How Covid-19 affected wines and winegrowers around the world

Instagram/Tascadalmerita

There have been good reasons for wanting to drink a lot of wine over the past two years. Especially if you’re a winemaker.

The pandemic has been stressful and difficult for everyone in the industry. But there is a saying among vintners: stressed vines make better wine.

The challenges for a winery in New Zealand’s South Island may differ from those on the island of Sicily, in southern Italy. California’s Napa Valley has encountered its own difficulties. But making good quality wine is tough wherever your grapes are planted, and Covid-19 added an extra degree of difficulty.

“It was a stressful time when Covid began because it was harvest time,” recalls Yang Shen, estate director of Cloudy Bay, arguably New Zealand’s most famous winery. “It was early 2020 and a third of the harvest team could not come into the country. That was very stressful.”

New Zealand’s rapid response kept the coronavirus at bay, but it hampered its wine industry. Shen, who emigrated from China with his family, accepts the good with the bad.

“On one hand, it’s a positive we shut down the border, but it was a problem for the wine industry. New Zealand is an island, so it’s easy to run out of resources and be stuck here. Luckily, it’s not a bad place to be locked up in.”

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“As the pandemic continued, the problem was getting workers and the logistics of getting materials like bottles. We tried to buy from overseas but had to switch back to local production. Fortunately, we foresaw logistical issues so we pre-ordered a lot of vessels and shippers, and brought forward and shortened bottling schedules.”

This autumn, Cloudy Bay successfully launched its 2021 sauvignon blanc and 2019 Te Koko, an alternative Marlborough sauvignon blanc. It’s the first release of this range in two years. Both are considered among the finest since the brand’s founding in 1985. For Cloudy Bay, Covid-19 has been good for business. Perhaps people stuck inside their homes are passing the time knocking back more wine?

“We’ve actually had growth in sales, as have many New Zealand wines,” Shen says. “I believe it’s the best time for investment as well. There was some panic and there is still some doubt, but instead of retrenching, we’ve invested more.

“People are drinking more wine and better wine. In lockdown they are spending more on better quality products, which is good for us. But I do feel the industry is changing.

“Producers that rely mainly on restaurants, they might have to look for a new strategy. And some countries that traditionally produce a lot of wine for export, they might have to settle for more local consumption.”

Covid-19 hit northern Italy extremely hard in the spring of 2020 when the pandemic started. Sicily, by comparison, saw far fewer cases, so the personal toll was less severe, but economically it was still dramatic for wine producers like Tasca d’Almerita. The operators of five large estates on the island, the family has been making award-winning wines for 200 years.

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“Around March 2000 was when everything started happening. There was a lot of confusion. Milan was a disaster and we were hearing bad news from Asia. The number of people sick was really high in Milan and Bergamo so that was scary,” says the family firm’s managing director Alberto Tasca d’Almerita.

“Sicily was lucky because at that time there were no Covid cases yet. People have also been very responsible here, wearing masks.

“In terms of business, it was a total disaster because when it started we didn’t know how long it would last. The news from places like Hong Kong told us all the restaurants were closed. So all our targets fell short.

“Where we could sell wine was in our little restaurant but then there were no more events, no weddings, so that business collapsed. We only made about 20 per cent of our regular sales revenue.”

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Instead, the family hunkered down for four months at their home vineyard, Regaleali, waiting out the pandemic and trying to stay positive. “Every time you are not in your comfort zone, you learn something. We had time to review, discuss everything, and as things changed, we were able to implement some new ideas,” Tasca d’Almerita says.

Fortunately for them, 2020 was a great harvest and as Europe slowly recovered, sales improved, too. “2021 was booming as the business was coming back,” Tasca d’Almerita says. “As you can imagine, everyone was depleting their stock so there were huge logistics issues, lots of cost increases like with finding materials and glass bottles. Everything was crazy.

“I would say we are back as strong, if not better, than during the pandemic. We have much more multichannel outlets than before, and e-commerce. I see Italy is in a really great position. The percentage of Italians and Sicilians that are vaccinated is pretty high. But nothing’s stable yet. There is a rebound but it is unpredictable.”

Tasca d’Almerita was already one of Italy’s most eco-minded winemakers (the wines are available in Hong Kong from Certa), and Covid-19 convinced its owners that sustainability is not just about environment but people, too.

“For us, I think the idea of business is changing,” Tasca d’Almerita says. “Before, business was just about making money. Now, sustainable business has to be about managing a win-win situation everywhere.”

In California’s Napa Valley, Scott Meadows, winemaker and president of Silenus Winery, was watching intently as Covid-19 ravaged the United States’ east coast in early 2020.

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“Restaurants were shutting and people were starting to not go out,” he says. “At the end of the day, if you can’t sell your wine it doesn’t do any good. Restaurants are a main income avenue. I remember thinking, ‘I wonder if this will affect our sales projections?’”

Soon California shut down, too. The Silenus Winery tasting room had to close and external sales dried up. “That’s when we knew we didn’t know anything,” Meadows says.

Silenus wines are sold across the US and in overseas markets including Japan. The wines were previously available in China, until President Donald Trump’s tariffs made sales untenable. But Meadows says he can ship online orders to Hong Kong.

Surviving the pandemic was Meadows’ priority — for his company and his staff. “You can leave wine in the cellar, but we still had to keep our crew safe,” Meadows explains. “Luckily we could work, as the state considered us essential workers because we were a ‘food product’. But to meet the budget, I had to make some serious cuts. Luckily not to staff.

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“In the US, we had the Payroll Protection Plan subsidy. I also delayed the bottling of our 2018 vintage from July to January to buy time. Bottling takes a lot of money.”

Meadows’ most drastic move — one that proved lucky — was to postpone signing contracts with his grape growers.

“There are independent vineyards in Napa that grow for wineries,” Meadows says. “I delayed those contracts, which was not great for the growers, but I had no choice. Then a wildfire happened in the path of a lot of those vineyards. Luckily, most of the growers had crop insurance. It was good news for me too, as my exposure was lessened and I didn’t need to make a large outlay of cash.”

The fire also resulted in a short harvest in 2020, bringing in much less fruit. “That put some pressure on the bulk wine market. Because there was so little wine, I ended up selling some of the wine that I was planning to bottle but hadn’t, to bring in cash. It was all just bob and weave, trying to figure out what to do.”

Like the other wineries, Silenus also had logistics issues. Oak barrels from France sat in a container off San Francisco for six months due to port backlogs. “I ordered them in February. Normally they arrive well ahead of the harvest. I just got my last barrel shipment in early December, two months after harvest.”

As markets rebounded in 2021, Silenus’ sales also rose. “Every month that we’ve been able to reopen our tasting room, we’ve had record sales.” But Meadows understands the pandemic is not over. New variants continue to threaten people and markets. In fact, Meadows stared down the Covid-19 gauntlet directly.

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“Half my crew ended up with coronavirus, including myself, a year ago,” he admits. “That was probably the hardest part for us. The good news is everyone made it through fine. But it’s tough not knowing if people would survive or not. That’s not very pleasant.

“For long-term planning, the worst is the uncertainty. But all of us has gained a new appreciation to be flexible. Rather than sit back and wait for things to happen, we’ve become more proactive in seeking solutions.”

This article was first published in South China Morning Post.