High street retailing and the internet have been the two channels that have kept the global drinks industry moving over the last 15 months with record sales online and Christmas-level trading in the major supermarkets. Which has been particularly good news for those preferred retail suppliers that the big chains rely on when their demand goes up. But it is only good news if you are capable of stepping up to the mark, which has been the challenge and opportunity Off-Piste Wines has grabbed with both hands throughout the pandemic.
Off-Piste Wines’ managing director, Andy Talbot, and marketing director, Rachel Archer, explain to Richard Siddle how they have kept up with retail demand during Covid-19.
Such has been the demand from its retail customers over the last 15 months that it has been all hands on deck for Off-Piste Wines. So much so it has had to expand its team from 26 to 33 just to keep ahead of the market.
Considering the negative impact Covid-19 has had on the drinks industry, with so many suppliers and operators having to mothball their businesses, place staff on furlough for the best part of the last year, or let people go, it’s certainly a nice place to be in. In fact, Off-Piste Wines has actually outgrown its office during lockdown and will be looking to move to new premises when the full team is able to come back in the coming months.
It is a position that managing director, Andy Talbot does not take lightly. Very much aware that if it was the off-trade that had been forced to close for much of 2002 it would have been a very different story for a business that relies on retailers for the vast majority of its sales.
“I have never worked harder or been busier as we have in the last year,” says Talbot. “We are always busy at Off-Piste, but the last 12 months or so has brought with it a whole set of new challenges. It’s been harder to get hold of people at key times, haulage has become really hard since Brexit, and we now have the global harvest challenges. But we have always been a company that gets on with things and rolls its sleeves up.”
Then, as the saying goes, you make your own luck in business. It’s also thanks to the hard work and relationships built over the last five to 10 years, particularly with the major multiples, that Off-Piste Wines was on the front row of the grid to be able to take advantage of the extraordinary increase in wine and drink sales since the first lockdown came into place at the end of March 2020.
“We have also picked up a lot of new customers in the last year as well and expanded into new market segments,” adds Talbot. “We have also been able to grow business with our existing customers as well.”
It has also been a frustrating time, he admits, and certain projects have been held back simply because the team has not been able to travel and build the relationships it needed to. “We have certainly improved our trading, but it has been harder to develop the overall business,” he says.
Now it’s no surprise that Off-Piste’s sales have done well in a year when overall retail still wine sales were up 21% by value in the year to February 26 2021, but it can point to the success of its Most Wanted varietal driven wine brand that was up 63% in value sales over the same period (Nielsen 52 w.e May 5, 2021). Making it still the fifth fastest growing top 50 still wine brand in the UK, up 10 places to 28 best selling wine brand in the last year, according to Nielsen.
Recruiting Archer can be seen as pivotal in Off-Piste’s success in recent years. She joined the business on the back of creating the I Heart Wine brand, whilst at Copestick Murray, that has gone on to become one of the sector’s most significant brand launches not just in the UK, but around the world. She then followed that up by launching the Most Wanted brand at Off-Piste. Most Wanted has since grown to have 21 different SKUs in the range, including bag in box and the biggest selling canned wine brand in the UK, for its sparkling Pinot Grigio and Pink Pinot Grigio Fizz cans, that have sold over 7 million cans since their launch in 2017, says Archer.
Having a varietal-driven brand means the Off-Piste sourcing and buying teams can be creative in bringing in wine from anywhere in the world providing the quality and price point are right. Once grape prices go up in one particular part of the world it has the sources, contacts and networks to be able to introduce new varietals to the range, with the right level of supply for its customers at the price points they need. It has also introduced a regions tier within the range to give it more flexibility there as well.
Talbot admits it is going to have it work cut out to find the right levels of certain varieties in the months to come due to poor harvests in key parts of the world.
Take its Most Wanted’s Sauvignon Blanc brand which was the fastest growing New Zealand Blanc brand in the UK last year, up 196% year-on-year. That’s going to be hard to follow up in the year ahead with news that New Zealand’s 2021 harvest is expected to be close to 20% down. Most Wanted can also lay claim to having the top selling Albariño and South African Malbec in the UK.
Off-Piste has looked to address what Talbot admits are “sourcing challenges all over the place” by bringing in key new people during lockdown that can help build its international network and its access to secured fruit. “We just have to be as creative as possible. Covid has made supply and demand difficult all over the world, and there is also a shortage of containers.”
But there have been good harvests in South America and Australia and fingers are crossed for a stronger European harvest than expected after the damaging frosts in spring.
Financial and global push
The business has taken big strides over the last five years, in particular, to build its International sales. The Off-Piste stand is now a regular fixture at major global trade shows such as ProWein and by building a wider global network for its wines it has helped grow and invest in its brands, like Most Wanted, and take them to the next level, says Archer.
Talbot says it was in 2015 when it really put its foot down to grow internationally. A move that has seen it build partnerships with like minded suppliers and distributors in the US, Canada, across Europe and into Asia.
The company is in an even stronger position to grow internationally thanks to the £8m investment it got from BGF, the private equity business, in December 2019. A move that saw that saw Andy Fennell, former chief marketing officer and and regional president at Diageo, join Off-Piste as chair of the company, along with BGF’s Alex Garfitt.
“We wanted to find someone that was the right fit to help us grow,” says Talbot. He admits working with the team at BGF has already brought in a “new professionalism” to the company, particularly having the extra management expertise on the board. “We hope that experience can help take us to the next level.”
Off-Piste Wines was first started in 2007 by co-founders and now joint chief executives, Ant Fairbank and Paul Letheren. Talbot has also been with the company from the outset, when he began as finance and operations director. All three had been colleagues at Western Wine before.
Talbot, who has been managing director of the business since 2017, says the BGF investment will hopefully help double, if not triple, the company’s sales over the next five years, jumping from £37m to £52m in year one after BGF came. Its goal is to reach between £75m and £100m by 2025.
BGF’s investment has also “allowed us to have a better strategy for our overseas growth,” says Talbot. It has also helped it realise that it is best to focus on having strong business in around 30 countries than it is trying to have sales in up to a 100. “We need to be focused and concentrate on those markets where we can scale the business,” he adds.
It’s why it is taking a data and customer-led approach in each of the markets it does go in to and makes sure it is working with the right distributor that can help it build a long term strategy for how its wines and brands can grow in different channels of the markets it is in.
“It’s a case of going in and researching a particular country and then finding the equivalent distributor to us in the markets we want to be in and then working with them to build the business in those markets,” he explains.
In the US, for example, it is working with a (un-named) partner that is able to distribute its brands across 19 states.
Building strong brands, both in the UK, but also crucially around the world, has become one of Off Piste’s key points of difference as a major wine supplier. It’s noticeable BGF refers to Off-Piste Wines as a ‘wine brand developer and distributor’ on its website.
Its brand team was also strengthened with the new hires during the last year with Off-Piste looking specifically to bring in “specialists” with brand agency and new product development experience.
Archer says the brand team is now able to build global strategies for its brands, with a portfolio that now stretches across 40 brands with its own IP, including Most Wanted and Pinot Pinot.
“Having a global sourcing and branding strategy means we can focus on what wine is right for a particular market,” she says. Most Wanted, for example, is now sold in around 15 countries.
BGF’s backing also brings with it the know how of when building brands that can go from being in the Nielsen Top 50 to Top 30 and then up to top 15 and top 10. “They have the experience of doing that,” he says.
Archer is delighted to have BGF’s expertise and support. “It makes us have more of a big brand mindset,” she says. “We have always been a very nimble business, but now we have the backing of this strong foundation, we can work on our brands in a bigger way. Most Wanted launched in 2015 and we have done a great job to get it where it is, but with the right mentoring and advice we can take it to the next level.”
Part of that brand development story is developing and investing in the packaging formats that are really going to resonate the most with consumers.
One of the big success stories in the retail wine market in the last year was the rise in demand for bag in box wines, which were clearly in tune with consumers looking to stock up when they were out doing their grocery shop. Off-Piste says it saw record growth 115% for its Most Wanted bag in box formats, as well as a 37% increase for its canned wines. Most Wanted bottle sales were up 66%.
“The rise in bag in box took everyone by surprise, but it made complete sense,” says Archer. That said sales have fallen away a little with us coming out of lockdown, and Archer says it will be interesting to see just how the category has grown overall.
She thinks the summer will be another boost for canned wine, a category which Off-Piste claims it helped kick off in the UK being the first major canned supplier in the multiple sector, and it remains a market leader today. “Canned wine is a great format for coming out of lockdown. It is doing the opposite now to bag in box,” she adds.
“Having a spread of formats is very important to us in the UK, but it is even more important when growing internationally. Just look at canned wine in the US. It just gives us more options.”
Preferred supplier status
Off-Piste has also become a preferred supplier to the multiples for its ability to respond to the market and fast track private and exclusive brands into their stores and that remains a key part of the business accounting for around a third of its sales.
But it is also very aware that any “preferred supplier” status is not guaranteed and the multiples are forever demanding more from who they work with. Archer says that is best seen in how they want a more “data focused approach” with the companies they do business with.
“It was more relationship-based in the past, now they expect to see a much more professional pitch,” she adds.
It is up to the likes of Off-Piste to come up with the data and the fact based answers that the supermarket wine teams will be getting asked by their managers internally. It’s not just about having a good wine any more, every space on a wine shelf is “at an absolute premium” and suppliers have to cover all bases in order to earn it.
She says that also means having above the line marketing support to back up the wines on shelf, be it with the retailers themselves or on social media and in the consumer press, through experiential activity and bigger campaigns.
It’s why Off-Piste has invested in its own data analysis so it can use both its own internal data with any external figures it buys in, says Talbot. It is now having to use a far wider bank of external data feeds to support its brand pitches.
“Data has become the most important commodity,” he adds. “But it is also how you analyse it and them make it relevant to your customers’ needs.”
Marketing and influencers
As a marketing director the last year has been a case of ripping up plan after plan for its various brands as we went from lockdown to another. All her plans for brand activation around events and summer festivals were all stopped before they can get started.
“In 2020 we had to be a lot more reactive,” she says. Which has meant focusing far more of its efforts online with digital advertising and social media activity and linking up with other relevant brands and “being as creative and adaptable” as you could. It also stepped up the work it has been doing with lifestyle influencers, particularly for Most Wanted.
Archer says they made the decision early not to rely on festivals again this summer, “which has turned out to be the right decision”. “We do, though, have our own exciting outdoor activations planned this summer and will be releasing full details on this shortly. It will be brilliant to get out in front of our audiences again, without relying on bigger festivals being allowed to happen. In fact we going to end up doing more than we thought we would be able to do, rather than less. We also have an exciting big campaign for the autumn and winter,” she explains.
“Last year, though, was tough, not being able to plan. But then you had this captive audience and had to find the right way to focus on them. Which is why Instagram has been even more important for us in the last year, particularly when aiming at a younger audience as it is such a big part of their lives.”
Even this summer’s plans look like not being as extensive as they hoped, but when they can the focus will be on getting out to consumers and allowing them to experience the brands with lots of “experiential activity,” says Archer. “The good thing is we have been through the same thing before.”
On-trade and impulse
The next stage for Most Wanted in the UK it is to build its presence in the on-trade and impulse channels, says Archer. “We are looking at private label for those sectors too.”
Again that is where some of the focus for the new hires has been, adds Talbot. “We have brought in people specifically to look at those areas. That is where we want Most Wanted to grow next. It’s why it also took us longer to recruit as most of our contacts are grocery lead and wanted to get the right people in order to attract new customers in the on-trade.”
Ideally it would be able to build business with some national and regional pub groups and with the right regional wholesalers into the on-trade.
“The timing is right for us,” adds Talbot. “There is a lot of pent up demand and good will in the on-trade and we think our Most Wanted brand can help with that.”
Before Covid-19 Off-Piste had a clear strategy not to explore any DTC opportunities out of respect for its retail customers. But lockdown has certainly changed the rules of engagement with most major brands, across all grocery categories, exploring DTC options with the good will of their retail partners.
Archer stresses it is not part of the businesses long term strategy, as it is not set up to deal with the delivery and customer service issues, but it certainly proved a purpose, particularly for its Most Wanted brand, during lockdown when consumers were struggling to get out and get delivery slots.
“It was much more of a brand awareness and PR exercise than a focused revenue stream for the business,” explains Archer. “We wanted to give our customers a positive experience of Most Wanted online. It served its purpose.”
But it has found a brand that can work DTC for the long term – its very own gin brand, which it introduced just as the country went into lockdown in March 2020. Archer admits it “was a challenging time to launch a new brand” but it also proved to be excellent timing too. It was very much a first for the Off-Piste team and the results are impressive.
It has teamed up with a Cheltenham-based family distiller to create a truly distinctive brand that is very much inspired by the Alps and mountains with its stand out wraparound label open bottle design. Archer says they wanted to capture that Alpine resort image and says it has worked well. The brand has been picked up by premium online retailers, including Masters of Malt, and Laithwaites and hopes to add more in the coming months.
As well as creating and building its own brands Off Piste has also made its name working as an agency partner for wineries all over the world. One of its most recent recruits is Salentein from Argentina and it is very much on the look out for similar profile producers to work with,.
“We want to build our footprint of suppliers,” says Talbot. “We have around 30 producers now, which is double what we had five years ago. We are working with very good people and can achieve lots of different things together.”
He says it is looking to play to its strengths and offer premium producers, who may be working with another UK supplier to access the on-trade, to see how they can build their business in the multiple and retail sectors through Off-Piste.
Talbot and Archer admit it is hard to know how the wine category is going to play out in the coming months as we finally come out of lockdowns and social distancing measures. Will the premium price points we saw last year continue?
“Last year was a bit of an anomaly,” says Talbot. “It was a time of crisis and the big brands won. New Zealand Sauvignon Blanc and Malbec, which are like brands in their own right, also did well. Because people were at home they were trading up as they were not going out to eat. They were spending above £10 on a bottle of wine when they normally always spend less than £10.”
The hope is that the market as a whole will be able to start from a higher price point than when it went into Covid-19, he says.
Whatever happens Off-Piste’s focus will be keeping one or two steps ahead of the rest of the market and plotting the next trends – providing it can source enough wine to keep all its customers happy.
“It’s never been a harder time in the wine industry,” says Talbot. “The ones that win will be the ones that can find the right space to go into and find enough wine to supply it, which is exactly the focus of Off-Piste.”