SND: What’s your read on overall conditions in the wine market as we enter the new year?

Persson: Although we aren’t selling as much as we did prior to the Covid crisis, I’ve been pleasantly surprised by how durable the economy has been to-date in terms of consumers’ sustained demand for wine. Obviously, there’s a concentration of sales in certain channels to the detriment of others. And arguably, there’s been an acceleration in the $10-$30 range within the off-premise ecosystem. Items of ours in that $10-$30 price range that were already well-established in the off-premise have benefited overall. Conversely, items sold exclusively through the on-premise and at our Mount Veeder tasting room, or items which were heavily dependent on either of those channels, have been negatively affected. The latter would include newer items or brands that were in the development stages of their lifespan. Heading into the pandemic, about 30% of our sales were generated in the on-premise and direct-to-consumer channels, but we’ve been able to offset about half of these losses with gains in other channels.

SND: How have those conditions affected the overall trajectory of the portfolio?

Persson: The big challenge for us has been the continued development of our newer, higher-priced items. Driving awareness and trial in these conditions is more difficult, especially with the shuttering of our on-premise partners in many markets. We’ve had good success in developing sales of our Lions Head Collection of wines with fine wine retailers, particularly for the Lion Tamer brand. Those results bode well for our Panthera brand of wines in the Lions Head portfolio, which we will be expanding this month through the introduction of Panthera Pinot Noir ($45). But the on-premise remains a critical component of brand development, and with it so heavily impacted by the pandemic I think it will probably take us about six or seven years to achieve what we had previously hoped to do in four or five.

SND: What pandemic-related changes to the business will have the most long-term impact in your view?

Persson: We were forced to make a series of urgent, tactical changes to address the conditions imposed by the pandemic. We’ve made substantial changes in the DTC arena, building a team with club and e-commerce skills. In the sales arena, the fact that most business planning and execution is now remote has emphasized the importance of skills in managing one’s business through our wholesale partners. As a consequence, we’ve further invested in that capability within the sales team. I imagine that many of the changes necessitated by the pandemic will be long-term in nature. However, the importance of the on-premise channel in terms of brand development will remain, and it’s been a much harder piece to solve. The brand awareness component can to some degree be transcribed into the digital arena, and we’re much more active in that sphere than we were a year ago. But driving trial without a fully functioning on-premise channel is very difficult, especially at higher price points where the consumer is compelled to make a bigger initial investment than before—having to buy a bottle instead of a glass. So like everyone in our industry, we’re very much invested in and looking forward to the recovery of the on-premise channel.