipped all over Greece over the next three months, to support healthcare professionals working on the front line.

 A direct collaboration with American hospitals

In the United States, our Westland distillery directly contacted hospitals in the Seattle area to send 500 liters of finished WHO-formula sanitizer out the door. The volunteer bottling teams work every day with the challenge of keeping the stations completely separated from each other. They anticipate outputting 400 liters per day, 7 days per week, starting the week of April 6, supported by one of their main suppliers who has generously donated 60 tons of malt to produce ethanol.

Update – Countries that have banned alcohol sales due to Covid-19

In North America and much of Europe, liquor stores remain open with limited hours. Often busy and protected under the same regulations that allow businesses such as supermarkets or pharmacies to operate.

Some countries, on the other hand, have banned alcohol, others say liquor shops are essential services, and one top official even suggested a tipple after a long day trapped at home can be a necessary restorative.

The debate around alcohol and the coronavirus pandemic touches on issues of health, the economy, worker safety — and whether for some a glass of wine may indeed help cope with the stress of seeing their lives upended in the space of weeks.

While restrictions have been placed on alcohol sales in many countries due to the closure of pubs, restaurants, bars and stores, here is an update on the countries and regions that have gone one step further that have banned both on- and off-trade sales during the coronavirus outbreak.

 South Africa

South Africa, the epicenter of the Covid-19 outbreak in Africa, has enforced strict lockdown measures. The country has banned the sale and export of alcohol until 16 April.

However, the country’s wine industry received a welcome boost last week when viticultural and winemaking work was deemed “essential”. This means that wineries will be allowed to finish their 2020 harvest and work on the wine in their cellars.

Citing reasons for the alcohol ban, the government said that booze reduces a person’s ability to practice social distancing and practice good personal hygiene. It also stated that alcohol can affect the immune system, meaning that those with already weak immune systems will make themselves more susceptible to disease.

It also said that an alcohol prohibition would “limit the possibility of an increase in incidents of domestic violence” and also reduce stress on the emergency services.

Greenland

The sale of alcohol was banned in the capital of Greenland, Nuuk, and the surrounding area (Kapisillit and Qeqertarsuatsiaat) as of March 28, and is expected to last until April 15.

The country’s prime minister, Kim Kielsen, said that the consumption of alcohol makes people “less aware of the danger of contamination”.

He also said that he has taken the decision to ban alcohol in order to protect children and make sure they have “a safe home”.

Aisne, France

Aisne, a département in northern France, announced March 24 that the sale of alcohol from stores was banned during the coronavirus lockdown.

Like the reasons given in South Africa and Greenland, Ziad Khoury, Préfet of the region, cited concerns over violence, particularly in the home, as being a contributing factor to the alcohol ban.

However, after a backlash, this decision was allegedly reversed and the ban was lifted.

 Provinces of Thailand 

Sakon Nakhon banned the sale of alcohol starting Tuesday at least until April 16. The move is designed to curb group drinking at home, a popular tradition among rural Thais. Thailand has the highest per-capita alcohol consumption in Southeast Asia, according to a World Health Organization report.

Majority-Buddhist Thailand already has relatively strict rules that block sales of beer, wine and spirits during specific hours, and others among its 77 provinces could follow Sakon Nakhon’s lead if infections keep surging, according to health officials. The country has more than 1,600 confirmed cases and 10 fatalities.

Banning alcohol would add a tier to state-of-emergency rules imposed by the government last week, under which non-essential businesses are shut and inter-provincial travel is discouraged.

Violation of the rule in Sakon Nakhon is punishable by one year in prison or a fine of 100,000 baht ($3,066).

 

Sources: Drinks Business and Bloomberg

 

 

 

The Bourgogne Wine Sector Stands Ready — New Working Practices on Estates to Face the Health Crisis

Since France has ground to a near-halt under Covid-19 confinement measures, growers and négociants in Bourgogne have continued to work, introducing some ingenuity. This is essential because the vines continue to grow; there is work to be done in the cellar, and because one also has to think about when normal business resumes. In Bourgogne, growers and négociants are adhering to strict safe distancing measures both in the vines and the winery.

Activity accelerating in the vines

The hashtag #LaVigneContinue exists for a good reason: Nature cannot be confined! Especially in the springtime, when the sap rises, and the buds emerge from their downy cocoons. In each plot, there is work to be done. The cuttings must be cleared after pruning, trellising must be repaired, the canes need tying up, the ground needs plowing. After budburst, the excess buds and suckers will need to be removed.

Growers and négociants in Bourgogne are continuing to work as far as possible and adapting to the situation. Nicolas Rossignol, in Gevrey-Chambertin, has reorganized his team: “I have asked everyone to use their personal vehicle to get around. In the vines, it is one to a plot, or else we leave two or three rows between us (2 to 3m) if we have to work in the same place. In addition to tying up and fixing trellising, we are also starting to plow. I have two tractors, so each driver has their own.”

And for a touch of local ingenuity, he reveals that instead of using commercial hand-sanitizer, he dug out some of the “head” distillation liquid from a batch of marc de Bourgogne. “It’s around 80% alcohol, so it’s ideal for disinfecting hands and equipment. In the same vein, we no longer eat together. Since we’ve had fine weather, everyone has lunch outside. You just have to go one at a time into the kitchen to reheat your dish.”

There are some unexpected obstacles to manage, such as hiring a seasonal worker to make up for the absence of an employee who has to stay at home to look after children while the schools are closed.

In wineries that have larger teams of staff, managers have also had to adapt. With 10 or more employees, flexibility is the order of the day. Working times are staggered to avoid encountering coworkers, and those who are partially occupied looking after children come into work when they can, including on weekends. Nicolas Rossignol concludes: “The growth cycle has begun, although the cold which came at the start of last week slowed it a little. But overall, we are working at the same pace as usual.”

Complex adaptation for shipments

During this season, activity in the cellar is calmer. The wines are in the middle of aging, and the main task is topping up barrels. This only usually requires one person. Other lower-priority tasks can wait.

The area of bottling, labeling, and shipping poses another set of challenges. Some companies are carrying on, anticipating that others will resume activity a fortnight from now. But whatever the task, managers are attentive to maintaining safe distances between employees, and respecting all the recommendations from the Ministry of Health. The essential thing is looking after the health of staff.

On the commercial front, there are fewer orders than usual. Some transporters continue to make deliveries, while certain international orders have been put on one side, ready to go as soon as international transport resumes.

“We know the current situation is only temporary, and we are ready to respond to increased demand as soon as it comes,” said Louis-Fabrice Latour, President of the Bourgogne Wine Board (BIVB) and CEO of the Louis Latour wine house. “Managers of wineries and estates are keeping a close eye on when normal production activity can resume, whilst ensuring the health and safety of all concerned.”

On behalf of the whole wine sector, he added: “We are aware of all the efforts being made, on all levels, for France to emerge from this health crisis as quickly and in the best shape possible. We will contribute to this return to normal. We are also greatly appreciative of all of those who are taking care of us and our families.”