December was a month of assessments and plans. December 2020, however, is, to put it mildly, different from previous years. For many companies in the wine business, including Sommelier.BG, the year was quite financially challenging as a result of Covid-19, which cancelled wine events, minimized the Horeca channel and slightly shifted trade to a lower price range. For better or worse, the year is over, but 2021 is coming, which already gives indications that it may be just as challenging.
Here are some trends that are expected in 2021
It may be a little exaggerated, but the online alcohol trade is entering its Renaissance. The leading online stores report sales growth compared to 2019 from 20% to 200%. The trend of increasing online sales share is very likely to continue in 2021. Here, however, the subtle point is that no matter how tempting a bite of online commerce may seem, it is not for everyone. The relatively small digital wine market, for which several online stores and several distributors are vying, may be oversaturated for new sites, given the seemingly hidden costs. In a similar situation may be the wineries that are about to embark on online commerce.
All the hysteria surrounding the pandemic and the closure of the Horeca channel has led to a highly competitive market, driven mainly by offers and discounts. The uncertain future, depending on the development of Covid-19, will continue to work in favour of the wines in the Beg-in-Box, which in turn will add weight to the stock of bottled wines. This is already evident. If in previous years we saw discounts only on a certain occasion and for a short period of time, then at the end of this year things are different – December turned into permanent discounts, up to 30%. It is very likely that we will continue to see such discounts throughout the year, which would logically lead to lower prices. Of course, this is welcome for customers, but it is not very clear how this will affect other participants in the cellar-customer chain.
The drought in Bulgaria is a fact and we will witness more and more dry years. The fact that in our country the capacity in the state administration is weak and no long-term solutions to the problem are sought does not mean that there is no solution. The drought management approach is called “dry farming” and works very well in wine regions such as California, Santorini and the Moselle. It is logical that foresighted growers should start thinking more and more about scientifically proven techniques and practices applied in dry farming. Such practices and techniques take years to work, so it is important to be patient.
Limited wine lists
Popular chains and restaurants that are currently closed do not in many cases view their wine lists as a tool for trading with importers and producers, rather than as a tool for communicating with customers. When they open, the wine will be in the background, given the large financial losses they are currently suffering. All this is very likely to lead to “tempting” offers for compact and limited exclusive wine lists, which will be difficult to refuse after a long period of closed establishments.
More small shops
Small shops that offer wine, alcohol and products that are not available in the chains work well during a pandemic. Convenience, the unpopular but quality range, will continue to make them preferred in the future, with or without a pandemic.
So we send “the worst year in history”. With a lot of optimism and sincere wishes for better times for wine lovers, producers and those like Sommelier.BG, which are the links between them.