Imbibe Live Online: Five takeaways from The Impacts of Lockdown on The Wine Market session

Jacopo Mazzeo

Jacopo Mazzeo

09 July 2020

Following two days of successful Imbibe Live Online talks last week, we take a closer look at some of the most insightful sessions

Last week, as part of our Imbibe Live Online show, Imbibe contributor and Sommelier Wine Awards (SWA) chairman, Chris Losh, sat down with Bibendum CEO Michael Saunders, head of wine operations at St. John Wines Victoria Sharples and The Pickled Pub Company & The Frisco Group owner Heath Ball to investigate the impacts of lockdown on the wine market.

During the session, our speakers discussed the elements that the UK on-trade wine industry needs to be aware of to succeed in the immediate post-lockdown, offering five key takeaways for the audience.

1. Some wine lists are set to shrink

St. John Wines’ Sharples believed that, with venues now operating at a much reduced capacity, and because of stock and spending limitations, wine lists are likely to get smaller: ‘We want people back in restaurants,’ she said, ‘and you don't want to spend all your time scrolling through pages and pages of a book or on an Ipad, because it takes you out of the conversation of what you’re there to do. People don’t want choice,’ she added, ‘they just want what they want... St. John has always worked on a two-page wine list, which is dynamic, can change as and when.’

Ball brought a different perspective to the virtual table. ‘I get bored selling the same stuff… I think there’s always someone who’s had a great day at work, even with all that’s going on... and I like to give them the opportunity [to choose from a wider selection]. I get frustrated when I go out and I’ve had a very good week and I say “give me a really good Burgundy” and it’s not there. I’ll carry on with the same list.’

I get frustrated when I go out and I’ve had a very good week and I say “give me a really good Burgundy” and it’s not there. I’ll carry on with the same list

Heath Ball

Although rumors seem to suggest that wine lists are, on average, going to shrink, Bibendum's Saunders stressed that he won’t be contracting its portfolio. ‘I find it really difficult to part with old friends. And actually I find that there is some polarisation happening. Some customers want to move towards a smaller list in the short term, but there are others who think they can actually have a larger list… The more effort you [put] into it, the more you get out of it, but I would say that, wouldn’t I?’

Despite diverging opinion on wine list sizes, all panellists agreed that people might want to spend a little more to drink better: ‘People are already buying better wine and we’re going to see more of that,’ said Ball.

2. Don’t push the margins

Sommeliers are often wary of listing wines that are available in retail, as that makes on-trade margins become more obvious. 

Over the many weeks of lockdown however, with merchants pivoting to direct-to-consumer sales, people have been able to drink wines that they would normally only find in restaurants.

Sharples claimed that offering wines at both retail price to take away, or at wine list price to drink in hasn’t been an issue at St. John: ‘We don’t have that problem. We ship most of the wine directly from France, so most of what we have is generally exclusive. We’re not too greedy with the margins... but there might be some places where they might have too much of a contrast in margins.’

We’re not too greedy with the margins... but there might be some places where they might have too much of a contrast in margins

Victoria Sharples

Saunders stressed that businesses, especially in the current circumstances, have to be wary of high markups: ‘Business is about the money, because if you don’t have the money, the inevitable happens one day. My view is that if you take the opportunity to sell a great product at a price that people can get a real enjoyment from, then that’s great. My business argument is that on-trade [venues] don’t have the cost of carrying the capital [investment of wine], that falls on companies like mine, so if you can present the right wine at the right price that’s great for everybody.’

3. Back to safety

Moderator Chris Losh highlighted that the results from Imbibe's own SWA competition, which ‘we got out of the door literally just a week before the whole country went into lockdown,’ as he put it, showed an upward trend for premium or niche styles such as oaked rosé, sparkling wine beyond Prosecco, Champagne and English fizz, biodynamic and organic, and orange wine.

Ball said that, ‘there’s always a market for those wines’, but he pointed out that they might ‘slow down’ as people move towards ‘safer’ affordable luxuries. ‘People are going to play safe,’ he said, ‘they’re going to drink what they enjoy and like.’

Sharples agreed that there will be people that will go back to safety. On the other hand however, she thought that certain trends that the wine industry has been experiencing for a while, such as the growth of Crémant and other sparkling wines, aren’t going away. ‘Particularly if, during lockdown, people have been getting mixed cases delivered, trying different wines, experimenting, and they’ve been willing to spend a bit more because it’s retail price rather than restaurant,’ she commented.

4. Alternative packaging

‘The increase in bag-in-a-box sale, which is a long time coming, has been phenomenal,’ said Sharples when asked whether the Covid-19 crisis might have provided an opportunity for alternative wine packaging. ‘[Bag-in-a-box] is incredibly convenient, you just go to the fridge or go to the bench and top up.’

For Bidendum’s Saunders though, the growth of alternative packaging shouldn’t be interpreted as coronavirus-related. ‘Cans were coming anyway,’ he said, ‘and we’re going to see more of that in the next two years as technology develops. I’ve seen that there’s a new paper bottle in the UK now, we tried to launch it a few years ago and it didn’t work but perhaps now is the time. 

Cans were coming anyway, and we’re going to see more of that in the next two years as technology develops

Michael Saunders

‘Also,’ continued Saunders, ‘just because it’s always been a 75cl bottle, doesn’t mean it has to stay like that, who’s determining that? Of course, at the top end it will stay like that for all sorts of reasons, but there are many more opportunities now to break the mould. On the other hand, half bottles are almost dead. Producers hate them, and they’re always a vintage behind.’ 

5. Brexit: The cherry on the cake

‘We’re sleepwalking into a disaster for the wine trade in this country,’ Saunders said bluntly when asked about Brexit negotiations. ‘And it’s not just Brexit’, he added.

The amount of work and time to fill [VI-1] forms [is immense]… something is always missing, isn’t signed properly… it’s not just the delays and the amount of man hours involved. It’s absolutely frightening

Victoria Sharples

‘Brexit could introduce costs that are not yet understood, such as the VI-1 form, which is coming back. We’ve got a lot of issues potentially coming. We take the idea of shipping lots of small wines from around the world for granted, but it may not be so easy come 1 January. The work that Victoria [Sharples] does might need a lot of additional staff.’

‘I’ve had this experience when I was importing wines from Australia,’ responded Sharples hinting at the much feared VI-1 forms. ‘Even if we’re working with 15 producers, the amount of work and time to fill these forms [is immense]… something is always missing, isn’t signed properly… it’s not just the delays and the amount of man hours involved. It’s absolutely frightening.’

‘The WSTA,’ said Saunders, ‘is working incredibly well and hard with the government to get around this but at the moment it’s looking a bit tough.’

If you like to watch the entire session, you can do so on demand here.

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