As Enotria&Coe unveils its new portfolio for the year ahead at its annual showcase tasting today, we take a closer look at what the company is doing to help drive its already impressive spirits range in the second half of our interview with the business’s two new managing directors for the on-trade, Ants Rixon and Sam Thackeray. They also look at how it is preparing for Brexit and the work being done to keep on top of new wine and spirits trends for the year ahead.
Driving value and margin through the premium on-trade is at the heart of Enotria&Coe’s business strategy which is why it believes having such an extensive, and ever changing, spirits range is potentially such a competitive advantage.
It is one thing for a major drinks distributor to have a big spirits range, it is quite another to have one that works not only for your business, but for the customers you want to serve. After all with a seemingly endless supply of new products entering the market it would be quite easy to make room for more and more brands in the hope that one or two will turn out to be the next big thing. But not if you want to be running an effective, and profitable, spirits range, says Sam Thackeray, Enotria&Coe’s new managing director looking after national on-trade accounts.
Instead it is case of finding the ideal balance between getting the “right financials” and “margins” for customers on the major household spirits brands, whilst then adding value and interest with more bespoke and artisan spirits, explains Thackeray. “The move is towards premiumisation and selling more interesting and quality products, that have provenance, good stories and love and attention in how they are made,” he adds.
This is where he believes Enotria&Coe has a huge opportunity to be able to offer far more of a personal consultancy service for its customers so that it can curate spirits lists that really work for their needs and their specific outlets, stresses Thackeray. “We want to be seen to be leading the category, and bringing interesting and different products to the market. The UK public has become a lot more interested in provenance and our portfolio needs to reflect that.”
On the front foot
It’s also part of not just falling into being a re-active wholesaler, adds Jon Pepper MW, Enotria&Coe’s marketing, buying and retail director, but “being pro-active and saying where we think the category is going” and then having the products to back that up, supported by tastings and masterclasses.
Again combining the opportunity to work with high end bars at one end, but also having a structure in place that allows you to take an offer to the rest of the market around the country.
It all comes back to having a tailored approach, says Pepper, whether you are working with a gastro pub or a premium cocktail style bar. “We need to be able to to go into a gastro pub that has three gins and explain to them how to build a five to eight gin and tonic list, with the correct serves and how to bring it to life. There’s a huge amount of incremental value that we can add. We did this recently with a group of three pubs and drove their gin sales up by 145% a month. Or for a more high end bar customer it could be about bringing in this week’s new spirit for them to help promote,” he says. “So again it’s how we can flex our range to different types of customer.”
Enotria&Coe, with its national scale, is also in a good position to really help drive change and push new trends into the market, adds Pepper. “If we can pick up trends early in London, where they are first emerging, we can then help over the next 12 to 18 months to roll that out to the other big cities and beyond.”
It’s also where Enotria&Coe’s recruitment strategy has particularly paid off in hiring former Harvey Nichols spirits (and wine) specialist Ivan Dixon to head up its spirits division.
“He has a very good reputation within the trade and brings that ‘je ne sais quoi’ to our range. He’s got a really good eye for product, and a thirst for knowledge, is keen to learn, and to bring in cool stuff and then activate it,” says Thackeray.
The advantage with spirits, adds Rixon, is that most brands have local teams and ambassadors that they can work with on a regular basis. “It’s like having a winemaker in town every day with these brand owners,” he says.
It means it is also possible to move quickly, make decisions and then really see a benefit and impact in the trade very quickly, he adds. “If we identify something that is going to be good within our business, then we can have it out to all parts of our business within 48 hours. That’s what makes it particularly exciting. It’s about being efficient and agile.”
Thackeray also admits the company’s spirits range is probably currently too big and needs consolidating around the products that are really in tune with the market.
We can also expect to see Enotria&Coe build up a wider, and innovative range of non or lower alcoholic products and respond to what is clearly an ever growing part of the market, says Thackeray. These could range from mixers, fruit juices, through to sparkling teas and products that “drive a point of difference for their customers”.
Looking ahead to Brexit and the consequences – and opportunities – that might bright, Pepper says the business is as “well prepared as we think we can be”. Which means having a “couple of months” of stockholding on key lines and a 12 months hedging policy for currency.
It also works with Hillebrand as its freight forwarding business and has been assured that it will be able to carry on doing its own customs clearance, outside of HMRC, whatever sort of Brexit we end up with, says Pepper.
If tariffs and rates go up on certain countries wines and spirits then the opportunity is there, adds Thackeray, to “move quickly and work hard for customers to find the right value portfolio” for them so that they can have alternative products that provide them with the margins and value that they require.
There will have to be changes to pricing in any case due to the duty increase that comes in at the start of February.
But we are set for some interesting months ahead, says Pepper, particularly as there is the “potential for huge shifts on the import landscape” as we move through 2019.
Which will probably see it holding back on its 2019/2020 list for as long as possible to see what is going to happen with Brexit.
Regardless of what happens the Enotria&Coe team are full of confidence that the UK will still be seen as a vital market for wine and spirits producers to be in. Largely because we have, compared to so many mature wine producers countries, such a diverse and huge range of products available to buy here. “It really is staggering the variety and sophistication of the market here which still makes it extremely relevant,” says Thackeray.
Pepper agrees: “London and New York are the two key global showcases for premium brands.”
Picking out future wine trends is never easy, but the Enotria team were united in seeing further growth for aromatic white wines, primarily driven by all the emerging varieties coming out of Italy and across the Iberian Peninsula.
Thackeray says we can only expect to see more of the “crisp, fresh, aromatic styles that the UK market really enjoys drinking”. “Italy has such a fantastic selection of indigenous varieties that makes it an easy switch to say ‘if you like this you will like that’.”
Rixon sees more opportunities for lighter style reds, particularly amongst younger drinkers, particularly those with lower alcohol levels. He also thinks people’s openness to try new styles and unusual varieties will be carried through to how wines are served and packaged with a bigger trend of keeping red wines in the fridge and dining out casks, kegs or cans.
That equally chimes nicely with a more sophisticated consumer that is looking for quality and provenance, says Thackeray, who sees a good future for different styles of Pinot Noir in 2019.
Pepper is particularly interested to see more wines coming onto the market that are in what he calls the “intersection” between natural winemaking and “really excellent, technical winemaking”. Wines that “take you into a really interesting space where you have wines that have that personal, quirky feel with a lot more depth and unusual flavours, but with the bottle consistency that is so important for restaurants”.
Driving cash margins
Thackeray also forsees, particularly with more owner operators in the market, the long heralded switch away from chasing a 70% to 80% mark up on wines, to a more flexible approach that puts the emphasis on driving cash margin, and offering better value to customers that can help drive repeat business. “People are looking for value, and good quality product and I think you are seeing that approach from the more canny operators,” he explains.
It also fits nicely with this move to more premium wines, where clearly a low cash margin on a more expensive wine is going to be better than a low margin on an entry level wine, says Rixon. But he also concedes that for some customers a percentage margin is what they are judged on by their owners and banks.
Having the opportunity to get in front of their customers to make those recommendations and help them manage their drinks offer better is ultimately what it is all about, he adds.
- You can read Part One of our interview with the new Enotria&Coe managing directors and Jon Pepper here.
- If you are going to today’s tasting then you can see for yourself what work Enotria&Coe has been doing behind the scenes with its annual Showcase tasting at London’s Saatchi Gallery on the King’s Road, SW3 4RY between 10am and 5pm. There will be over 600 wines to taste and over 100 producers flying in from around the world as well as a wide range of spirits. Key highlights will include: Tri-nations Treasure Trove, The Unusual Suspects, Mezcal and Friends, Lurton: A Family of Fine Wines, Picture This, Low and No, Craft Beer and Cider, Gin Garden, Explosive Italians, Rising Stars of Europe. To register for the event click here.