A winery's pandemic journey

Like many businesses, especially retail and hospitality, the gyrations that wineries have endured due to the pandemic have taken their toll. How a winery has fared during this time has largely been a function of if they had an existing online presence and grocery distribution channel, or instead relied heavily on tasting room and/or restaurant and hospitality sales. As you might guess, wineries in the former situation were in much better shape (all other things being equal) during the pandemic.

Wineries that relied mostly, or completely, on tasting room visitors or hospitality sales experienced the worst effects of the pandemic. Tasting rooms closed immediately, bars and restaurants moved to take-out only, and most hotels hosting tourists and conventions closed; all stopping the purchase of alcoholic beverages. These virtually overnight circumstances converged to force most wineries to lay off staff, close facilities to the public, restrict production to reassess demand, and attempt to find or expand other sales channels.

Wineries that decided to push forward found that wine club memberships and direct-to-consumer pickup/shipping offered one option for relief, and some were fortunate to have wholesale and grocery channels, creating a huge opportunity. Montinore Estate Vineyards, is one example of this kind of business transformation. Montinore is a winery located in the Willamette Valley of Oregon, led by Rudy Marchesi since 2005. Before Montinore, Rudy’s passion for wine started on the East Coast where he grew grapes and produced and sold wine, in addition to consulting for a wine distribution business. Over the years, Rudy and his team diversified the sales of Montinore by selling through the tasting room, direct-to-consumer, to restaurants and hotels, and to grocery stores.

When the COVID restrictions hit, Montinore and many wineries quickly adjusted to the new conditions. Expanded online presence, on-site pickup, low-cost or free shipping to wine club members and consumers were all common practices to keep sales in place. However, Montinore had an advantage that many smaller wineries did not: their wine shop and grocery store distribution channels. With Rudy’s East Coast experience and existing relationships with distributors around the country, Montinore was able to increase their wholesale channel revenue. “We were in a pretty advantageous position,” Rudy noted, “We quickly pivoted to retail versus restaurants, but the tasting room was a different story altogether and had to shut down.”

Montinore was able to keep revenue flat in 2020 versus 2019. For 2021, sales are continuing to improve. With the prospect of reopening the tasting room, hosting events, and more sales to reopening restaurants and bars, Montinore is in the process of expanding production to meet this anticipated demand.

By no means was 2020 easy. On top of pandemic-related adjustments, Willamette Valley wineries also dealt with Chinese tariffs, and the worst wildfire season in decades, which caused many wineries to reduce production due to smoke-damaged grapes. Despite all these hurdles, the hard work of many wineries like Montinore continues, thanks to dynamic industry leaders like Rudy Marchesi.