This Silicon Valley vineyard owner says Covid-19 will lead to big changes in wine

As the wine world grapples with the impact of the coronavirus pandemic, one entrepreneur is seeing wider industry change on the horizon, reports Arun Kakar

Every industry is weathering the effects of the coronavirus pandemic in their own way, and the world of wine is no exception. While alcohol sales rose by a reported 22 per cent in March according to research firm Kantar, other factors are souring the overall outlook. Europe’s largest wine fair Prowein was cancelled this month, along all other fairs and tastings across the continent. Then there is also the matter of wine tourism – an increasingly important source of income for vineyards – and the closure of restaurants, bars and other key buyers.

This might all make for as dismal a situation as any other industry that is grappling with the shocks caused by the pandemic, but one vineyard owner is choosing to see the light at the end of the tunnel.

‘Covid-19 is the impetus needed to shift the wine-industry into a new future where it can thrive in a world of increased volatility, demand fluctuation, climate change consciousness, and yet desire for consumers to engage in new experiences,’ says Michael Baum, the founder of data platform Splunk and owner of Chateau de Pommard in Burgundy, which he acquired in 2014.

For Baum, the dramatic impact of the pandemic on the wine and hospitality industry shows that owners must prepare for future change. This, he claims, translates to a more direct-to-consumer focused model, as opposed to how most wine in the region is sold via what can often be several middlemen in process, Baum decries.

‘The wine industry has been stagnant for 100 years, trapped in the same multi-tiered distribution systems which are being exposed through the outbreak of Covid-19 and frankly benefit the middlemen much more than the producer or the consumer,’ he says.

Indeed, Baum is optimistic that a more direct-to-consumer approach can be adopted by capitalising on the opportunities offered by digital technologies. It’s a practice that he’s already set in motion at the 294-year-old Chateau, where he has taken advantage of faster internet speeds, ‘collaboration tools’ and the rise of the carbon-conscious traveller to embrace a new future.

‘With the restrictions on travel now and long into a post-Covid-19 future, the advancements we are embracing will be even more critical to us and the wine industry as a whole,’ he notes.