wine industry Archives | Benjamin Allison

Prohibition, COVID, and getting lean.

Most people, myself included, believe Prohibition ended in America on December 5, 1933. That blessed 21st Amendment allowed the country to whet its whistle after 14 long, dry years.

This appears, however, to only be partially true. The regulatory systems set up to control the production, distribution, and sale of alcohol at the state and federal levels, have had their own prohibitive effects. The impact of this bureaucratic sludge has never been felt more sharply as it has during the Coronavirus pandemic.

While sales for wine, beer, and spirits are up across the board, this doesn’t tell the whole story. Kathleen Willcox writes:

“…revenue losses for the country’s more than 10,000 wineries and 8,000-plus growers alone could reach $5.94 billion in 2020. Ninety-seven percent of all U.S. wineries produce fewer than 50,000 cases each and are expecting revenue losses of up to 66 percent this year, with the expected impact getting worse as production gets smaller.”

“On-premise sales in April were down 85 percent for both wine and spirits,” says Michelle Korsmo, president and CEO of WSWA. “America’s wine and spirit wholesalers can expect to lose up to $924.1 million in uncollectable or difficult to collect receivables alone due to shelter-in-place.”

I encourage you to read the whole article. The realities presented require response. Of course, my expertise doesn’t lie within the legal domain. I have no solutions to those particular problems. To be quite blunt, I’m not sure anyone does. A pandemic can certainly expedite change, but that change is unlikely to be comprehensive enough, or swift enough, to be helpful to those artisans and producers who creep ever closer to shuttered tasting rooms and dashed dreams.

What we have before us is an invitation to reinvent. Survival depends on creative thinking. Captivating an audience. Finding new ways to do outreach. Cutting costs and moving to leaner solutions. COVID has changed, perhaps permanently, the way in which many of us work. It’s a dilemma. How do you continue to have a brand presence, attract customers, launch exciting new products, when marketing budgets are drying up?

One simple solution is to streamline how those dollars get spent. Paying a full-service agency makes a lot of sense when the money is there. When it’s not, downsizing and contracting specialized, experienced designers and marketers could get you more for less.

This only works if you’re organized internally and can take on some of the project management load. If you are, you may find the lower costs and increased nimbleness hard to give up when things regain some semblance of normalcy.