As our headlines are dominated by the trials, tribulations, mergers and acquisitions amongst the largest businesses in the drinks industry, there is a whole new sector quietly emerging that could well be the successful trading model of the future. Alistair Morrell looks at the rise of the specialist wine importer and why being unique and different is going to be the key in the future rather than big and for everyone.
We hear a lot about the need for companies to be somehow “disruptive” to be successful. Alistair Morrell, aka The Wine Inspector, says that does not necessarily mean re-inventing the rule book, but finding your own niche, and what you are good at and becoming the best at it.
The business climate is one where the innovator and entrepreneurs (or in other words those that have found a unique specialism which they persuaded many to value) are hailed as the saviours of future business whether that be in tech (Elon Musk, Space X, Tesla) or ice cream (Jason Wolverton, Halo Top) or craft beer (Brewdog).
The spectre of trade wars and Brexit, which are uncontrollable for traders, further push UK businesses to make sure that they find a unique space where we can look after ourselves, or at least innovate as much as possible. McDonalds UK chief executive, Paul Pomroy, says the UK market is in a “perfect storm of challenges” and this behemoth’s strategy is to disrupt and innovate.
Whichever way business turns today it seems that everyone is a specialist in something, and if you’re a big corporate then innovating and specialising is hard. How often do we hear from the corporates that they are ‘divesting of loss making sites’ or ‘focussing on our core strengths’. Although there are risks of importing, foreign currency and uncertain consumer spending, they don’t seem to deter the doughty UK wine import businesses. Their response is to become more specialist in their nature.
Differentiation is critical
In the premium on-trade differentiation is critical. By developing relationships with more specialist wine suppliers, the opportunity to open up differences to your competition become greater. Here are just a few examples of key distributors who are making a success from specialising in wines of particular regions, countries and more.
Lee Evans, managing director of Condor Wines, specialist and leader in South American wines think so. Their business has grown as Argentinian Malbec has grown, and then been sustained because they responded quickly to the market and offer not one but several different levels of Malbec.
Evans’ mantra is ‘keeping things simple’. When UK buyers are thinking of South America he wants them to think of Condor first, almost as a sub-category champion. With the market requiring better quality, Condor’s specialist knowledge available and a more mature market there is less room for generalists, he believes.
Equally the benefit for producers and suppliers is the focus on their business in particular; whereas in a more generalist business then such focus can often be lacking.
Specialism in South American wines is also a feature of Gourvid, a newcomer to the sector. Its managing director, Juan Manuel Matas, relocated to the UK to provide focus on the market for two wineries. He saw the UK is open to New World wines especially from Argentina and Chile, and with business in Europe then the UK became a natural focal point. His producer focus is more boutique projects with more natural wines and diversity of varietals. For example he has the biggest producer of Ancellotta in the world and what he claims is the only white Malbec from Argentina.
Their focus is not just on country of origin but on the type of wineries which produce different varieties – another dimension of specialism.
Vintners Pride of Germany (VPOG), also a newcomer, and not surprisingly is focussing on the (finest) wine estates of Germany. According to Tony Porctor of VPOG its target market is the specialist independent retailer and wholesaler who sell on to the consumer and to the Horeca sector. Precisely those who are receptive and want to offer high quality, interesting wines that make perfect partners for good food and fine dining.
Its entire portfolio requires specialist knowledge and, of course, enthusiasm! Such focussed support is by its nature unavailable from the grocery market. Even if VPOG did want to sell into this market, their principals would not be able to supply the required volumes year in year out. These are seasoned campaigners, previously involved with leading Australian brands, and they say they have learnt from the mistakes of the 1970s & 80s.
Marce Colucci specialises in Prosecco combining passion and good business sense. Colucci’s Prosecco was created out of personal passion and his families long connection with wines and winemaking. Whilst at the same time emerging trend of sparkling wines growth in the market made for a compelling development.
Colucci’s observation is that it is critical to be focussed on what the consumer wants, create experiences and standout from the intense competition. These require a focus on the particular sector within the category and an open mind, which in turn brings that specialist knowledge to the customer.
Andina Wines is a new specialist Spanish import company with half a dozen high quality producers. Its managing director, Joaquin Meier, has always had a passion for wines and when the opportunity came to partner with his Spanish wife then the mould was set.
Meier believes a focus on a passionate area and a clear head for business provides a great platform from which to start. Andina Wines research finds a surprising lack of Spanish focused supply businesses in the UK, especially considering its size and awareness as a food and drink producer.
He says the lesser known wine regions of Spain are much under-represented and outstanding value for money, when put up against regional France or Italy or even Rioja itself. One avant garde aspect of Andina’s range is the unique Cinema range. Created by a Spanish film star, the wines are high quality, individual estate production sold through the meme of Cinema.
Coping with consolidation
One counter piece of research shows that alcohol wholesale distribution businesses have gone down from 2,605 to 2,531 in the 12 months to September 2017 and revenues have dropped by £1bn. This suggests the opposite, that in actual fact consolidation is at large as revenues fall. However, this may be more reflective of wholesaler to outlet business as opposed to importer to wholesaler. These numbers report across all of booze, and so are reflective of declining beer, and wine volumes as well.
Nonetheless, this increasing group of specialist wine businesses believe that the best way forward is to focus on their particular country or region.
In this short expose then it would appear that these are the innovators, disruptors and specialists of the UK wine importing business – the happening businesses to trade with either as a customer or as a supplier. If you are a potential customer, you have the benefit of knowing that your supplier can come in and wax-lyrical and with passion about their chosen specialist country or region.
This excitement for your consumers, could be critical to their outlet experience. As we all know that Millennials and Gen Z require ‘experiences’ in the on-trade.
Equally as the producer you know that your brand(s) receive a focus and level of attention that they wouldn’t receive in the more generalist distributors.
The hospitality sector is a vibrant place and change is a constant. In the past single and limited supply routes have been a common strategic line for many mainstream bars, restaurants and hotels. If wine is becoming more specialist, optimising value may require some decisions about what your customers want and how to supply them best. Likely this will include taking on wine suppliers who have a specialism that can help you business stand out in a competitive market.
- Alistair Morrell runs his own wine consultancy business and you can read more about him and other opinion pieces and articles at is site, www.thewinedetective.co.uk.