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HB winery bucks trend in US

HB Recovery

Dale Cowie28 July 2020

A Rabobank report released this month indicates that NZ wine exporters are at risk from the US hospitality biz plummeting due to Covid-19, but at least one HB winemaker is proving it is more bumpy than battered.

Interestingly, the reason that Te Awanga Estate seems to be faring better than expected is they are doing exactly what the Rabobank researchers say NZ exporters must do to manage the disruption – they are working with their US distributors to find ways to engage consumers.

The Rabobank report, Covid-19 and the US premium wine market, says the US situation is unlikely to recover until 2022 (see table below). It states that the US foodservice sector, which is a key market for many of this country’s smaller wine producers selling into the US, has experienced a 75% slump in sales through March and April.

 

Roughly 20% of total wine sales were made through foodservice channels in normal times, but the value of wine sold through this channel was the highest of all. Overall, wine sales across the US were down by 22%, or $US68 billion, in the first four months of the year.

Bucking this trend, Te Awanga Estate’s Rod McDonald says his company’s sales are nearly 30% ahead of this time last year. This, he suggests, is in part due to having increased the number of US distributors on last year, and that his stable of wines are being sold in more states now. Another factor is that two wine-keen states affected badly by the pandemic initially, Massachusetts and New York, had bounced back “really quickly”.

While sales through foodservice had definitely dropped, Rod says, his distributors were working very hard to move into other and multiple sales channels, in particular retail and online.

“People are still drinking wine, it’s an affordable luxury, so we’re looking to our distributors to develop multi-channel strategies.

“We’re working closely with them to help them achieve the sales we all need. It’s a case of asking what do you need from us? What can we do to help you make sales and get paid?”

To this end, Te Awanga Estate created a series of 10 videos during April and May this year, providing a virtual tour of the business, allowing viewers to watch the harvest, meet and hear the stories of the vintners, winemakers, and others.

“It’s a tool to help our distributors when they’re out selling.”

Which is what RaboResearch senior wine analyst Hayden Higgins and report author says is needed. “The report is basically signalling that the New Zealand sector needs to start engaging with their distributors around how they are being promoted, what marketing and branding materials they need to be supplying, and those sorts of things.”

The report is available online but only for Rabobank customers. https://research.rabobank.com/far/en/sectors/beverages/wine-quarterly-q2-2020.html

Photo caption: One of Te Awanga Estate’s US distributors, Mike Rosaly from MS Walker (centre) hosting an event at a rooftop bar in Manhattan, New York.

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Dale Cowie28 July 2020

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