Coronavirus conversations: Nuno Silva, MA Silva
We catch up with the team at closures giant MA Silva to talk e-commerce, 9am Zoom calls, and how to run a cork factory in a pandemic.
How is business during this tricky time? What challenges does lockdown throw up for the closures industry?
Being a multinational company we have the advantage of having knowledge about the situation from all geographical areas. The difference in this coronavirus crisis compared to other past crisis is that it is impacting all nations worldwide which is a rather new phenomenon. In our Portuguese HQ we deal daily with several markets specific challenges. Business has been relatively regular until March with April showing the first setbacks and May will definitely keep a slowdown tendency. Wineries have kept more or less their activity during the first quarter as they had wine ready to bottle from the last vintage and commitments with and from all the stakeholders throughout the chain. We expect the curve to head into a recovery mode from June on, depending on the different geographies. Being the traditional wine industry in Europe one of the first geographies impacted, we expect those countries will recover its activity earlier than others like Americas that have seen the crisis arriving a bit later. The biggest challenges are the same as in other industries, to keep our teams focused and encouraged in a different market approach, be digitally effective in communication and find other ways of bringing value to our customers in this tricky times. Social distance has been imposing new formats to reach our customers. We need to be disruptive using our digital channels and/or create new ones to reach our objectives.
In US, like in other countries, although the business has been relatively normal, the biggest challenge being that our sales teams cannot visit customers until the lockdown is lifted and more lenient. Otherwise, our production team is working as normal with new protective health requirements and social distancing practices in place.
2. How have you adapted the way you do business during the coronavirus crisis?
We need to give two different approaches to that question:
In Portugal, we needed to ensure that our facilities implemented all safety and government sanitary recommendations very early in time. MA Silva has 4 production facilities in Portugal that are responsible for supplying our international companies and partners. We had to quickly reorganise our internal logistics of materials between our local units, keep them working under strict contingency plans and additional efforts to commit with timely and consistent productions to supply to all our stakeholders. Our workers have played a very important role and immediately aligned with the strategy from the very beginning and thanks to them we are all succeeding as a group.
Secondly, virtual calls and conferences were the essence of our communication with all our business partners during this period. We believe that important now is to stimulate the teams to use the digital channels and, has described previously, to try to be disruptive creating new tools that might allow us to keep demonstrating our customers our differentiation credentials, the reality of our operation from the forest to the final product and how we can help them in moving their and our business further.
In the US we use Zoom or Virtual Calls with customers, allowing us to still see them during the lockdown and maintain that personal communication. We have had most of the administrative team and sales teams working remotely. In order to maintain our company team culture, we have a daily 9am call on Zoom with all staff to play a quick game, answer business questions, and to communicate in an informal way as a team again.
3. Have you noticed the crisis has changed drinking habits/consumption trends?
Speaking on behalf and as a south European country and culture, where social contact in restaurants, bars, cafes is very important for encouraging drinking and for the added value at the supply chain, we would say that the present situation has changed dramatically this side of the business. People are in fact drinking more at home and off-premise sales were increasing in the majority of the world. However, people are afraid or not allowed to hang out, go to restaurants and bars contributing to a significant drop on the on-trade. Even after government policies will release, the fear and consciousness of people for savings due to uncertainty of the international economic conjuncture will certainly last for a while and make that market sector recover only very slowly.
In US, research has shown that alcohol consumption is up. We suspect this is primarily in the $10-$20 bottle range since people are drinking more frequently and not drinking luxury-end wines as much.
4. What kind of conversations are you having with your clients at the moment?
The conversations are addressed to support, to be present and to try to help as best as possible on their specific requirements in this period, either enhancing our overall service, supplying products in time and listening to their difficulties at the moment.
Our US team is working with our clients on updated payment terms in order to help both our businesses. We understand that their business has drastically shifted and we want to support as much as we can.
How do you think the coronavirus crisis will change the world?
At the moment social distance is the most effective way to deal with the virus pandemic. It is too soon to preview a World with several changes and adaptations. However, it is important that the promotion of different communication channels is reaching all levels of societies, markets and business areas. This will be fundamental to have a more prepared world for the digital future, without interfering to much in the economy balance, where traditional standards of living and commercial approaches are still associated to many cultures..
We believe that the US in particular will change spending habits and the way we consume/share wine will change. There’s clearly a huge boost in the virtual tasting videos going on in the wine industry, so we imagine that we’ll see many more virtual events and shared drinking experiences.
6. How should the wine trade adapt in the face of the crisis?
We cannot stay way from the digital transformation. Wineries must be online all the time and be able to redirect the delivery channel to people’s homes. It can be in addition to the usual trade models, however digital has to be part of it and its relevance will undoubtedly increase. How to deliver? How to get the attention? How to resume the wine portfolio? Are questions, ate the moment, that need to be answered.
In the US, with unemployment rates skyrocketing and people not being able to visit/travel to the wineries as expected, the wineries should shift to produce more daily-drinking wine and have a smaller luxury portfolio. Offering tasting packaging and virtual tasting videos is a great way to stay connected to the consumers who can’t visit.
7. What is the future for the wine trade post Covid-19?
We believe the future of wine trade will be linked with the societies and markets adaptation to their daily lives. Wine will still be consumed.
We are hearing some customers that are planning to drop production considerably. But with that said, wine will still be made somehow, and likely at a lower price point.
8. What are your top priorities as a company going forward?
Our top priorities as mentioned above: keep our teams focused and encouraged; generate a bigger perception of the company and its business in digital formats; be disruptive in storytelling our business, adapt to market and industry changes. The goal is to maintaining business with our customers, growing business, and all while maintaining our current workforce.