New wine business models

Winery tasting rooms are closed. A terrible blow, especially for smaller wineries. Some, however, believe the COVID crisis could reshape the industry for the better.

Tasting rooms can account for more than 25% of a winery’s income. Tasting rooms are the major way wineries acquire members for their wine clubs, and wine clubs generally account for another 25% of a winery’s income. The smaller the winery, the more important tasting rooms and wine clubs.

The COVID crisis demolished tasting rooms, but enhanced on-line buys. When you shelter in place, you buy wine on the internet. Internet sales have soared 200-to-800%. Still, no tasting rooms reduced wine club enrollments.

The new reality sets up an epic conflict between the way alcohol has been sold from the end of Prohibition idiocy to the present day. It is time for slobbering nonsense of individual state alcohol regulation to end. Here’s why:

• In too many states, alcohol producers are required to sell to middlemen for their product to show up in a store across the street from the production facility. Really? Why?

• In too many states, alcohol producers—wine, beer, and spirits—must sell to a middleman distributor who adds to the price before the retailer can sell it to you. It is called the three-tier system. Why do we have this? This is the 21st century. Collect taxes? Done. Control access to minors? Done—as if the old system ever seriously prevented minors obtaining booze.

• Wineries have been able to ship to consumers across many state lines all the 21st century. We have not seen minors abuse direct-to-consumer to obtain alcohol. Why should minors jump through hoops when they have always been able to obtain alcohol through other, simpler means? Please.

• No widespread tax avoidance. Direct shipping has not lead to higher rates of alcohol consumption. Retailers and wholesalers have not gone out of business. Chicken Little—the sky is not falling.

After COVID, we confront a clarified world. If you want to secure wine from anywhere you want, why should you not be able to do that? Alcohol sales have been screwed up since misguided do-gooders prevailed with the 21st Amendment in 1920. A century later, we have the opportunity to give Americans access to what they want. It only seems the sensible thing to do.

Last round: COVID-19 wine hack: drink wine with a glass in each hand to remind you not to touch your face.