Hallgarten Druitt optimistic after recording sales growth
Hallgarten Druitt’s managing director is bullish about the firm’s chances of succeeding in a consolidating market after reporting 8.5% sales growth in 2017.
The supplier is celebrating its 85th birthday this year, having been on an intriguing journey since it was set up by a German émigré in the 1930s.
It began by selling only German and French wine but has worked hard to cover all the world’s major wine-producing areas over the years.
Now it is trying to become more specialist to continue thriving in a challenging market.
Managing director Andrew Bewes told DRN: “Sales went past £50 million for the first time last year, which is up about 8.5% on the previous year. Suffice to say profits were affected by a combination of FX and a heavy year of investment on training.
“Trading-wise, we are looking very healthy. Making money is difficult, but we have been encouraged by more interest than ever in what we are doing.
“We are very bullish about this year. We have seen remarkable interest and we are gathering pace. We see an appetite for our specialist knowledge. We have moved gradually over the past four to five years. We realised that being a generalist in the market is dangerous. We need to find our niche.
“There is so much change because of the economy and Brexit, the squeeze on margins, and consolidation – Conviviality and Enotria & Coe etc – and that stirs things up a bit.
“With the trend towards reduction in supplier bases, the pressure on the [remaining] suppliers to provide great value and great levels of specialist knowledge has been absolute. In the old days we used to think we could be all things to all people and fundamentally we think that’s pretty flawed now. We need to work with a much more defined customer base for whom our ranges are relevant.”
Bewes said the firm will continue to be a pioneer when it comes to emerging regions, and offer specialist training and advice to the trade.
“The average off-trade buyer we talk to is hungry for something new,” he said. “The buyers are sold on diversity and points of difference. The challenge is at the point of sale. Apart from the better wine merchants and the sommelier-led restaurants, we are either relying on the shelves or the front-of-house teams, who aren’t experts. That’s why training is such an important part of the mix, giving them the confidence to ask consumers, ‘why don’t you try this?’.”
He believes the trade is in danger of using “premiumisation” as a euphemism for prices going up in line with duty increases and cost price inflation, and argues the need to genuinely nudge consumers towards wines that offer a higher margin.
“We really need to tell consumers why they should spend a little bit more over price inflation,” he said. “It’s all about the gatekeepers that give consumers confidence to spend more than £10 at a retailer and £30 in a restaurant. There’s an appetite for a knowledge-based [consumer] buying decision. We have seen it in spirits and beers. But research says they don’t want it in wine. Wine has the most provenance of any of those products, but there is resistance to it, so we have to make the information palatable to consumers.”
A global shortage of wine has been precipitated by bad weather, but Bewes said: “Malbec, Pinot Grigio and Prosecco are all under threat and we have all had to be very agile at pushing our partners to look at a long-term view. Overall I think my team has done a remarkable job at keeping list price increases to a minimum. We have been helped by exchange rates outside the Eurozone. The Australian, New Zealand and US dollars are doing all relatively well compared to this time last year.”