Key takeaways

• During the pandemic, the retail side of the wine industry saw consistent sales and growth, while the service sector saw restaurants, bars, and hotels suffer.
• The pandemic caused a marked increase in wine consumption, as people looked to relax.
• The wine market has found novel ways to create revenue, such as online subscription wine clubs. The pandemic is still present worldwide, and business is not yet back to normal.

The wine industry, like everyone else, has felt the overarching effects of COVID-19. Grape growers, winemakers, bottlers, import/exporters, sellers, and servers have all been hit hard by this worldwide pandemic. Tasting rooms – an incredibly important source of revenue and pride at wineries all over the world – are much less full. Some export orders are delayed. Business from restaurants and the hospitality industry has fallen. However, while the world changed how it practiced leisure and self-care, wine consumption is still as popular to drink with close friends and family. Here are some of the effects of COVID-19 on the wine market. 

Challenges to the wine industry during COVID

Many industries have been impacted by this pandemic, including the wine industry. Here are some of the challenges it has faced. 

• Deterioration of hospitality and restaurant industry

The pandemic has disrupted wine distribution channels globally due to closures and restrictions on hotels and restaurants across the world. 

• Wine production

Most wineries have continued production during COVID but at a slower rate. Lost sales and unanticipated expenses for items such as hand sanitizers and cleaning services had many wineries operating at a loss during the COVID crisis. 

• The abrupt change in the purchasing behavior of consumers

Many wine drinkers became more dependent on buying wine at food retailers and online. This caused the wine industry to quickly shift focus and these trends are set to continue.

• The pandemic hit global markets simultaneously

The COVID-19 crisis led to a global decline in wine exports, especially to countries like the United States which has a high proportion of wine consumption at social events and restaurants.  Slow recovery of wine exports is expected, but decreased compensation and economic distress in the wine industry as a result of this decline will continue well into 2021. 

• Ongoing economic consequences of COVID-19

Consumers did treat themselves by drinking wine during the pandemic. Many experts predict, however, that the ongoing economic consequences of COVID-19 will lead to more price-sensitive wine drinkers and lower sales of premium wines in the future. 

Opportunities and diversification in the wine industry during COVID

The wine industry, along with so many others, has met numerous challenges during the pandemic. They also saw opportunities spurred by new wine-buying habits and digital communication.

• Digital transformation of the wine industry

Online communication with wine retailers and producers intensified in response to the pandemic. The social media presence of wineries greatly increased, as did the opening of online shops, online wine tastings, and delivery services.  This is expected to continue well into the future. 

• E-commerce sales

E-commerce sales proved to be a positive revenue stream for the wine world that offset the decline of the hospitality industry. Online and phone sales skyrocketed during the COVID-19 crisis. Purchasing wine in these ways is safe and easy.  

• The wine world explores new avenues

Wine businesses want to diversify across sales channels and markets to spread their risk more effectively. Without as many tasting rooms, restaurants, and bar businesses, the wine industry has found new ways to distribute products.  Here are a few ways winery owners have promoted business:

• Pop-up wine shops
• Subscription wine clubs
• Creative meal takeout wine pairings
• Adaptive management skills
• Virtual wine tastings
• Wine delivery services

The wine industry has experienced both challenges and opportunities during the COVID-19 crisis. Social distancing, a loss of income, consumer hesitation, and safety regulations have altered how vineyard owners, wine producers, and sellers conduct their business. 

There is a bright spot, though. COVID vaccinations and new e-commerce businesses have made leaders in the wine industry optimistic about the future. 

Looking to the future

Wine has been enjoyed by people for thousands of years; COVID may have sent the industry into crisis mode, but it will endure, and robust and flavorful wines will be enjoyed by families and friends for generations to come. 

Domaine Bousquet has four generations of history in the winemaking tradition. Our passion is producing organic wines of superior quality in Mendoza, Argentina. Taste the quality we have to offer.