With some 130 wines and growing, Buckingham Schenk is becoming a serious potential on-trade partner, particularly as it has direct, secured access to wines from across Europe. Richard Siddle assesses how it is changing its business model to keep on top of what wine buyers are looking for on their lists.
If you were given a large chunk of money to set up a new wine import and distribution business in the UK, which model would you choose?
Go it alone and look to find interesting producers with scale from growing wine producing countries around the world? Decide to specialise in one key area of the world and focus only on selling to the on-trade and independent channels? Or go direct to consumers via your own website or create a sophisticated app that looks to target specific age groups and salary brackets?
There are many ways to skin a wine distributor’s cat. But here is one option that increasingly seems to be one of the more safest and protected routes to market.
Work with a major producer that is making wine in different parts of the world and set up a dedicated UK export division with them. But with a twist. Make sure you are also free to sell other wines and create labels of your own, separate from what the mother business might do.
Now such opportunities do not come around very often, and where big wine producers are running their own UK operations they tend to be cutting back on them, relying on teams of one or two people, like we saw last week with Chuck Cramer, the UK and European face of America’s Terlato Wines.
Strategic alliances
But there are still many wine producers that sill see the UK as being a key strategic market to be in. Not just for sales and profits in their own right, but to act as a testing ground and statement of intent for how it wants to work in other growing, potentially more profitable markets around the world.
The Henkell Group, for example, the major German wine company, now has the holding share in UK wine business, Copestick Murray, and with it for the first time real, direct access to all the major buyers in the key retail and on-trade channels to help seed more of its own wines in to the important UK market. As well as giving Copestick Murray the security and financial backing to be able to do what it does best and experiment and try and bring new products to market, be it in wines, spirits or beers.
The Schenk Group, another major European wine producer, is a little further down the line in UK distribution than Henkell, but is running a very similar strategy. It first entered the UK distribution market when it took a stake in what was then Buckingham Vintners in 1994.
A position it continued to strengthen over the years before it took full control and created the new Buckingham Schenk business we know today in 2009. But whilst it is very much part of the family group, it is also run asa separate identity in terms of sales and profits with its own DNA, fully functioning organs and blood supply.
Full back up
The Schenk Group provides the coporate support and access to wines from across Europe
For the management, sales and marketing teams at Buckingham Schenk it means they have the support and a portfolio of wines that are being made across Europe, including, France, Italy, Spain and Switzerland. It has also built up a suite of agency brands and has the freedom to look at other projects and work with customers to create standalone wines and exclusive labels well away from Schenk’s core business.
There’s certainly a clear line in the sand for Craig Durham, Buckingham Schenk’s managing director: “We have our business targets with them, but otherwise they leave the day-to-day running of the company to us. They are in no way looking over our shoulders.”
It is also how they run the business in other key markets around the world, so it is a well structured and practised way of operating.
What’s key, he says, is that it respects the fact they each have their own on the ground market knowledge. “We have full autonomy to run the business how we think, knowing that we also have their support as well. They, in return, know they have their own route to market in the UK. They have a similar distribution model in Europe in the Benelux and Germany.”
“We are also not just another agency business, but have direct access to our producers right across Europe.”
That’s what makes it a very different type of wine business to the majority of operators in the UK. “We are certainly not a typical group that has to sell all its own wines either. We make our own decisions.”
Clearly it makes sense for Durham and his team to work with the Schenk Group where it can for the wines it needs. Particularly as it has most of the bases covered for sourcing wine in Europe.
The Buckingham Schenk team all ready to go at the Spanish wine fair
Tactical advantage
It is a business model that potentially gives Buckingham Schenk a clear advantage over much of its UK competition looking forward to the next 12 months. Particularly when it comes to working with the major retailers, and other large customers and operators who are going to find it much more difficult to find the volumes of wine they need considering the huge 31 million hectolitres shortfall there is in the 2017 global wine harvest.
Durham explains: “We are clearly a big importer of their wines and we can access their vineyards across Europe in France, Spain and Italy and their headquarters in Switzerland. But we can also create our own brands here that are not from Schenk producers. That said the balance is probably 75% Schenk produced or Schenk-owned to 25% of our wines we have coming from countries like South Africa, Spain, Australia and New Zealand.”
It seems to be working. Buckingham Schenk hit its internal target of 15% growth in 2016/2017.
On-trade strategy
Buckingham Schenk will be more familiar to the trade a major off-trade supplier, but it is now widening its ambitions in the UK and has built up a portfolio of around 130 core wines it can now service the on-trade with. A range that covers all the key price points, offering opportunities for scale at both the volume and premium wine end.
Durham admits it still has some way to go to be fully seen as an on-trade partner for some leading restaurants and sommeliers, because it is so well connected and involved with the major multiples. “Our bread and butter has been in the off-trade and we have only been in the on-trade for the last two years or so,” concedes Durham.
That task to build that up is down to national account manager, Emma Crowther, and sales director Andy Rawlinson with plans to add more on-trade resource in early 2018. Backed up by a new on-trade wine list that is to be introduced shortly.
“We have the wines to do different things in the on-trade,” he says. “But we realise we are still seen as a new kid on the block and we need to have a long term strategy to build wider distribution.”
That means finding the right wholesalers and regional partners to work with and making sure it gets it channel management spot on.
Targeted tastings
David Tromans is working hard to present Buckingham Schenk in a different, more creative way
Part of its on-trade strategy is to host smaller, bespoke events so that it can showcase different parts of what it can do. It is, for example, going to be running a Spanish wine showcase in February with its five Spanish wineries to show the depth of its Spanish offer. “We’re planning a similar event for our Italian wineries in November 2018,” says marketing director, David Tromans.
Durham is quite confident the two sides of the business can work separately from each other and once premium on-trade buyers are aware of what it can do, and the scale and support it can provide on top, then it is in a strong position to really ramp up its on-trade credentials.
Particularly as it is also so experienced in helping to create major own label and exclusive wines for major retailers which would be ideal for large on-trade operators and pub groups.
“We do have to think about it completely differently. It’s a different approach for us. But we have the wineries. The stories, we can take the buyers out to meet the producers,” he claims.
Off-trade innovation
Finding distribution for its off-trade wines, as well as developing own label and exclusive wines for its retail customers, has been an easier journey to take. “We can play a big role in helping them source the right wine. We are doing more exclusive and own label work.”
“Our big focus is also to drive NPD,” stresses Durham. “We have, for example, developed the exclusive Menestrello Pinot Spumante Rosé and a Prosecco DOCG for Morrisons.”
He adds: “As the number of Schenk wineries grow around the world we can go to our retail partners and show how we can help them right across the board from own label to brands.”
Interestingly it is not involved in bulk and bottled in market wines and only deals in bottled wine despite steps taken by some of its competitors to ramp up their investment in those areas.
Durham explains: “We only deal with bottled wine – we have toyed with idea of bulk in the past, but there are others in the market who are much better at it than we are so we’d rather focus on our core strength which is bringing in bottled wines from our own wineries.”
Viva Viñalba
The Vinalba pop-up shop proved to be a brave, but successful decision by Buckingham Schenk
The Argentine Viñalba brand, which is a joint venture between Bodegas Fabre and Buckingham Schenk, which holds exclusive distribution rights in the UK and Europe, is a good example of what it can do with a standalone brand with a strong proposition. It has helped build the brand so that it is the fifth largest Argentine brand in the UK (IWSR).
That profile convinced Buckingham Schenk to even set up their own pop-up branded Vinalba wine shop in Shoreditch, east London last month, to celebrate the brands’s 10th year anniversary. “It was a very exciting project and very different from doing a portfolio tasting,” said Tromans.
“We believe it was the first of its kind for a still wine producer in the UK. Close to 700 people visited the shop during the week, tasted and had the opportunity to buy our wines. The average basket size was around £27 over the five trading days which is almost double Viñalba’s typical retail price and shows there is a real appetite from customers for wines with a story to tell.”
The team also worked hard to push the event through social media ending up engaging with over 20,000 people. “We also held a launch party with around 80 guests from the trade and press contacts and a private tasting with Majestic managers and the winery owners to mark Viñalba’s 10th birthday,” he added.
Durham believes the brand has the strength to go on to another level. “It has won 17 trophies and 230 medals since 2008. There is a lot of opportunity for that lighter, fresher style from Argentina.”
Doing things differently
The Viñalba pop up proved to be a real statement of intent not only for the strength of that brand, but also for the dynamism within the Buckingham Schenk team to shake things up and present a different business to what many in the trade might have become accustomed to.
Over the last couple of years Buckingham Schenk has recruited some key senior members to the team including, as well as Tromans, a new sales director, brand manager and technical manager. “We realised we need to put in extra resources and there will be more to come,” says Durham.
The Pepica paella gifting offer was one a number of a new gifting ideas
Much of its new approach can be seen in how the business is looking to push itself in to non-core channels of wine retailing. Particularly gifting which at this time of the year becomes a retail channel all of its own. During the summer, for example, it ran a paella gift pack with its Spanish wine brand, La Pepica, which celebrates the famous paella restaurant in Valencia by the same name. It came in a gift pack complete with a paella pan, rice and a tin of paella to make it allup at home.
“This is where it can really work and grow partnerships with key customers,” says Tromans.
“We’ve published a gifting portfolio which we are currently promoting with our customers – this includes magnums and gift boxes on some of our brands such as Viñalba, Bacio della Luna, Lunadoro, Vox Populi and others.”
He adds: “Developing brands is important, but also doing so in different formats, like magnums and particularly for gifting. You have to think of different ideas and gifting brings theatre to wine, be it in a store or online.”
Moving with the times and adapting your business model to keep on top of the changing retail and on-trade channels is where a business like Buckingham Schenk is to be truly tested. For on-trade buyers its certainly an operator you you need to keep your eyes on.
Buckingham Schenk’s key wine brands and channels
Argentina: Viñalba from Bodegas Fabre (off-trade and specialists).
Phebus from Bodegas Fabre (on-trade).
Australia: Pipers Brook, Australia (on-trade and specialist).
Sorby Adams Wines (on-trade and specialist).
Chile: Amayna, From Garces Silva (on-trade and specialists).
Boya (Majestic).
Italy: Castello di Quercetto (on-trade), Lunadoro (on-trade), Amicone (off-trade).
New Zealand: Rod McDonald Wines (on-trade).
Rockferry Wines (on-trade).
South Africa: Land of Hope (off and on-trade).
Spain: Vox Populi (Majestic), Bodega Otazu (on-trade), Bodegas Murviedro (on-trade), Cellers Unio (on and off- trade), Finca Casa Lo Alto (on-trade), Bodegas Larchargo (on-trade).
Switzerland: Badoux Vins/ Aigle les Murailles (on-trade) and La Suisse (on-trade).
Champagne: Bonnet Launois (on-trade).
Prosecco: Rivani (on-trade), Bacio della Luna (on-trade) and Cantina Monteliana (on-trade)
