Bibendum: Different strategy reaps rewards
When the on-trade giant Bibendum Wine saw its sales come to an abrupt halt in March this year, the company naturally turned itsattention to its specialist retail business, Walker & Wodehouse, but it required a huge effort to refocus the business in a short time.
Michael Saunders, chair of the Wine & Spirit Trade Association and chief executive at Bibendum Wine, says: “The on-trade part of our business hit a wall and you can’t replicate that through shop sales, but the off-trade side has done well. We were able to avoid going on a massive culling exercise with staff.
“The other thing I decided was to not repurpose our business for B2C, instead we actually redoubled our efforts in supporting our customers who do sell B2B, so I took a slightly different line.
“We have a specialist retail arm of the company called Walker & Wodehouse, which does the independent sector, and we put all our efforts into that, whereas some of my peers just decided to go and compete with that sector. I didn’t want to do that. I didn’t think that was right or appropriate.”
The strategy worked well, as Saunders confirms. “The Walker & Wodehouse business has done fantastically well over the past five or six months and it has been interesting to see what clients have been buying.
“It has been incredibly rewarding, partly because when I decided to create Walker & Wodehouse in 2014 there were people internally who thought I was barking mad.
“But it has positioned us incredibly well for what has happened – that’s more life, and not judgement – but I have always believed we should have a specialist team selling to the specialist retailers. So in that sense we are coming out of it incredibly well.”
Bibendum had a lot of stock lined up for the on-trade sector and luckily a lot of wines cut across both channels, Saunders says.
“We were a little bit surprised by the shift in demand, not so much in the volume but the quality jumped quite significantly in terms of what our retailers were selling, so we did need to be quite fleet of foot to get that correctly resourced. And that was alongside some of our own suppliers having their own coronavirus issues to deal with. But I have a flexible team and we came through it incredibly well.”
The Walker & Wodehouse business is up about 40% year on year, and while this has been at the expense of the on-trade, Saunders is hopeful there will be some positive outcomes for independent wine retailers.
“I hope this bucks the long-term health of the independent sector and I hope there is a long-term shift of consumers wanting to buy from their local independents.
“I think that would be great for the industry holistically. “It does enable some of my producers who make quite nuanced wines that aren’t suitable for mass distribution to have an outlet where they can have their handcrafted products sold in a 121 ways.
“It does enable quite interesting wines to be sold quite well. And that’s aligned to the online transformation that has happened so people have more confidence in shopping online, which again is good for some of these more nuanced producers because the information is easily digestible for those who are interested in taking their time to read about it.”
One of the noticeable spikes in sales recorded by Walker & Wodehouse was for premium rosé, with many retailers seeing a huge demand for this over the sunny lockdown period.
Saunders says: “With day-to-day drinking, the spike in premium rosé sales was very noticeable. We were selling significant quantities of Ultimate Provence rosé, Châteaux d’Esclans and Châteaux Saint-Roux, ultimately retailing at between £14 and £20 per bottle, for rosé in significant quantities.
Then we also found that a lot of our parcels of very premium wines were selling out all the time.
“People haven’t been spending their money by going out so they are allowing themselves to buy better wine to drink at home.”
Like many, the company has been doing its bit to support South African producers, who have been hard hit as a result of Covid-19, to try to raise awareness of their wines.
“This has worked well,” says Saunders. “We are now doing the same with our Lebanese producers and it is interesting to see the good uptake that the Walker & Wodehouse customers are having.”
Looking ahead, Walker & Wodehouse is in the midst of piggybacking the organic push, which runs throughout September.
“We have quite a lot of organic and biodynamic producers, so we are highlighting these through September. We don’t choose them because they are organic or biodynamic, we choose them because we like them. They just happen to be in this sector and the fact that they are makes it much more attractive for us.”
Meanwhile, the UK faces ongoing hurdles as a result of coronavirus, but there are other challenges ahead, as Saunders highlights.
“We have got the supply chain and logistics sorted now for coronavirus but Brexit is an entirely different matter. As chairman of the WSTA I am highly involved in this, and Miles Beale and his team are doing a fantastic job.
“But the issue with Brexit and VI-1 forms is rushing at us hard and we are struggling to get the government to understand that what it is introducing is complete nonsense and a complete waste of time.
“And if anyone could explain to me what those forms are there to do I would love to hear it.
“London is the fourth largest exporter of food and drink from the UK to the world, and especially wine. If these forms come in this will be lost. It is complete lunacy.”
But he is confident the independent sector is in a strong position, even though the country faces a number of uncertainties.
He says: “I can’t see that buying patterns are going to change a lot because at the moment everyone is doing well – the independents, the multiple retailers, online, convenience – and that’s currently at the expense of the on-trade, but how quickly that pendulum shifts back into the old balance is unknown. I think independents will have a great life for the period ahead.”
For the near future Saunders believes the indies will do well in the run-up to Christmas.
He says: “Classics always work well but where we did - and are doing – well is premium Argentina. We represent the Catena family here and we have been working together for more than 30 years and every year they release their top single vineyard cuvées and every year Walker & Wodehouse offers it up and every year it sells out.
“They are being shipped out now and they will arrive in time for Christmas and you are talking about expensive Argentinian wine.”
Pre-Christmas wine tastings are usually a big part of the festive offer for independent wine shops, but this year there are obviously challenges with this. Instead, Walker & Wodehouse has been working on virtual tastings, which it has been running directly with the winemaker, on site in the vineyard.
Saunders says: “It is often very difficult to get winemakers to be there physically anyway, and at the right time when you want to do an event. Now it is easier and there is interest, and that is brilliant.
“If you think about it, say you are a producer with a winemaker in Central Otago, and there is a business in the UK that has got 100 people who want to taste your wines with you. You can do it just sitting in your winery; you know you can bring your wines alive in a way that hasn’t really been told that much before.
“So it’s no surprise that this is something we are thinking quite hard about, because it is transformational. We will definitely be looking at these from now onwards.”