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WineAmerica survey forecasts economic impact of Covid-19 on US wineries

Data from a nationwide survey of wineries shows how badly affected the US wine industry is by the pandemic...

A new report from WineAmerica – the national association of American wineries – reveals how the Covid-19 pandemic is affecting the US wine industry.

The headline figure shows that the industry’s total financial loss in March due to Coronavirus is $40.4m, with the caveat that this figure ‘could be multiplied by 10 to arrive at a nationwide estimate’.

The data comes from a survey sent to all wineries in America on 19th March. There were 1,085 responses spanning 49 states, which represents slightly more than 10% of all American wineries. ‘The totals in response to certain questions are shown directly below. While it is not certain that this was a representative sample, if so those totals could be multiplied by 10,’ says the report.

The survey looked at the overall effects on employment, production, tourism, sales, expenses, and total financial loss. Here’s a snapshot of its findings:

  • Normal Employment: 11,043
  • March Layoffs: 4,496
  • Normal Annual Visitors: 26,096,279
  • Events Cancelled: 4,582
  • Unanticipated Expenses: $840,487
  • Total Financial Loss in March due to Coronavirus: $40,439,764

On average (mean) wineries have laid off four employees as a result of the epidemic, 80% of wineries have continued production (67% at a slower rate than normal) and respondents anticipated a 63% decrease in sales during March with a 75% decrease expected for April.

Tourism has been hit badly too with visitors down an expected 75% in March and wineries on average cancelling four ‘events’ such as tastings and dinners. ‘Virtually all responding wineries were recommended or required to reduce or cease operations by one or more levels of government,’ says the report.

Counting both lost sales and unanticipated expenses – such as hand sanitisers and cleaning services – the average winery will lose $37,376 in March.

What does the future hold?

If wineries were able to resume operations in a month’s time on April 30, the average winery said it would require 12 weeks return to normal business in terms of employees, visitors, sales, and other factors.

‘In a remarkably short period of time, the Covid-19 has already had major negative impacts on wineries of all sizes in all states, undoubtedly with more to come,’ says WineAmerica in summary. ‘The American wine industry is comprised primarily of small, family-owned businesses that have very limited resources in the best of times, so this period is particularly trying.’

Economic relief

Wine businesses could be assisted by recently approved Coronavirus Aid, Relief and Economic Security Act (CARES Act), which includes favourable loans for small businesses, employee retention tax credits, and payroll tax deferral.

‘WineAmerica has been working around the clock with our colleagues in the wine, beer, cider and spirits sectors to secure economic relief for the beverage alcohol industry,’ it said in a statement.

‘There are quite a few provisions in the bill that would significantly aid the wine industry in this time of extreme need.’

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