Struggling Napa Wineries Offer Deep Discounts and Virtual Tastings

(Bloomberg) -- Spring has arrived in idyllic Napa Valley. The buds emerging from dormant vines signal the beginning of a new vintage. The scene looks normal, except that vineyard workers are careful to stay 6 feet apart. Despite the global pandemic of Covid-19, there will still be grapes for this year’s cabernets.

That’s the good news. 

But the novel coronavirus is having a huge impact on this tourism mecca, with wineries to restaurants to hotels suffering. The glitzy Auction Napa Valley, held annually since 1981, has been canceled for the first time. 

 “It’s the cloud of unknowing. I’m not even sure that I’ll have all the supplies needed for bottling in four months,” says winemaker Philippe Langner, owner of Hesperian winery on Atlas Peak. In 2017, Langner lost his house in the wine country fire. 

The big worry is how the region’s almost 500 wineries will cope financially. Most depend heavily on visitors—3.9 million in 2018—to stop by their tasting rooms, snap up bottles, and join their wine clubs. California Governor Gavin Newsom ordered tasting rooms closed on March 20, though the wineries themselves are classified as essential businesses. 

“Normally on a spring day, we’re bustling with guests. But now it’s a ghost town,” says Diana Hawkins, owner of Pope Valley Winery. 

Many vintners have discovered that their insurance for business interruptions, meant to replace lost income to cover operating expenses, has a fine print clause that specifically excludes damage due to viruses and infections. 

The spill out for wine lovers: good deals and rare wines directly from the source and, even better, the chance to support the wineries you love and forge a more personal connection with them.

Desperately seeking buyers 

“People still want to drink,” says Rob McMillan, senior vice president of Silicon Valley Bank’s wine division, “but now online sales and social media are critical for Napa wineries. Most don’t have a lot of cash, only enough for 90 to 120 days.”

He points out that Napa vintners sell about 30% of their wines through tasting rooms and 20% to restaurants, but those channels have dried up. 

For example, Jill and Steve Matthiasson, whose eponymous brand is a hot favorite of somms (and me), sell in 40 states and 17 countries, but only 15% of their sales are online, mostly to wine club members who’ve signed up at their tasting room. “I’m busting my butt to sell wine,” Jill says. 

To boost online sales, they put together the same bottles you can sample in the tasting room (6 for $249) with a virtual tasting. “Some folks are purchasing the pack as gifts and doing online group tastings with their friends in separate locations,” she says. 

Bigger wineries with a long track record, such as Heitz Cellar, purchased in 2018 by Tennessee-based billionaire Gaylon Lawrence, also expect a hit to revenue. Chief Executive Officer Carlton McCoy says projects and equipment purchases have been put on hold but the winery is keeping all employees. He’s trying to expand online sales, and says they’re exploding. Wine lover loyalty has surprised him. 

Lesser-known names have a tougher time. Brian Brakesman of Summit Lake Vineyards is making phone calls to club members to keep connections alive. 

The rise of virtual tastings and deals 

To fan personal connections—and, of course, sell more wine—dozens of Napa wineries are hosting virtual tastings on Zoom or streamed through their winery Instagram or Facebook pages. More are starting daily. This is a great chance to meet famous Napa winemakers and ask questions, and so far the sessions are wildly popular. Last week, Cade Estate held one that drew 500 viewers.

Some helpfully post their tastings on the Napa Valley Vintners website. One public relations professional has put together a website on which her winery clients will be listing tastings and deals.

Many tastings are free, while others are more exclusive and require the purchase of specific bottles to be tasted and discussed. Bouchaine Vineyards in Carneros has gone all-out offering by-appointment virtual tastings and experiences with Napa Valley chefs and musicians, as well as streaming vineyard walks with winemakers talking about the 2020 growing season. E-mail for schedule.

Deals include everything from free shipping to rare cuvées and older, now unavailable vintages, sometimes at discounted prices.

Pott Wine, the label of star winemaker Aaron Pott and his wife, Claire, is offering wines on its website that usually go to restaurants, as well as one that it wasn’t even planning on releasing to at all—even to members of its wine club—the bold, exuberant 2016 Infinite Improbability Drive cabernet blend for $95, with only 96 cases made. 

Life in the vineyard and valley 

Luckily, it’s not harvest season. Pott, who consults for a number of wineries, says it’s easy to maintain distance for the work in the vineyards. He’s alternating teams of workers in wineries so they, too, can stay six feet apart. Cleanliness has always been essential, but now it’s the main thing, with workers sterilizing surfaces and even the levers of forklift trucks.

One immediate challenge is getting wine into bottles. Cain Vineyard, on top of Spring Mountain, is working at half-speed with fewer people to maintain proper social distancing. An additional problem for the cash-strapped, says winemaker Chris Howell, “is we can no longer carpool.”

Luxury hotels such as the new Archer and Meadowood have closed. Linsey Gallagher, president and CEO of Visit Napa Valley, emailed that “preliminary Smith Travel Research (STR) data for the week March 15 to 21 showed hotel occupancy was at 13%.” She didn’t want to predict how vast the financial fallout might be. 

Like restaurants around the world, those in Napa are also trying to keep afloat by offering takeout food and wine. 

Matt Stamp, co-owner of my favorite Napa wine bar, Compline, says it’s delivering food daily to a lot of winemakers. For a $20 donation, you can buy a meal for a health-care worker.

“Comfort wine for me,” Stamp says, “is good wine that doesn’t need to be the center of attention that comes from winemaker friends who are struggling, too. If we can all help each other out right now, that’s comforting.”

And on the charity front, Napa-based online discounter Last Bottle is holding a massive marathon sale that ends on Friday, April 3, at 11:59 p.m. PDT with $1 per order going to two valley organizations helping those in need. On Thursday, they sold 3,000 bottles of cabernet in two minutes.

Winebid.com is launching online weekly wine auctions of donated bottles of Napa wines such as Harlan and Screaming Eagle, as well as less expensive stunners like Lorenza rosé to benefit restaurant workers. It kicks off on April 5.

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