I don’t shy away from difficult conversations. I have been saying for years the wine industry is going to hit a major wall and it will be interesting to see how it will all play out.

WHAT WALL?

It’s complicated and it’s multi-faceted. And there are many events that catapulted the industry to the strained alternate reality that it’s in right now. For some, they are not feeling the strain just yet – or they are in denial. For others, they are shutting down or will be soon forced to shut down because there will be no course for recovery from this colossal strain.

WHAT STRAIN?

Let me go back in time to the days of my great-great-great-great-great-great-great-great grandfather Marchese Piero Stravino who lived on his vast landholdings at Montefalcone in Caserta, Italia (in the Campania region). The land was used for several agricultural purposes and only a small parcel was dedicated to the Marchese’s vine yard. The grapes were made into wines that were cellared in his estate and consumed by the Marchese, his family and guests whenever he entertained. A portion of the wine was divided for the local community. It was a simple division of the product that served everyone, and everyone was happy. That’s how it was done!

If I were to back up even further, in nearby Pompeii, an epicenter for winemaking in ancient Rome, the Pompeiians were highly revered for their winemaking abilities. The Vesuvius eruption destroyed Pompeii’s vineyards and caused the price of wine to skyrocket.  So, a limited base of consumers had access to wine and it was set aside for the elite. See the pattern here?

The Roman Empire was crucial to the winemaking industry. During the Roman Empire’s reign, the wine market grew more advanced and expanded its reach. Romans drank wine with every meal and recognized its improvement with successful aging.  The Romans believed wine was a daily necessity, so it was available to peasants, slaves, women and aristocrats alike.  Romans refined the winemaking process with innovative techniques, some of which we still use today. The barrel-aging system often used today was developed in the Roman Empire to produce larger quantities of wine at a lower cost.  And while the Romans developed wine distribution, it was always controlled by its landholders production capacities.

But the wine market today is so vastly different because of extreme competition and over-saturation of the market. There is still the disparity between larger quantities available at lower cost versus smaller production of scarcer wines at higher, collectible price points. But with widespread wine businesses emerging and saturating the market, it’s not just about volume availability and price points, it’s also about the ever expanding quantity of brands or labels in the market. One could (and does!) argue – how many Cabernet Sauvignons from California do you need?

In Europe, there is much more control in the production volume of wines based on limited land availability and also by restrictions set forth by regulation organizations (AOC in France, DOC in Italy, etc.). That isn’t to say that some wineries or wine categories in Europe aren’t over-producing or growing. But, by contrast, in the States, the numbers of wineries continue to grow steadily in key wine growing regions, and large wine groups keep expanding their reach with vineyard/winery purchases that are mostly about increased volume and broadening market reach.

Competition isn’t a bad thing. For a moment, there was room for all kinds of wineries – large, small, boutique, heritage/legacy brands, traditional, natural, organic, biodynamic, and so on. The world of wine was interesting and seemed to be at an exciting moment in its role of offering significant bottle shop variety, award winning restaurant wine lists, professional sommelier career opportunities, wine category growth, expansive distribution, and so on.

Then the pandemic hit.

At first, it seemed like the sudden isolationism and quarantines initiated a serious boom for wineries online sales, boosting direct sales. But, distribution sales declined significantly, and in some cases catastrophically, as people stopped going to bottle shops and going out to eat. During the years of the pandemic, wine sales fluctuated quite a bit. It was one of the most irregular periods that sparked fears and concerns about the state of wine sales. Curbside pick ups became the norm, and eventually wineries got creative about their wine tourism offerings – using private wine tasting pods and developing outdoor tasting spaces. Wineries continued to evolve, ever so carefully, guided by the principle term of the pandemic – by pivoting. Meanwhile, distribution sales continued to struggle severely. Restaurant closures became a distressing sign of the times.

Add climate change and the cause for concerns regarding wildfires, smoke taint and in some cases, a handful of ruined vintages for some regions, and you have a wild turbulence requiring rethinking around vineyard management and protections, and protocols in the winery.

2020 was an apocalyptic beast of a year.

In 2022 inflation added another complex layer that killed many restaurants and small businesses, adding another layer of struggle in the world of winemaking. For example, my cost for glass went up from $6.00/case to $12/case in one year! That pricing has not since deflated.

Also, here in Oregon our local governing body of alcohol felt it was reasonable to raise prices for winery licenses – at a rate of 66.66%.

A smart business decision is to raise your prices so you don’t eat all of those newly added-on costs. But, then the market responded negatively to those imperative price increases and many distributors were forced to stop supporting certain brands because their customers now want cheap wine and big deals that most wineries could not and cannot afford to dole out.

Pandemic relief funds came by way of loans. And, aside from limited forgiveness loans around employee payroll, small businesses are now also dealing with the SBA insisting on paying up on pandemic loans – despite the fact that most small businesses are now worse off and struggling more than during the height of the pandemic.

How is the system NOT going to crash? I’m not an economist, but I can see the writing on the wall.

So, every segment of the wine business is now hurting and dealing with consumer fears around the economy, changes in spending habits, and post-pandemic health consciousness that has changed the drinking habits of a former steady wine drinking base.

The latter change in declining sales due to changes in health habits has set off wineries as a final blow to their fragile state of real business struggle.

THAT IS THE GREAT WALL.

This Great Wall doesn’t discriminate. It seems all wineries – large, conglomerate, medium, and tiny micro producers – are capable of being in some form of trouble, at least in experiencing a decline in sales and not knowing what best course of action to take. Wine organizations are not touching this subject – although many wine journalists are writing about it. Some wine professionals are clapping back at the World Health Organization and other local health organizations asking consumers to “rethink the drink”, to limit alcohol consumption and to be more aware of the health risks associated with consuming alcohol.

I recently decided to speak up in a recorded video about why that approach is reactionary, short-term thinking.

In my professional opinion, it is not helpful to get mad at a movement targeting improved health outcomes for consumers who are “rethinking the drink”. There has been a backlash against consumers participating in Sober October or Dry January. Again, all short-term thinking.

I took a sabbatical from my business this year for personal and family health reasons and decided to do a deep dive in studies around herbalism and regenerative business. I have learned a great deal. I have learned that sustainability isn’t the metric we need to base our ethos on anymore, it’s outdated. Sustainability is about sustaining where we’re at. We need to be better than that. Regeneration is about getting back to a place before we harmed ways – with agriculture, ecosystems, the environment and in our communities – and it charges us with the great responsibility to ensure a fair wage both with empathy and in how we pay our workers and employees, and how we treat our customers/consumers.

In short, regenerative business puts the wellness and wellbeing of the planet and people over profit.

That does not mean regenerative business can’t be profitable. But regenerative systems need support from our governing bases, too. Example, if the local alcohol controls in your state think wineries should be paying more for permits, they may be out of touch with what it takes for wine businesses – that have one annual crop – to not just succeed but to survive. When all organizations are on board with seeing wine businesses succeed, then there is more room for the things that really matter – our land, ecosystems, environment, communities and people. We need to share these values. We need to take a closer look at why and how the status quo of business operations and ethos continue to follow sustainable principles and why sustainability does not do enough.

Believe it or not, taking the leap into reforming toward a regenerative business model will likely increase profit!

As I begin to evolve my business and take steps toward a more regenerative business model, I decided to take a more honest and transparent position on what I am putting out into the world. Mostly because I am changing as the world is changing.

I simply own the fact that I produce a product that can cause elevated health risks for some. Ironically, that goes without saying.

I happen to have a degree in holistic nutrition and a certification in herbalism. I have studied, extensively, the effects of alcohol on the digestive system. We know that regular consumption increases the risks for certain types of cancer, like cancers of the mouth, throat and digestive tract, as well as elevated risk for cardiovascular disease. We know this.

I have an autoimmune disease and I am in the throes of perimenopause and my body simply cannot handle the inflammation that drinking alcohol presents to my body. So, I physically, mentally, and emotionally understand the pain, discomfort and potential harm alcohol poses on my body.

It’s a slippery slope when wine businesses and professionals make claims or generalizations about human health. And yet, many are taking to social media to speak up about the “health benefits” of drinking alcohol – completely ignoring the elevated risks. This is a kind of fear-driven defense mechanism. And it’s obvious to everyone else – ask any Gen Y’er. Again, this is short-term thinking.

Healthy consumption vastly differs from individual to individual. And, for some, there is no healthy amount of alcohol consumption based on health history, genetics, stage of life, etc.

We have to stop pretending alcohol is part of a healthy diet and trying to use that as a defense mechanism or selling point for getting more people to support our brands, our businesses, and, more emotionally, our dreams of winery and vineyard ownership and production.

Instead, we can support the enjoyment of alcohol for celebrations and pleasure, and maybe get more curious about wines meant to lay down and age versus making wines with short shelf lives that need to get consumed quickly. We can be more mindful about producing alcohol and endorsing a healthy lifestyle. We all say moderation is key, but are we really practicing that? Do we need to push a shit ton of mediocre, cheap rosé for pounding on the porch all summer long? Do we need to target “mommy wine” without considering what this is doing to the mental health and well-being of so many women struggling especially since the pandemic?

I have some ideas to encourage my colleagues.

Maybe larger wineries should hire a staff nutritionist or a nutrition consultant to set the course for their “healthy outcomes platform” in marketing outreach as well as in their tasting room experiences – coming up with menus to support healthy tasting options that reduce the rate of alcohol absorption. Another strategy is to offer amazing alcohol free options in tasting rooms, to create superlative wine country experiences for those limiting or abstaining from tasting, at minimum for your designated drivers. Don’t assume a guest who does not intend on tasting will not purchase your wine! And if you’re only offering a bottle of water, rethink that drink! I want to see stunning mocktails made with local, seasonal ingredients. Get creative! Give all your guests something to rave about – and remember! What else can visitors do at your winery besides belly up to the tasting bar? Can you offer experiences that show how special your place of business is and other things that you might be passionate about? How about a wildlife/nature reserve? Or, an elegant sculpture garden with artwork produced by local artists? Can we get people to slow down more and take in some fresh air and maybe go forest bathing in the woods that surround your tasting room? What matters to you?

If you’re a small winery owner like me without a tasting room, how can you slow things down to elevate a message and awareness around healthy outcomes for all? How do you use social media? Are you pouring wine in those posts and reels? Showing a closed bottle actually creates a very different message that highlights your product in a different way than showing the bottle opened next to a wine filled glass. There’s an interesting article on wine psychology, basic and applied published in 2020, that addresses how the consumer’s perception of wine – highlighting how basic cognitive research can help understand and therefore modify the way in which people respond to wine. Basically, the plain unopened bottle shot is more appealing and delivers a more elevated image and perception of your wine.

As an industry, we should take the side of encouraging consumers to know their personal health risks, to get their annual check ups and regular screenings, and empathically support the wellness and positive health outcomes for all. That doesn’t mean a death sentence to your business. Nor does that mean we need to set up healthcare check ins at our places of business! I’m obviously being facetious there. There are ways to reach and meet consumers in a healthier way. The businesses that embark on long-term solutions and look toward regenerative business models for guidance and inspiration will more likely see long-term healthy business outcomes.

Not all of your customers will appreciate this new approach. Design a way to hold your ground as a responsible, concerned business without alienating your broad customer base. Yeah, it’s going to take some time and some careful consideration to build this kind of platform.

At the end of the day, people get to decide what kind of risks they’re willing to take on in pursuit of their own independent wants, needs and desires – it’s not our job to lecture or enforce intention or habit, obviously. It’s about genuine care and concern for others and recognizing the importance of prioritizing healthy outcomes for all above profit. Old business school models have taught us that sales are the most important thing to a business. Old structures are crumbling, things are shifting. When you place the importance of the good of all and everything above all else, everything falls into place, including sales and profits. There has to be a willingness to let go of old ideas, old systems, old thought patterns – maybe you’re operating from a scarcity mindset? If so, you need to clean that up. If you have a scarcity mindset, all of the restructuring and reforming toward regeneration won’t bring you financial success. It might help you evolve into a more conscious business person. But, go do some personal work – therapy, a shaman? Clean up that scarcity shit if you want to thrive in any business.

It’s not easy to be outspoken. It’s not easy to change. It takes some courage. Courage to face potential backlash, ridicule, and clapping back – we live in the time of social media comment threads that are more unkind than not. But I think people are beginning to feel the shift. The shift that regenerative business so beautifully holds and offers. That wall I mentioned can be imaginary, cautionary, theoretical, or as physical as we allow it to be. The challenge, really, is in what we decide to do with that wall. Knock it down, hide behind it, pretend it’s not even there, or paint a glorious mural on it to inspire and elicit thoughtful consideration in others?

I hope my painted mural here has been effective and impactful to that point.