WineDepot helps struggling wineries

With alarming reports that one-third of Australian wineries could go under from COVID-19 closures, WineDepot is throwing a lifeline to struggling wineries as they quickly pivot to online direct-to-consumer sales.

Australia’s 6,000 grape growers and 2,500 winemakers have been hit hard this year by bushfires, smoke taint and the lowest yield in seven years. On top of this, COVID-19 has had a negative impact on export markets, trade distribution, and cellar doors.

In response to these challenges, WineDepot has announced that it will be providing wine producers a support package of subsidised services to help them maximise their ability to trade during this challenging time.

“Never before have Australian wine producers faced a challenge like this,” said WineDepot founder and CEO Dean Taylor. “The silver lining is that consumers across the country are rushing to order wine and other essentials online for home delivery.”

This has certainly been true for Tasmania’s Josef Chromy Wines, who has been working with WineDepot to maintain strong sales during covid-19 closures.

“We saw a little bit of panic buying happening, particularly when the alcohol limitations started in some states,” said company spokesperson Amy Russell.

Other wineries, however have been slow off the mark. “We know of smaller producers who aren’t selling online and all of a sudden find themselves with no outlets at all.”

To support as many wineries as possible from going under, WineDepot is offering a support package that allows them to maximise their margins from online sales during this once-in-a-100-year event.

“Our platform allows wineries in regional areas to provide a fulfillment service that competes with that offered by the major retailers. With physical depots in each state of Australia, we manage everything so that a winery in Tasmania like Josef Chromy, can deliver the same or next day to customers in Sydney or any other capital city in Australia,” said Taylor.

WineDepot Cellar Door Support Package is valued at over $5,000 per winery and includes the following benefits:

  • $500 free credit
  • 3 months free storage
  • Free initial stock transfer into bulk storage
  • Delivery from just $7.95/case for metro areas
  • Waived platform access, set up and integration charges, usually $995

This is available to all Australian owned and operated wineries, who establish an account and move inventory in before the end of April, with no lock-in contracts or requirements to continue using WineDepot services after the free storage period ends.

“Partnering with WineDepot means we’ve avoided quite a few overheads,” said Russell. “Sitting down here on an island, we have additional challenges trying to get freight off Tasmania, especially at critical times like Cyber Monday and Christmas. Now we have that little bit of an edge in terms of already having stock in market that we can quickly dispatch and distribute.”

The direct-to-consumer sales market is estimated to be worth over $1 billion per annum and employs tens of thousands of people around the country. WineDepot hopes to also help protect this source of jobs, revenue and amenity in regional areas.

 

Food safety expert: how to keep premises safe during pandemic

A leading expert in food safety standards is calling for all relevant businesses in the food industry – restaurants, manufacturers, packaging companies, retailers and transport providers – to meet Australian and global food safety standards to help reassure consumers in the current pandemic. The call comes as the industry faces the challenge of quelling customer fears about the potential transmission of COVID-19 via food. 

Maidie Wood is a food safety expert at SAI Global, a provider of food safety certification and training, which has audited thousands of businesses to ensure they comply with industry regulations.

There is currently no evidence to suggest that coronavirus is transmitted through food. COVID-19 is a respiratory virus, which is spread almost exclusively through person-to-person, or person-to-surfaces-to person contact – as was the case with earlier strains, including MERS and SARS. On the other hand, food contamination risks are typically microbial,” said Wood.

“As we learn more about the virus, there may be a slim chance that COVID-19 does present some cross-contamination concerns. It is contracted by inhalation or a similar mechanism, such as breathing in infected droplets from another person’s cough. As a result, it might be possible that a person can get COVID-19 by touching the food or food package that has had the virus on it and then touching their mouth or nose. However, any trace of the virus would be destroyed by proper cooking.”

Although any food safety risks of the virus continue to be evaluated, Wood warns that it is extremely important that food businesses have hygiene systems in place that meet Australian standards, and where necessary, take additional measures to keep the risk levels low. “In times of increased pressure on businesses within food and packaging supply chains, it is imperative that correct hygiene, sanitisation, and pre-operating procedures are strictly adhered to. For business owners, excluding ill workers from your premises is also a necessary prevention measure.

“Although it’s a legal requirement that all food businesses in Australia are trained in food safety, more in-depth Food Safety Supervisor training, such as HACCP certification, should be considered during – or following – this challenging health and safety crisis. SAI Global encourages food manufacturers, retailers and food services to get certified to meet internationally recognised food safety standards such as SQF, FSSC, ISO 22000, BRCGS and IFS – which all incorporate HACCP – to enable them to improve their processes, increase efficiencies, and ultimately, communicate to their customers they have robust food management systems in place.”

 The five tips are:

1.       Ensure your team are aware of the COVID-19 situation and take it seriously. The scale of COVID-19 is unprecedented. Therefore, managers need to check in with staff regularly to review their welfare and address any concerns as quickly as possible. For instance, staff should be encouraged to be open about their symptoms if they suspect they’re unwell and express any concerns about their circumstances, such as job security. There is a risk that food handlers may continue to work while infectious if they believe their job security is threatened. The best way to monitor staff is to check their body temperature as this cannot be hidden.

2.       Review the social interaction of your workforce. In the current social distancing environment, separation of shifts will allow greater time for cleaning and sanitisation of equipment, services, or common dining areas. Food businesses should also consider minimising the number of staff in production areas and position them in all areas of the premises so that they are an appropriate distance apart. Minimising the overlapping of shifts or rosters as much as possible is also vital. 

3.       Ensure adequate sanitisation facilities with instructions are provided, so that food handlers thoroughly and frequently wash their hands. Though good hand hygiene is common practice among most food businesses, consider increasing it under the current circumstances – according to guidance from the Department of Health. Additional handwashing and sanitisation points should be set up throughout food businesses. Handwashing and then sanitisation should be considered as the new normal routine.

 4.       Supervise all areas in which food is exposed to ensure it is not contaminated. While COVID-19 can be destroyed by cooking, it can survive on surfaces, such as benches, for several days. If a food handler has been unwell, and there’s concern that a surface might be contaminated, all food packaging should be removed from that surface and effectively disposed of.

5.       Advise staff that they can refuse service to any customers who appear unwell, providing this meets the necessary standards and regulations. According to Australian food regulators, businesses have the right to refuse service to customers if they display notable COVID-19 symptoms, such as fever or coughing. The ability for food handlers to exclude patrons underpins a fundamental social responsibility measure outlined by the Australian Government Department of Health, which has demanded members of the public stay home while displaying any symptoms.

Federal government stimulus package for SMEs including F&B sector

The Morrison Government has announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the challenges posed by the spread of the coronavirus. The package is aimed mainly at SMEs, with a large number of such enterprises being in the food and beverage industry.

The package has four parts:

  • Supporting business investment.
  • Providing cash flow assistance to help small and medium sized business to stay in business and keep their employees in jobs.
  • Targeted support for the most severely affected sectors, regions and communities.
  • Household stimulus payments that will benefit the wider economy.

Prime Minister Scott Morrison said as part of the plan up to 6.5 million individuals and 3.5 million businesses would be directly supported by the package.

“Just as we have acted decisively to protect the health of the Australian people, based on the best evidence and medical advice, our support package responds to the economic challenges presented by this pandemic in a timely, proportionate and targeted way,” he said.

“Australia is not immune to the global coronavirus challenge but we have already taken steps to prepare for this looming international economic crisis.

“The economy needs temporary help right now to bounce back better so the livelihoods of all Australians are protected.”

Delivering support for business investment

  • $700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.
  • $3.2 billion to back business investment by providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.

These measures start today and will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or three in every four workers. The measures are designed to support business sticking with investment they had planned, and encouraging them to bring investment forward to support economic growth over the short term.

Cash flow assistance for businesses

  • $6.7 billion to Boost Cash Flow for Employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
  • $1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

Stimulus payments to households to support growth

  • $4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment.

Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

Assistance for severely-affected regions

  • $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education. This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.

The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months. This is similar to relief provided following the bushfires for taxpayers affected by the coronavirus, on a case-by-case basis.  The ATO will set up a temporary shop front in Cairns within the next few weeks with dedicated staff specialising in assisting small business. In addition, the ATO will consider ways to enhance its presence in other significantly affected regions to make it easier for people to apply for relief, including considering further temporary shop fronts and face-to-face options.

 

Australian wine industry in challenging times

The value of Australia’s wine industry is rising each year, but producers will need to embrace new marketing and sales strategies to overcome slowdown in consumption in key markets, particularly the US and China, according to Rabobank’s latest global Wine Quarterly report.

While a recent boom in wine values to China has helped stabilise the impact of falling US consumption for Australian wine producers, the latest Q1 report reveals issues with declining consumption will be exacerbated by ongoing trade disruptions stemming from the COVID-19 coronavirus which is wreaking havoc in Australia’s largest wine market – China.

Rabobank senior wine industry analyst Hayden Higgins expects the global wine industry will continue to face significant uncertainty regarding international wine trade throughout 2020.

He said the first half of this year would be especially challenging for Australian wine exporters, reflecting the impact of the coronavirus in Australia’s largest market.

The Q1 report notes that while Australian bulk wine exports declined by 12 per cent last year in volume, they rose three per cent in value, and bottled wine exports declined five per cent in volume but increased seven per cent in value. Wine priced above AUD 20 per litre increased in value by close to 30 per cent (year-on-year).

And despite a 17 per cent decline in volume to China, sales increased in value by 12 per cent, with Australia now the largest wine exporter to China by value, and, in turn, China is the largest market for Australian wine by value.

The report found trade tensions between the US and China, Brexit negotiations and trade agreement negotiations all had an impact on wine sales and export volumes during 2019, which will continue in 2020, it said.

“A major element affecting the global wine industry in recent months has been stagnant domestic demand in the United States, but now we are also seeing a shut-down in China due to the COVID-19 outbreak which is adding to the slowdown in Chinese wine imports experienced in 2019,” Higgins said.

“The coronavirus outbreak is not only affecting actual consumption and trade flows of all goods, including wine, at the moment, but its economic consequences may undermine demand for wine even after the disease subsides.”

The Q1 report found US tariffs on selected EU wines were only in effect for the final two
months of 2019, yet may affect the entire year in 2020.

“All these factors may destabilise a market that is already reflecting the impact of ample
inventories and slow trade,” Higgins said.

He said while there were concerns about the impact that persisting drought may have in
the forthcoming southern hemisphere harvests, the abundance of global stock (in
particular of red wines) and uncertainties about demand were keeping prices “in check”.

The report found it was now imperative the industry quickly finds a way to boost
consumption in other key markets and broaden its appeal to attract new consumers.
It said the traditional focal point of most wine marketing – wine scores, tasting rooms,
vineyard soil quality, etc. – seem to be less relevant for the younger generation and it was
becoming clear that wineries need to re- think marketing strategies to reach the emerging
consumer.

“With sales growth slowing, the industry will need to take bold action to find new ways to
engage the market and connect with an evolving consumer,” the report said.
“This will require investments to build out e-commerce capabilities and improve brandbuilding skills to help reach a consumer that engages brands differently.”

How will the coronavirus affect agriculture in Australia?

The coronavirus outbreak is already having a severe impact on China’s foodservice and on-trade channels and this could become “more serious and longer-lasting” if the virus is not contained in the next six to eight weeks, leading agribusiness banking specialist Rabobank has warned.

But the extent of the impact on Australia’s agricultural sector will be limited in the short-term and will depend on how quickly the virus is contained, it says.

In a just-released report by the bank’s China-based research team, Recent Coronavirus Impacts on Chinese F&A, Rabobank says “disruptions are being experienced across the entire F&A (food and agri) supply chain” with the virus – which has infected more than 40,000 people to date – disrupting trade, production and supply chains as well as having a significant impact on out-of-home food consumption with the closure of many foodservice outlets.

With the virus outbreak arriving at the peak of 2020 Chinese New Year activities, it has had a large impact on out-of-home dining in the country, the report says.

“Given what we have seen on the ground, along with news received from major chains – for example, the closure of stores by Starbucks, Haidilao, McDonald’s, and Yum China – potential revenue losses for both retail and foodservice for the Chinese New Year week could range from 20 per cent to 80 per cent”. A loss of between USD 31 billion to USD 124 billion across retail and foodservice, it says.

While the report says a quick and effective containment of the virus could lead to a rapid bounce-back, the longer the virus is uncontained beyond March, the more extensive, sustained and structural the impact will be on the F&A chain.

For Australia
Regardless of when coronavirus is contained, Australian-based head of Rabobank Food & Agribusiness Research, Tim Hunt says it will “almost certainly” have a larger impact on food and beverage industries than the global SARS (Severe Acute Respiratory Syndrome) epidemic in 2003 – including in Australia.

Discussing the current and potential impacts of the virus on Australia and New Zealand’s food and agribusiness industries in a podcast, Coronavirus: How worried should we be, Mr Hunt says coronavirus has already spread more widely than SARS but it is Australia’s “much larger exposure to China” that is the biggest difference between current events and SARS.

“If we go back to 2002 just before the SARS crisis, Australia sent eight per cent of its ag exports to China”, Mr Hunt says. And this was largely in the form of fibre to be processed for export.

Fast forward to 2020, he says, and Australia sends around 28 per cent of its food and agricultural exports to China, much of which is consumed within China. “Add to that, the stronger links that have been developed between Australia and China in terms of exports, tourism, education and investment, we have a very different environment in which we might see the potential impacts of coronavirus this time compared to SARS in 2003.”

There are likely to be both first and second-round impacts of coronavirus on the Australian agricultural sector, Mr Hunt says, with the first round already being felt by any food and ag business relying heavily on the food service channel in China, particularly perishable goods.

“For example, rock lobster shipments to China have all but ceased in the last couple of weeks,” he says, “while chilled meat shipments for food service are also a risk category given a lot of hot pot restaurants are closed at the moment.” And while wine isn’t perishable, Mr Hunt says, sales are also likely to be low for those focused on the Chinese food service industry.

While Chinese consumption of meat, dairy and grains is unlikely to fall in the short-term, Mr Hunt says if the virus continued for many months to come, second-round impacts –“likely to hit our F&A industries” – would come into play.

“Hopefully we won’t get to ‘round two’,” he says, “but if we do, incomes may fall in China and we may eventually see less growth in sales of premium food and beverages as that wealth effect starts to kick in.

“And this may start to go beyond just food service sales and logistical disruptions to potentially impacting consumption in general of meat, dairy, grains and seafood.”

That said, Mr Hunt says, in the event coronavirus has second-round effects, the currency exchange rate would act as an “important stabiliser” for Australian agricultural exporters, with the Australian dollar likely to depreciate significantly as the market responded to slowing economic growth and rising risk concerns. And this, he says, would “somewhat offset” any fall in global commodity prices when expressed in local currency terms.

Going forward, Mr Hunt says, it will be important to closely monitor developments, including this week’s return to work in China after the extended New Year holiday and how the Chinese government continues to manage the outbreak including restrictions on the food service sector.

“But the most important development will be when we see a slowdown in the rate of infection,” he says. “SARS took around three and a half months for the infection to start slowing but after that, it didn’t take long for infections to cap a few weeks later.

“While we have no idea how this virus will behave compared to SARS, there won’t be any easing of restrictions until it does.”

Mr Hunt says it will also be critical to monitor the spread of the virus to other countries such as Indonesia, Vietnam and other parts of South-East Asia, because if it spreads “we will start to see the same set of impacts in a second very large set of export markets for Australia”.

By Commodity
Rock lobster – likely to be the most exposed sector, with 95 per cent of sales going to China. While rock lobster sales from WA have ceased for now, fishermen can leave the lobsters in the ocean and catch their quota later if quota windows allow.

Read meat – short-term disruption is likely given logistical disruption and reduced eating out by Chinese consumers. The general shortage of protein in China as a result of African Swine Fever is still expected to result in ongoing strong demand from China once the short-term impacts of coronavirus are overcome.

Grains – limited impacts are foreseen both initially and in the event of a second round phase.

Dairy – at this stage, limited first round impacts as most of what is shipped (i.e. powders and infant milk formulas) have a good shelf life and are consumed at home. That said, cheese consumption could be impacted as it is mainly used in food service (for burgers and pizzas).

Sugar – very little disruption is expected to impact sugar trade flows, processing and consumption. But indirectly, the dip in the oil market – associated with concerns on the impact of the outbreak on global growth – could push Brazilian millers to produce more sugar this season which would lead to a softening in global prices, and ultimately, Australian prices too.

Wine – On-premise consumption of wine in China in 2019 accounted for around one third of total wine sales. Sales into this channel are expected to fall in the short-term while restrictions on group dining remain in place. That said, volumes of wine sold via e-commerce are likely to rise as distributors attempt to push more product into, and invest more money in developing, this sales channel.

Horticulture – Fortunately the cherry industry had air freighted most of its crop to China before the virus hit, something that would have been highly problematic a month later. In the next two to three months the main threat to export fruit and vegetable crops will be logistical, with demand from Chinese consumers for quality imported fresh produce not expected to fall from current levels.