Supply Chain Mishaps Cause Delays and Endless Headaches

Wine puzzle illustration
Illustration by Julia Lea

Nayan Gowda was helping to restore ancestral vines for Jardin Oculto in Tarija, Bolivia, when the novel coronavirus pandemic hit. One of the first wines the label planned to release was a pét-nat.

After Bolivia shut its borders on March 17, however, Gowda’s shipment of dry goods, including sparkling wine bottles from Chile, was delayed at the border.

“The delay meant we changed…to a bottle-fermented style, so I racked and sulfured accordingly,” says Gowda, the founder of Vinosity Consulting. Unfortunately, the crown caps arrived but the bottles did not. “With no end in sight, we decided to bottle a still wine.”

It wasn’t a straightforward process. “I had to play around with extended lees contact and lees stirring to build palate weight and complexity to push a wine originally intended for sparkling to something that will hold its own as a still wine.” Now, the corks are stuck at the border, and Jardin Oculto still can’t ship the wine to distributors and retailers.

As Wine Sales Skyrocket, Retailers Shift What and How they Stock

Gowda is one of many wine professionals struggling to navigate shifting operations as a result of the pandemic. Because the industry’s supply chain is so intricate and interconnected, shipment delays, packaging complications and other small disruptions have enormous consequences.

Supply chains stretched internationally are particularly vulnerable. “The supply chain issues evolve day after day here,” says Reka Haros. She co-owns Sfriso Winery in Italy’s Veneto with husband, Pier Sfriso. Their first hiccup occurred in March when shipping containers couldn’t be sent from China, which in turn delayed their ability to fulfill orders in the U.S. by a month.

“These extra obstacles for small wineries who depend on every single sale…It’s been hard” says Michael Kennedy, founder of Component Wine Company in Napa. In late February, Kennedy applied to sell foreign wine to a licensed distributor in California. The process, which normally takes two-to-three weeks, lasted two full months.

The delayed approval went straight to Kennedy’s bottom line. “Since we don’t get paid on the sale for an extra 30 days on top of that, it delayed a large sale on our end for over 100 days.”

Other issues arise in seemingly banal places. Label printing stymied Lisa K. Miller, owner of Koi Zen Cellars in San Diego. Her printer’s typical turnaround time of two weeks stretched to two months due to lack of manpower and materials.

“That [delay] was not going to work for us…so we changed to a wrap label,” she says. Foregoing the front and back label allowed them to print at the winery.

Bars and Restaurants Have a Chance to Change for the Better. Will They Take It?

Brands with significant on-premise business have suffered in myriad ways. In addition to vastly reduced sales and shuttered bars and restaurants, these wineries have to contend with impaired receivables, or lowered or delayed payments due. That figure has ballooned for Max de Zarobe, owner of Avignonesi winery in Montepulciano, Italy.

“In three months, this index has soared from .5% to 16% and counting,” says de Zarobe. “Most of our debtors won’t survive, and those who will overcome the crisis might be so weakened that it’ll take them ages to pay their outstanding bills… If by miracle the Italian and European institutions inject loads of liquidities into the economy, the vintners will be the last to have access to it.”

In the meantime, consumers will likely see individual brand delays and diminished access to their favorite wines. Disruptions could eventually trigger price increases as larger producers, buffered by deeper pockets, consolidate pricing power.

Smaller brands, however, may not follow suit. Kennedy believes the struggles and added costs will be absorbed by producers.

“We all want to keep [prices] as low as we can…None of us could dream of raising prices in a climate like this, even if we should. We just want to ensure our wines find the best homes possible and bring a little joy.”

Published on June 22, 2020
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