“We know where we have come from – and that’s serving the on-trade,” is how Nigel O’Sullivan, founder and managing director of Fine Wines Direct UK, sums up the last 12 months that has seen this almost exclusive Welsh on-trade distributor diversify into retail and e-commerce for the first time. For whatever new business it has been able to achieve, the company’s heart, soul and DNA lies in the on-trade. Here Richard Siddle catches up with O’Sullivan and sales director Bastien Martinole, to look back on 2020, but assess where Fine Wines Direct UK goes from here.
Relationships forged over years have become even stronger in lockdown even with the on-trade closed, says Fine Wines Direct UK’s founder Nigel O’Sullivan.
Some conversations on Zoom can struggle to get going and you are only too aware of the technology getting in the way as people talk over each other, freeze mid sentence, or worse still, don’t have a lot to say.
Spending an hour in the company of Nigel O’Sullivan and Bastien Martinole of Fine Wines Direct UK could not have been more different. In fact if Zoom had a “just like having a chat in a pub” mode then this was it. For not only did the energy and passion for their business shine through in spades, they did what so few interviewees ever do, and that is take the time to make you feel welcome too.
But then, with someone with Welsh roots myself, that is very much the Welsh way. We were not going to start talking about the nuts and bolts of running a successful wine importer and distribution business until we had got to know each other first and, of course, dissect the latest game of Welsh rugby. As our call came just a few days after Wales’ victory against England in the Six Nations it’s perhaps not surprising they were in such good spirits.
Sport, though, was a topic we would return to time and again during our chat. For having close ties with different sporting organisations, clubs and individuals has been very much at the heart of Fine Wines Direct UK growth since it started out in 2009.
Not just at the top of the game either, but the business is involved at all levels, supporting grassroots sport right across Wales. It is, though, also very well connected at the highest levels and can draw on a legends list of former Welsh ruby internationals to appear at wine events and dinners and is the main wine supplier to the Celtic Manor resort, home to many prestigious golf tournaments.
In fact only the week before we spoke O’Sullivan had held a wine tasting evening with Liverpool football legends, Kenny Dalglish and Alan Hansen, to help raise money for Dalglish’s wife, Marina, and her cancer charity.
Sport and wine are also good for business, says O’Sullivan, who enjoyed a long semi professional career himself playing football for a number of teams, including Bristol Rovers, Coventry City and Wolves.
“Sport is integral to our business,” says O’Sullivan. “In many ways I have built the business on the back of it. I have a lot of friends who are ex rugby players and it is always good to have them on board and it clearly goes down so well with our customers.”
What better way to forge close relationships with your on-trade customers than sharing a glass of Champagne whilst watching the Ashes at Glamorgan cricket ground, or seeing a major Welsh rugby international in its private box at the Millennium Stadium?
Even its two major portfolio tastings would have a rugby theme – hosted at the Millennium Stadium with former rugby internationals to talk to as well meet and taste wines from its producers. “They have always been great fun, so well attended and we would all go out for a big dinner afterwards,” says O’Sullivan. “Our golf days have a waiting list for them.”
From mine to wine
Before he was rubbing shoulders with the high and mighty of Welsh rugby, his first day job was as a trained electrician working down the mines in south Wales. He says he can proudly look back on a career that has taken him “from the mine to wine”. His initial route into the drinks industry came when he applied for a job with Pernod Ricard’s wine distribution arm, JR Parkington, before being “head hunted” to go and join Matthew Clark.
Before Fine Wines Direct UK he had started another wine business, Cellar Wines Direct in 1999, before agreeing to sell out to Scottish & Newcastle (the deal was done during a British Lions tour in 2005), where it was merged into the Waverley distribution business.
O’Sullivan agreed, as part of the contract, to spend time with the new business, but as soon as he was free to leave he was ready to start his own business again, and Fine Wines Direct UK was born.
From Bordeaux to Cardiff
Martinole might speak with a Welsh accent but that comes from marrying a Welsh woman and living in the country for most of the last 10 years. He is originally a trained chef from Bordeaux and his journey into wine came via Bordeaux’ wine school and gaining experience working a few vintages in the region.
It was whilst doing an internship working at Welsh vineyards that he met his now wife and moved to Wales. It was almost inevitable, he says, wanting to work in wine in Wales that he would end up meeting O’Sullivan and the team at Fine Wines Direct UK.
He has become an integral part of the business ever since and you can tell there is a great deal of respect between the two. “Nigel gave me my chance and I have grown up with them really,” he adds. “I started with a blank piece of canvas and have helped build the business up with them.”
Under the radar
The speed of growth that Fine Wines Direct UK has had over the last nearly 15 years has largely gone unnoticed. Which is just the way O’Sullivan likes it: “We have been very much under the radar compared to some of our competitors.”
Providing his customers and producers know he and his team are doing everything they can for them, then that’s all the promotion he has needed.
Going into 2020 its annual turnover stood at around £9.4m (excluding VAT) following a number of years of double digit growth. Being almost 100% dedicated to the on-trade, though, going into the pandemic has hit those figures in the last 12 months, despite its moves into retail and setting up its own e-commerce site from scratch. “Before the pandemic we were really on a roll,” says O’Sullivan.
It has been able to claw back up to 30% of its usual turnover through changing the business and is thankful, says O’Sullivan, it was in such a strong position going into the pandemic. The last year has, he adds, enabled the business to take stock, and re-group its operations so that it can have a more balanced on-trade, off-trade and business with independent wine merchants.
It is still in a position, for example, to have gone ahead last month with long term plans to invest in 30,000 sq ft of extra warehouse space, next to its current site in Cardiff, that effectively doubles the size of its bonded capacity.
The extra space has partly been brought in as a response to Brexit and the extra trading restrictions that means it is more economic to bring in larger volumes of wine at any one time in order to offset the extra administrative costs.
Increasing its footprint by supplying independent wine merchants and running its own e-commerce site has also meant it has needed to bring in more wine, and build up closer relationships with key producers around the world. It now has a wide range of producer partners including Allan Scott Vineyards in New Zealand, Rioja’s Marques de Cáceres and Familia Fernández Rivera in Ribera del Duero, and Escorihuela Gascón from Argentina.
Changing business model
Like so many other on-trade focused distributors, Fine Wines Direct UK had to start its e-commerce model from scratch. Which to some extent has been an advantage in that it has been able to develop and evolve it in line with the level of demand it has had, says Martinole. Its next step, for example, is introducing its own subscription service and seeing how it can develop that.
The impact of Covid-19 and the closing down of the on-trade has given the business the time and space to look at e-commerce, an opportunity that just was not really there when it was flat out serving restaurants, bars and hotels prior to the pandemic, explains Martinole.
“We clearly have had to diverse our business during the pandemic,” agrees O’Sullivan, which in many aspects has been like going back to when it first started out “knocking on doors” on gaining new business, particularly with specialist independent wine merchants, largely through word of mouth and recommendations.
But whatever changes it has made, stresses O’Sullivan, it has done so in total respect to its on-trade customers, ensuring it is introducing different wines, and it is not pushing and promoting its core on-trade offer to new channels. “We have been very protective of our on-trade customers,” he says. “We know where we have come from.”
It has taken a number of measures, he says, in the last year to help its on-trade customers where it can, be it being as flexible as possible on payments, helping them with their cash flow and taking back unsold stock. “We have been there for them in any we can,” he says.
One area it has been able to step in and help has been with wine deliveries and making wine part of any takeaway and home delivery service that restaurants are offering. “That has been incredibly successful for some of our customers,” says Martinole.
It has also been able to focus in on its corporate business in the last year and its close ties to so many companies in different sectors across Wales. “That has been incredibly successful for us,” he adds.
Again relationships built on the back of sporting events, hosting golf days and entertaining customers at various sporting events have really come to the fore in the last year. Those ties have been made stronger, in many ways, says O’Sullivan, even if they are hosting them on Zoom.
He admits, though, it has been “a very strange year” not having both the on-trade to work with, and all the sporting events to entertain his guests. “We have been able to keep all those connections going,” he says.
Fine Wines Direct UK, for example, recently sent out a hamper of food and wine to all box holders at the Millennium Stadium to enjoy whilst watching the rugby.
O’Sullivan says it will certainly continue with the new retail and e-commerce arms of the business when the on-trade fully comes back and it will make it a stronger company as a result. Hopefully putting it in a position to attract more producers and suppliers to work with.
It has also given it the impetus to look to spread its customer base outside Wales, which currently accounts for 70% of its business, and build on what is already a strong network in south west England into different parts of the UK.
“We have over the last couple of years been selling more wine in England,” says Martinole. “We don’t want to be everywhere, but we want to find key customers to work with.”
Which again goes hand in hand with building up its own agency business and representing more producers of the size and stature of Allan Scott in New Zealand and Marques de Cecares in Rioja.
“We are now in a position to put together deals to work with the right partners,” adds Martinole, which, in tun, will help it build its business with independent wine merchants.
Its e-commerce offer, for example, is more focused around bigger brands “to draw customers in,” says Martinole. “We are selling fantastic wines but we appreciate not everyone knows what we are doing. So that is going to be a real focus for us in the coming months to try and promote our agencies and brands more.”
Which has seen it take on a PR agency for the first time – the highly respected Madeleine Waters and Rachel Davey through Coco PR – which will it see it push its wines out far more to wine writers and look to get more regular coverage for what it is up to.
“It’s not something we have really done in the past,” says O’Sullivan. “We’ve not had the time to do so, but the business has evolved over the last 12 months so much that we need to take that next step. It’s great talking to Madeleine and Rachel as they understand us and what we can do,” he adds.“We have got the foundations in place to help us grow.”
But none of this will be news to those long standing on-trade customers that already know the Fine Wines Direct UK story. As O’Sullivan says: “We’re here for them for the long term. And we know our loyalty to them goes both ways.”