“There are some smoking-good deals for consumers, if they know what to look for,” says Jeff Leiker, a buyer for Tower’s two stores in the Atlanta area. “It’s a great time to get to know your local wine retailer.”
In yet another effect of the coronavirus pandemic on the wine market, consumers who have not been economically affected have an opportunity to score some deals. After all, $46 for a Napa cabernet is not inexpensive, but it’s a lot cheaper than $75. If you’re looking to build a collection or resupply the cellar you’ve been drinking down in anticipation of the end of the world, now’s the time to look for bargains.
Here’s why: When the pandemic hit this time last year, restaurants across the nation largely shut down. Some pivoted to retail sales and sold off their wine cellars to keep the cash flowing. In many jurisdictions, restaurants have been allowed to include wine in takeout or delivery orders, but this sales channel is a tiny fraction of what it was before the pandemic.
Wineries essentially have three sales channels: Direct-to-consumer through the tasting room or online, restaurants and retail. Many high-end wineries emphasize restaurant sales. Their name on a wine list and their label displayed in a restaurant wine vault and on tables for other diners to see helps build brand recognition and a sense of exclusivity. These brands typically have limited retail visibility.
That changed when the restaurant channel essentially disappeared overnight. Some wineries quickly adapted to the market change and authorized their wholesalers to release restaurant-allocated wines to the retail channel. For example, Jordan winery in Sonoma County’s Alexander Valley was named the most popular restaurant wine brand and the No. 1 restaurant cabernet sauvignon by Wine & Spirits magazine in its annual restaurant poll just as the pandemic shutdowns hit. CEO John Jordan quickly authorized his distributors to sell their restaurant allocations of his wines to retail customers.
“Throughout the pandemic, we have continued to make our wines available at select retailers,” he said, noting that the wines’ average retail price has actually increased during the year. “If any discounting is happening, it is being done at the discretion of the retailer,” he said.
Or maybe the wholesaler. Here’s how that might work, based on conversations with several wholesaler representatives who spoke on the condition of anonymity because they were not authorized to speak for their companies. Say a local restaurant group puts a wine on its list for the year. Its distributor would buy several pallets of the wine (a pallet is 56 cases) and make deliveries throughout the year as needed. When the restaurants shut down, the wine was stuck in the warehouse. And although consumers bought a lot of wine in the early months of lockdown, we tended to buy cheaper, so higher-priced wines languished. Larger distributors tend to want to move that wine even at deep discounts, and smaller distributors may have an urgent need to move product.
Elyse Winery emphasizes direct-to-consumer sales and some select retail markets, owner Josh Peeples explained in an email. When the pandemic hit, he offered discounted wholesale pricing with the expectation that the retail price would remain the same, but wholesalers and retailers can pass the discounts to consumers.
That’s how Leiker found the Elyse Morisoli cabernet at such an attractive price around the new year — inventory time for distributors. It’s also possible the warehouse was clearing room for the 2016 vintage, the winery’s current release.
Leiker also raved to me about Schweiger Vineyards cabernet sauvignon from the Spring Mountain area of Napa Valley. The 2014 vintage, a fine year with some age on it compared with most current releases, was suddenly available at a price that he could put on the shelves for $30 a bottle. The same wine on the winery website is $75.
At MacArthur Beverages in D.C., wine buyer Phil Bernstein said a wider selection of sought-after vintages such as 2016 Barolo from Italy was available because of the loss of restaurant sales. Andy Creemer, the store’s U.S. wine buyer, said that “instead of a few bottles, we’ve been offered multiple cases” of allocated brands such as Kistler and Peter Michael. They were leery to discuss the issue for fear of straining ties with wineries and suppliers, a sign of how competitive and sensitive the wine business can be.
We should remember that these bargains are available to us because others are hurting. About 17 percent of U.S. restaurants have closed permanently or long term because of the pandemic, the National Restaurant Association said in December. Recovery will be slow, and we don’t know what restaurant wine programs will look like in the post-pandemic normal. Schweiger Vineyards barely escaped autumn’s wildfires, and it decided not to make wines from its 2020 vintage because of smoke taint. Importers are reeling under tariffs imposed by the Trump administration on some European wines and struggling with supply difficulties because of pandemic-related shipping backlogs.
“I honestly am grateful for the business but wish it wasn’t at the expense of the struggling restaurant industry,” Bernstein says. “I’d much rather see restaurants come back strong, and I feel for them.”
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