Throwing growers a lifeline
The Wine Society has always been about establishing long-term relationships with its suppliers rather than trading for short-term gain. As such, lending a helping hand to winemakers in times of need is nothing new. After all, The Wine Society was established on the back of such an act, in an early form of crowdfunding. After the International Exhibition in 1874, one of the last of its kind, a group of individuals came to the aid of the Portuguese shippers whose barrels of wine had inadvertently been left forgotten in the cellars of The Albert Hall rather than brought up for display to potential importers in the galleries above. They decided to buy the wine between them, setting up lunch parties to share the wine with friends and found that this was actually a good way of buying wine from an authenticated source. The rest, as they say…
The Wine Society was founded in 1874 following an early form of 'crowd funding' to buy up some Portuguese wines left over after the International Exhibition held at the Royal Albert Hall
With this as its founding principle, it comes as no surprise then that Wine Society buyers were in immediate contact with their suppliers to see what could be done to help. Pierre Mansour tells us:
'We haven't publicised ways in which we have supported our growers in the past, but in a business like making wine, cashflow is often critical; investment in new equipment can be a costly business and if you need to do this before your new vintage is ready to be sold, we have sometimes stepped in by paying extra early and in advance for a grower's wine so that they can renovate their cellar (and make better quality wine as a result). We have also been able to buy up wines from growers who have been let down when commitments for orders have been reneged upon by others.'
Nadia Curto's small village in Barolo was badly affected by the virus
In this current situation, clearly it wasn't possible to help everyone. Some of The Wine Society's growers, particularly the smaller ones were already really struggling with social distancing and travelling restrictions impeding vital work. At the peak of the outbreak across Europe, negotiations were underway with winemakers in Piedmont, one of the parts of Italy particularly badly affected by the virus. Sarah Knowles MW, buyer of Italian wines, said that her daily conversations with producers were quite harrowing, here's is what she told us of here communications with Nadia Curto at the time:
'I have been in touch with Nadia directly over the last six weeks, and the lockdown for her has been very difficult and sad. The collapse of the local on trade, illness and loss in the village; the fear was palpable. Nadia was taking solace in working in the vineyards, well isolated, and cooking (and enjoying wines) at home with her family. Members purchases from our Barolo en primeur offer meant I could confirm orders for Nadia and others in Barolo at this difficult time.'
Nadia was one of many producers who sent heartfelt messages of gratitude to The Wine Society and its members when en primeur orders were placed for her wines:
'The fields nothing matter the virus or whatever... so... in a moment when the economy is blocked and the future is uncertain when you buy a bottle, as you did, you really help the little farmer to go on and give some new breath for every wine company.'
So, how did The Wine Society make the choice as to who to help in this situation? Was it a question of who asked first or did the buyers decide who they thought needed support the most? Pierre Mansour, again:
'It was a bit of both. We are really lucky to have such strong relationships with our growers which is based on trust and doing the right thing. It also helps that our buyers spend a lot of time visiting regions, meeting growers in person, revisiting every year or more. This human element makes us stand out in the wine trade. It also helps that The Wine Society has an impeccable reputation for paying on time. We realised that each grower's situation is different – some had cash pressures, others stock pressures; some were doing just fine; some were sitting on cancelled orders from other export markets. We also knew that we wouldn't be able to help all our suppliers. So we decided the best way to approach it was to select growers who members value most (with a track record of supplying delicious, good-value wines; growers that go the extra mile by attending our events or by hosting members on their travels; growers that exclusively work with The Wine Society, for example).'
Because The Wine Society is a mutual, owned by its members, it means that it can make business decisions not directly leading to growth profit. What this means for the members is that wines are always competitively priced and also, at times like this, when the essential thing is to encourage as much support as possible, discounts can be offered to members to encourage everyone to get involved and back the growers. The idea of a special promotion that offers a win-win opportunity for all, was a no-brainer – the concept for a big autumn offer 'Backing out Best Growers 2020' was born. 'It's a great deal for members and helps keep some of The Wine Society's 'best-loved growers' going in these difficult times,' Pierre explained.
How has The Wine Society fared during these difficult times?
Like many of its producers, The Wine Society has weathered tricky moments in history and survived, thanks to good governance and prudent management, and of course, loyal share-holding members. Current circumstances are, however, to use that much overused term of the past few months, 'unprecedented.'
But while wine sales in the on-trade all but vanished overnight, in the off-trade and for organisations like The Wine Society, with a long track record of distance selling, orders spiked, particularly with the panic buying that went on at the start of lockdown.
The Wine Society saw Christmas levels of ordering and as well as lapsed members wanting to come on board again, there were also record numbers of new members keen to join. Pierre Mansour is candid about how The Wine Society coped with the additional demand:
'Our first priority was to make it safe to work in our warehouse. We were forced to close the business for a couple of weeks to do this enabling us to redesign every stage to ensure social distancing. This was not an easy decision to make but we are proud that members of our Committee who are on the boards of high-profile blue-chip organisations and financial institutions, took learnings from our set-up back to their businesses.'
Our socially-distanced Warehouse team showing their appreciation for NHS and key workers on a Thursday evening
The changes made to the operations at The Wine Society have enabled it consistently to ship record amounts of wine, recognising that this was going to be more than just a few weeks of disruption. At the time of writing demand remains high. Pierre continues:
'Our members are a thirsty bunch and lockdown seemed to accentuate this! We paused all our marketing and decided to temporarily close new membership so that we could satisfy this demand and properly look after existing members, only opening up again to new members when we felt confident in our ability to provide a great Wine Society experience. Initially we prioritised shipping the most popular wines and managed to retain a broad range throughout lockdown but were quickly able to move to offering a full range of wines and services. This kept our teams really busy. The buyers found themselves with more time at home and turned their attention to creating content (articles, video, virtual events with winemakers) to entertain members. Everything became digital but tasting wine still requires reality, so our homes became inundated with new vintage samples sent by our growers. Our neighbours became our best friends!
Buyers' hallways stacked with cases
Fortunately for The Wine Society, our internet-based model and home delivery meant we could continue to be relevant. Our trading performance has been strong and jobs secure. As we entered the next phase (coming out of lockdown), we realised we could play an important role by supporting our most important growers. We also realised that each grower's situation was different and so it seemed appropriate to ask them what The Wine Society could do to help.'
The importance of logistics to the wine industry
One of the big lessons learnt in the first few months of the crisis as the peak of lockdowns swept across Europe, was the importance of logistics to the wine industry. Transporting wine from vineyard to warehouse involves a complex chain of events. For businesses like The Wine Society, who ship direct and sell direct to consumers (its members), it was a question of balancing high levels of demand with getting the right wines into its warehouses at the right time to meet demand. Head of merchandising at The Wine Society, Louisa Peskett provides more detail:
'To give you some idea of the scale of demand, in May alone, we sold more than 16,000 cases of wine compared to the same month last year. It was bigger than Christmas. Clearly as stocks were depleted, we had fewer wines available and while we always maintain good stocks of our most popular wines, these were the first to go; between March and June our stocks almost halved (reduced by about 100,000 cases). We immediately set out a plan to reorder stocks of our top 100 wines. All previous forecasting models went out the window; nobody could have planned for this! Luckily, our supply-chain systems worked pretty well and fortunately most of our suppliers were able to carry on operating during lockdown, though there were inevitable hold ups, particularly where bottling and labelling new vintages were concerned. The sunny weather during spring saw unprecedented levels of orders for rosés, more than 1,000 dozen increase year on year. While keeping the supplies coming was a major challenge, it was one my team rose to but because of the new ways of working within our warehouse, there was a limit to the number of wines we could manage at goods-in compared to what is normally achievable, slowing down our usually highly slick and fast operations.'
'I'm really proud that very quickly we were able to have around 1,500 wines on sale and have maintained our range of wines, including half bottles, magnums and mixed cases throughout the lockdown period. This has not been easy and I can understand why some businesses chose to focus on offering a core range.'
New ways of working
Many colleagues in the UK wine trade are facing uncertainty about job security, particularly in those sectors that serve restaurants. Longer term it's highly likely that the wholesalers (those that sell wine to businesses in the UK) will need to reinvent their models. Some might decide to start selling directly to wine drinkers to compensate.
Some commentators in the wine industry are even quite up-beat about the challenges that they are facing, welcoming the opportunity to rethink how they operate.
Pierre notes, 'As Albert Einstein once said, in the midst of every crisis, lies great opportunity' and it was amazing to see the creativity that many in wine embraced to overcome the challenges. From live virtual events to beaming news direct from the vineyards, and so on.'
Eric Baugher, chief operating officer and head winemaker of Ridge, Monte Bello, is just one of many of The Wine Society's suppliers that have quickly had to readjust to the new ways of working:
'The pandemic has really thrown us and most businesses off the sales goal. Our two tasting rooms were shuttered from mid-March until July. Having no visitors to the winery meant we needed to do more outreach to our customers. We did a weekly virtual tasting for our customers that was educational, interactive, and successful. It helped us continue to sell wine out the cellar door using traditional shipping or our own delivery service. In the US market, on-premise restaurant business is dead. All our wholesale market has gone to off-premise retail. Consumers are buying wine, but dining at home. Alcohol consumption, especially wine, has picked up significantly during the COVID pandemic. It is unlikely that restaurants are going to return to normal business in 2020, but we have adapted and direct sales from the winery are doing very well to pick up the slack. At this moment, we're doing better than expected but watching sales channels closely and being ready to adapt further if necessary.'
Keeping its members entertained
Eric was just one of the many winemakers who have taken part in the programme of virtual events that The Wine Society's tastings team quickly brought together. To date, almost 4,000 different members have taken part in these live Zoom events and there have been a further 35,000 views on The Society's YouTube channel. Together with The Society's social media channels and its online Community pages, the teams quickly put together a calendar of events with Q&As and lunchtime chats, themed taste-alongs and workshops, as well as more formal presentations and conversations with its growers – there was something happening every day.
Some might jest that it takes a pandemic to get Wine Society buyers to embrace social media (they now all have their own Instagram profiles), but many were already pretty active across such platforms and Marcel Orford-Williams has become a bit of an internet sensation with his regular 'Glass with Marce' videos of lockdown tastings.
Buyer Marcel Orford-Williams' 'A Glass with Marce' videos have become a bit of an internet sensation!
In the absence of sales offers, the marketing content team threw themselves into publishing stories from the growers and buyers, guides and recipes to keep members engaged; members joined in with their own lockdown tales of forgotten bottles and lucky finds. The feedback from members on all these initiatives has been great and The Wine Society will carry on with its programme to entertain and engage with its members through its Discovery content.
As we emerge from lockdown The Wine Society is committed to continuing its support of its growers, just as it has done since its inception in 1874.
Read more about the effect of the pandemic on winemakers around the world
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