Sunday Strategist: How a Brooklyn Wine Shop Bucked the Covid Odds

(Bloomberg Businessweek) -- Leon & Son had all the markings of a Covid casualty. The tiny Brooklyn wine shop is full of relatively esoteric, small-batch bottles that are best sold with a back-story. Since opening five years ago, its business development plan was an ever-present box of Milk Bones behind the counter. “Every dog in the neighborhood stops at our door,” says owner Chris Leon. (That’s how Woodrow and I became regulars).

Small businesses employ nearly half of the nation’s private sector and more than half of these outfits predict failure within six months of the new normal. The federal Paycheck Protection Program is a Byzantine shambles. And yet, Leon & Son is thriving, albeit with doors closed. Revenue is up, and the volume is akin to a Friday or Saturday a few months ago, though costs have ballooned as well. To be sure, Leon has a propitious product. Selling wine in the midst of a coronavirus lockdown is a bit like hawking bug spray on Zika island.

Still, Leon did a lot of things right and early, in part because his sister has a PhD in biology and studies pathogens. This week I caught up with Leon to get a play by play of his recent pivots. What emerged were some best practices—or at least general guidelines—for a small business trying to survive.

Embrace change

The wine shop staff got freaked out early, as customers crushed the store to stock up weeks before an official lockdown. Leon closed his doors March 16 and had a frank conversation with each employee about their willingness to work and what that work might look like. The business day was extended by three hours to spread out employees, and staff was scheduled by pairs; if someone gets sick, the theory goes, the exposure may be contained to one other person. “It’s been hard to process how much we’ve changed as a business in such a short period of time,” Leon said. 

Build capacity

Virtually overnight, the cozy space and its precious shelves became an industrial warehouse with wine boxes stacked to the ceiling and a long table in the center where two people are packing shipments 12 hours a day. “The first couple days we went full-on pick up and delivery, orders were coming in almost every minute for three hours at a time,” Leon said. “It was like a snowstorm was coming.”

The supply chain quickly got lumpy. Wine shipments that used to come daily, began arriving only three days a week. Shipping boxes grew scarce. Leon learned to over-order, build a cushion and is now looking to rent storage space nearby.

Upgrade talent

Some of the Leon staff who didn't want to leave their apartments essentially went on furlough. At the same time, the shop built the ranks out to 10 positions, primarily by scooping up sommeliers from shuttered restaurants—it’s a buyer’s market for talent.

Treat e-commerce like R&D

The shop has been experimenting with e-commerce for awhile. It started shipping cases a few years ago and in 2018 launched a mail-order wine club. In the midst of the lockdown, Leon overhauled its web site, making it easier to order and shop by food pairings and other predilections.

Do some good, if possible

While Leon welcomed the restaurant world’s refugees, he also went on a mission to buy its idle inventory. He needed wine, he figured, and they needed money to cut their final paychecks. All told, Leon bought about 600 bottles from local restaurants and every one he sold, included a note about its provenance and what that particular business was doing to stay alive or wind down gracefully.

Communicate constantly

In early March, Leon shored up its e-mail list and started sending regular updates about its battle plan, including apologies when operations weren’t running smoothly. Its Instagram feed documented the shop’s transition to wartime footing. “We’re constantly telling people how we’re learning; how we’re getting better,” he explained. “Fear has driven us to hyper communicate.” As economist Tyler Cowen points out, when rattled customers re-emerge, trust will be a valuable asset and one uniquely suited to small businesses.

Meanwhile, Leon started a daily Live feed where he tracks down vintners and distillers all over the world. These are the people he used to go visit, and the reason he opened the shop in the first place. His customers, of course, had never seen them before. 

For more stories like Leon's, check out Bloomberg Businessweek's Small Business Survival Guide.

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