Strategic Sips

Dated: April 18. 2020

How wrong was I?

1. The Great Move Toward Virtual Reality

Wineries and breweries alike start to invest in equipment and headsets for VR. After leaning on Zoom, Facebook and Instagram for their virtual tastings during the pandemic, they explore other platforms like Oculus GO, and charge a fee for their tastings which includes product and shipping expenses for the headsets.

2. Wine Lists Get Thin

Every fraction of the margin now counts so restaurants begin trimming their list to keep inventory low and distributor bills lower. Adding to the difficulties, they will need to rely on brands that are proven to sell and move inventory quickly with fewer tables to ensure proper distancing. Combined with tariffs, rare wines from lesser-known regions will struggle in this type of environment.

3. Sommelier Game Will Change Before and after the initial “Somm” movie came out, these sommeliers have had tremendous influence and put certain wines into fashion. Would we have even heard about “orange wine” without a group of buyers in NYC touting the Italian skin-fermented white wine? Heck, would winemakers in California even begin to make it themselves without the guarantee that a young sommelier would put it on their wine list? Overnight, it seems, this profession has taken a hit and maybe with it the leverage they once had – an unforeseen casualty of the virus. A restaurant owner or investor is going to keep a tight leash on purchases at least in the interim and request more hats for these somms to wear. The profession will be re-defined with perhaps less people opting into same educational path.

4. Amazon Does Booze

After shutting down their online store in 2017 due to alcohol regulations, Amazon gets back into the game in a big way. Since then they have been tepid and mindful not to anger regulators by only delivering in select metro areas. Now that regulators have eased retail and restaurants booze deliveries post-pandemic, Amazon makes their move and wins on shipping costs and one-two day deliveries, possibly even acquiring Drizly or Minibar.

5. Healthy & Sustainable Demand Becomes Stronger

The trend towards health and wellness accelerates and demand for sustainable options grow. Low-alcohol and low calorie are no longer buzzwords and start taking more shelf space in retail. Beverages with a sustainable story has a leg up on others who don’t as consumers want the full package: less plastic, environmental responsibility, and wellness. It may have lost focus during the pandemic, but the topic swings back for consumers, and particularly the demographic below.