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Coronavirus conversations: Richard Burch

The export manager at Howard Park in Margaret River on why direct to consumer sales are booming, how the crisis will make businesses smarter, and how technology will play a greater role in the wine trade going forward.

How is business during this tricky time?

Business is steady. Some parts of the business have been hit hard by Covid-19, while other parts have been increased. The closure of restaurants, hotels, pubs and cellar doors has seen those channels grind to a halt.

Sales to retail and independent bottle shops saw a spike in growth in March but have since fallen off. However, Wine Club direct to consumer sales have seen a huge spike in growth, which has been very encouraging.

How have you adapted the way you do business during the crisis?

The business environment and regulations are changing quickly, so we have tried to stay agile and constantly observe to what the market is doing. We have tried to keep our sales and marketing strategies flexible to respond to those changes as quickly as possible.

Since we can’t visit a number of our markets in person, we have taken to online platforms like Instagram, Facebook, Skype and Zoom to communicate with our partners. A number of our staff have had to diversify their roles to keep busy during the quieter period.

With our Cellar Door closed, our staff have been in the warehouse packing orders and processing online sales. Over vintage we had our South East Asia brand ambassador driving the tractor in our Leston Vineyard in Margaret River.

The business and staff have taken advantage of the quieter period to tackle some of the more difficult and challenging jobs in the business that we were unable to take on when things are busy. Things like updating our IT systems, overhauling our website, data collection and analysis have been worked on, which will be helpful when things get busy again.

Have you noticed the crisis has changed consumer drinking habits?

In some markets, we have noticed people ordering smaller quantities but higher quality wines. Additionally, we can see that customers are very willing to engage directly with the winery, which is great.

Are you enjoying a boost in off-trade/ online sales?

Online sales have been booming, which is very encouraging. Off-trade experienced an uptick in sales through March but has since plateaued as things returned to some degree of normality.

How do you think the coronavirus crisis will change the world?

One thing is certain – the world will not be the same. There are going to be some long-term impacts to the way people interact with one another. People are more aware and mindful of their surroundings and hygiene levels.

I think people in general are more aware of global economies and how fragile they are, particularly global supply chains, wages and productivity. I also think that people are more aware of the challenges of climate change and mental health.

People’s perceptions of value will have changed, and I think consumers will be more conservative in their spending habits and likely to trade down and look for increased value in their drinks purchases. Conspicuous consumption is likely to be frowned on and not where you want your brand to be.

How should the wine trade adapt in the face of the crisis?

The obvious one is stopping the bleeding of cash immediately. Secondly, make sure there are plans in place for emergencies, stabilisation and returning to growth. There are lots of things the wine trade can be doing now while it’s quiet: communicating with customers, cleaning out unsuccessful parts of the business, building databases, tackling ‘tricky’ jobs, updating systems and personal development.

Do you think it will change how people do business, if so how?

I think businesses will come out of the crisis smarter, leaner and more digitally savvy. There is nothing like a near-death experience to remind people of what is important!

What is the future for the wine trade post Covid-19?

More efficient supply chains, increased digital marketing and a strong focus on building life-long value and relationships with customers. Technology will be of increasing importance to various stages of grape and wine production, particularly in sales and marketing. Even in times of recession, people still recognise quality when they see it.

What are your top priorities as a company going forward?

We’re using this period to refocus our vineyards to make sure we have the right clones and varieties on the right soils that suit the current market and anticipated market going forward. We’ve replaced Petit Verdot with Malbec, while planting more Chardonnay and Pinot Noir.

Do you have any new wines in the pipeline?

Our newest wine is Howard Park A.S.W. Cabernet Shiraz, named after my grandfather on my mother’s side, Alex Stephen Wee. It’s the first time we have blended Cabernet Sauvignon and Shiraz together in 33 years while using some American oak after 12 months in top French oak.

We will also be relaunching our Howard Park Allingham Margaret River Chardonnay, named after my great grandfather, into the market, which has been sold to Emirates First Class for the last five years.

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