Lioco Wine Company is in survival mode.
Under ordinary circumstances, this small California wine producer buys grapes from vineyards in Sonoma County, Mendocino County and the Santa Cruz Mountains to make expressive, nuanced wines.
It sells them to restaurants, to distributors around the country and directly from its tasting room in Healdsburg, Calif. But the Covid-19 pandemic has forced the abrupt closing of restaurants and the tasting room. Restaurants that are open for takeout and delivery and able to sell wine legally are focusing on their existing inventory rather than buying more wine.
Faced with a steep drop in income, Lioco’s owners, Matt and Sara Licklider, have had to move fast to stay in business. They have furloughed their nine-person staff, as well as themselves, Ms. Licklider said, as they can no longer make payroll or pay their bills. They are applying for a small-business loan, and they are hoping for the best.
“We have been on a wild ride,” Ms. Licklider said. “The only channel we can really plumb right now is direct shipping, so we have been working that angle as best we can. Perhaps we will see a couple of wholesale orders stream in once all the retail shelves are ransacked. People are definitely drinking — I know I am.
“We aren’t going anywhere,” she said. “But I’m not sure what our business will look like on the other side of all this.”
Throughout the American winemaking business, fear and uncertainty reign. Producers, who operate on a largely predictable schedule dictated by seasons, holidays and the agricultural cycle, are suddenly facing great unknowns.
Their umbilical connection to the hospitality industry — restaurants, bars, hotels, clubs, tasting rooms, even airlines and cruise ships — is no more, forcing a painful reckoning with staffs, budgets and business plans, with little sense of how long the disruption will go on or of what will await them when it’s over.
The entire wine business is affected. Big companies and corporate wineries have far more resources to face difficulties. For small family businesses, it’s potentially an existential crisis.
For some, the anxiety is assuaged by a direct connection to the earth. Vineyards in the Northern Hemisphere are at a delicate moment.
Just around now, give or take a few weeks depending on the climate, weather and grape variety, vine buds are bursting forth with leaves and the first tender shoots.
It’s a tenuous time agriculturally as the potential for deadly frosts, which in one cold night can literally nip a harvest in the bud, lingers for weeks. Farmers must be prepared to sometimes work through the night to protect their fragile vines.
At the same time, these ordinary anxieties provide a distraction from the pandemic.
“Throughout this confused and disorderly time, we are finding some respite in the vineyard activity here at home,” Andrew Mariani, a proprietor of Scribe Winery in Sonoma, Calif., wrote in an email. “Mother Nature’s course continues, and bud break still requires our attention.”
So far, Scribe has not had to lay off or furlough any of its team. Mr. Mariani said that it was hard to know what to expect, but that Scribe was trying not to make any big decisions with such uncertainty.
“The situation continues to change so quickly, it’s hard to tell what hurdles we are actually facing,” he said. “But we can’t imagine anyone is in a long-term, sustainable position at the moment.”
Philippe Langner’s initial reaction to Covid-19 was panic. He makes wine in Napa Valley, selling small amounts of an expensive cabernet sauvignon under the Hesperian label and larger amounts of a more moderately priced cabernet under the Anatomy label.
The pandemic caps a difficult few years for him. He lost his house on Atlas Peak to the 2017 wildfires. Work on a new house has been underway, and construction on a winemaking facility was set to begin.
“I expected sales to crash for months, but in fact they haven’t,” he said. “I expected to be completely locked down, but in fact I can still work. I expected the reconstruction of my house to be delayed again, but in fact it will be done next week. I expected distributors were going to not pay us for months but in fact they have.”
It has helped that he deeply discounted his wines, cutting the price of his top $150 cabernet in half, which has kept the cash flowing.
“I can pay my bills this month,” he said. “It’s about surviving this event.”
Mr. Langner works largely on his own, with one part-time employee for social media and one vineyard worker. For larger companies, social distancing poses a challenge.
At this time of the year, Jason Lett, proprietor of the Eyrie Vineyards in the Willamette Valley in Oregon, is usually bottling wines and packing boxes to ship to members of Eyrie’s wine club. But not in 2020.
“Am I jamming eight people in a room together to bottle?” he said. “Certainly not. So spring bottling is on hold.”
Chris Brockway runs an urban winery, Broc Cellars, in Berkeley, Calif. Faced with closing his tasting room and losing his restaurant clients, he started a local wine delivery business, selling bottles to anyone in the Bay Area.
“So far it’s allowed us to keep everyone on our staff employed,” he said. But he is not sure it’s a sustainable solution. “That’s a big worry at the moment,” Mr. Brockway said.
Thinking ahead, he’s planning, for the first time since his initial harvest in 2002, to make less wine in 2020 than in the previous year.
“At least that’s the plan right now,” he said. “My thinking today is plan for the worst and hope for the best.”
Jason Haas of Tablas Creek Vineyard in Paso Robles, Calif., initially feared the worst. With a steep reduction of revenue, he said, he began canceling investments that were not necessary, and wondered how he could keep his staff intact.
He started to feel a little better after Congress passed the coronavirus relief bill in late March, which he said included provisions to help small businesses like Tablas Creek. And, he said, they’ve been able to sell more wine directly to customers than he expected.
“The vineyard is in good shape, we’re working on blending this week, and the 2019 whites look outstanding,” he said. “So that’s something.”
When wineries are hurting, the connective tissue that makes up the wine and food trade hurts as well. Doug Polaner, who with his wife, Tina, runs Polaner Selections, an importer and distributor in Mount Kisco, N.Y., said the company was doing about 60 percent of its usual business, but expected that figure to fall as the crisis extends.
Half of Polaner’s customer base is gone, Mr. Polaner said, and social-distancing protocols do not permit business as usual.
Selling wine is a personal matter, one that depends on opening bottles, tasting and discussing them face-to-face.
“It’s one of the essential touches in our industry that is not compatible with social distancing,” Mr. Polaner said.
Importers are already dealing with the fallout of tariffs, not only those President Trump imposed on wines from France, Spain and Germany in a trade dispute with the European Union, but also tariffs that he imposed on goods from China.
As a result of the Chinese tariffs, along with the Covid-19 crisis there, refrigerated shipping containers, or reefers, have been stuck in China, without the trade business that would keep them circulating throughout the world.
This has caused a severe shortage of reefers available for shipping European wines to the United States, a trade already diminished by work stoppages mandated in Europe because of the pandemic, said Catherine Miles, a vice president of The Sorting Table, an importer in Napa, Calif.
While producers, distributors, restaurants and retailers are the most obvious members of the wine trade, other people like publicists and marketers are the lubricants that often keep the machinery operating smoothly. They, too, are facing possible disasters.
Alan Goldfarb in Mill Valley, Calif., who does public relations for small family wineries in California, works on his own, and says his three clients provide plenty of work for him. Since the pandemic hit, he says he has cut his fees, but doesn’t know how much longer he’ll have work.
“I am terrified of losing these clients, who may soon realize I’m not an essential part of their business,” he said.
In the Finger Lakes region of New York, Michael Schnelle and Nancy Irelan, husband and wife, operate Red Tail Ridge Winery in Penn Yan. They depend on restaurants and their own tasting room for income, which has largely dried up. They are now selling wine only online or for pickup at the winery.
“As a result of all this, we’ve had to lay off all of our tasting room staff and my assistant winemaker,” Ms. Irelan said. “We still have our seasonal crew helping us in the vineyard, but apart from that Michael and I are handling everything.”
Like so many in the wine business, they know other people who have lost far more, and say they are grateful for what they still have.
“Things are challenging, but we are keeping our heads down and pushing forward with finishing wines, emptying tanks and preparing for the 2020 vintage,” she said. “Mother Nature waits for no man, or pandemic.”
