While the pain of 2020 is likely to linger through most of 2021 because of ongoing losses in the on-premise sector, the positives of 2020 are expected to stick around too with retail and online sales poised for continued growth.
The abundance of 2018 vintage bulk wine was drained because of soaring demand for off-premise retail wines and grape losses from the 2020 vintage. While the industry may be approaching the high-point of a typical sales year with direct-to-consumer and retail sales strong, these channels can’t compensate for on-premise losses that will persist well into 2021.
The challenges of 2020 have emphasized technology that enables direct-to-consumer sales, customer engagement and timely fulfillment. As COVID-19 disrupted some traditional sales channels, technology has helped wineries increase revenue in others.
This year looks to be a watershed moment for direct-to-consumer sales. Forced to overcome disruptions from the pandemic, wineries have embraced new platforms, consumer engagement and data-driven marketing. Challenges and uncertainty remain in the wake of devastating wildfires and as seen in a steep decline in winery hiring activity.
The wholesale market continues to evolve through consolidation and distributors investing in new technology. Some of these changes were accelerated by the global pandemic, while others were in play prior to COVID-19. Widespread and raging wildfires in the western United States will have a significant effect on the 2020 winegrape crop although the full extent is unclear.
The ongoing pandemic disrupted the global wine market just as it did in the U.S. where off-premise and direct-to-consumer spending remain high but have yet to eclipse losses from the on-premise sector.