For those who say the high street is dead and online is the place to be then they need to take a closer look at Amathus. For in the last few years it has gone from having five retail shops prior to 2020 and Covid to 15 sites now. Whilst the majority of its stores are in London it has also expanded out to different cities and you can now find an Amathus in Bath, Brighton, Bath and Oxford.
“Covid really kick-started a shift in the business,” says head of wine, Jeremy Lithgow MW.
Previously the bulk of its business had been through its wholesale division servicing hospitality and the on-trade. But with Covid so many new opportunities came up for retail with lots of well placed, competitively priced sites, particularly in what you might call the neighbourhood or “village” areas of London.
It means there is no set size or structure for an Amathus store as they are all shapes and sizes. Its store in the East Sheen, Mortlake area of London, for example, is more of a Majestic concept with trolleys and a dedicated car park.
Amathus's new wine warehouse store concept
“It’s our first attempt at a larger format,” adds Lithgow who says it has been a good learning curve and exercise in terms of having a range that encourage people to buy 12 to 24 bottles and not just ones they can pick up in a store.
“We don’t want to be a Majestic,” stresses Lithgow, but it has meant looking at its range and having a comparable pricing structure, he adds. It is also situated next to a Waitrose which has been a factor too in pulling a different range together.
It has, for example, picked out 30 key wines across the biggest selling grape varieties (Pinot Grigio, Chardonnay, Malbec) and “got really sharp pricing” on those.
“It’s been interesting to see the reaction as some people have not heard of us before so it has been a big opportunity,” he says.
Big changes
Things have certainly come a long way for Amathus and Lithgow since he was first brought into the business in 2017 to build up a wine range that could be complementary to its existing, highly respected spirits offer.
He has had a pretty open brief in terms of the wine range he has been able to develop, with, at its core, a firm commitment to sourcing and listing wines from interesting, small, family run producers.
It has now built up a “solid” base of around 900 agency wines that can supply both its wholesale and retail sides of the business. It is now shipping directly and exclusively from around 150 of its producers.
The expanding retail portfolio has allowed Lithgow to really stretch the range of wines it can now list and go well beyond supplying the on-trade with competitive wines for by-the-glass sales. Its ceiling, as it were, has got a lot higher.
Amathus' wine range has now been built up to feature around 900 producers with its stores evenly split 50/50 in terms of range on show
The on-trade and wholesale side of the business works very much in tandem and in step with what it is doing in retail.
“Without the shops we did not have that opportunity,” he says. “Having shops gives us much more scope to buy as we know they can go into the shop network.”
It means Amathus can now talk to producers about taking wines right up the pricing ladder from entry level to premium to fine wines. But at each level he is looking for wines that are “best in class” and offer as much quality as they do value.
He is particularly keen to work with producers that can help it offer an enhanced range of wines that can be sold by-the-glass, particularly for mid to premium level wines. “The perfect producer is one that can offer wines by the glass, alongside a tiered range of more premium wines,” he says.
“We can say to producers you can be listed in our 15 stores and also go into the on-trade too,” he says.
“It also helps drive cash flow through the business being such an omni-channel group,” he adds, which in turn protects it more from “any of the bumps in the road”.
He admits it is “learning all the time” from its retail estate and the fact there are so many differences between the stores in what he calls the “London villages” and its new sites in strategic cities around the southern half of the country.
“We are selling, for example, a lot of natural wine out of a Shoreditch shop, which is perhaps not surprising, but we are also selling a lot of natural wine in our Bath store, which you might not expect,” he says.
“Different communities are changing all the time as well. Shoreditch, for example, is very different to how it was in 2019. Hampstead is the same.”
Amathus's new store in Bath is one of a number of sites it is up opening up outside London
The success of wines in the retail side of the business often comes down to its packaging and what it looks like on shelf. Having effective packaging is also something that Lithgow is keen to see more of on the wholesale side of the business.
“The wines have to look good in an ice bucket too. While the most important factorfor us is the price quality ratio, what is selling well in the market is often wines that have fantastic branding.”
Strong position
Lithgow says the business is now in a great position to build on what is a strong foundation for growth.
“We know we have got a good product with great staff and are in the right locations. Our customers come back to us and know what they can get from us. They know we are not the cheapest but a place where you can come and browse and discover something new,” he explains.
Amathus, stresses Lithgow, stands out against other on-trade suppliers in that it is so strong in spirits with its overall range split 60% in favour of spirits and 40% wine in terms of the number of SKUs.
Its stores, though, are split in half with 50% dedicated to wine and 50% to spirits which hopefully makes it a full drinks experience for its retail customers. The average bottle spend in-store is £22.50
While sales in the on-trade have traditionally been focused on spirits, wines are growing rapidly with the aim being an equal split.
Jeremy Lithgow MW says it has been exciting to have the freedom and scope to widen Amathus' wine offer and bring in more exclusive producers to work with
Amathus’ wholesale division is now well placed to service what is an increasingly diverse customer base, thanks to the work of its 12-strong on-trade sales team - all carefully briefed to tailor the wines they offer “so they match their customers’ budget”.
“We are bringing in bigger and better names for them to sell which allows them to shoot a little higher where they go,” he adds. “We are also buy in some wine from other agencies if we need to have a well known name - particularly in fine wine. We want to have all the classics and appellations where the volumes are covered.”
He adds: “We want to be able to offer customers two to three options for each of the key grapes and regions. Something for sommeliers to discover.”
Lithgow is pleased to have six Chinese wines in its range as well as wines from Turkey and Armenia.
“I will open every email and always look at what producers have to offer,” he promises.
He is also a regular at major trade fairs such as Wine Paris, where he will go with “his shopping list” based on his “ground work” done before the show to pick out potential producers to taste and visit.
Lithgow says he is increasingly looking to source biodynamic or producers that are looking to go that way as not only is it the right thing to be doing in terms of the vineyards, it is becoming “commercially more relevant and where the market is going”.
Bigger and wider range
Amathus has taken over the old Philgass & Swiggott store on Northcote Road in Clapham
The increased size of the business means there are now options to bring bulk and volume wines into the portfolio.
“We are not quite the scale to be shipping wine in flexitanks on our own, but we can look to take a proportion of one. We are working with some agents to do that.”
Ideally when working with a new producer it will look to ship three to four pallets in order to “test the market” and allow it to build up a relationship together.
“You have to have a honest dialogue with the producer,” he says, “and work out what our mutual expectations are”.
“We don’t want to say ‘yes’ to a sales volume we are not going to be able to achieve. We take our time to make sure we get things right from the start. A producer that can offer a tiered range is ideal.”
It means it can now be more competitive when pitching for house wines on on-trade accounts.
“We see house wines as a key growth area for us and we are actively looking to increase our entry level range and are confident we have got a winning selection across all the main house wine essentials,” says Lithgow.
It is an area it particularly wants to push in the build up to Christmas when “customers have the chance to switch and save some money” and it is looking at how it can help “incentivise and de-risk” the decision to make those changes.
He also wants to make clear it is very strict on its channel management and is only focused on supplying the on-trade and independent wine merchant sector and does not sell into multiple retailers.
It is also very aware of the pricing needs for both its on-trade and independent merchant customers and looks to work with them so that they can add at least a 35% margin to a wine.
Retail strategy
Amathus' stores are able to select the wines and spirits they want for their stores and receive dedicted training from the Amathus' central team
Interestingly each of its stores are able to determine their own ranges and are not forced or committed to buying specific wines from the Amathus overall range.
“We treat our stores in the same way we do our clients,” he explains. “They also get the same level of training that we offer our on-trade accounts. We need to sell our wines to them in just the same we do our other customers.”
It does, though, have the advantage of being able to get its producers into its stores to do tastings and consumer events.
Amathus is also looking to improve the wholesale side of the business by making “it as easy as we can for our on-trade customers to buy from us”.
It is also down to the producers to play their part and get out on the road and visit the shops and convince them they need to be selling their vines. They are not going on a victory tour, but need to put the hard graft in too and it is a great opportunity for them to talk to the local teams about their wines and how to sell them to their customers, says Lithgow.
Supply and demand
Amathus is in the process of introducing a new dedicated trade app to make the ordering process even easier for its trade customers, with a minimum order of 12 bottles for free delivery, or the option to pay a delivery charge if you order less.
“They can also go to any of our stores and buy directly from them as well,” he says with the Amathus store on Wardour Street in Soho, for example, often full of bar tenders picking up bottles of spirits for their nearby bars.
All its trade customers are either served directly from its Park Royal distribution centre, via its fleet of 15 delivery vans, or via couriers for some parts of the country. They can even go to Park Royal and Amathus’ dedicated trade counter if they want to pick up their orders and receive slightly improved pricing as a result.
“We want to give our customers as much flexibility as they need and an app-based ordering system is going to be quicker and more efficient and allow us to serve more customers. It is all part of scaling the business up," explains Lithgow.
Although the market conditions are “tough” there are also lots of “opportunities out there if you have got the right offer,” he claims.
Which also means getting things right as a supplier.
“It means doing what you say you are going to do and giving customers the support they need on pricing and training,” he says.
Moving into hospitality
Amathus is set to open its own wine bar concept - Cru 78 - as part of its increased move into hospitalilty which already includes its wholesale division and dedicated training and support
Amathus is now looking to put all its extensive experience working in retail and supplying the premium on and off-trade by opening up its own wine bar - Cru 78 - in Maida Vale, London.
The bar is the result of a good 18 months of planning and “if successful” will lead to other bars being opened in the coming months and years. It also signals a major change in strategy for Amathus being what it hopes will be a serious on-trade business of its own.
He says it has very much taken the classic Paris wine bar as its inspiration and hopes it can stamp its own Amathus personality on the hospitality scene and will be serving plates of charcuterie and cheese.
It is looking to have 50 wines by the glass across reds, whites and rosés and a strong sparkling range too.
Sparkling has become a position of strength for Amathus with over 300 lines in a wide range of styles from across the globe
The wine list at the bar will include selections from the world’s classic regions spiced up with wines from the more obscure, such as Armenia, China and Lanzarote.
Jeremy Lithgow MW speaking at the recent The Buyer Coravin by-the-glass debate. Picture Thomas Skovsende
Speaking at the recent The Buyer and Coravin by-the-glass debate Lithgow said about the opportunity for by-the-glass wines: “We have got the technology to it and we want to make a rapid impression and make it part of what we do. We will have to see how it goes but we see wine by-the-glass as being very important to what we can do.”
By working with its on-trade customers it is clear to see how by-the-glass helps “generate extra margin, attract clients and introduce more obscure wines”.
He adds: “It certainly drives volumes for us and gives our customers a chance to experiment with a selection of wines.”
But then experimenting with wines for its customers to select is very much what Amathus is all about. There is now clearly a lot more experimenting, fine tuning and “selecting” wines for its customers businesses than there ever has been before.
* You can find out more about Amathus at its website here.
