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How COVID-19 Impacts Wine Industry in the US?

COVID-19 Impact
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A national economic impact survey of wineries across the United States revealed the initial effects of the COVID-19 crisis on their businesses so far.

The survey by WineAmerica, the national association of American wineries, was sent on Thursday, March 19 with a deadline of March 23, and went to all wineries in the United States. Responses were received from 1,085 wineries in 49 states, or more than 10% of all American wineries. Questions examined the overall effects on employment, production, tourism, sales, expenses, and total financial loss. Because there is such variability in the sizes of wineries, WineAmerica is reporting both the mean (average) and median (midpoint) of responses to present a more complete picture. 

The totals in response to certain questions are shown directly below. While it is not certain that this was a representative sample if so those totals could be multiplied by 10 to arrive at a nationwide estimate.

  • Normal Employment: 11,043
  • March Layoffs: 4,496
  • Normal Annual Visitors: 26,096,279
  • Events Canceled: 4,582
  • Unanticipated Expenses: $840,487
  • Total Financial Loss in March due to Coronavirus: $40,439,764

More specific information is below.

Employment: The average winery reported 10 employees in normal times, with 4 as the median. Layoffs due to the crisis averaged 4, with 2 the median.

Production: 80% of wineries have continued production, but 67% at a slower rate than normal.

Tourism: In a full year, the average winery welcomes 24,111 visitors, with 5,500 the median. The average winery expected a 75% decrease in visitors in March, and the median an 80% decrease, compared with previous years or 2020 projections. The average winery canceled 4 special events, and the median 3, in March due to the crisis.

Official Restrictions: Virtually all responding wineries were recommended or required to reduce or cease operations by one or more levels of government, including state (1,030), federal 311), county (305), and city (19).

Lost Sales: The average respondent anticipated a 63% decrease in sales during March, with the median at 70%. Looking at the month of April, the average winery expected a 75% decrease, with the median at 80%.

New Expenses: The average winery incurred $776, and the median $200, for unanticipated expenses for supplies like hand sanitizers, cleaning services, and other products and services that are not part of their normal business.

Combined Loss: Counting both lost sales and unanticipated expenses, the average winery will lose $37,376, and the median $15,000, in March.

Recovery Time: If wineries were able to resume operations on April 30, the average winery said it would require 12 weeks (3 months), and median 8 weeks (2 months), to return to normal business in terms of employees, visitors, sales, and other factors.

Summary: 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 American wine industry is comprised primarily of small, family-owned businesses that have very limited resources in the best of times, so this period is particularly trying. View full report here.





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