As the COVID-19 pandemic continues to wreak havoc across the country, Texas has found itself in the spotlight as one of the states with the highest infection rates. As one of the first states to begin opening back up its economy, state officials were hopeful that the Lone Star State could safely return to some semblance of normalcy.
In May, Texas wineries had an opportunity to begin opening back up, provided they followed a series of safety guidelines. But as COVID-19 cases have skyrocketed throughout Texas in recent weeks, on Friday, June 26, the state ordered all business entities that sold 51% or more of alcohol to shut down. While this order focused on closing down bars, many of which were serving customers over the specified capacity, winery tasting rooms were also lumped into the category. By contrast, restaurants were allowed to remain open at 50% of their normal capacity.
In many states, such as Virginia and New York, wineries are classified as agricultural entities, a clear point of differentiation from your average bar. But this is not the case in Texas. Instead, a winery must hold a “G Permit,” which simply allows a winery to be classified as a business that manufactures, bottles, packages, and sells wine to wholesalers and consumers. The concept of agriculture, which is the primary ingredient in wine, is not addressed under the permit. Instead, the G Permit looks very much like Texas’ Mixed Beverage (MB) Permit, which allows a business to sell wine, beer, and mixed drinks on-premise, the permit bars are required to hold. These permits differ from Food and Beverage Permit, which restaurants carry, allowing the sale of wine, beer, and cocktails so long as the gross receipts of alcoholic beverages do not exceed 50 percent of total sales.
Early in the pandemic lockdown, William Chris Vineyards co-owner and winemaker, Chris Brundrett, shared his view with me that Texas wineries were going to have to adapt quickly over the next year that there would likely never
be a return to a normal way of business. Instead, planning for the “new normal” would be his focus.
With an average production of about 30,000 cases, William Chris is considered a medium-sized producer in Texas. But with about 90% of its sales dependent on the direct-to-consumer (wine club and tasting room) market, shuttering its doors has forced the winery to rethink its approach. To continue our initial conversation, I caught up with Brundrett a couple of days ago to get his take on how running a winery looks right now and what the future could look like for Texas wine.
Jessica Dupuy (JD): When it first became clear that the state was going to shut down in March, what were some of the actions you took to prepare?
Chris Brundrett (CB): We were tracking the pace of things about a month before everything shut down and planning for what we would do, looking at worst-case scenarios and prioritizing what our needs would be based on that. We scrapped our 2020 budget and cut it to the bare minimum that would allow us to keep our staff. As the days went by, we voluntarily chose to close our doors before the mandate was made. We felt like it was the right thing to do for our staff and our customers. We were not exactly caught off guard, but it became more real by the day.
JD: Since most of your business depends on direct sales to your customers, how did you plan for losing that direct contact with them?
CB: We knew social media was going to be a pivotal component to stay connected with our customers, so we launched a weekly tasting through Facebook Live hosted by my wife and me, —and sometimes my two daughters would join. We also had weekly virtual happy hours organized by our Director of Education. We knew early on we needed to have a voice that could still reach people. But we couldn’t have pulled it off without all the people behind the scenes who made it possible, from our staff to the company that made weekly wine shipments to allow our customers to have the wines in hand before we went live.
JD: You talked about being able to keep your staff. For those whose primary job was in the tasting room, what did you have them do?
CB: We’re responsible for 64 families, and it was amazing to see everyone’s willingness to pitch in in different ways. We found all sorts of ways to keep people working; most of it was outside. We put some people to work on our vineyards, in our gardens, and on our grounds crew. Some people helped with winery tasks like bottling and packaging. And we also formed a dedicated team to make personal phone calls to our wine club members to check in on how they were doing and make a connection. We wanted them to know that it was with their support that we could keep things going.
JD: What was the response like from your wine club members?
CB: It was honestly overwhelmingly humbling. We started four bulletin boards in our office to put up the countless emails, texts, and messages from our customers with words of encouragement and inspiration. It was wind in our sails.
JD: With all of this extra work, did you find the effort paid off?
CB: To be honest, it felt like working twice as hard for half as much, but it didn’t matter. We were able to maintain what we needed, and that was enough.
JD: When Texas slowly began to reopen in May, what did that look like for y’all?
CB: We chose to wait to open. We wanted to make sure we had a safe plan. At first, we only opened to wine club members with reservations for a couple of weeks. Then we started to accept bookings from the general public. But we never let our capacity exceed more than half of what things were like pre-COVID. All of our staff are masked, and tasting spaces were spread out. Every little detail helped instill trust within our customers so that they could relax and be safe.
JD: As you began to see COVID-19 numbers increase again in Texas, do you feel you were prepared to have to close your doors again?
CB: No. It really caught us flat-footed. It seemed very arbitrary to have to shut down just because our sales are more than 51% alcohol, like a bar. It doesn’t make sense that people are allowed to pick strawberries at a farm just down the road from us, or eat inside at a restaurant when we offer the same indoor spacing as a restaurant, and even more spread-out seating areas on our property. We had advance notice of just two and a half hours to close our doors on a Friday, and we already had a full reservation list for the whole weekend. We estimate that we lost about $70,000 in sales from just the weekend alone.
JD: How do you see your business as being different from restaurants and bars?
CB: We’re farmers. Plain and simple. We farm vineyards on our property, manage vineyards in other parts of the state, and work with other vineyards to buy fruit for our wines. We have a perishable item. There are many other wineries just like us, some smaller, some larger, and it was a hard blow to those of us who were doing the right thing by our customers and staff.
JD: How do you see the economic effects of the first and second shutdowns for wineries affecting the Texas wine industry overall?
CB: People have to realize that the Texas wine industry has a $13.7 billion economic impact on the state. That’s from an agricultural and tourist perspective. We had so many people furious to have to change their plans last weekend, who had planned their vacation in the Texas Hill Country. Instead of being spread out on our property, they had to opt for restaurants and shops in town that require more interaction with people.
JD: But it’s more than just tourism that if being affected?
CB: What’s more concerning is that we are coming up on the harvest season. Most wineries depend on buying fruit from grape growers in the High Plains and the Hill Country. If we’re not able to sell our wine, we won’t have money to buy grapes to make wine for the next vintage. And grape growers won’t have income for the crop they’ve been working on all season. The trickle-down effects are massive.
JD: So how do you move forward?
CB: In the short term, we’re following the orders we were given, but we’re working with our legislators to try to make some changes to how wineries are classified in the state. In the long term, there’s still so much that is unknown. We may open and close again 45 more times before the end of the year. We’ve told our staff that we just have to keep going and do the best we can. We’re fortunate that we’ve had more than a decade under our belt to establish a brand here in Texas. And we’ll keep doing what we can to keep people buying our wine. My only hope is that our other colleagues in the wine industry can weather this time as well.
