For La Mare Wine Estate, which produces Jersey wine, liquor and specialities such as fudge and black butter, it could not have been more marked.
Managing director Tim Crowley explained that as supply chains ground to a halt, exports of alcohol and local Jersey delicacies stalled. And with business as usual coming to an end the company soon found itself producing hand sanitiser rather than liquor.
‘We were exporting black butter and cream liqueur in the main. Those are our two biggest products and they stopped dead in the water because the UK market, which is our main market, was just not active,’ he said.
‘There were no trade shows, no events, no farm shops and no delis. Supply chains were closed. They’re starting back off again but I’m very worried about wholesalers.
‘Margins in wholesaling are relatively low and if you’re a big international supplier and you’re dealing with small companies like us all around the country and half of them are not producing the goods for you when you need them, you’re going to be letting customers down on a daily basis.
‘There’s probably a thousand people in the supply chain to get you a Christmas brochure, for example. Trying to join those dots together now is so hard.’
Mr Crowley said that the difficulties faced by the business were alleviated by the Government of Jersey’s support package, where staff wages were subsidised by the public purse, including for active workers.
He views the co-funded payroll support package as superior to the UK’s furlough scheme.
‘We have recently gone through a coming out of Covid-19 and we’re going to come out of the blocks fast,’ he said.
‘We’re doing quite well, to be honest, but that’s primarily down to good government support. I’m involved in some lobbying groups working with government officers to achieve that.
‘Rather than sitting in an office, we’ve been actively engaging with the government and saying here are the problems. I think the packages are brilliant in Jersey compared to furlough in the UK where everyone is still sitting at home until September when it finishes.
‘Even if you do one day’s work under the UK scheme, your furlough ends completely and you get nothing from the government. That’s ridiculous because business cannot go from closed to full operational profits in a day, you have to build back up and Jersey allowed us to do that, which is why we’re all open.’
He said that he felt ‘pretty confident’ about the future of La Mare with the crisis appearing to subside and, vitally, key businesses within the industry having been kept alive.
‘I’m not at all worried now but I was very worried at one stage. If we hadn’t got government support we would have sunk,’ he said.
‘I was most worried about the whole industry sinking because there’s no point in La Mare being open if airlines are not operating and the hotels are not there. We need each other to survive.’
He added that people were the ‘bread and butter’ of his business, which runs a number of shops as well as acting as a tourism and wedding venue.
‘Weddings are people, tourists are people and that is what we missed,’ he said.
‘The business is spread over 13 profit centres, which were all managed independently – fudge, biscuits, preserves, wine, brandy, gin, weddings, retail and wholesale.
‘We were doing very well on that but what happened with Covid-19 is you took away the one common denominator that we never saw coming – people. We never thought we’d lose both tourists and weddings. We thought we might lose one but Covid took away both. We didn’t see that and I don’t think anybody would.’
La Mare quickly found itself adapting to manufacturing products to help combat the spread of the virus.
‘We went into hand-sanitiser production almost immediately. We contacted the World Health Organisation to give us a recipe and off we went,’ said Mr Crowley.
‘We did this in a matter of days. We did very well – we made about 10,000 units over two or three months. But we never wanted to do it long term, so it’s not a product we wanted to continue doing.’
He said that another reconfiguration of the business had seen it targeting a younger, local customer base, using its large outdoor hospitality space as a selling point after tourism dried up.
‘We never particularly focused on locals before because we were really busy with weddings and tourists. We have in the last year and it’s been a good thing. We have a much younger demographic now,’ he said.
‘We still feel outdoors is where we’re strong. There’s not many places in Jersey that have as much outdoor seating and we’ve taken advantage of our assets.
‘What we miss most is group visits and I’m worried about them probably more than anything. The German market for us was huge – it was about a third of our visits – and it has gone to zero.
‘The problem with the group market is it takes two years to work. You sell it this year to bring the visitors next year and they are not yet in the selling space.’
Mr Crowley has made clear that he feels investment in business, enabled by government, is now essential to revive firms reeling from the impact of the coronavirus. (See page 23.)
However, he said that the impact of Brexit, in particular staffing and supply chain issues, is something that remains to be dealt with and has been ‘masked’ by Covid-19.
He added that Jersey’s soaring house prices would also make it difficult to attract staff to traditionally lower wage sectors.
‘La Mare has been around for a long time and we’ve got very good supply chains and very reliable people,’ he said.
‘But supply-chain issues are going to lead to a lot of people having a significantly longer lead time for products. I think we’ll be OK but not everybody will.
‘Plus staffing issues are huge and I think it’s not going to change. We’re operating a self-service now here. We’re lucky because we can do that but a lot of restaurants haven’t got that ability.
‘I think it won’t be as bad next year because movement of people is the key issue and that will come back. But Jersey will appeal less and I think it might struggle a little bit more.
‘The housing problem over here is really getting fuelled. The housing market is on fire and that is fine if you’re at the top end of the tree, but if you’re hospitality, workers, hotel workers or agriculture workers, then you’re even worse off than you were before.’
