It’s been a rollercoaster 15 months for any drinks business, but few have been hit, pulled, stretched, and then literally brought back from the dead like Jascots Wine Merchants. A business that pre-Covid-19 had a successful business model as a 100% dedicated on-trade supplier. A strategy that was ripped up from under its feet once the pandemic struck. Managing partner, Miles MacInnes, explains in candid detail just how close it came to going to the wall, and how it has been transformed in a matter of months under the ownership of Freixenet Copestick.
Jascots Wine Merchants has been through the wringer with the Covid-19 lockdown, but with the security of Freixenet Copestick behind it, now has the potential to kick on and become the wine distributor it was striving to be pre-Covid.
By the time Miles MacInnes and his fellow Jascots directors got the call last December from the administrators that the senior management team at Freixenet Copestick wanted to talk to them he admits to feeling exhausted after 10 months of round-the-clock negotiations to secure the future of the business had seemingly failed.
It was not that he did not want to speak to Freixenet Copestick. Far from it. It was wariness earned from the many oh-so-near deals that rose and fell on the tide of Covid optimism and pessimism over the course of 2020.
He even admits starting the call with the body language of a beaten boxer slumped in his corner waiting to go out for the final round. Suddenly, though, this was a very different kind of conversation. This was a company deadly serious about not just rescuing the business and taking it out of administration, but transforming it into a vital new arm of its already successful business model based on multiple, convenience and online retailing.
The premium on-trade was a hole in Freixenet Copestick’s business plan, and Jascots Wine Merchants was the company to fill it. He suddenly realised this was a deal that would work perfectly for both parties, the shining corporate knight on the white horse coming to rescue Jascots from oblivion.
But how had things got so bad? This was after all a growing business pre-Covid, turning over £9m a year, with a 37 person strong team, operating out of a prime warehouse and distribution location in London’s Park Royal. A company that proudly claimed to be London’s only pure dedicated on-trade supplier.
A claim, however, that proved to be the kryptonite that very nearly took the business under.
We have heard and read a lot about how drinks companies had to change and move fast when lockdown first came at the end of March 2020. For Jascots the closure of the national on-trade meant it literally went from fielding 100 orders a day to simply a handful. At best.
But like a cornered and injured animal it came out fighting. I can remember getting a call from MacInnes on the Monday of the first week of national lockdown with the news it was starting, from scratch, a new direct to consumer e-commerce wine delivery business. Although clearly facing the dire consequence of what had just happened to his customers and his business, this was also a man deeply enthused and passionate about doing all he could to keep his team in jobs and the business afloat.
Little did he know then that this was switch to DTC was not just sticking a plaster over a gaping wound, that could be properly treated in a few weeks time, but was going to become its primary way of doing business for the best part of the next 12 months.
It is testimony to the work ethic, teamwork and spirit within the Jascots team that they were able to build up such an effective DTC business from a standing start, connecting with personal friends and tapping into all their networks both in the trade out outside. Within weeks it was bringing in around 20% of its usual turnover, which was clearly still a massive drop off, but enough to keep cash moving, and the team working side by side to keep the business at least going if not moving forward.
By the time the administrators came knocking the Jascots team had settled down to a team of 20, through a process of redundancies and “natural attrition” says MacInnes, with people moving on for personal reasons and returning home in some cases.
Now it is in the welcome position of being able to recruit and build back its team with the support of Freixenet Copestick (and its owners, the wider Henkell Group).It is also able to free up some of its management and administrative costs by sharing back-office functionality with Freixenet Copestick, particularly around human resources and finance.
“We have kept our own buying team and that is really important for the Jascots proposition,” stresses MacInnes. “It was also important for Freixenet Copestick that we are an independent business responsible for buying its own wines. Having that independence is going to be a very important part of how this works going forward.We are also the only part of the business that is currently responsible for that last mile of delivery to the customer.”
MacInnes says its current buying responsibilities – still headed up by Alastair (Ally) Pyatt- are primarily responding to the immediate needs of its on-trade customers as they are re-opening and what sort of demands they are seeing.
“We identify what we need for our customers and Ally brings exceptional producers to our tasting table. We always taste through the wines with the sales team to see what will work best for our customers,” says MacInnes, based ultimately on quality, provenance and commercial value of any particular wine. “We want to introduce people to exceptional quality and very good value wines,” he adds. Wines that are not always the most famous brand or producer in a particular region, but ones that have the “quality and the status that sommeliers want”.
“Wines that not everyone knows about. We are very focused on delivering that and very protective about it. We are constantly looking for producers that are not represented in the UK.”
A producer’s sustainability credentials are also very important for Jascots and it particularly wants to work with wineries that are truly committed to making sustainable wine and are not just “ticking boxes,” says MacInnes. “We are learning all the time about what that actually means in practice.”
He cites Argentina and Chile as being two countries that are now consistently producing wines from a growing number of producers that are taking wine to another level of sustainability based on using hardly any water in the process.
The next level…
Where it will take some wines from the Freixenet Copestick portfolio are wines from its growing agency range that can help add a little extra to the overall Jascots list.
How it works with its new parent owners is a relationship that clearly MacInnes and the Jascots team needs to get right. But it is one that MacInnes has welcomed with open arms. Not just because Freixenet Copestick put the Jascots team back on its feet, but also for the opportunity it has given Jascots to move to the next level.
As he explains: “As a small importer it was always difficult to grow as we had to work with smaller shipments from our producers. Now with the backing of Freixenet Copestick we can afford to be braver, more ambitious and bring in a broader selection of wine.”
It means Jascots can now ship in bulk, bottle wine in the UK and work on more exclusive private label wine projects with bigger customers. Opportunities it simply did not have before. “We did not have the level of sales before or the cash flow. We were buying very much based on necessity,” he adds.
“Now we can bring in bigger amounts of wine, make stronger commitments to our producers and respond quicker to major challenges such as outbreaks of frost, by increasing our stock holding of wine to protect stock levels in the future.”
He says it is particularly rewarding to be able to “pay back the loyalty” its producers showed Jascots during some of the dark months of 2020. “They were so supportive and we now have the chance to reward them for that loyalty. That is our priority to put in bigger commitments for their wine and buy a bit more stock in advance.”
In the past the only way it could compete on price was to “keep its range very tight at entry level, by having volume on a few stock lines”. Now by bottling more in the UK, for example, it can widen the number of producers it is working with.
Particularly from the New World where it “really struggled,” admits MacInnes to be able to ship the required amounts to make it competitive. It can now share shipping and container loads with Freixenet Copestick from countries such as Chile where, again, it can commit to larger shipments at any one time.
“Deep sea was a really difficult area for us in the past,” he adds and they were limited to shipping a few key lines. Now it can be braver and widen the net more.
MacInnes says that alongside Freixenet Copestick he is keen to look at more sustainable formats. “We really want to focus on that, and look at more alternative packaging formats that are kinder to the environment. It has been really interesting to see the interest there has been in sustainability amongst our customers, without us pressing it too hard.”
Which, again, makes Freixenet Copestick such good owners, he adds, in that it too is “really committed to this”. “We want to do the right thing and it’s really exciting that we can do this together,” says MacInnes. “But this is not at all proprietorial. It’s not a way to steal an advantage but a way to share innovations and things that work.”
The new Jascots
Six months on from Freixenet Copestick saving it from administration MacInnes is able to reflect on what sort of business has emerged.
“The values are the same,” he says. “What we stand for today is the same as when Freixenet Copestick bought us. They came in and told us they admired us for the way we did things and wanted us to continue with the same ethos. It’s also really well aligned to Freixenet Copestick’s principles. Hopefully our clients won’t have seen any difference. The business plan we agreed before Covid is still the same business plan today we can just get on and make it happen much faster.”
The big difference has come more in what the deal now allows Jascots to do. “It has accelerated plans that would have taken us so much longer to achieve. We have taken on a year’s worth of new producers, for example, in the first half of this year that we would not have been able to do due to cash flow restraints. We can also go into every day with so much more confidence.”
That last line really is crucial for MacInnes and the management team, who are now operating without a massive dark cloud pressing down on their heads.
“Being on a stable financial footing makes things so different. It allows Jascots to be even more focused. Because we are part of a bigger group we don’t have to be distracted by things that are not our core skills. We don’t, for example, need to be responsible for the multiple off-trade. Freixenet Copestick gives us the strength to to be more selective and even more focused on building business with the premium on-trade and specialist independent wine merchants. To build on what is the expertise of our business and make sure we are absolutely on top of our game in our part of the market.”
That capital support and investment also helps on the supply chain and logistics side too. Jascots is moving to a larger warehouse in North West London so that it will be able to supply its larger range if wines to London restaurants, bars, pubs and hotels through its own fleet of vans.
“That is the 20 year success story of Jascots,” says MacInnes. “That reliability and felxibility of service. What we are now able to add to that is a broader range of wines.”
You can sense the excitement in MacInnes’ voice that having come so close to seeing all their dreams of Jascots crash to earth, they are now in a position of not only making them happen, but building on them.
“We can really focus on what we need to do to be the best wine supplier and we have the support and expertise of an extremely successful larger business to do it.”
One of the upsides of the Covid lockdown for Jascots was the time and opportunity it gave to its sales team to really get to know, understand and look to build up business and networks with independent wine merchants. It has been a long term aim of the business, but always pushed to the back burner just to keep up with demand from the on-trade.
Then there was e-commerce and Jascots now well known move into DTC. Looking back MacInnes says they “made a fair fist of it” but is also open enough to admit that just spending a few weeks working with the team behind slurp.co.uk – the dedicated online retailer which is also part of Freixenet Copestick – has made him realise just how much they still have to learn to get that right. “We learnt in three weeks with Slurp what took us a year to learn on our own.”
But having Slurp as part of the overall Freixenet Copestick business, has also freed up Jascots to rethink its online offer and “execute a different strategy” that is more compatible with being an on-trade supplier.
New membership scheme
It has now switched its DTC model to a membership scheme “Jascots at Home”, that allows all those who bought wine from Jascots during lockdown to join free, whilst any new member will have to pay a donation of £20 that in the first instance will go to support Hospitality in Action.
That way it can remain loyal and continue to say thank you to all those who supported Jascots online service during lockdown – a core audience of around 3,000 private customers – by continuing to give them access to restaurant quality wine at a members only price, but also support the producers who were also able to work with Jascots over the last year to make its e-commerce model work. Membership is also free to anyone working in the hospitality industry.
But with a model that also stays true to its restaurant and on-trade customers that it is not going out on Google and actively pushing wines to the general public that they can also buy in their outlets.
“Our customer base is made up of supporters of the on-trade who also want to enjoy those wines at home. Hence the Jascots at Home name. It’s exactly what it says it is. We want to be able to offer Michelin-standard drinking at home.”
By running the online service in this way it means it can also provide the demand to keep wines pushed through the supply chain and introduce more new wines to the market, helping its producers along the way.
“Not every wine a producer has is suitable for the on-trade,” explains MacInnes. “We can now take some of these and offer them to our membership base. It keeps them happy as they are continuously being introduced to new wines.”
Having an e-commerce business also provides Jascots with immediate sales data and consumer spending patterns that, in time, will help it buy and source wines better suited to their needs.
“If you are just relying on-trade sales data it takes you longer to see what trends are emerging,” he adds. It’s also a good way to test wines with consumers, and if they work well give them a stronger reason to go and pitch them to their on-trade customers. We have been talking to our restaurant customers about our online offer for the last 12 months, we even formulated it with them, so they understand it and they also know how committed we are to them. We have gone out to our current customers and asked them about our new membership scheme and had nothing but positive feedback.”
He is also confident supplying wine for restaurant dining at home will be here for the long term and that there will be ways for suppliers to work with their on-trade customers to build up those new revenue streams.
“The hospitality industry is incredibly entrepreneurial and it has been great to see how so many outlets have found way a way to take their offer to customers at home. I am sure that will continue which is good news for wine.
“We are also inevitably going to see even more changes. There are some extremely resourceful and creative people in hospitality and we have already seen so many ideas in response to covid.”
Re-opening hopes…and fears
MacInnes was encouraged by the initial response of the on-trade to re-opening outdoors from April 12 with around 20% of its regular customers still brining in 50% of average revenues when the sector is fully open. That momentum has continued with the second relaxation of rollout on May 17.
He is particularly hopeful the increase in average spend on a bottle of wine can continue in the long term as well. “A lot of our customers are confident, the demand is certainly there and people are less reticent about going out than they were last summer. So it all points to a really exciting summer, and if we are not allowed to travel far then that is also an added bonus to the UK on-trade too.”
MacInnes is undecided about what impact we might see on wine lists and the types of wine that are going to be most in demand. “We are seeing people buying wines that they would not normally do, which then allows our customers to expand their selection. It’s why, for us, being able to offer one day, for next day delivery in London is so important. We are seeing the top outlets looking to have a broader selection.”
The sector as a whole, he adds, needs a good strong summer as we are all faced with a tough winter ahead, particularly when furlough is withdrawn and rent and rate holidays come to an end.
“It is going to be challenging for a lot of businesses if it is not handled very carefully. Kate Nicholls at Hospitality UK and Miles Beale at the WSTA have done such a good job in raising the issues that matter to us. Hopefully a sensible approach will be taken which gives us all time to rebuild and become great contributors the economy again.”
With the support of Freixenet Copestick – and its parent Henkell Freixenet – behind it Jascots could not now be in a better place, he says. “I have been so impressed with all the team at Freixenet Copestick. You can see even through zoom calls that there is a good atmosphere and team spirit. It is such an innovative and fast paced business and we are clearly delighted to be part of it.”
What pleases him most by the Freixenet Copestick deal is that it has allowed Jascots to keep hold and even build on what MacInnes call its “culture”. “Every one of us puts every ounce of energy they have into this business. Even through our difficult times we have maintained our reputation throughout.”
“We owe so much to Freixenet Copestick. When we first met we had been let down by so many potential investors and we were pretty deflated. But their team has just been amazing and so professional from day one. It’s great for us now to see our team grow and achieve the rewards for all their hard work we can all really focus on our work with confidence.”
It all feels a long time ago to when he first took the call to speak to Freixenet Copestick’s joint managing directors, Robin Copestick and Damian Clarke. MacInnes and his team have not looked back since.