COVID-19 incited an unusual global predicament for wine businesses by intensifying supply chain interruptions, marketplace disruptions in many countries, and related trade uncertainties continually shaping the wine sector from production to distribution and sales, marketing, and consumption rates. As the pandemic endures, the wine industry's short- and long-term recovery consequences, as well as momentary or enduring business and marketplace changes, remain unknown. This chapter explores these dynamics through an intervention action research (IAR) case study of a US wine business.
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The wine industry is essential to the world economy, with global sales estimated at nearly $250 billion in 2020 (International Organization of Vine and Wine, 2020). The Covid-19 pandemic has significantly impacted the wine marketplace, with many businesses adapting to the new environment (Lux, 2020). One of the most significant impacts has been the closure of many retail outlets, such as restaurants, bars, and tasting rooms (Lux, 2020). This has led to a significant decrease in sales, as customers can no longer purchase wine in these venues (Lux, 2020). Furthermore, the closure of borders has meant that many wineries have been unable to export their products, leading to a further decrease in sales (Lux, 2020).
Another impact of the pandemic is the decrease in tourism, which has significantly impacted the wine industry (Lux, 2020). Many wineries rely on tourists to purchase their products, and the decrease in tourism has meant that wineries have had to find new ways to market and sell their products. This has led to an increase in e-commerce and direct-to-consumer sales, as well as an increase in the use of subscription models (Lux, 2020).
The pandemic has significantly impacted the supply chain, with many wineries facing delays in the delivery of their products due to the disruption in international shipping (Lux, 2020). This has led to some wineries finding alternative suppliers or switching to local suppliers to ensure their products' timely delivery (Lux, 2020).
The Covid-19 pandemic has created a marketplace disruption for wine businesses, forcing them to adapt to the new environment. The closure of retail outlets, the decrease in tourism, and the disruption in the supply chain have caused this disruption. In order to mitigate the impact of this disruption, wineries must be willing to adapt and take advantage of the opportunities that the new environment presents while adapting to changing demographics of customers (Lux, 2020).