“Our main strength is the on-trade, so we have been through the wringer,” is how Giles Cooke MW, wine development director of Alliance Wine, looks back on the last three months of lockdown. But like so much of the wine industry it has been quick to adapt and push the majority of its resources into working with the strong independent wine merchant sector at this time. He also talks about how its diverse business model, that involves making wine and distributing it all around the world, is also proving invaluable in how it copes with Covid-19.
On the face of it Alliance Wine is a classic UK wine importer and distributor, but that’s only telling part of the story as Richard Siddle explains.
“We feel a bit beaten up at the moment,” is how Giles Cooke MW, director of Alliance Wine, responds to the question of how he is feeling. Which is not surprising considering the past few months that he and his team have been through.
Even before Covid-19, Cooke had to personally face the impact the devastating Australian bush fires had on so many wineries, particularly in the Adelaide Hills, where he and his fellow Alliance director, Fergal Tynan MW, make their own under the Thistledown label.
“One of our growers lost his vineyard and our supply of Chardonnay, so it had been hard dealing with the aftermath of all that,” he says.
In fact Cooke had to fly back from the winery in Australia towards the end of March in order to be in the right part of the world for the business, and most of all his family, for when lockdown came only a few days later. “I was able to get on the second last flight out of Adelaide,” he says.
Although there are clearly big enough concerns and issues for Cooke to worry about and address in the UK, part of him is still in Australia, as his thoughts are with the growers and the rest of the Thistledown wine team during this time.
“With all this crisis they have largely been forgotten about, but there are lots of people who have lost their livelihoods there,” he says. “Then Covid-19 came along, so it’s been pretty tough.”
Through the wringer
Going into the crisis Alliance Wine was better placed than many of its on-trade supplier competitors in that it did not have all its eggs in the on-trade basket. But it had a fair few. “Our main strength is the on-trade, so we have been through the wringer,” he adds. “It felt like flying into the eye of the storm when I came back.”
Around 70% to 80% of its UK business is either working directly with its on-trade customers, or working with regional wholesalers and independents to do so. Those two combined make up the majority of its day-to-day turnover in the UK.
Which means as a business, it has “taken a large hit” and had to make use of the government’s furlough scheme so that it could carry on working, but with a much smaller team.
Where it has been able to do well is with the other 20-30% and driving business through the off trade . “This channel has held up very well,” he adds. “It’s a very good time or us to be so diversified,” he says, “and have a foot in both the on and off-trades.”
So much so it has “slowly started to bring people back in to the business” as it starts to work more towards getting itself in place to be ready for when the on-trade can return.
“But whilst April was very busy for the off-trade, which has been very positive, it can’t make up for the on-trade hole in our business,” he concedes.
Taken a large hit
If there is anything positive to be taken out of this crisis, it is the “feeling of collaboration and community that has been strengthened,” says Cooke. It has been particularly heartening, he adds, to get so many messages from customers thanking the Alliance team for how quickly they have responded to the situation and ensured they got their wines when they needed them. “That’s been really good for all of us in the Alliance team,” stresses Cooke.
Having such strong sales in the independents means it has been able to sell wines right across its portfolio. The only “more problematic” ones are the more “esoteric” wines that really need a persuasive sommelier in a restaurant setting to sell, he adds. “Ones that are more particular to the London on-trade scene.”
Alliance Wine is also now very much an international business. It does not just make wine in different countries and continents it sells its wines there too. Which, again, has proven to be an invaluable trading strategy going through this crisis. Already, he says, it is starting to see “the green shoots of recovery” in Asia and has shipments to Japan and China going out this month.
“Seeing that does give us some level of optimism that things will return to a level of normality after Covid-19.”
It was also making good inroads into the US before the pandemic struck, and is hopeful it can bring that back over the coming months.
“Online is doing phenomenally well in all countries. But particularly Australis and the US, so that side is pretty positive too and will help us have an even more diversified customer.”
As well as its wine production division in Australia, Alliance Wine is also running its own production in France and Spain. He says there was some initial issues with bottling and production in Europe, but they have now all been smoothed out.
“They are, though, the first tentative steps as glass manufacturing was shut down during the pandemic in those countries. That’s all now back up and running again.”
Alliance has also not had any issues getting wine into the UK and around the world. Initially Cooke was concerned the ports and main distribution routes might be affected, but the reality has seen very little disruption at all.
But then he also stressed having a “warehouse full of wine” when most of its “customers doors were closed for business,” meant running out of wine was not a pressing problem in the early days of the lockdown.
“Inevitably you end with too much of some wines, and too little of others, but there has to be some degree of pragmatism in what people are ordering.”
New ways of working
What the lockdown has also done is open Alliance’s eyes to the opportunities and possibilities it still has, particularly in growing its international presence. “It has really opened our minds.
We have been talking to different parts of the drinks industry that we normally wouldn’t do about how we can help each other over the next two years. Like introducing each other to customers and distributors in different markets. Particularly in spirits and whisky where we are not competing with each other.
“It’s almost silly why we did not do this before. There is so little conflict of interest, but such huge opportunities. The key is we have now had the time to have those conversations and everyone is also far more open to more collaboration as well.”
But needs must and the last two months has made every business leader press down hard on the fast forward button.
“The crash after 2008 pales into insignificance compared to what we are currently facing,” adds Cooke. “Everybody is now forced to look at what they have been doing, and how they are going to come out of this situation. Although it is very challenging, it is also important to focus on what the opportunities are as well.”
That said, warned Cooke: “It’s very easy to be busy at the moment.”
Keeping in contact
Although the majority of its on-trade customers might be physically shut, many are still keen and willing to talk about future plans, says Cooke. “We are trying to keep in contact with all our on-trade customers and get a feel for their plans. Some have morphed into takeaway and semi retail businesses – some quite successfully – but the main objective is to try and keep the lights on and their people motivated.”
He also been surprised by the number of on-trade operators that are asking Alliance to look at their lists and use this time to make any changes needed.
“We have found a number of restaurants are looking at how things can be freshened up a bit. We all need to work together on that.”
Where possible Alliance has been quick to work with those operators that are doing delivery and ensure they have the right wines available to offer.
Which means ensuring the work in its own distribution warehouse can carry on unaffected, with rotating shifts to avoid contact, and ensure the wines can be delivered when they are needed.
“We have worked night and day to make sure they have what they want. It’s been a herculean effort by everyone in the team, but particularly the people in the warehouse and the drivers. They have done an incredible job in difficult circumstances,” explains Cooke.
Having its own delivery vans and distribution warehouse has also proved to be a massive factor during lockdown. It has allowed Alliance, at least, to have total control of what it can and can’t deliver, says Cooke.
“It means we have a degree of self reliance, a level of control and we can maintain our service levels, and focus on quality. The feedback we have had has been great and shows that people in the trade recognise the fact we have worked really hard to keep them going too. They are all feeling the stress and pressure and when their wine delivery arrives when they need it – be it for a bank holiday weekend – or whenever.
For its own part Alliance has got involved in hosting online tastings and tutorials for customers, which has worked well in terms of getting people joining in around the world.
“It’s mind boggling the reach you can get on Zoom. I did a tasting recently to diploma and MW students and we had 600 people join in. But these situations throw up opportunities.”
It has also demonstrated how businesses can make much better use of technology to make their companies and their staff more efficient.
“We have a meeting once a week with Alliance Wine in Australia and our communication and contact with them has never been as good. We have go the time to be positive as well.”
What is happening in other international markets is also a good guide to how we can expect the on-trade to return in the UK. Both in terms of the numbers of people wanting to go out and the types of wines they want to drink when they do.
He fears it may take longer for the on-trade to come back than some in the trade hope, particularly if the 2 metre social distancing rule is kept in place.
As he looks ahead Cooke is mighty pleased and relieved it has a business strategy and trading model that is clearly fit for purpose. The challenge will be how it can build on the strengths in the off trade channel in the coming weeks and help the on-trade recover.
“It really does demonstrate that having a good spread of channels, and in more than just one country mitigates against some of the risks. Having our own production at the ready is already very good for us. So hopefully we are solid coming out of this.”
One things for sure are all going to have to get used to a new way of working and living in the drinks and hospitality sectors with a very different customer to serve.
“They say it takes around six weeks to form a new habit,” says Cooke. “How we are able to connect with people is going to be crucial, if we are to be successful in the future.”