Industry in free fall as economy vaporizes

If ever there was a time to buy a bottle of Virginia wine, it’s now.

After 40 years of robust growth, the 26 winery owners in Fauquier County and some 275 statewide are faced with a make-it-or-lose-it scenario that will unfold over the next several months due to COVID-19.

The emotional and financial pain facing these small business owners is reflective of millions of other businesses nationwide. But envisioning a vibrant sector of the local economy going up in smoke is almost unimaginable, given where they were two months ago.

“We will not grow grapes or make wine this year,” said Brian Roeder, owner of Barrel Oak Winery in Delaplane. “I think we are going to lose at least half of the wineries in Virginia, probably more.”

He will block fruit production of his healthy vines by pulling the flowers on the young buds.

Roeder thinks it’s not just “hobby” or boutique wineries at risk, but at least 20 percent of the serious businesses that produce large case volumes for sale to individuals, wine shops, and restaurants.

On March 10, Roeder realized it was going to be a monumental challenge to survive the financial hit his business had taken and initiated a plan to remain viable.

He terminated the employment of all 60 of his employees. Some have offered to assist him gratis during the crisis. “We have a wonderful group of people here,” he said.

Not wishing to encourage his customers to leave their homes, he has not taken advantage of pickup bottle sales permitted by Virginia, but rather is selling wine at a 20 percent discount and offering free shipment. It’s “the deepest discounts we’ve ever offered.”

It’s challenging to square Roeder’s usually optimistic view with his take on the current situation. “I believe we are going to be in an economic depression within months, and it will probably last years,” he predicted.

An analogy he shares with business associates and the county leadership is, “The U.S. economy was a dragster headed down the track at 200 mph when it was thrown into reverse, blowing the engine and transmission but not deploying the chute.

“I’m going to have to tear my business apart, everything I’ve spent years to build, simply to find a way to exist,” he said.

Jim Law is the proprietor of Linden Vineyards in Linden.

All of his sales were to people visiting the winery and to restaurants; almost all those sales have ceased. But what has been a positive surprise for him is, “the number of people calling us and ordering wine, which we ship. I did not expect that.”

These are loyal customers who understand the hardship he is facing, he said.

Like Roeder, Law does not offer bottle sales onsite. Since social distancing has been put in place, guests are not allowed on his property. He said, “We are taking the whole isolation thing very seriously. We do not want to contribute to getting people out of their houses.

“I am not speculating as to how this will ultimately unfold, but when things do open up, it will look very different than before. We will likely restart with reservation-only visits, so we can control the number of people coming out here. Social distancing will continue to be an issue, and we want to control that.”

On another sobering note, Law observed that because of the recent mild winter, bud break is occurring earlier than in previous years. That has the potential of setting up a dreaded frost scenario.

If a hard freeze hits before the final frost date of May 10, it could decimate the grape crop, literally nipping it in the bud.

Luke Kilyk, owner of Granite Heights Winery in Warrenton, echoes the assessments of his fellow vintners. “It has been devastating for us, and I think every winery across the board is seeing that devastation. Our business is down by at least 75 percent.

He said, “We do not host weddings and other large events, but for those who do, they will have to face those realities too.”

Kilyk also observed that now more than ever, wineries will need to focus on quality wine because that’s what will drive consumer purchases, not entertainment and events.

His winery has a carryout sales system in place as allowed by law. Customers order by phone or email, and upon arrival at the winery, an employee walks out and places the paid order in the trunk of the vehicle to maintain social distancing.

Kilyk has a successful law practice in Warrenton and said, “If it weren’t for my primary income, I would be in dire, dire straits. My law firm is what is holding the winery together.”

He too opines if a debilitating frost occurs because of the mild winter, money will be needed to protect his vines, an investment he will be forced to make to save his business.

Chris Pearmund, the owner of five wine businesses, including his eponymous Pearmund Cellars in Broad Run, said, “To survive we are doing a lot of creative marketing and outreach to our customers.

As a result, we are hurting, but doing better than expected.
“But, if we do not do creative things, we will die.”

Among his tools are $100 gift cards selling for $80. All of his wines that have won gold medals are selling for $25 a bottle. Given that a wine bottle holds 25 ounces, he promotes the sale as “selling gold for a dollar an ounce.”

To further enhance his “gold sales,” he includes free shipping.
He has laid off close to 100 part-time employees, keeping only managers on the payroll.

To survive, Pearmund underscored the need to stay in touch with his customers and continue to be creative in maintaining close relationships.

One timely product he produces is a high-end organic hand sanitizer. It costs $45 a gallon to make, and he gifts a bottle to his customers and business clients.

Pearmund quoted Audrey Hepburn invoking where he is philosophically today, “To plant a garden is to believe in spring.” To that end, last week, he planted one thousand grapevines and 107 trees at his Broad Run winery.

Published in March 2020 in the Fauquier Times.