Wine wholesaler finds new retail success amidst COVID-19

COVID-19 has changed how all of us work, but few so radically as that forced on the Australian food and beverage industry. The need to social distance eliminated a billion-dollar industry effectively overnight, putting hundreds of thousands of bartenders, waiters, chefs, managers, baristas and more out of work.

These changes were not just felt at the coalface – they reverberated back up through these venues’ supply chains. Sectors that relied heavily on supplying in-person dining establishments have seen profits plummet, with Australia’s oyster farmers seeing profits fall by up to 80% and many vineyards and wine wholesalers expected to go the wall as wholesale demand evaporated.

By their own reckoning, Joseph and Nina Burton of Hobart’s Joseph Burton Wines feared they were going to be right there with them.

“It was two days’ notice, everybody’s closing. And yeah, we freaked out,” Joseph told Bentleys.

With the restaurants, bars and hotels making up more than 95% of their clients unable to open, unable to serve and unable to pay their suppliers, Joseph and Nina had real reason to worry. Running credit on 21-day terms meant that stock that had left the warehouse well before lockdown might simply never be paid for. Combined with significant costs for suppliers and warehousing space, for a few weeks it seemed like they might be cornered.

Shifting gears

Fortunately, Joseph Burton Wines is still here. Joseph and Nina still sell wine, just not how they used to. The collapse in wholesale demand for wine as devastating for them as it was for restaurant suppliers across the country, but through persistence, flexibility, business acumen, teamwork and the support of their community, Joseph and Nina were able to transform their business.

It turns out, Australians still love a good drop of wine, even if they cannot get it at a restaurant. A rapid pivot to retail – enabled by a pair of IT workers who got their site eCommerce ready in return for a case of wine – kept the money coming in and the bills paid. That and two years ago changing their liquor license to allow them to sell direct to public gave them everything they needed to start.

A revitalised Joseph Burton Wines

Stunningly, the retail branch has grown in just a few months from being a lifeline for the wholesale business to almost replacing it entirely.

“By every metric we’re doing better in 2020 than we were in 2019,” Joseph said.

“Looking at January through May, revenue is up, gross profit is up, and net profit is up.”

That success did not come easily, however. Losing the predictable profit cycles of wholesale wine meant that Joseph and Nina had to work much harder for every dollar.

Directly marketing to customers was a new skill both had to learn, but the right mix of skills from Nina and Joseph’s experience in events management and as a sommelier respectively meant that there were deep wells to pull from.

Social media became a vital lifeline between them and their new customer-base, in a much more intimate way than other eCommerce businesses could claim.

One of their most successful initiatives is The House Wine. A virtual wine tasting program, The House Wine allowed customers to purchase three hand-picked bottles of wine to be delivered to their door, and then be guided through them by Joseph live on Facebook.

Not only did this build a community of people engaged with and talking about Joseph Burton Wines, it also gave them immense reserves of content for social media and a great way to cross market. By requiring participants to purchase the wine for the tasting through the website, their brand was always top of mind, and their other more expensive products always in sight.

Community may just be the keystone of the new Joseph Burton Wines. In addition to their legions of apprentice sommeliers, Joseph and Nina are also extremely popular with Australia’s vegan community.

Nina herself is a vegan, and in a moment of late-night desperation posted an ad for Joseph Burton Wines on a Tasmanian vegan Facebook group, offering hand-picked vegan wine packs delivered.

“I put this post up at 9 pm one night thinking I’d wake up to a couple of enquiries, and I was up to about 2 am responding to people,” Nina said.

“It was amazing, it was opening this can of worms we would have never explored if not for pure desperation.”

All of this hard work came with upsides, however. While sales were smaller, Joseph noted that every conversion provided an immediate cash injection into the business.

“Online retail sales were a completely new revenue stream for us. Two key aspects are there’s more margin, and customers pay upfront which is an entirely novel idea to us,” he said.

Nina stressed that in a time of uncertainty, that cash in hand did a great deal to boost their confidence in their business.

“There’s no risk involved with retail sales. When we already had all this risk sitting there and we couldn’t afford to take on anymore,” she said.

Partners you can rely on in a crisis

Bentleys was right there to assist Joseph and Nina throughout the process. We were able to make an immediate and rapid impact on the business as soon as COVID-19 hit.

According to both Nina and Joseph, it was the personal touch that set Bentleys apart.

“The team at Bentleys has been amazing, unbelievably supportive, they’ve been very excited about what we’re doing,” Nina said.

“They didn’t just offer a normal accounting service, they asked about our ideas and our vision, our strategies and our execution.”

“They supported us with business advisory and cloud solutions services to help evolve our business, and then also bought our wine and gave our number out to others. It felt like having a couple of mates who really just tried to help us in whatever way they could,” Nina said.

Joseph Burton Wines is just one of the businesses – both big and small – that Bentleys helps succeed every day, every quarter and at every level. If you’d like to learn how we could help you, start a conversation with one of our consultants today.

We, at Bentleys, are doing everything we can to help businesses come out of this challenging time in good shape.

We will continue to update our COVID-19 resource hub with important developments, so please return soon.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

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