Just before Christmas, Coterie Holdings announced the acquisition of Hallgarten & Novum, further signalling the company’s intention to build a significant and multi-faceted wine company. Here, CEO Michael Saunders tells Lucy Britner about Coterie’s ambitions.

Drinks Retailing: How did you arrive at Coterie?

Michael Saunders: Rather amazingly at my age, I was approached by the chair of Coterie, Chris Robinson, who I’d met along the way. He was long-time Tesco. Then he went to be CFO at Berry’s, then Richard Caring’s CFO. I jumped at it, frankly, because I thought it’s exciting to be part of something with big ambitions, is well-financed, and is in a sector that I’ve spent all my career in.

DR: Where does the money come from?

MS: It’s a private wine collector – a private family office, and they love wine. They are very entrepreneurial with roots in many different businesses usually to do with modern manufacturing – electric cars, electric bikes, PVC for capturing sunlight. They want to build a premium wine business and they can see ways that we can probably modernise it a bit. There are certain elements of the wine industry that are still quite traditional and by using technology, we hope to bring some extra zip to the wine sector.

DR: What will that look like in practical terms?

MS: Take Coterie Vaults in Suffolk, it’s a high spec modern wine depo. I’ve seen a hell of a lot of wine warehouses in my time and this one is incredible – perfect temperature control, use of modern technology and ambitions to roll it out globally quite quickly. The fine wine ecosystem is quite weird because cases move around depending on who has bought them. If we have hubs in several markets across the world, then the cases can be identified on the system and stay where they are.

DR: How do the different parts of Coterie operate? Do they run as separate businesses?

MS: It’s quite organic at the moment. We just announced the acquisition of Hallgarten, but the business started off with the acquisition of Lay & Wheeler back in 2019. Then the secondary bit was the building of Coterie Vaults, which opened last year. If you have private clients who buy fine wine, they need to store it somewhere. Historically, it’s generally been outsourced. And to be very clear, Coterie Vaults is a different business to Lay & Wheeler, which is a client of Coterie Vaults. It will act as a storage operation for other businesses as well. There’s a clear separation. Business number three is Jera.

DR: What is Jera Wines?

MS: The point of Jera is to allow people to get some liquidity from their wine holdings, which is completely normal in many other sectors – mortgages on houses for example. People do it for cars, they do it for paintings. This service is only for high-net-worth customers, and they will have the ability to use their wine as collateral. The reason banks haven’t done it is because if a customer defaults (which no one with us has yet) they don’t want the asset. Whereas we can use the asset to create more business.

DR: Where does Hallgarten fit in?

MS: I felt very strongly that we needed a white tablecloth operation, because a lot of the producers that we want to have relationships with, they want to see their wines on the right tables around the UK. I’ve always been an admirer and a competitor of Hallgarten for all my career – and Andrew (Bewes, MD) is a friend of mine, so it was a natural go-to business for me.

The acquisition does a number of things – it allows Hallgarten to feed off Lay & Wheeler’s fine wine capabilities and it allows Lay & Wheeler to feed off some of Hallgarten’s agency capabilities, albeit they will be a customer of Hallgarten, because we don’t want to disadvantage any of Hallgarten’s own customers. When you supply the trade, often they want tastings, events, wine clubs for their customers, Hallgarten will be able to use Lay & Wheeler’s capabilities to execute private client events.

DR: Are there any redundancies with the acquisition?

MS: I’d say the opposite, we want to grow and there are currently around 20 positions advertised on the Hallgarten site. Will everyone want to come on this journey? It may not be for everyone and I respect that. I want people on the journey with us who really want to be on that journey. Because, you know, frankly, I think this is very exciting.

DR: What about the off-trade?

MS: Hallgarten has a very good business supplying independents and the off-trade and I want to enhance that.

DR: Are you sticking to the premium end, or will you move more into grocery?

MS: Well, Hallgarten does that already. They operate with better wines, and I’d say we will continue with what I’ve done all my career. We have healthy relationships with the multiples and absolutely we will continue to enhance that.

DR: Are there any parts of the puzzle missing – any more acquisition targets?

MS: The simple answer is that we’ve just bought Hallgarten and I want that to get settled in. But I’m never going to say never – we are very ambitious. People are approaching us with interesting opportunities because there’s a lot of interest in Coterie from the trade. But the thing we’re looking at closely is Coterie Vaults and how we roll that out beyond these shores.

DR: Any plans to buy wineries?

MS: No. As far as I’m concerned, that’s not what we’re trying to do. We are trying to create a wine ecosystem where we have a good footprint in the right markets where the businesses interlock and can feed each other.

DR: You bought in former Bibendum COO James Kowzsun as Coterie COO, are you getting the band back together?

MS: James has been with me as COO for years. He’s much better at running a business day to day than I am. Years ago, I recognised that my main qualities were out in the market. I asked James to come in and enable me to do that, having the confidence that the business was being run immaculately. Even this first week, we’ve done an enormous amount.

DR: How do you describe your vision for Coterie in a nutshell?

MS: Coterie is a privately owned company that cares deeply about its people and producers. We want to be seen as a trusted partner in the market – we are here for the long term, and we are very ambitious in terms of our footprint in the UK market. 

And pace – I just turned 60 last year, I don’t have another 40 years in the trade, I want the business to be in a really good position in the next 10 years.  I learned from Bibendum that it’s important to bring everyone along on the journey – we had a fantastic culture there and we had fun. It’s hard work but we had fun. That’s what I want to do here.