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| April 13th 2007 |
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| Who is Who in the United Kingdom |
As the only truly international publication for the wine industry, we introduce in this issue a new series revealing the major players in every major wine producing and consuming country. We begin here with the United Kingdom and will follow this piece with similar portraits of all of the world’s major wine markets.
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To draw up our profile of the wine industry in the United Kingdom, we invited over 500 of its key members to name the people, companies or organizations that they believed to be most important across a range of activities, from supermarket retailing to label design and warehousing. The results, as in any such poll, are bound to raise a few eyebrows, but we are confident that they provide a picture of the British wine industry in 2007, which should prove invaluable to anyone seeking a greater understanding of this highly complex and rapidlyevolving market.
The market in brief
One of the longest—established and still most dynamic wine markets in the world, the United Kingdom is the 8th largest market and accounts for 5% of global sales. It stands apart from other countries in a number of ways. Despite the existence of some 350 wineries, the volume harvested each year is sufficiently small for the country to be considered as a non-producing nation.
Domestic production accounts for 0.09% of total consumption. British consumers are among the most ready in the world to experiment with wines from unfamiliar countries (this is the market in which the New World first made its mark) and to accept change (a recent survey by Wine Intelligence reveals that a strong preference for corks has been transformed into a 75% acceptance of screwcaps in less than five years).
Duty rates – at £1.72 per litre - are among the highest in the world and they rise in line with inflation annually. Though this is partly responsible for pegging average retail prices at under £4, cultural attitudes also play a role. Ireland, for example, has even steeper duty rates, but buys higher quality wine. Just under 80% of wine is consumed at home, often without food. An increasing proportion of the wine that is consumed in bars and restaurants is also drunk by itself as an alternative to other alcoholic beverages.
Around 80% of all take-home wine is now sold by a small group of supermarkets which, led by Tesco, are also increasingly strong in internet-based home deliveries. A once-dynamic set of specialist wine retailing chains has now been reduced to less than a handful, all of which struggle to compete. However, smaller independents, of which there are around 500 significant players, are gaining in strength. Few, however, turn over more than £1m.
Branded wines – particularly from the New World - are strongly in the ascendant – indeed the top 20 brands are currently growing at 14%, against a market growth of just 2%. While there is still a market for the finest French wine, top wines from other countries are hard to sell - and California’s top wines are particularly hard to find. Further, critics are far less influential than in other Anglo-Saxon markets, particularly America, and brands are seldom built on success in restaurants. The latter, however, is a growing target area for would-be exporters to the United Kingdom who are frustrated by |
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the difficulties in gaining retail distribution. Discounting – often at half price – is endemic in supermarkets and Threshers, Britain’s largest specialist retail chain, has a permanent 3-for-2 offer across its entire range of wines. British consumption has grown steadily – by up to 8% annually in recent years - over the last 25 years, but has slowed to a near standstill over the last 12 to 18 months.
THE RESULTS OF OUR POLL:
1.) Best Supermarket Retailer
The dynamism of the supermarket sector and the size of its market share make this a crucially important part of the UK trade. Unlike France, British supermarkets have little experience of offering and selling top wines, even during their “wine fairs”. There have, however, been recent moves towards introducing “Fine Wine” rages both in well-sited stores and, more particularly, online. Also unlike other countries, UK supermarket buying is done centrally, so there are few regional variations in the range of wines offered. Branded and own-label wines are also highly important, much more so than in many other countries.
Winner: Waitrose Limited
www.waitrose.com
The voters’ choice was unequivocal. Waitrose, the smallest of the major chains was the runaway winner, as it has been in several other similar polls. Until the recent takeover of Safeway by Morrisons and the purchase of some of the former chain’s stores in the north of England, Waitrose only operated in the south of England. Unusually, the company belongs to its employees and has a reputation for placing a greater emphasis on wine knowledge and quality.
2.) Best Major Specialist Retailer
The number of different chains with more than ten outlets specializing in drinks has shrunk dramatically over the past generatio. Their market share as well. One stood out.
Winner: Majestic Wine Warehouse
www.majestic.co.uk
There was no surprise here, either. However, the fact that a chain that only sells wines by the 12-bottle case could win by a very significant margin shows the fall from grace of competitors Oddbins and Thresher. Majestic also stands apart from the herd in being a profitable independent wine retailer. Its success lies in combining well-priced branded wines with more interesting fare, much of which is bought in small parcels.
3.) Best at Internet or Mail Order
While the UK saw a similar early flurry of activity among internet start-ups focusing on wine, none has survived independently. All have either disappeared or been swallowed by larger, traditional players. This sector is growing, but much of the growth seems to be enjoyed by supermarkets.
Winner: Berry Bros & |
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Rudd
www.bbr.com
Britain’s oldest wine merchant has also been one of the most proactive, embracing the internet with a highly sophisticated and informative site that is genuinely global in its appeal, covering everything from top Bordeaux to new wave New Zealand Pinot Noir.
4.) Best Wholesaler or Agent
As in other countries, the number of wholesalers is shrinking, but in the United Kingdom there is an interesting trend. The more successful companies are becoming involved in brand creation and ownership - and are moving into sales offshore. This is particularly true of our two front runners in this race, both of which have shown great skills in dealing with the Old and New Worlds. In the end, Bibendum had one more vote that Liberty Wines.
Winner: Bibendum
www.bibendum-wine.co.uk
The firm that Dan Jago, now head of Tesco’s wine department (see below) once ran, has evolved over the years from retail to wholesale and to brand creation. Today Bibendum has a foot in several camps, selling fine Burgundies and Rhones from individual estates as well as highly commercial examples of branded wine from Southern France and Australia. It has also been unusually successful in supplying restaurants.
5.) Best Event Organisers
Scarcely a day passes in London without some kind of tasting and often there are clashes of two or three such events. We decided to ask who the best organizers of these kinds of tastings might be.
Winner: Hunt & Coady
jane@huntandcoady.com
Jane Hunt MW was head of Wines of South Africa before jointly setting up a dynamic company which runs some of the UK’s best trade events, including the annual France Under One Roof tasting, which is often thought to be run by Sopexa, as well as tastings for other countries such as Argentina for whom they also recently organized a blind export wine competition in Mendoza.
6.) Best Warehousing
Britain’s heavy duty rates mean that wine remains in bonded warehouses for as long as possible. There are several companies offering this service, but when we counted the votes, two stood head and shoulders above the rest, with Octavian edging out London City Bond.
Winner: Octavian
www.octavian.co.uk
With space for 800,000 cases of wine in perfect conditions in its Corsham, Wiltshire cellars and its “all risk” insurance, which comes as part of the package, Octavian is considered to be the “gold standard” in the UK.
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7.) Best Freight Forwarders
Freight forwarding is a crucial business and the UK is lucky to have some highly professional companies.
Winner: Porter & Laker
www.ffg-hil.com
Founded in 1878, and a subsidiary of Hillebrand since 1992, Porter & Laker is still run by members of the original families. “Not the cheapest,” wrote one voter, “but service is fantastic.”
8.) Best Delivery Services in UK
Wine delivery within the UK is a vexed issue, both in terms of cost and the quality of service. Amtrak received several votes of approval – and some much less complementary comment that left us unable to include it in our list of winners. Ultimately, two firms virtually shared the highest ratings, with Fastway outpacing DHL.
Winner: Fastway
www.fastwaycouriers.co.uk
A franchised service (use the website to find the nearest franchisee) that was described as being “by far the cheapest and [with] by far the best success rate for delivery.”
9.) Best Contract Bottler
Britain’s long history of importing Bordeaux in barrel and bottling it more or less ended in the 1970s. Today, 80% of the wine drunk in the UK is shipped in packaged form. The remainder is bottled or put into bag-in-box in Britain. This figure might be about to change if commercial trials, involving the government-funded Waste & Resources Action Programme (WRAP), Tesco and Asda, Britain's two larggest supermarkets, and Constellation Brands prove successful. At present, importing this many bottles not only represents 550,000 tonnes of glass, and the fuel required to ship it, but it also reduces the scope for recycling green glass in Britain. Another motive behind moving to more domestic bottlings is the cost savings that will enable producers to meet the price points set by the major retailers. There are several firms specializing in bottling and bagging in Britain, but the clear favourite of our respondents was Corby Bottlers.
Winner: Corby Bottlers
www.corbybottlers.com
Founded 20 years ago specifically to contract-fill bag-in-box, Corby now offers facilities able to package a tankerful of wine per day in bags or bottles with corks or screwcaps using a new £50,000 line. As one customer simply stated, “They’ve never let us down.”
10.) Best Specialist Importer
This category forms an increasingly important niche at a time when wines from some regions are difficult to find the high street. Yapp was given high marks, but Walford took the prize.
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Winner: Richards Walford
www.r-w.co.uk
One of the best kept secrets, Richard Walford is the business that supplies more visible companies such as Bibendum with many of their finest single- domaine wines.
11.) Best Market Research
The days when wines were bought and sold solely on the basis of their quality are – perhaps sadly - long past. Today, research is thought to be essential to anyone who takes the industry seriously. In some cases this will involve focus groups to assess new products, packaging and marketing. In others it will involve data purchased off the shelf, possibly from a company that also offers tailor-made research. This is a growing field and we were interested to see that the British trade publication The Drinks Business has just launched a new offshoot called Drinks Insight. For the moment, however, Wine Intelligence appears to be the one-stopshop for the British industry and a growing authority internationally.
Winner: Wine Intelligence
www.wineintelligence.com
By far the most widely quoted research company in the UK, Wine Intelligence was founded by Richard and Lulie Halstead in 2001 after considerable experience in wine retailing. Today the firm offers services ranging from mystery shopping to focus groups and in-depth research for organizations such as the Napa Valley Vintners.
12.) Best Packaging and Design
It may seem curious that in a non wine producing country like the UK, label design has become a sophisticated art. The answer lies in the number of wine brands that have either been created here, like Kumala, or adapted to suit the British market. The skill of designers in Britain has been recognized overseas and many wines produced and sold in countries such as the United States and Argentina have labels that were conceived in Britain.
Winner: Amphora Design
www.amphora.co.uk
The winner of this award, Neil Tulley of Amphora, is distinguished by being a Master of Wine as well as a skilled designer with a degree from Central St Martin’s Art College in London. The business was started in Bath in the west of England in 1992 and clients since then have included Kumala, South Africa’s biggest selling wine, Firebird from Eastern Europe and Devil’s Rock from Germany. Neil Tully estimates that £1m of wine bearing his labels is sold every day in the UK.
13.) Best Sommelier
Sommeliers in Britain play a far less important role than in many other countries. Indeed, they are often treated with suspicion by customers and the press. Jancis Robinson, for example, wrote |
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recently of her unhappy experiences at the hands of French sommeliers.
There is, however, a new wave of young sommeliers who have won the respect and affection of the trade. Sadly, far too many of them have been tempted away to do other things. As we went to press, we learned that the winner of our poll, Ronan Sayburn, has decided to give up his job at Gordon Ramey to become a winemaker. Matt Wilkin, previously at the Capitol, has joined a wine merchant and Gérard Basset MW, “The King of Sommeliers!” and runner up to the world title, has become a hotelier.
If we remove Sayburn, Wilkin and Basset from the list of runners and restrict ourselves men and women who are still to be found, at least occasionally, pulling corks and decanting, we are left with two winners and a long list of excellent sommeliers who received equal numbers of votes. In the end, Joelle Marti-Baron had one more vote than Gearoid Devaney.
Winner: Joelle Marti-Baron
www.london.greateastern.hyatt.com
Ms Marti-Baron was born in the southwest of France and trained at La Poularde, a 2-star Michelin restaurant between Lyon and Clermont-Ferrand, which was very unusual in the 1990s in having a range of non French wines. From there she went to Sydney and thence to the London. Today, she is responsible for three restaurants at the Great Eastern, A Hyatt hotel that was originally converted as part of the Conran group.
14.) Best Promotional Office
While Australia’s recent success in overtaking France in wine sales has to be largely attributed to the marketing muscle of a set of big brand-owners, few would deny that the foundations were originally laid in the 1980s and early 1990s by the Wines of Australia promotional office under the dynamic leadership of Hazel Murphy. Ms Murphy, whose role has been recognized by several awards from official bodies in Australia, set a standard that others have struggled to match. In particular, she introduced programmes of public and trade tastings that would still not be countenanced by any European wine producing country. Today, Australia no longer holds the top crown, but its annual trade tastings are still reckoned to be the biggest and best of the year. Portugal is felt to be trying hard, but there was little praise for Italy “Who might as well not have a trade office here” and California “who aren’t given any decent ammunition to work with; they’re slaves to the big companies”.
France is the most complex country to judge because it is represented by so many organizations, including Sopexa, public relations companies who look after regions like Bordeaux and Champagne as well as an independent event organizer that runs the annual France Under One Roof tasting.
Winner: Wines of Chile
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http://www.winesofchile.org.uk
Today, there is no question that the Chilean office in London, under Michael Cox, former head of the UK operation of Yalumba Wines in Australia, is way ahead of the rest of the pack. Among the initiatives that are thought to have contributed to Chile’s current success in the UK has been the presence at several consumer events and the launch of an annual Export Awards tasting in Santiago at which top UK palates judge wines that are intended for sales in their country. It is to the Chileans’ credit that their neighbours, the Argentines, have decided to launch a similar scheme.
15.) Best Public Relations
The lack of all-powerful gurus in the British wine industry and the relative paucity of wine-related advertising mean that public relations can play a very important role. This is not an easy field, however, partly because the space provided by the media to wine has shrunk in recent years and partly because wine writers are less easily enticed by free lunches than many of their counterparts elsewhere. In simple terms, the 12 or so most influential writers would be more likely to attend an interesting tasting where no food was on offer than a duller one in a Michelin-starred restaurant. Respondents on both sides of the counter – clients and journalists – complained of the lack of originality, professionalism and skill of a large number of British public relations firms. “Far too many rely on press releases and trips. These may have worked a decade ago, but today you need to think outside the box if you want to get noticed”. Another comment was the lack of appreciation of the importance of the internet in general and bloggers in particular. “Threshers and Orbital Wines, owners of the Stormhoek brand, have proved what can be achieved by working with the bloggers. But many public relations’ companies don’t seem to have noticed”.
Winner: R&R Teamwork
http://www.randr.co.uk
Rosamund Hitchcock and Rupert Ponsonby run their operation from an unpretentious office in a West London basement and their evident unwillingness to waste their own money on unnecessary rent is apparently reflected in their readiness to spend their clients’ money wisely.
Among the companies and organizations for whom R&R work are Bordeaux wines, Louis Jadot, Villa Maria, Errazuriz and Yellow Tail. Canny initiatives have included organizing bicycle trips around Burgundy for journalists and Yellowtail promotions using a chain of women’s hairdressers. Interestingly, this is the fourth time R&R has been named as the best of its class. On the previous occasions – in 1999 and 2002, the voting was restricted to wine writers. “PR |
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people with a really unusual understanding of all aspects of the wine business,” was the typical comment.
16.) Best Wine Journalist
The metamorphosis of Wine International magazine into a semi tradefocused publication called Wine & Spirit has left the UK with two consumer publications, one of which, Decanter, sells 40% of its copies overseas while the other, the World of Fine Wine, sells an even smaller proportion of its very small circulation in Britain. It was interesting to note that two of the most highly rated writers, Joanna Simon and Andrew Jefford, have lost much of the space they previously commanded. While Tim Atkins and Matthew Jukes were often praised, the winner was no surprise.
Winner: Jancis Robinson
www.jancisrobinson.com
In the Financial Times and on website, Ms Robinson is the epitome of Englishness: opinionated, but never dictatorial. As one voter wrote, “she would never claim the ‘definitive’ tag so happily worn by Parker.” Another added that “Saint Jancis’ integrity is beyond question.
17.) Most Influential Wine Person
A simple question, which elicited some interesting answers
Winner: Dan Jago, Tesco
http://www.tesco.com
As one respondent wryly suggested, “to say that George W Bush is the most powerful man in the world is a statement of fact, not a vote of approval”. And Dan Jago, who took over the top job at the UK’s biggest wine retailer in May 2006, certainly wields more crude buying muscle than anyone else in the country. He is, as another person suggested “one of the few members of the wine trade in the world who can dine at the same table and on the same terms as the heads of the wine monopolies of Canada and Scandinavia”. But if some of the recognition of Jago’s importance was grudging, there were also comments that his previous background as Managing Director at Bibendum had given him a greater understanding of the need to avoid the business being totally overtaken by big brands and marketing dollars. “I believe that his heart and palate are in the right place, but he’ll have to fight to maintain his integrity, let alone impose it, in a business of the size of Tesco”.
The results of our poll may raise more questions than it answers, but a look at the full list of nominees on the internet and their evaluation by the trade will prove that it provides a realistic picture of the British wine industry in 2007.
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