Snapshots Of The New Retail Wine Sector And What Lies Ahead

As the country moves into the third month of quarantine, a handful of wineries and restaurants are reopening in 38 states. We have yet to see the impact that they will have on what has continuously been a very vibrant off-premise market for wine.

I recently sat down with Ray Blair, the owner of Cheese Plus, which is a cheese and wine Mecca located in San Francisco’s Cow Hollow neighborhood. He has been doing a brisk business in both wine and food sales over the past three months.

All responses have been edited and condensed for clarity.

Liza B. Zimmerman: How has Covid transformed your business?

Ray Blair: Like all other food retailers, we’ve had to limit the number of customers within our space. We did this early on, realizing if we could separate our foodservice operation from our retail operation we could keep all our operations open. 

We only allow prepared foods to be purchased at our sidewalk window. This allows our interior to be dedicated to our cheese, wine and grocery operations. We’re fortunate that our café has always been accessible through our sidewalk window.

But we did reduce our hours of operations so that we could “compress” our opening and closing team schedules to allow more staff coverage throughout the entire day. This has proven to be a good decision because we have remained quite busy during the shelter in place. However, it is very challenging to do business with the demands of increased sanitation, our own internal physical distancing, watching the door and limiting the number of customers inside.

L.B.Z.: Are you open at all for dine-in or just take out?

R.B.: Our foodservice is strictly take-out. We closed our outdoor park and removed the tables and chairs at our sidewalk café when the shelter in place was ordered. Essentially this closed our dining room and prepared sales plummeted, but with each week of the shelter in place we are seeing more and more prepared food customers. We have had moments where we were too busy and needed to close the foodservice window temporarily to handle the crush of business and keep our team safe.

L.B.Z.: Do you think you are busier because the on-premise is basically closed down?

R.B.: Yes, absolutely. Wine sales have essentially doubled. We attribute this to the lack of restaurants and bars, but also to more overall alcoholic beverage consumption and shoppers engaging in larger, less-frequent shopping experiences.

L.B.Z.: Do you expect it to stay that way? 

R.B.: It’s hard to know. At some point the restaurants and bars will open up and I think we’ll see strong campaigns to get society back out in the world and save them from going out of business. So, it’s natural to predict we will see a dramatic drop for a few weeks or months. We’re hopeful we’ve made a lot of people happy and that they’ll be loyal to us in the future, but we’re not sure how to plan for the winter holidays.

L.B.Z.: Have you had to let staff go?

R.B.: No, but we do have a few folks who quit early on and opted to not work in order to take care of family. 

Now we’re hiring! Business is up overall, and we now need a front door person all day every day. This is a big challenge.

L.B.Z.: What additional precautions are you taking with your staff and food preparation?

R.B.: We’re doing all the necessary protocols and protections: masks, clean gloves, so much hand washing that our water bill doubled, allowing the team extra breaks and doing routine disinfecting.

The team also receives weekly organic produce bags at no charge to help them eat healthy and limit their time at other grocery stores. We also have put sneeze guards in all customer service points. We’re lucky that our staff has stayed healthy through this period, but the truth is we’re all worried that the public will bring the virus into our environment.

L.B.Z.: Was this something you ever expected? 

R.B.: When the news broke about China, we did purchase masks and sanitizer thinking it would be a good idea to make our team feel better. At that time there was no way to really contemplate a national shelter in place or the sustained need for masks to stay healthy. Who could ever imagine that a bug you can’t see would lockdown the entire planet?

L.B.Z.: How do you expect this epidemic to transform the retail business?

R.B. Take out will likely continue to be popular as consumers feel more comfortable eating at home but don’t always like or want to cook. This is good news for 3rd party order and delivery services, however the people who shop and deliver food are not paid minimum wage, offered benefits and have little protection in place for the work they do. It’s a bad situation that consumers would willingly place their trust in a stranger and potentially put that stranger at risk just to have a sense of personal protection now. 

The corporations and start-ups will no doubt influence the consumer to believe they are too busy or too smart to purchase and prepare their own food. We’re on the complete opposite end of that spectrum. We want you to know where your food comes from, who prepared it and how to prepare it yourself. Perhaps, with all the home cooking and baking happening now, consumers will continue to cook for themselves and learn more about high-quality food.

More and more foods will be sold pre-packaged. Again, this is considered convenient and hygienic. But it just raises prices and floods our landfills with plastic. I’m concerned that marketers and developers will do all they can to eliminate the human element in retail—and create more apps and build more kiosks that eliminate human interactions and jobs— all in the name of hygiene and convenience.

L.B.Z.: Do you think the restaurant business will ever be the same?

R.B.: Yes, of course it will…and of course not. But it will probably depend on simpler restaurants that survive and become the norm. Think rotisserie chicken with a walk-up counter. High-end, fine dining will likely continue for diners in that demographic, but I can’t see many small neighborhood restaurants being able to adapt to tables spaced six or more feet apart. There just isn’t enough revenue to make ends meet. I’m sure many, many restaurants will close as the economy softens and consumers' tastes for predictable comfort foods continue for the next couple of years. 

L.B.Z.: What are some of your other concerns?

R.B.: The big concern is that small businesses will suffer in the coming months and years. Many small businesses do not have the working capital necessary to sustain months of no income and may have few other resources to continue their operations. Their locations may sit empty for months or longer and the corporate restaurants and retailers will move in and take over. This will not only reduce the diversity of foods offered, but also reduce the workforce overall and concentrate wealth within the corporate entities and not distribute it across numerous families and businesses within the community.

L.B.Z.: How do you expect the restaurant and retail business to be different when this is over?

R.B.: Retail food will always survive and the good retailers, with a broad spectrum of offerings and services, will thrive. Niche brick and mortar retailers will continue to have a hard time staying relevant in today’s world of 24/7 online hours and overnight shipping.

We will see even more movement toward fast casual and convenience for the restaurant industry in the months and years ahead. Hopefully with a great diversity of cuisines and not just Applebee’s and Starbucks on every corner!

L.B.Z.: What does the retail world of the future look like?

R.B.: In many ways it will look the same. That said, we’re already getting calls from new start-ups building online new home delivery platforms. I expect there to be more pressure for restaurants and retailers to move in this direction. But if the economy softens, inflation occurs and 25 percent of the workforce is unemployed, I don’t know if this will remain a popular option for many consumers.

Blair gives us quite a lot of food for thought to reflect on.