And for those who might want to read the release write-up here it is. Definitely a little more business-talk then I normally like but I haven’t seen too many things written on the current situations impact on small wineries though I have talked with many winery friends and we are all seeing very similar things.
Hi Everyone,
Like so many small businesses, we are feeling the severe impact of COVID-19. This is the scariest time we’ve gone through since the winery started in 2007, and our heartbreak is compounded as we watch fellow wineries and beloved restaurants struggle under economic realities unfathomable just a few months ago. “It takes a village to make a wine” has been printed on our corks since the first vintage, and we’ve never been more grateful for our village. We take your patronage of Bedrock wines extraordinarily seriously, and it has been tremendously heartening to read the messages of support people have been sending our way and to see all the photos of folks pairing Bedrock with meals at home. The knowledge that our wines might spark a flicker of joy for people is just about all we could hope for, and I know good bottles have brightened up some of the darker days on our end.
After much thought, we decided to add a direct release to this year’s schedule. We didn’t come to this decision lightly, but we’re excited about what this release allows us to do:
Fill up those depleting cellars – we have received a lot of requests for additional Ode to Lulu, Old Vine and others! We are offering a few Bedrock staples here that were originally earmarked for restaurants and our currently closed tasting room.
Lend a helping hand to our restaurant partners by donating 20% of our profits from this release to the Restaurant Workers’ Community Foundation and James Beard Community Fund.
Release some library wines and smaller “deep cuts” from the cellar. Our wines are typically offered as guaranteed allocations, which means that some small-production and experimental wines aren’t large enough to release, as there is often only a barrel or two produced. Since this release is first-come, first-serve, we can offer up some jewels from back of the cellar. (A note to doctors and other shift workers: our guaranteed allocations actually started in 2009 at the request of an ER doc. If our release is during your shift, email us—we have a plan!)
Stabilize our own business, so we can continue to care for our employees and suppliers.
Given these unprecedented times, I wanted to write a bit about what we are seeing from our small corner of the wine industry. I don’t typically share much about the business of wine, because it’s usually more interesting to write about vineyards, winemaking, and the wines themselves. However, now seems like a fitting time to talk about the economic realities of running a small winery. To be honest, my biggest fear in writing something a bit more candid and raw is that it will be interpreted as a “woe is us” epistle, which is something I really don’t want. Our winery is one of millions of small businesses impacted as the economic framework that we know melts like a Dali-clock on the canvas of the status quo. My hope is to give some insight into Bedrock’s business situation and shed light on what is happening at many small wineries across the country.
The very first Bedrock wines were released against the backdrop of the 2008 financial crisis (the first release was shortly after the fall of Lehmann Bros.). That experience has informed many of the core tenets of winery operations. We seek to provide wines that present quality and intellectual interest for their price, are diverse across price points, keep overhead as low as possible, balance sales between our lovely mailing list and independent retailers & restaurants, balance grapes between vineyards that we lease/own and fruit purchased from our cadre of excellent long-term growers, pay down loans on schedule, and squirrel away a little cash for a rainy day. In many ways, we hoped we were set up well for the next disturbance in the economic force.
The effects of this crisis on restaurants have been well documented, and our hearts hurt for so many dear friends and colleagues who have felt the repeated hammer strokes of this disaster. Unfortunately hammer strokes carry deep reverberations outward and all of those who are part of the restaurant supply chain, wineries prominent among these, are feeling the ripple effects as a main source of reliable sales disappeared overnight. Current independent wine retail success is mixed, depending on local regulations – some are doing well, others just OK, and others have been required to close. Chain grocery stores and larger retailers seem to be doing the best from a wine sales perspective, but since most wines sold in such locations are controlled by large companies, it has had little benefit for small and independent wineries. We have chosen to build relationships over the last thirteen years with independent retailers and restaurants, because our general ethos, nerdery and love of good food & wine all align. We work with a range of specialized, smaller distributors around the country that focus on supplying these independent accounts. When these small businesses struggle, our whole distribution ecosystem is hobbled. In straightforward terms, we have seen a 75% decrease in distribution sales and an even greater drop in payment for wine already delivered to now-closed restaurants & retailers.
To compound the cash crunch, both 2018 and 2019 were large harvests – nearly 30% higher than expected. The rainy day fund we had worked so hard to create was depleted as we paid growers and bottled more wine, knowing it would be a couple years until that wine sold and we could refill our piggy bank. There are many joys in working with an agrarian crop like grapes, but the capriciousness of annual production is a constant challenge.
Given all of that, here’s what we are doing to weather this storm:
Our first priority has been to retain as much liquidity as possible, so we can maintain salary and health care for our team. Like everyone else we know, we applied for relief from the Small Business Administration Paycheck Protection Program, and like 75% of California applicants we did not receive funding; we are optimistic that additional funds will be added, but like my mentor says, “Don’t build your business plans on promises from the government.” From a vineyard and cellar side, we have suspended all redevelopment at Bedrock Vineyard and a couple capital intensive improvements planned for the cellar; that means another year or two until we can plant the Zin, Grenache, Carignan, Mondeuse, Negrette, Port varieties, Godello, Viosinho, Arinto and mixed whites that we’re so excited about. We have also made the painful decision to cut many of our non-estate and non-essential vineyards (don’t worry, Pagani, Old Hill, and other favorites are definitely essential!), as we fully expect the lingering effects of this situation to last several years. This has been especially painful, because our team has been working with many of these vineyard owners on rehabilitation for years, nurturing their old vines back to vineyard designate status while using the fruit for Bedrock mainstays like Old Vine Zin. It’s a labor of love for our team and growers, and it’s hard to let that work go for now. Essentially, we are doing everything we can to minimize costs in order to keep our Bedrock team whole.
From a broader “good citizen” perspective, we are also doing our best to support the independent restaurant industry. The two organizations that we’ll be donating 20% of this release’s profits to, the Restaurant Workers’ Community Foundation and James Beard Community Fund, both support restaurants and their employees, who make up 16% of the American workforce. After word-of-mouth referrals, restaurants are the biggest way that people learn about our wines, and we are so grateful to all the restaurants who have poured our wines alongside their delicious dishes. As this crisis continues to unfold, we will do what we can to support those who have been most impacted.
Despite everything, I think we are all trying to focus on the positive. We feel enormously blessed to be weathering it with such a talented team of people—Cody, Luke, Jake, Sarah, Seph, Jackie, Kristin, and Emily—all of whom continue to awe me with their calmness, alacrity, and work ethic when it would be easy to just hide inside and hope the sky doesn’t fall. As you might imagine, Bedrock is very familial, so we have done our best to celebrate what we can—Luke releasing the Filomena wines he has been working on for five years, Cody and Emily getting their first amazing reviews from Antonio Galloni for their Desire Lines project, and Kayte and I expecting our first child in October (it’s a boy, so karma is real). And always, but especially this past month, we all feel blessed to have you, our longest-tenured members of the Bedrock village, without whom this winery would not exist. For many small wineries, mailing list sales will be what carries us through these complicated times, and we have never felt more grateful and humbled by the strong support you have shown for us over the years.
Stay safe everyone.
Morgan and Chris
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