U.S. Wineries May Lose as Much as $400 Million in March Alone Due to COVID-19
A national survey of 10 percent of all wineries showed staggering losses that are predicted to grow.
How has the COVID-19 pandemic affected the American wine industry? As an ongoing crisis, the figures can be hard to calculate—though you should be doing everything you can to support your favorite wineries, regardless. Still, the national wine association WineAmerica has tried to crunch the numbers, sending a survey to all wineries in the United States earlier this month. By the March 23 deadline, 1,085 wineries across 49 states had replied, representing about 10 percent of all American wineries, and the results were not pretty—predicting potential financial losses in March alone as high as $400 million.
Importantly, these stats are the result of a survey, so they do not represent official accounting, but based on responses, WineAmerica pegged the “total financial loss in March due to coronavirus” at $40,439,764. However, the association adds, “While it is not certain that this was a representative sample, if so, those totals could be multiplied by ten to arrive at a nationwide estimate”—thus resulting in a potential nine-figure loss. As a point of reference, in 2018, the Wine Institute estimated the total retail value of U.S. wine sales at $68.1 billion.
Worth noting, not all of the reported financial losses are due to lost sales. Respondents said they had also been hit with $840,487 in “unanticipated expenses”—meaning that around 2 percent of the financial cost of COVID-19 to wineries was from things like “like hand sanitizers, cleaning services, and other products and services that are not part of their normal business,” as WineAmerica wrote.
Meanwhile, when asked specifically about lost sales, the average winery said they anticipated a 63 percent decrease in sales for March—a number they expected to jump to 75 percent for April.
Beyond the total financial impact, WineAmerica looked at other coronavirus-related numbers as well. The over 1,000 wineries that replied to the survey said they had to lay off a collective 4,496 employees, representing over 40 percent of their normal staff for this time of year. And though 80 percent of wineries said they were continuing with production, two-thirds said the rate is slower than normal. Additionally, 4,582 events had been canceled among respondents, an average of about 4 per winery.
And looking ahead, the future does not look bright: “If wineries were able to resume operations on April 30, the average winery said it would require 12 weeks … to return to normal business in terms of employees, visitors, sales, and other factors,” WineAmerica wrote. “In a remarkably short period of time, the COVID-19 has already had major negative impacts on wineries of all sizes in all states, undoubtedly with more to come.”
The association says they “will likely send out more surveys as the situation evolves.” In the meantime, wine lovers should keep those virtual happy hours going.