Independent wine merchants can boost sales by championing Argentina
Independents can boost profits by mimicking the way restaurants champion top-end Argentinian Malbec, according to a leading supplier.
Argentina is the fastest-growing wine country of origin in the UK off-trade, with sales shooting up 24% to £120 million in 2015 (Nielsen).
A lot of that growth has been driven by Concha y Toro’s Trivento brand, which is up by more than 100% in value and volume year on year, but which is mainly in the grocery channel.
Andrew Steel, director of Connoisseur Estates, sees strong potential for the independent trade to tap into the trend seen in restaurants, where premium Malbec is the hottest thing around.
He told OLN: “Malbec is doing really well in the on-trade and it should follow through into the off-trade. We have a Malbec from Gauchezco selling at £60 or £70 in the on-trade and individual restaurants are selling eight to 10 bottles a week. Currently the trend is for individual styles of Malbec. Confidence in Malbec is there. Our biggest problem at the moment is that we can’t keep up with demand for the top-end stuff.
“Argentina is a hot country – it represents great value and you don’t tend to get a bad bottle.”
Steel, who spent eight years at Mentzendorff before setting up Connoisseur in 2002, believes independents will lead the wine trade back into growth and argues that their role is even more crucial now that some multiples have culled large swathes of their ranges.
He said: “We see the independents as key to the UK market. With what is going on at the multiples, the independents have this huge opportunity and we have expanded our sales force to take advantage of that. We have also expanded our portfolio to fill in a couple of gaps, particularly New Zealand.
“We have Tom Barton in the south targeting independent retailers, and Alison Gregson targeting them north of Birmingham. Stuart George is challenged to get central London independents. We have doubled the sales force to take advantage of the opportunity.
“I am confident the marketplace is moving where we want it to be going, which is great. Fifteen years ago, if you wanted to sell to the specialist market you would have to do 10 deals for 5,000 outlets. Now you would have to do 2,000 deals to cover those outlets.
“Independents are now buying much better than they have. They know what they want and they go for it. They need the price-fighting stuff but they need points of difference and we are putting together a portfolio that has lots of points of difference, delivered from one place. We are seeing growth and distribution gains, which is seriously encouraging.
“With Champagne, top-end Argentina, South Africa and New Zealand, some individual estates around France and iconic wine from Sicily we have a good portfolio that is striking a cord with independents. We look for brands that work well in the marketplace but also have history.
“We also have a volume side, so independents can buy a house Pinot Grigio at incredibly competitive prices and single varietal Spanish wine that could retail at £4.99 and fill up their orders with some top-end cases.”
Premium brands in Connoisseur’s portfolio include Tohu from New Zealand and Oldenburg from South Africa.