As the drinks supply chain looks at how it can start to bring its people back together again Richard Siddle talks to Craig Durham, head of Buckingham Schenk, about how it has managed to keep the majority of its team working through Covid-19, and how, as the UK arm of the Schenk Group, the major international producer, it has worked with the company’s teams across Europe to give its customers the best service it can and is very much on the front foot coming out of lockdown.
Craig Durham on how Buckingham Schenk is fully focused on the issues, challenges and opportunities that lie ahead.
Whilst the majority of drinks suppliers have had their head offices firmly shut throughout the Covid-19 crisis, Craig Durham has done what he can to keep things as normal as possible during lockdown.
As soon as it was safe to do so Durham has been happy to work at Buckingham Schenk’s main office in Bracknell and steer the company’s response to the crisis in familiar surroundings rather than make do from an office at home.
For most of the time he has only been accompanied by his logistics manager, but is clearly excited about the opportunity of slowly bringing members of staff back to the office as long as it safe and healthy to do so.
“We have all been working from home since since mid march, but it’s not the same as being together in the office,” he says, particularly for those who are living on their own without the close support of their families.
It will initially re-open with a “skeleton crew” but has put in the necessary safe distancing measures, in what is a large open plan modern office, to allow as many members of staff to come back in as often, or as infrequently as they like. “If they want to just come in one day a week then that’s fine. I think it’s important for people’s mental well being as well,” he adds
Durham has also had more than just the needs of Buckingham Schenk’s UK staff and customers to think about during this time. Being part of a major pan-European wine producer – the Schenk group – has also meant being closely tuned in to what the mother ship and its other subsidiary businesses in Europe – across the Benelux, Germany, Italy, Spain, France and its headquarters in Switzerland – have been up to.
Most of which has been done through weekly international Zoom meetings, which, says Durham, has arguably meant, as a group, the Schenk business has never been more connected and on top of what is going on in its various divisions.
Schenk is very much the sum of its various parts. As a producer it is still very much family owned and makes wines in Switzerland, France, Italy and Spain.
Buckingham Schenk in the UK runs as a separate, independent business and whilst its takes the majority of its wines from the Schenk portfolio, it is also free to import and build relationships with producers all over the world. Most notably its long standing ties with major players such as Viñalba in Argentina, te Pā in New Zealand and new producers such as Domaines Auriol in the Languedoc in France.
Which is what has helped Buckingham Schenk, claims Durham, offer its customers a very different level of service and access to wines from all over the world than many of its competing suppliers in the UK.
Plans and preparations
Durham is keen to get as much of his team working alongside each other as he knows how important, busy and uncertain the rest of 2020 is going to be.
If anything the pressure is going to ratchet up even more now that most of the economy is coming out of lockdown, and we have the fast approaching reality of what Brexit and leaving the EU will actually mean come January 1 2021.
It’s time now, says Durham, to start thinking and preparing for how business is going to be not just now, but in five months time.
Being part of a large European business means Brexit is firmly back on the agenda, particularly in terms of how it is going to be able to continue to trade with the UK if the much publicised new, restrictive red tape and administrative costs – like VI-1 forms – are introduced.
“It is a big concern,” confirms Durham, particularly for the smaller family wineries it might want to work with for the on-trade. “All our suppliers want to trade with the UK, but not if it is not viable.”
“Then there is also the Deposit Return Scheme in Scotland that is coming our way which will have a big impact as well.”
Coping with lockdown
All of which seemed a long way away in the depths of lockdown. Durham says the business was able to function pretty much as normal throughout the lockdown and there was no problems in getting in stocks and re-supplies from its own producers and partners. “We did not miss any orders, there might have been a slight delay here and there , but they were very rare,” he explains.
“Even with the increased demand from our retail customers we were able to keep everything running smoothly. “
It also speaks volumes at just how clinical and safety conscious the average winery is, which meant there were no issues on the grounds at all in terms of production and moving wine.
“I honestly thought at the beginning of lockdown we might have some logistical issues and there might be problems getting stock, but we have not had any issues at all. Hillebrand and Kukla have been very good and kept us updated at every step.”
Retail focus – on-trade opportunity
Buckingham Schenk’s mix of business, with around 80-90% in retail and cash and carry and only 10% in on-trade, meant it has been able to trade strongly throughout the pandemic.
“Having a diverse retail strategy certainly came into play,” says Durham, with both strong and close relationships across the multiple and specialist sectors and into convenience retailing too.
Buckingham Schenk has been able to work its supermarket and independent merchant partners to help them make the most of this opportunity and it has been “amazing” to see how quickly so many of them adapted and switched to online during this time, he adds.
Its strong relationship and ties to Argentina was a particular bonus as there was huge demand for classics such as Malbec across the supermarkets. “That was very positive for us,” he says.
It was also able to lean on its Prosecco and Italian supply chain and cope with the huge surge there was for Italian sparkling and still wines.
“There was a huge demand to bring in more wine, quicker, and we were able to do that.”
Whilst the retail side has shone in the past few months, it has been the on-trade that has been hit the hardest. It’s an area that Buckingham Schenk might be relieved not to have been so exposed in during Covid-19, but it’s certainly a key focus for the company moving forward – particularly when compared to five years ago when 99% of its business was in the off-trade. “We have been slowly building the on-trade side of things and had strong targets for this year and we were way up on budget [prior to the lockdown],” he says.
It has now developed an exclusive on-trade and specialist retail list featuring separate wines and producers, where it has been able to source and work with new producers as well as tap deeper into the network of Schenk-owned or supported wineries across Europe and the world.
It has also been able to introduce on-trade focused wines from some of bigger partner producers – like the Phebus range from Bodegas Fabre in Argentina that is behind the Viñalba brand.
It now has three dedicated members of staff focused on developing the on-trade.
Switch to premium
Across the board Buckingham Schenk is now very much more focused on the premium end of the wine market. To such an extent that its overall volume sales are probably around half of what they were 10 years ago but its turnover was not similarly affected.. But that has been a strategic decision to move away from the entry level and discounted end of the market, and look to build brands and do more bespoke and exclusive work with their main retail partners.
Durham also sees its on-trade growth being an ideal vehicle to really showcase the big changes that have taken place across the Schenk group in the last three to four years, with a new management team tasked with its raising it profile, identity and reputation in each of its key markets. Particularly the UK.
The Schenk relationship
“We talk about the Schenk group with great pride,” says Durham. “As a family owned Group,It produces around 180m bottles of wine a year.”
But he is aware many of the key buyers and sommeliers across the premium on-trade are not familiar with either Buckingham Schenk or its parent company. “We are perhaps more known for what were our value wines. So we are working hard to change that perception,” he adds.
The Schenk Group operates through similar divisions in its key markets around the world, but particularly in Europe.
“Our priority is to focus on Schenk wines, but we can also do our own thing and go out find new wines and wineries that suit our different needs. But its German distributor would have a very different range to our portfolio. We are able to react and adapt to what the market wants,” he explains.
Its strength also comes in its diversity, adds Durham. For whilst it has its own network of company owned producers, there are also a wide range of agency patterns working with its different divisions in key markets. Which together gives the group access to such a wide variety of wines, styles, prices and the ability to move fast and act on key trends in the sector.
It also helps soften and stretch its global supply chain so that if certain regions hit a peak or a trough, it has the resources in other areas to support them.
But he stresses the first question the Schenk management team want to know on his weekly call is “how the team is?”. “They are genuinely concerned and want to do what they can to help.”
A typical gesture, he says, was when, at the hight of lockdown, the Schenk head office sent a personally signed bottle of wine, to every member of staff working in its business at every level, in all the countries it is in. “It showed we really are all in this together,” adds Durham.
Looking behind Covid-19 Durham says it is still very much looking at new ways and channels in which to sell its wine and raise its profile. One key area is events and live sampling, which might not be possible at the moment to any great degree, but are very much part of its future strategy.
“We were going to be going back to the BBC Good Food Show this winter for the first time in 14 years,” says Durham, who looks forward to doing so when it can.
Similarly events such as Three Wine Men, and other consumer shows will be on its agenda just as soon as they can come back.
It’s where it can really help promote and build the brand image of key producers and wines such as Viñalba. “People when they see it, know it, and these events are all about raising that profile even more.”
He hopes it will be able to build on the strong sales it has had with independent merchants during lockdown, and introduce more exclusive and premium wines to them.
“The sales through indies were very encouraging, the demand was certainly there for more interesting style wines, and we hope that continues.”
But he is very much aware of the need to manage its wines and ensure there is a clear channel strategy for each wine and if there are any changes they need to be clearly communicated through the sector.
Like every other major distributor Buckingham Schenk has played its part hosting and running online tastings and bringing its procurers closer to the trade and their consumers.
It’s an area, believes Durham, that is here to stay for the long term and it will be looking at the best ways to carry on doing interactive tastings, and video conferencing with producers and customers – particularly for its growing independent and on-trade listings.
“It’s not the same as being in a wine shop or restaurant, but we will definitely be doing more of that in the future.”
Back to normal
Durham is less confident about some of the trends we have seen in retail during the lockdown continuing in the long term – particularly around discounting and consumers trading up to buy brands at full price. He’s sure the old competitive streaks will return and we will start to see the average retail price start to go back down again thanks to “natural competition”.
One area he is confident will see major changes going forward is the amount of travel businesses and people are going to be willing to do. Lockdown has shown how much more effective companies and individuals can be if they are constantly not on the move, never mind the carbon footprint side of things.
He says Buckingham Schenk and the Schenk group had already been looking at their own carbon emissions and what steps they could be doing to cut down and this period will only accelerate that. “We are going to be flying and travelling less.”
If a major UK buyer, for example, needs to visit Viñalba in Argentina then it is more likely to rely on the skills and experience of the people at the winery rather than fly out there themselves. “We have always been very good at that and will be even more so in the future,” he adds.
Lockown life as a business leader
Finally Durham reflects on what it has been like as a business leader throughout the lockdown: “It has been exhausting, and every day has been different and challenging in it own way. But it has also allowed me to concentrate more on what is happening on the day to day side of the business.
“Our main priority has been the safety of the staff, although I have missed the team aspect of working together. It’s just not the same on video conference. So I will be glad when we get a back to a little more normality.”
It has also helped him, and the team, focus in on what are the really important aspects of their business that can help their customers.
“We need to make sure our route to market and diversity of our products continues to grow. But we are really bullish about our future and determined to focus on the areas of business that are in our hands, and what we can do well. That’s our challenge.”