Hello friends, after a two-week quarantine and the closure of many sectors related to the production and consumption of wine, restaurants, wine bars, etc., the negativity of people in the wine industry is growing.
The primary in us said, “We need to have the means to make the most necessary survival products,” (because this pandemic and the incessant information from around the world make people think about self-preservation and the survival of them and their families). All over the world, jobs and positions are already being redistributed so that something built over the years does not collapse for months. It will be the same here in Bulgaria and undoubtedly every sector will be affected in some way, mainly economically and thank God, let us be alive and healthy, we will manage!
In this regard, we tried to get more opinions from people related to the wine world of Bulgaria, starting with a small wine producer, publishers of wine catalogs, sommelier, wine merchants, large wine producers and organizers of wine tours. Of course, we cannot cover the opinions of everyone in the production cycle, but we think that the people who answered our question are competent enough and mostly realistic about what will happen to Bulgarian wine in the very near future.
How will the Covid-19 pandemic affect the wine life of Bulgaria, including wine cellars, wine exhibitions, wine shops , economically, morally and in terms of personnel?
The answer to this question is a function of time. The situation is one now, in a month it will be different, in three months, in six, in nine, in two years it will be different. Unfortunately, no one can now predict in detail how the pandemic will develop and what changes and results the measures taken by governments in different countries will lead to. In my opinion, a possible development of the situation is the following:
Restaurants, hotels, exhibitions with physical presence are blocked. Transport is very difficult, wine supplies are minimized. Wine exports are almost blocked.
There are no obstacles for virtual marketing, custom sales with home delivery. Internet sales have seen visible growth, but overall there has been a large decline in sales and revenue.
Unfortunately, more and more people are losing their jobs, ie. without income and if this continues it will soon be understood that wine is not the highest priority when planning expenses.
At the same time, the vineyards must be cultivated and for now they are being cultivated, the wineries must take care of their production, incl. to bottle as far as they have purchased materials. Of course, wine tourism is blocked.
There is a need for additional funding for the sector to compensate for the delayed sales.
2. After a month-two-three:
There are two options:
A). If the measures to limit people’s contacts, and hence the functioning of the economy and consumption, continue, the problems of an economic nature will increase.
Wine sales at home and abroad will decline significantly. The sector has very limited opportunities to reduce staff and limit costs, except by reducing wages.
We will see sales of good wine at prices below cost, but also the entry of counterfeit wines to be cheaper. It is possible that some of the distributors and wine shops will stop working.
B). If during this period the isolation measures are weakened inside and outside the country, life will gradually begin to normalize, but the consequences of the reduction of production and income of the population will remain, and hence the consumption of wine and income of wineries. Even if we return to the volume of sales (in kind and in money) from before the pandemic, the loss will not return, we will find ourselves with excess wine stocks and a significant reduction in sales during the year, wine prices can be expected to reduce. This is actually the best option, possible losses in some markets will be offset by others, there is no reason to expect cataclysms in the sector.
- After 6-7 months, ie. September-October 2020:
According to the options in the previous period, the following can be expected:
A). If the measures to limit people’s contacts, and hence the functioning of the economy and consumption not only in Bulgaria but also around the world, especially in Europe, have lasted longer or continue, the problems of an economic nature will be correspondingly deeper. .
Wine sales at home and abroad will have fallen sharply and will continue to decline.
Most of the wine producers will find themselves with full cellars, without the possibility to accept a large part of the new harvest, with minimal opportunities for realization and from there for income.
The sector has very limited opportunities to reduce staff and limit costs, except by reducing wages and bankruptcies will begin. More mass layoffs are possible.
We will see sales of good wine at liquidation prices. A wave of acquisitions of companies in the sector is also possible, which will be bought for nothing. The problems of some of the distributors and wine shops will deepen, and there will be consolidation and bankruptcies.
B). If in the previous period there has been a weakening of isolation measures inside and outside the country (the earlier, the better), life will gradually return to normal. Of course, 2020 will be the year with at least 20% -30% and more percent reduced sales revenue and this can not be overcome. However, there is an opportunity in the coming periods to return to the volume of sales in kind from before the pandemic. The industry will have to fight to reduce the cost of production in all possible directions.
It is possible that with the onset of the autumn-winter season will come a new wave of crown virus. In this case, we will still have two main options:
a) If the restrictive measures have been weakened in the past and the number of survivors of the disease and acquired so-called “herd immunity” is large enough, and if countries have not missed the time to better prepare their health systems for the specifics of this virus, for example with the production of effective drugs or vaccines, the pandemic will not happen again, we just have to get used to the fact that this virus will be added to the usual flu. We will have to get used to it and drink our wine, including to strengthen the immune system. The industry will stabilize.
b). If countries have missed the time to better prepare their health systems for the specifics of this virus, or if due to a new mutation the long-term isolation exercise has to be repeated, we will have to expect, albeit for a short period, a boom in the consumption of wine of despair, because this will be the last remnant of our previous way of life before we return to a new pre-industrial era in which everyone produces everything they need and does not have to work in factories, trade and meet others. people.
With all the conventionality of the above considerations, which do not claim to be a prediction for the future,
Wine has never been a current commodity, the daily sale of which determines the salary of employees, especially with stagnation of several months.
In fact, the wineries work because the work on the wines does not stop even in the spring, and in them taking disinfection measures is not difficult at all, because they have everything they need, or at least know where to get it at a good price. .
The work on the vineyards does not stop either. This is also not a revolving product J.
Only traders whose wages are tied to their turnover will have slight wage shocks, but still everyone loses from this crisis and should be happy that they still have a job.
However, the tourism departments will be severely affected, but a good manager would always transfer this workforce to production so as not to lose an employee. And they can still take their vacations.
In other words – in my opinion there will be no strong shock in the wine cellars with difficulty for several months. Wine sales continue online, albeit at a slower pace. The wine cellars do not rely on the monthly turnover for the salaries of their employees, the banks will reschedule the loans, and if there is a dismissal of staff, then definitely not KOVID will be the reason.
Wine fairs – those who manage to postpone the dates – will not be a problem, especially since some of the fairs have already been canceled. There are few events in Bulgaria to worry about the lack of participation from the cellars. Another question is whether there will be visitors, but therefore we must consider the time to postpone the event – not exactly in the midst of falling quarantine.
Morally, I think that everyone in Bulgaria already understands the need to “CONSUME LOCAL PRODUCTION”.
Personnel – I don’t think there will be a difficulty. Only wine tourism WILL THREAT! That is why a lot of effort must be made for the internal market, because we will not be able to rely on foreigners for another half a year (in my opinion).
Wine Stores: Those who have online stores and good promotions will do. The rest who don’t have it will have to be more creative – personal contacts, social networks, free deliveries, etc. in order to be able to sell.
The good thing in this case is that most online stores only sell bottles, and bottled wines are in physical stores. That is, I anticipate that bottled wines will outperform available wines. I hope!
The unprecedented situation, which was reached due to the threat of CoVid-19, will seriously affect both the wine industry and the business as a whole in Bulgaria and the world. Many wine events such as tastings and exhibitions traditionally take place in March, and this year they have all been either postponed to May or canceled altogether. This completely limited the opportunities of the wineries to present their products to wine connoisseurs and did not allow them to reach their own and new audiences.
The restaurants and wine bars in the country are closed, which leads to a decrease in sales of all wineries. Some restaurants quickly adapted to the new reality and began to offer home delivery. Few of them offer the opportunity to deliver wine along with the ordered dishes, thus supporting wine producers in these difficult times.
Most specialty wine shops remain open, and some have also started offering supplies – a service they have not had before.
Augeo Family Estate has an online ordering channel through our website, but our observations in the last two weeks are that customers lack mood during home isolation and orders are low.
In recent days, wine producers have united under the call “Stay at home and drink Bulgarian wine.” We all hope that the situation will pass quickly and that we will be able to meet our clients face to face again.
Answer: It depends on which point of view – the pessimist or the optimist. As an optimist by nature, I think there will be a balance in many aspects of the wine industry. People are quickly adaptable, this was seen in the short time we live in isolation. I strongly hope that the 2020 harvest will be good and that it will delight the fans of Bulgarian wine. It will certainly not be easy in the cellars – loans, salaries, insurance, running costs. They need to be very flexible in their trade and pricing policies in order to be able to adjust to the coming year. We cannot hide that there are overpriced wines on the market that now have a chance to show a more reasonable price. They also have an excuse, it will not affect the image of the winery. I will be happy if you increase online wine shopping, because it is really easy and convenient, especially if you know what you want. Here, I think there is a lot of room for action. Wine shops also need to rethink their pricing policy and be more flexible and creative.
Wine fairs – in my opinion will remain the best and those that are innovative. It is important to attract the right people, it is important to develop wine culture. From my observations, especially from the last edition of the Balkan Wine Festival 2019, we had almost 10,000 visitors, mostly young people aged 25-34 and mostly women. We will announce our new dates for this year within a month, because we want to be useful to both wineries and wine lovers who will crave a real wine festival after a long isolation. We will offer it to them! We are preparing a very useful part for the cellars, but we will leave it as a surprise, we will announce it when the time comes.
The world will not be the same after this crisis. I think that a clearing of the accumulated falsehood between people is already beginning, and I strongly hope that we will all become better and more empathetic to each other. Such will be wine marketing – emotionally touching.
The pandemic that has befallen us is inflicting severe damage on the entire wine life in Bulgaria and the uncertainty of how long it will last makes the anxiety even more painful. In a few days the commercial activity literally stopped, our sales representatives are on vacation, the cellar is in semi-working mode. Only a few people work, performing urgent tasks in the cellar and deliveries to the chains and online orders. The export deals we have been negotiating for months are now being reviewed and are very uncertain. This collapse will inevitably push us into financial weightlessness, sales are currently negligible against the background of the costs we have to make on a monthly basis. We have been used to working on certain models for years, but obviously from now on they will obviously not be adequate and we will have to change the approach.
Ah, if anyone knew the answer to that question!
Obviously, at the moment the main place to offer wine does not exist – restaurants! This will lead to a reduction in the team of wineries, which will be greatly reduced in attempts to rebuild the business (there are already layoffs in the sales teams). For me, however, the main problem will be outside the wine industry – a recession, even a depression that will affect the incomes of a large part of the population and lead to the abandonment of non-essential goods and this is certainly wine, especially in its -quality form. An even bigger problem is that the crisis is global – that is, there will be no international market to target. In general, the negatives are too many and finding positives for most sectors of the economy will be difficult. The main and predominant channel is for the supply of wine in the store network at the moment and I guess it will be maintained after the crisis or at least in the beginning due to the shrinking total consumption and reduced tourism. But returning to reduced consumption of non-essential goods, there may be retention and slight growth in the cheaper wine sector in larger and cheaper cuts.
Obviously, wine shows are a marketing approach that is expensive and time-oriented, and this will be one of the first items to fall away or at least shrink. Wine shops will also retrain as online stores and the emphasis will again be on more affordable prices. Unfortunately, the main victims will be the cellars that make quality wines or at least this part of their portfolio. The beginning of wine tourism in Bulgaria also does not expect good development – at least in the short term.
I very much hope that this negative picture (for the most part, because cheap wines may have an increase in volume) will be overcome within a few months – a year and things will start to develop again in a positive direction for the whole business, including guilt in the near future.
In these extremely difficult times of global crisis, we are trying to maintain a positive mindset. At the same time, we can not help but realize that there will be a serious collapse in the wine industry, especially in the part related to sales. Katarzyna Estate has proven its successful trade policy over time, but market turmoil will not pass us by. My forecast for the changes in the buyer’s behavior are already a fact – the high price segment is currently frozen (this applies to wines in the price range of BGN 25-27). For wines with a price of BGN 15-18 there is movement. I predict that people will focus mainly on the lower and middle price range of wines (starting with MEZZEK and CHEVAL, to the middle class – CONTEMPLATIONS, LE BLANC, LE ROUGE, LE ROSE).
Currently, stores and large retail chains apply regularly, which shows that people continue to drink wine. At the same time, the orders in our online store increased significantly. This is good news for Katarzyna Estate. The team of the winery works at full speed, the administrative office in Sofia carries out its activities from home so that we can comply with state regulations for compliance with social distance.
Despite the worrying situation of stagnation in the economy and the gloomy forecasts for the detrimental impact of the restrictions in it, I am optimistic and I hope that very soon, by the end of April, there will be a positive change in our sphere.
I hope that when the pandemic is left behind and restaurants start to recover, the wine market will gradually regain its former rhythm.
I predict a rearrangement of the market of Bulgarian wine producers, those who will be able to quickly adapt to the changed conditions will succeed. I believe that after the crisis we will come out stronger, I even expect a stronger demand for wines produced in Bulgaria.
I will start with the events, because this is the most obvious. The situation is tragic, not only because of the physical isolation and the inability to share our impressions (you know how nice all such formats are), but it is a livelihood for the event companies, which also have costs, pay insurance, etc. They may be small businesses in Bulgaria – for now – but they are actually a pillar of wine culture. It is the exhibitions that are the direct contact with the customers, because there is no better way to advertise the wine than the so-called sampling or tasting.
Wine shops MUST work, there is no reason for all other cigarette and alcohol booths to work, right? I directly recommend them to sell wholesale – with cartons, with sawn margins, otherwise we will all perish. At least while people still have some resources, they are unlikely to change their drinking habits. Maybe they will switch to more budget wine, to bulk options, but if they have easy access and good deals, I believe that people will choose to drink wine. In general, our hope is in them.
For wine cellars, where the cycle – economically and naturally – is annual, it is clear that there will be huge losses in these 2-3 months and they are unlikely to catch up by the end of the year. The past 2019 was not easy either, so this will be the second consecutive year of losses for many of the wine cellars, and many of them service loans, pay salaries, electricity, etc. You can answer the question of how many of them will survive and at what price. I hope that the government in the person of Minister Taneva will win some of these cherished 4.5 billion for the sector. I don’t want to be pessimistic, but there was a joke about Aisha and Mango in which Mango told her on her first wedding night, “I hope you’re a virgin!” Aisha: – Yes, but not at all. And yet hope dies last, I think we need to help them in this fight and support the demands of the sector.
Now a little about the market: it is clear to everyone that at the moment the market is even more price sensitive. In our country, in principle, this is because of the “wonderful conditions” that the state provides us as a business environment, and now the little accumulated culture is slowly beginning to evaporate. This is the saddest thing.
If I can rely on Miguel de Cervantes, with whom I feel particularly close lately (reread Don Quixote, it’s never superfluous), we now choose between freedom and salami.
Uva Nestum is a complex for wine tourism. Wine production is not large, but it is essential for the overall tourist product. The wine of the winery is offered only on site and so far this has been a working approach. The complex is currently closed due to pandemic measures, ie. the only channel for selling wine does not work. In times of crisis, restructuring and creating new channels will be a difficult and slow process. This year the winery invests in expanding production – new vessels and equipment. Unfortunately, the quarantine period occurs during the process of implementing the new equipment, which also creates difficulties.
For Uva Nestum, the tourism product is the one that mainly generates revenue. Tourism is likely to be one of the slowest recovering industries because, in addition to refraining from traveling in terms of security, many people will lose income, jobs, income and will not actually have the purchasing power to plan trips and vacations. In addition to current salaries, the organization has been investing in training, professional training and improving the knowledge and skills of staff for years. With prolonged stagnation, in addition to the possible release of trained personnel, the company will actually lose long-term investment funds for training. The loss of qualified staff, the financial crisis and the shrinking of all types of costs and investments can lead to a reduction in the quality of services,
Uva Nestum presents its entire product – wine tourism – mainly at specialized exhibitions. This strategy was chosen because it is the only one that allows for personal contact and personal attention to the most valuable target group – wine lovers. We have practically become convinced over the years that this approach creates lasting relationships with our guests. Several significant wine events have already been canceled and this is becoming a trend. Thus, the main marketing channel of the complex also becomes inaccessible.
The pandemic and its consequences will certainly have a significant impact on the entire HORECA sector, respectively on all related industries in the supply chain. Without targeted support from the state, this sector will recover the slowest, due to its specifics – a luxury that can be saved. Support does not necessarily have to be seen as direct funding. Possible support measures can be expressed in:
- active advertising and marketing campaigns to promote Bulgarian wine;
- information campaigns about the opportunities for year-round alternative tourism in Bulgaria, incl. wine and wine-culinary;
- active development of a program for development of wine-culinary tourism, including with opportunities for formation of public-private partnership and financing under EU programs;
- simplified procedures and facilitated conditions for wine producers under the measures financed under EU programs, incl. marketing of Bulgarian wine;
- tax relief for the sector.
In the short term, the most affected will be producers and importers, who work mainly with restaurants, cellars with tasting rooms, as well as wine exhibitions in the months until August. Stores should not have shocks, on the contrary – they have a slight growth, at least for now. The online trade in wine is increasing, which is generally lagging behind in Bulgaria, so this is one of the few positive things that will help us get out of the crisis.
In the long run, the Covid-19 pandemic is leading to a financial crisis that will affect Bulgaria. This will not reduce wine consumption, but will lead to a slight shift in the market to cheaper wines, especially in the high segment, and in the low to increased demand for the already popular bag-in-box at the expense of bottled wine. It is very likely that we will see new mass series of middle and low class wines from wineries that do not currently work with chains and supermarkets.
The competition, which will intensify, will inevitably lead to the emergence of real marketing campaigns, and not to chaotic facebook posts, which includes the marketing of wine at the moment in Bulgaria (with a few exceptions).
Imports of wine, passing mainly through restaurants and through private customers, will shrink further, which may force some traders to close down.
The pandemic will logically affect all industries when this business is forcibly closed, as wine is a product that is not essential, but is a product associated with good emotion on the table pleasant company and in times of crisis, uncertainty about the future and financial deficit, the wine industry is directly affected.
The situation is out of control. Wine life cannot exist in this situation and is completely dead except for everything that happens on Social Media.
We all rushed to look for On Line sales methods and it became a lot of fun.
I want the whole Wine Society to think before it acts. In this situation of survival of the Cellars, Wine Shops, traders and all accompanying activities, it is important to keep common sense and, if possible, with joint funds and campaigns to preserve what has been achieved so far. According to the imposed method, everyone will be saved individually, it will be very difficult.
No one will save us by targeting the state, we will have to save ourselves.
The problem of the drowning is the drowning themselves.
All efforts for the industry should be focused on convincing a large percentage of Bulgarians to support Bulgarian producers, a sustainable and long-term goal.
Stay at home and drink Bulgarian Wine
The outbreak of the coronavirus has created obstacles in the wine industry. There is no way he can stay away from everything that is happening. At this stage it is too early to draw conclusions, but some things are a fact: reduced sales, the system of wine events such as exhibitions and tastings, which are important for wineries, has collapsed. Closed establishments hinder the work of wineries, distributors and everyone in the chain. And all this before the start of the active summer season. Efforts must now focus on mutual assistance – we must focus on the consumption of Bulgarian wines, ordered more directly from wineries or specialty stores, which continue their activities at this stage.
In my opinion, we will generally talk about before 2020 and after. It will all depend on how long it takes to deal with the virus. The restaurant business is very dynamic and sometimes things change literally in a week. The Horeca sector will suffer a lot and no matter how dissatisfied we have been with the producer chain, we now see that things are going in a certain direction. Now everything is asleep, or at least for those of us who do not make home deliveries. A decline that I can’t really estimate how big it will be. Many negative messages are sent by the government, which further increases the tension ?! Moral and personnel… .. Everywhere around me there is panic and quiet horror because of the unknown who are waiting for us. On the agenda is how important it is to be local and how important it is to maintain the Bulgarian producer. And personally and especially for the wines (because 9 years) since we have been working we have offered only Bulgarian wines and now I am a little unfamiliar with this “hysteria” but in no case do I want to point out about it. The bad thing is that from those who depend we hear words only about criminals and restrictions and nothing positive in the direction of Facilitating small businesses. I can give many examples. Sales channels will shift and it will depend on each one to what extent you will be successful again. New, even greater efforts will be needed to get the wheel back on track. I can give many examples. Sales channels will shift and it will depend on each one to what extent you will be successful again. New, even greater efforts will be needed to get the wheel back on track. I can give many examples. Sales channels will shift and it will depend on each one to what extent you will be successful again. New, even greater efforts will be needed to get the wheel back on track.
As for wine sales, I can only say that after we open the restaurant and start a normal job, I will see where things are going ?! In the sense of what the new search will be. There will certainly be a change and I don’t know where it will be!
In conclusion, we can only say that the time has come to shake hands and think as one!