It occurred to me that many BC wineries were not in existence since our last major crisis–not the month long disruption caused by forest fires, SARS and Alberta boycotts but September 11, 2001. Even for wineries that were in business 19 years ago many may have forgotten how that impacted our industry. When tourism was disrupted as it was post 911, it not only resulted in fewer people walking into cellar doors but it also had a big impact on sales in the Lower mainland and beyond. People ate out less in restaurants, retail sales were mostly flat (in some cases slightly up) and events were non-existent.
With the COVID-19 virus the same thing is happening but on a much larger scale. We have been rather isolated where most wineries are located, the Okanagan Valley, because as I write this, the outbreak has not yet taken a foothold here–but it is only a matter of time. Tourism will be impacted to an even greater extent because during this crisis, even locals may start staying away from wine touring. In contrast, after 911 the locals seemed to still support our industry and it was mainly the international tourists that stayed away.
The other phenomenon that happened after 911 was the huge rebound that happened 9 months later when the crisis was over. Pent up demand to get back to traveling and spending took over and British Columbia had its largest tourism year still to date in the summer of 2002. Having just attended the BC Tourism Industry Conference in Victoria last week this was confirmed by Caroline Beteta, President and CEO of Visit California, who discussed the bounce back that happened after the multiple natural disasters that state has been plagued with. After the crises were over, there was an inevitable increase in visitations. BC wineries also need to be prepared for that once the COVID-19 virus fades away.
Below are my ideas for what wineries should be doing right now—and I mean now—to prepare for the crisis that is upon us:
- Find A Buddy Winery
If there is one thing that many BC wineries are good at, it’s their ability to isolate themselves from the rest of the industry. Now is not the time to do that. I suggest every winery seek out a buddy winery—one in their area—that can help them weather this storm. This can be a winery that you already have a relationship with or one you may have always wished to have a relationship with. It doesn’t matter if you’re the same size or not. It doesn’t matter if you are new to the industry and they have been around for decades. You can always learn from one another.
Buddying up with another winery will allow you to combine information that you are hearing from the marketplace, coming up with strategies on how to handle sick employees or ones that want to work from home and even to begin conversations on how you can share part time employees during this time. There are many part time employees that may not survive this crisis because they may be the first to go with cost savings measures. Before you tell that part time person that you don’t have hours for them, talk with your buddy winery to see if between the two of you there is capacity to share employment to keep that person in our industry. Once they are gone they may be gone forever so it’s time to start getting more flexible and creative and employee sharing is one strategy to do that.
- Do an Employee Inventory
If every employee, both part time and full time, seasonal and permanent, had to work from home, could they do that? The answer is probably “no” but often wineries stop there. “No, cellar, vineyard and hospitality employees cannot work from home” I can hear you say. Don’t discount this idea out of hand. Every employee has work that must be done at the winery, there is no doubt about that, but almost every employee also has work that can be done at home.
Your tasting room employee, if underutilized because the tourists aren’t walking in the door in their usual numbers, can update mailing lists from home. They an update credit card information for your wine club and they can look for innovative items for sale in your tasting room for when the flow of customers surge again. Cellar employees can get caught up on paperwork, inventory, bid equalization, capital purchases, packaging decisions and procedure writing from home. When they have to come in to do cellar work, they don’t necessarily need to be at the winery for a complete day. Vineyard employees may not be able to do much work from home but it is a great time to begin implementing a more rigorous health and safety program and maybe that can be done for a few hours in the afternoon once fieldwork is complete. Get good at using Google hangouts or Zoom or any of the various programs out there that help with video meetings. If you’ve never held a management meeting virtually, now is your time to learn. If you don’t learn now, you won’t be ready for the next crisis—and there will always be a next one.
Work from home will also help general managers and winery owners get better at another skill they often lack—trust in their employees. It’s hard to micromanage someone who’s not in the building, but learning how to better trust employees working off site is a skill that this industry needs to get much better at.
- Time to Up Your Game
A possible slow down in business allows every person who works at a winery to do those activities that they often put off during the year because they are running at breakneck speed. When was the last time you took a look at your updating your business plan? When was the last time you had a strategic planning session? What was the last innovation you put in action? Right now the BC wine industry is launching the new sustainability certification program—is that something you can now tackle? Do you have all the human resource programs in place at your winery? Have you renewed your marketing plan? Do you have a social media-planning calendar? Have you put in place a preventative maintenance program or updated your WHMIS sheets or started Health and Safety workplace inspections? When was the last time that you had heart to heart conversations with your employees outside of a performance review? Do you even do performance reviews?
When times are tough it is not time to pull back and withdraw. It’s time to leap frog over your old self and reinvent your new self. Grow the pie. Up your game. I can guarantee that your smart competitors will be doing this.
- Find Efficiencies
There are two ways to make money—increase your revenues and decrease your expenses. Now is the time to figure out ways to do the later. At the winery I used to run we called this a “rock list”. In other words, what rocks could we look under and find cost savings. You may be thinking you are already running lean, and that may be true, but this time get all your employees in a room and brainstorm. They are the ones working the front lines and often know areas of fat that can be reduced without an appreciable loss to your image or business. The very last place to look for cost savings, in my opinion, should be with your employees but often wineries start there. In 2001 after 911 happened our winery was in the middle of digging a huge pit for our barrel cellar. We knew there would be a big disruption to tourism and revenues and we started looking at ways to save significant money. We opted to order flat bottom glass rather than the deep punted glass that we usually used and at our volumes, that was a $40,000 savings in that one year. Because of that decision, we did not have to let one of our employees go. I can say in all of the 23 years we ran our winery, we never one time let an employee go for cost saving reasons. A statistic I am most proud of to this day.
Get your employees in a room and come up with ways to shave costs. Put a dollar amount next to each and you will be surprised how small savings add up. Remember, there are two ways to make money and raising your prices or expecting bigger sales during the time of COVID-19 is just not a logical expectation. Do it by finding efficiencies and who knows, you may get into the habit making a “rock list” even when times get better.
- Prepare for Growth
As stated at the beginning, a period of increased tourism and growth will follow this downturn and you want to make sure your winery is positioned properly for when that comes. You will need to ramp up tasting room employees—where are you going to find them? Are you keeping prospective employees in the loop as to when you will need them again? If you aren’t, your neighbor winery might be, and you will be struggling to get people in place at the same time that many other wineries will be looking to do the same thing. Have you planned for events that can be rolled out at any time of the year to take advantage of this increase in travelers? Are you producing marketing materials for your sales agents to utilize when restaurant orders pick up? There are a million ways to get your business ready for growth but you need to know that growth will inevitably come.
Is your winery going to be ready to pivot and be prepared to capitalize on the increased sales opportunities or is it going to be caught flat-footed?
I hope this has given you some things to think about in preparation for this upcoming drop in business. Imagine in a few months your winery has formed a new friendship with another winery, has learned to trust employees and given them the flexibility they need to thrive, become more innovative and efficient and become more proactive rather than reactive. Can your winery take the challenges and make them into something meaningful? It is not the crisis that defines us but how we deal with it.