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Betting On Wine Online While Hoping For A Restaurant Comeback

Grant Reynolds is founder of Parcelle, a New York wine shop and online retailer. He’s also co-author of How to Drink Wine, along with Infatuation and Zagat CEO Chris Stang.

Prior to the pandemic, I was a managing partner at Delicious Hospitality Group. Parcelle was a business that I was really eager to try to grow. Due to the small size of the Parcelle space, in my mind we were always working towards being more of an e-commerce business and a delivery-based wine retail business. When the pandemic hit, restaurants were greatly affected in a negative way. The retail business started to grow consistently, especially in March and April. I think we were fortunate to be a very young, nimble business. We’re very small, just in terms of employees. It allowed us to move quickly and come up with a lot of ideas.

There was an exodus out of New York early in the pandemic, and we did a retail pop-up for same-day delivery out in the Hamptons, which lasted until Labor Day. Then back in the city on Labor Day, we did a pop-up we called Parcelle Patio, which was like a wine bar on the sidewalk in the West Village.

I tapped a few people who I had worked with at restaurants before who were still unemployed. We put together a really great team and a product that people really responded to, experiencing our online brand in a physical way rather than just through digital marketing or social media. That’s something that I may explore down the road. The actual shop is not open to the public at this point, so all our transactions are happening through the website. We’re all e-commerce.

Although the shop opened a couple of years ago, our website didn’t start until probably a year ago. By and large, sales back then were what we call direct sales—people reaching out to us through email, or people coming into the shop. It was 80 percent retail and 20 percent online. We were shipping a very, very small amount, just delivery in the city. Now it’s like 95 percent online. That’s where I’m really excited about the growth of the business.

As a result of all this, I’ve had a career change that sort of happened overnight. I’m learning a lot every single day. It’s very exciting, ultimately. I was lucky to stay very busy throughout. The people I’m working with now—everybody on the sales and customer service side is a former New York City restaurant sommelier or wine director. We’re building up the team on the tech side and e-commerce side too.

On the other side of this pandemic will be a lot of really talented people who used to run brick-and-mortar restaurants and came up with other ideas that have enough momentum to grow. We took the opportunity to explore ideas we had always considered.

For example, we started a monthly subscription model. We were getting a lot of feedback from people saying, “We really like what you guys do. We want you to send us your favorite wines.” Our idea is to give people, in an everyday-drinking price point, the wines that we think are best and most exciting to drink now.

There are a lot of large online alcohol retailers. It’s kind of a race to the bottom as far as pricing goes. We’re trying to communicate that we are experts in the space, and we want to encourage people to look at wine not in a precious or pretentious way. Looking at a website that’s an infinite catalog of selections can be an overwhelming experience. People really responded to—and continue to respond to—getting some direction in how they’re choosing wines.

Our inventory has grown, but we’re actively designing the site and actively considering how best to give people access to stuff that they may not have known they would like, or otherwise didn’t have access to. If they want a $20 bottle of wine or a $15 bottle of wine, cool, we totally have that. It just may not be the same wine that you find at 200 other wine and liquor stores throughout the city or online. We’re an e-commerce business, but at the end of the day we’re a neighborhood wine shop that has a point of point of view—and we’re confident in that point of view.

The restaurant industry is the nucleus of the wine industry. They’re not like exact numbers, but pre-pandemic, a local wholesaler told me that 70 percent of their business came from restaurants. When that vanishes literally overnight—I don’t think there’s any opportunity without the restaurant industry really bouncing back. If you think about it, the way people get into wine is at a restaurant, or on a trip, or visiting a vineyard. Being able to have an experience like that is really critical. The cocktail industry would never exist if high-end bars didn’t exist. Nobody’s coming up with this stuff at home.

At the beginning of the pandemic, I got a couple of emails right out of the gate about selling off restaurant wine inventory. I’m still uncertain if that leaves a bad taste in my mouth or not. A friend of mine who oversaw the wine program at one of the best restaurants in the country, and in the world—he thought about that wine collection was in a really personal way. It’s probably a couple-million-dollar collection that my friend spent years and years amassing. You’re buying not just for commerce, but because it’s something you love. It’s like an art collection. The second you’re buying just for value is when people make bad mistakes.

That being said, wine is one of the few assets that restaurants have. So it’s amazing that rules allowing to-go wine and cocktails happened so quickly. All these archaic laws that existed because of Prohibition—loosening of those laws has given the restaurant industry some good opportunities, which is great. But we haven’t bought up any restaurant cellars. If a friend hit me up and said, “Hey, we need some cash, are you interested,” we would definitely take a look as long as it was to their benefit. I think you’ll probably see lower-value wine inventories in the future so that restaurants aren’t quite as exposed.

We’re trying to be conservative and patient with building a business in a thoughtful, long-term way. Considering the energy of the early pandemic in terms of throwing a whole bunch of darts at the wall—I hope there’s some stability for everybody to build on. I do think there are unfortunately going to be a lot of closures.

But when you look at the talent in the restaurant industry, especially in New York and the handful of other markets where people have probably moved—I am confident there will be some really good restaurants that come out of this. I’m pretty excited for that, but I’m ready for things to get back to normal.