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Club members buoy Napa Valley’s Peju winery until tasting room reopening

Peju Province Winery in the Rutherford wine growing district of Napa Valley had a soft reopening of its tasting room Tuesday under the new county safety protocols during the coronavirus pandemic and fully reopened on Wednesday.

One of the tough parts of the new COVID-19 safety protocols developed by state, industry and local officials is the ban on children and pets in tasting visits, according to Christine Lilienthal, director of marketing.

“We’ve always been family friendly and pet friendly, but because of the coronavirus we really can’t do that because it’s just not safe,” she said, noting that keeping kids and animals in one place can be difficult. “That was a really, really tough decision (for the Peju familiy) to make.”

About 20% of revenue from the 40,000–50,000 cases produced annually comes from wholesale channels, with 80% of those sales coming from on-premises accounts such as restaurants, Lilienthal said.

“We are a direct-to-consumer business, for the most part,” she said.

Many restaurants nationwide were closed in mid-March in local government programs to slow the spread of the virus. Some of the establishments pursued take-out orders they were allowed to continue, and among them were sales of bottles of wine along with the order.

“It’s not like we’ve declined for just basically holding flat, but we are looking at ways to maybe change that (wholesale channel) mix,” Lilienthal said.

The winery’s sales in off-premises channels such as stores have been enjoying growth, part of a trend seen in national sales figures for grocery chains and other stores that were allowed to operate during the shelter-at-home orders.

She noted that rule of thumb for the wholesale mix in the higher end of the business is 80%-90% in restaurants and 10%-20% in fine-wine shops.

“But I think that you can’t rely just on on-premise business anymore, so we’re going to be looking to also expand that fine-wine retail business,” Lilienthal said. “Before this happened, we were already talking about the need to push more into retail, as opposed to just on-premise channels, because we felt that we were probably a bit heavily weighted all in one area.”

In line with a trend seen throughout the U.S. wine business, when sales to restaurants fell off, direct-to-consumer sales besides at Peju’s tasting room took off.

“We obviously have done more e-commerce and email campaigns than we’ve done in the past, but really the life support for us during this time has been our club members,” Lilienthal said. “They have been so loyal. They have supported us throughout this time with regular increasing orders over time. We pick up the phone and give them a call and say, ‘Hey, would you be interested in upping your order by three bottles and if so, we’ll offer complimentary shipping?’ and people have been more than amenable. People have been sending us notes and following us (on social media) saying, ‘I’m gonna buy extra. We want to make certain that you’re still there, that you make it through. It’s been amazing the show of support.”

Raised in the Provence area in the south of France, Tony Peju and his wife, Herta, in 1983 purchased 30 acres of land in the Napa Valley. After launching the wine brand, the winery was completed in 2003. Their daughters, Lisa and Ariana, have become active in ownership and management of the company.