The last two months has seen a whole range of businesses from across the drinks and hospitality sectors having to rip up what were successful business models to find new ways just to trade and stay in business. For some drinks suppliers that relied 100% on the on-trade for its sales it has meant transforming themselves into completely different companies overnight. Like Jascots Wine Merchants. But before we get into the ins and outs of how and why Jascots has become an online direct to consumer operator during Covid-19, its managing partner, Miles MacInnes, is keen to stress this is a move it had to take in order to return at full strength as a key London on-trade supplier once restaurants start to re-open. Its new e-commerce arm, he says, can only make it a stronger, better and more efficient on-trade supplier in the future.
Its been far from easy and at times very hard, but a full team effort has allowed Jascots Wine Merchants to not just stay in business during Covid-19, but find a whole new way of working – doing home delivery.
If you could pick out one of the key themes from all the online debates, and webinars there have been about how businesses should best respond and behave during the Covid-19 lockdown, then being open and transparent about what you are doing would be right near the top.
It’s very much the approach that Jascots Wine Merchants has taken over the last two months as it has been faced with a total collapse in business, and then a recovery plan based on doing exactly the opposite to what it was set up to do.
One day it was a 100% dedicated wine supplier to the on-trade with no direct to consumer or retail customers. The next day, following the Prime Minister’s message to the nation to “Stay At Home” – and the resulting shutdown of the hospitality sector – it had no business at all. “We are an unusual wine business in that we have been entirely focused on the on-trade for five years now with no sales to wholesalers or retailers,” says managing partner, Miles MacInnnes.
Suddenly it was faced with the prospect of no income and 35 full-time staff to pay. If it was going to survive it was going to have to think, move fast, and fight. Which is what it has done, transforming itself overnight into a 100% direct to consumer retailer, starting with zero customers.
Close on two months later and it has over 1,100 new private customers and set its sights set on tripling that in the coming weeks and months. It has also been able to develop its own e-commerce platform from a standing start during the Covid-19 lockdown.
It, though, is typical of the reaction, and the pace at which a number of dedicated on-trade suppliers have been able to move their business model to supplying wine direct to the public.
MacInnes, who is co-owner of the business alongside John Charnock, said it has been a “a rollercoaster ride” with events moving at furious pace.
“We are having to make a lot of complex decisions quickly,” he adds. “Every day brings with it new opportunities and new challenges. It’s been a very challenging time, but the team’s spirits are high. We’ve been very proactive and got through a lot of work in a short time. We are determined to do everything we can to keep our very talented team together. That is the primary thing that is motivating us all. We are so lucky to have such a committed team and we want to do everything we can to stay together and come through this period strong.”
By moving to online and delivery Jascots has been able to keep on its entire team and has only furloughed ten of its 35 staff, which is split with a third in its logistics team, a third in sales and marketing and a third in buying and finance. “We will be looking to bring back our furloughed staff as soon as we can,” he adds.
Clear and open
But what it has done, from day one, is to be completely upfront with all its loyal on-trade customers – and the wider trade – about what it was doing. Very much aware of the sensitivities involved in switching wines that were sourced and bought to supply their wine lists and make them available to the general public.
MacInnes says he has been bowled over by the support it has had from all its on-trade customers. “Considering that our customers are amongst the worst-hit by this crisis it has been extraordinary how supportive they have been of us. Their view is that anyone who can find a way to trade, needs to as they want as many suppliers around for when they get back into business. We have had nothing but support from customers.”
It has also been able to help some of its on-trade customers by supplying them with wine for their own delivery operations. “Thirty five of our normal on-trade customers are open and placing orders, but these orders total around £1,000 per day compared to £35,000 to £40,000 in normal times,” he says.
It is finding more restaurants opening up to home delivery and takeaway and will be looking to work with as many as it can. Then there are the events caterers who have also now switched to delivery and corporate companies looking to send out wine as gifts to important clients. Jascots also supplies wine to a number of care homes and a hospital. “We are trying to find business if it is there,” he adds.
It is also looking to work with independent wine merchants for the first time and is now supplying over a dozen. “We would love to serve independent merchants, but appreciate that most of them already have great supply chains. But if we can, we will and we are here to help and do what we can for them.”
Whole new day job
The move to online and delivery has meant everyone in the Jascots team has had to learn new skills and re-write their own day jobs. All of which MacInnes stresses they have been very quick to do. But he admits it has not been easy and has meant using every available network to reach a new audience.
Having a dedicated e-commerce platform has taken some of the pressure away from the order entry and payment process, but that in itself means learning how to make sure it is working effectively and being supported with targeted and focused mailers.
“It’s been a steep learning curve with direct mailers,” he admits, but the opportunity is now there for it to use that personal contact to promote and introduce different producers, and look at using video and online chats so that it can build that engagement and interaction with what is a brand new customer database.
Two months on from the initial lockdown and MacInnes says it has been able to claw back between 20-25% of what it would usually be expected to turn over with a fully functioning on-trade. What has been particularly encouraging, he adds, is that of the over 1,000 customers it has been able to serve, almost half have already re-ordered.
Hard but inspiring
Looking back on the last eight or so weeks and MacInnes says they have all been through so much, and can be so proud of what they have achieved.
“What is most inspiring is that having received no orders from our customers on March 17 everyone came into work the next day ready to find a new way, and by March 19 we had 45 private customer orders to deliver. The spirit of the team has been amazing. For us, as owners of the business, that has been really inspiring and shown us just how agile and capable we are as a business.”
Ultimately it wants to be in as strong a position as possible for when it can go back, with its on-trade staff currently on furlough, to support its restaurant customers it has worked so hard to build up.
“The big unknown is the date when that might be and how the on-trade might look when it does. Clearly the hospitality sector is going to be one of the last to come back and we can only hope that the whole supply chain gets the level of support it needs.”
MacInnes is also fully aware it needs to adapt its own business model to be able to serve a restaurant community that is only operating at potentially 25% capacity. He believes the potential will be there for more restaurants to make delivery and takeaway a fundamental part of their business, including wine.
But how will it marry up the fact it will then have this burgeoning direct to consumer part of its business that has up to now been able to buy the same wines, at trade price, that were available to the on-trade?
Think on its feet
MacInnes concedes it is having to learn and think on its feet, but insists it “won’t compete with on-trade customers, we will continue to discuss our plans with our customers and ensure we are doing what is best for all of us as we emerge from lockdown”.
One option might be to carry on allowing those consumers who were there from the beginning to carry on as now, being able to buy wines at trade price, but any new consumers will have to pay a separate retail price. The other is create a separate non restaurant wine list for consumers to buy from.
“We have got a lot of new producers that are primed to come on board, and we have a few wines that don’t have a future in the on-trade that could form the basis of that list.”
Equally it needs to tread carefully as there are cash flow implications in suddenly doubling its current list of around 450 wines to cater for both on-trade and DTC customers.
“We need to feel our way and take whatever steps we need in order to protect our on-trade customers,” he adds, making sure it consults with them every step of the way. “It’s also quite easy for us to vary the products available on e-commerce and it is clear that private customers do buy different types of wine. So we have to establish which ones are going to be more compelling for private customers and which will make it easier to evolve into having two separate ranges.”
So far it is seeing “good premium sales” to consumers, with an average price per bottle of £12 to £13 including VAT. Which means a future buying strategy to bring wines between £8 to £20.
One of the big advantages Jascots has in going direct is that it has its own delivery vans which is allowing to beat many mainstream online competitors by promising delivery within three days.
“Having our own distribution has been absolutely vital from the beginning of this crisis,” he adds “we have been able to implement tight controls on distancing in the warehouse and for our driver team.”
Jascots is also being able to use its dedicated training arm, Wine Ed, to connect with its on-trade customers and their furloughed staff by offering a number of wine education sessions, tutorials and webinars. “We have had a really good take up and been able to help training teams that are on furlough and take them through some WSET training online,” he says. “People are really pleased to do it. So we are keen to hear from anyone who would like to be part of that.”
As to the future MacInnes says its focus is to continue to “evolve as the world returns to some sort of normality”. “Having a committed team and our agility will work in our favour,” he adds.