With restaurants and bars deeply impacted by the COVID-19 pandemic, wine portfolio SHARE A SPLASH is looking to new revenue streams while continuing to foster existing relationships.
While no industry has been left untouched by the COVID-19 pandemic, food and hospitality has been especially hard-hit. New York City has seen a 90% decline in restaurant spending since shelter-in-place orders took effect, and it’s estimated that over 100,000 restaurants and bars in the United States will close permanently due to the novel coronavirus pandemic.
As restaurants see decreasing sales due to shutdowns, countless vendors and partners behind the scenes are also feeling the impact of temporary closures. This is certainly the case for SHARE A SPLASH wine co, a producer and marketer of a portfolio of four wine brands including Cannonball, Angels and Cowboys, High Dive, and Astrolabe.
A large component of the SHARE A SPLASH portfolio is drinkable table wines under $25, and restaurants have been a primary customer base for brand building and by the glass volume.
With restaurant sales on pause, SHARE A SPLASH has had to seek other sources of revenue while continuing to foster relationships with the restaurants that have made the brand a success.
We spoke with Yoav Gilat, founder and CEO of SHARE A SPLASH and Columbia Business School alumnus, about how his company is adjusting to the changing hospitality landscape.
Adjusting to a Changing Market
SHARE A SPLASH is truly a global company; with winemaking operations in Healdsburg, CA and its business office in Palo Alto, it sells to consumers in all 50 states and 58 countries. As a result, the company was under pressure to adopt an agile response to the global pandemic. “There are some markets that are totally shut down, where there’s essentially no activity.” Gilat says. “But every market is different. For example, Korea is largely still open, and in Canada, it varies widely from province to province.”
To adjust to rapidly-shifting markets, SHARE A SPLASH continues to experiment with changing up its usual operations. “There are a lot of layers to producing and selling wine, from managing grower relationships, to winemaking, to filling orders,” Gilat explains. “Thankfully, the winery is still running and still bottling wine. We’re still dealing with Mother Nature; buds are still blooming.”
But with revenue streams drying up in select markets, SHARE A SPLASH has been turning to new sources of business. “People are still buying and drinking wine — they are just doing it at home now. Wine retail sales in general have experienced double digit growth during the pandemic, and buying wine online has quickly become mainstream. Shifting our focus and resources to where that buying action now lives has been key.” Gilat says.
Meanwhile, the brand’s online sales have unexpectedly taken off. “Generally, direct-to-consumer online sales aren’t very strong for wines in the $15-20 range, those wines are so readily available in retail stores,” Gilat says. “But in the weeks since the start of the pandemic, our online DTC sales have already exceeded total 2019 sales. Orders started coming in almost immediately.”
The jump in direct-to-consumer sales tracks with the trends seen in the industry at large; Nielsen reports online sales of alcohol have grown by 234% since mid-March. SHARE A SPLASH has taken advantage of this booming market by releasing attractive deals, including bundles of Cannonball ELEVEN wines, which are higher-end versions of Cannonball wines typically only sold to restaurants. “Those seem to be a big hit with people who want to spend $75 to $100 to try several wines at once,” Gilat says.
Relationships Matter — Especially When Times are Tough
Even though SHARE A SPLASH is turning its attention to alternative revenue streams, the company is still looking to support the restaurant partners that have helped it become a global brand.
“Japan was among the first market to shut down, and we immediately sent all of our Japanese partners a bottle of wine with a handwritten note letting them know we were thinking of them,” Gilat says. “Wine is a relationship-driven business; you need to go above and beyond business implications. You need to ask people how they’re doing, how they’re holding up, how their families are doing.”
The wine company has also been turning its attention to home. The company bought meals for the warehouse employees of its distributors, hosted online cook-alongs with partner chefs, and donated half bottles of wine to the frontline healthcare workers at the Stanford Medical Center at the end of their shifts. SHARE A SPLASH also recently aligned with José Andrés’ World Central Kitchen, and is donating profits from online sales to support the cause.
SHARE A SPLASH was founded on the significance of sharing — sharing a meal, sharing a conversation, and sharing a bottle of wine. True to its ethos, the company remains focused on people, not profits even as the pandemic disrupts sales and operations. “In good days and in bad days, everything is about relationships,” Gilat says. “The bottom line for us is to build relationships for the long haul. What goes around comes around, and that’s especially true in hard times.”