Nick Pringle was a professional cricketer who played for the English county of Somerset for five years before joining the drinks industry. In 2011 he became commercial director for Africa, the Middle East, South and Central America, sub-continental Asia and southern Europe for Accolade, the Australian drinks giant, before taking on the role as the company’s Head of China in 2016. In June 2017, he took on the role as Chief Operating Officer at Sula Wines, India’s largest wine producer and one of the sub-continent’s biggest importers of wines, beers and spirits. His international experience gives him a rare insight into a wide range of developing markets.
MEININGER’S: Is there an advantage to going into the corporate world after playing sport at a high level?
PRINGLE: Absolutely. Going into sales as I did, is a very good fit because, coming from sport, you’re competitive, you’re driven, and you want results. When I was responsible for developing markets at Accolade that translated into tripling the business. When you progress to somewhere like India where it can be hard to get a straight answer, a competitive instinct helps. But there’s another element, if you look slightly deeper. Professional sports nowadays are very processed. There’s a systematic approach to how you approach a season. So you strategise and you work out your game plan. When you’re young, you don’t really see how it applies to big wide world.
MEININGER’S: Is there a difference between having been part of a team rather than playing an individual sport?
PRINGLE: I actually wrote a paper once about the way Clive Woodward [coach of England’s trophy-winning rugby team] brought in specialists as trainers for individual players. It was a controversial concept that hadn’t really been done before. In business, you can apply the same idea, of understanding how to get the best out of employees. When you’re interviewing, you’d say, “Where are they going to fit within this team?” And sometimes you may look into the future. Things applicants say, or some of their experience may make you think that, in 18 months time, they could slot into a role that doesn’t even exist yet.
MEININGER’S: Before you moved into wine, you were working for Whitbread on a portfolio that included beers and spirits, as you are again today. Do you think that wine is treated too separately sometimes?
PRINGLE: People I’ve worked with at Accolade, for example, have either come into wine and stayed there or come in from a completely different industry. But they haven’t often come into wine from other drinks. I think that the more experience you have, the more you apply the learning from each category to the others. And in a lot of cases, particularly in developing markets, you are going after the same consumer. The people in China or India who might drink Louis XIII Cognac at the equivalent of $3,500.00 a bottle might also buy your super-premium wines. But the wine industry doesn’t always see it that way.
A journalist recently dug up an interview where I said that in Africa the consumers are quite similar. In the developing markets, consumers often start with spirits and then progress into beer, and clearly imported beer like Heineken will be quite important. Then consumers move through to wine. I’ve been fortunate in having the experience of getting to the consumer across all of those drinks categories in different markets.
MEININGER’S: You’ve worked in Africa, mainland China, Hong Kong and India. What are the biggest differences?
PRINGLE: South Africa’s a producing country and Hong Kong isn’t, but they’re both quite mature markets with a disciplined retail and trade environment where you can build brands. Walk into supermarkets in both places and you can be in any supermarket in the world. And you’ve got fantastic eateries in both markets.
In India, 600m people are using mobile phone devices, so there are similarities with the numbers you’d have in China, but the Chinese use them for shopping and you’ve got 25-year-old kids who’ve probably never been into a shop in their lives. In India, e-commerce is much less developed and you definitely can’t shop on-line for alcohol.
In China, people can buy the whole range of wines, so you can get very close to the consumer across the country far quicker than any other market that I’ve experienced. But you need to have a decent distribution network, whether it’s on- or off-line, or you have to have a share in, or acquire, a distribution business. All of those things are challenging and difficult in China and unless you’ve been there a long time, like companies such as Treasury [Wine Estates], it’s very, very tough.
MEININGER’S: How about the difference between these markets when it comes to distribution and the on- and off-trade?
PRINGLE: In China, e-commerce has had a huge effect on distribution. I haven’t seen anything that suggests that it’s on the horizon in India. When it happens it will be the game changer. But conventional retailing is developing. Unlike China, in India, you haven’t had a retail environment where you can buy wine. The off-trade has become more prevalent over the last maybe five years and there are some disciplined and quite high quality retail outlets where you can buy very decent local wine plus international offerings. But it’s still predominantly an on-trade experience.
When talking of the on-trade, one of the key things I’ve seen in the last five years in India – and perhaps there are similarities with Hong Kong, Cape Town, Beijing and Shanghai – is the growth in standalone restaurants. Traditionally, if you wanted an international experience you went to hotels. That experience is now lessening to the point where on, say, New Year’s Eve, in somewhere like Mumbai, people will go to standalone restaurants with really good food, global international food offerings and imported meats. Two of those are probably opening in Mumbai every week.
MEININGER’S: Another big difference between India and China must be the ease of doing business across China.
PRINGLE: India is very much a collection of states, where things can change very quickly. Duty and excise are the main things. Two weeks ago Karnataka, for example, reduced duties on spirits. But then you’ve got this overall anti-alcohol agenda in India. The prime minister comes from a dry state and there really is a political movement right across the country in different states that would vote to ban alcohol. In China that doesn’t apply. And that’s where you’ll win in China quicker than in India -- but you can get burnt very quickly in China as well.
MEININGER’S: And presumably logistics are another challenge in India?
PRINGLE: I had a vision that maybe in three years, from a quality perspective we could get a bottle of wine delivered to a consumer anywhere in the country with no compromise on quality. Three years is unrealistic; maybe it’ll be possible in five. It’s a big ask, but India is principally a distributor-led market. If you’re partnering the right people you can make these things part of your terms at the outset. When doing a lot of our deals right now, we say, are your wagons and storage at the other end chilled and air-conditioned? In Mumbai we have five or six distributors across the city and their wagons have to be chilled. But then you have retailers without air conditioning – or that turn it off when they are closed. So in Goa, for example, we’re putting 50 chillers into key accounts.
MEININGER’S: There are very wealthy people in all of these developing markets, but attitudes to super-premium wines seem to differ.
PRINGLE: There are fundamental differences. In Angola or Nigeria you can sell to the high-end earners. There’s a whole image thing, and a suspicion of wine that’s cheap. On the other hand, it’s definitely fair to say that in South Africa there’s a resistance to wines that are seen as expensive. You can have a great three-course meal with fantastic local wine for a third or a quarter of the price you’d pay in Hong Kong or London. Wine in Hong Kong is very, very expensive. Clearly there are consumers there in Beijing, Shanghai and 20 cities in China who want quality. But there are also people who spend money in a weird sort of way. I actually saw a woman buying five Louis Vuitton handbags. There was no logic to the purchase. And don’t forget, there’s a culture of premiumisation. There are local spirits in big, gaudy, really expensive bottles, but what’s inside them is very ordinary. You don’t see that in India. You don’t have gaudily packaged hugely expensive local whisky for example.
Johnnie Walker Black Label whisky is cool in India, and you see it and Beluga vodka in ice buckets in standalone restaurants. We’ve launched an Indian whiskey that’s probably price-wise going up against Teacher’s Highland Cream [a standard blend of Scotch whisky] but you wonder if you went up against a Black Label whether that would work. There’s just a perception that Indian whiskey is cheap, and you’re probably 10, maybe 15 years away from the consumer moving through that. And the same could be true for super-premium Indian wine.
MEININGER’S: Does China’s gift-giving culture help to explain its market for super-premium wines and spirits?
PRINGLE: Yes, but interestingly enough in India you have religious festivals like the festive period of Diwali and even around Christmas time, where alcohol is allowed and perceived to be OK. Gifting can become very important and I think there’s an opportunity there that we, as a wine company, haven’t really exploited.
MEININGER’S: How about the influence of critics and scores?
PRINGLE: Scores still work in China and Hong Kong. In India, they’re probably only for people that have lived in or regularly travelled to the US or UK or Australia or been educated there – millennials, 30 to 35 year olds.
MEININGER’S: In Australia, brands like Hardy’s have historically exploited the notion of the ‘ladder brand,’ offering wines at a range of price points. How does this strategy work in developing markets?
PRINGLE: In India, because of import duties and taxes levied by individual states, it’s very difficult to have a pricing pyramid. But the most successful brands in these markets have very small ladders. Is Jacobs Creek [the leading import brand in India] really a ladder brand? It has two or three rungs and, ideally if I were marketing a brand, I’d probably go for two. More than that, you confuse people and you don’t get scale or efficiency.
MEININGER’S: Let’s talk about wine styles in these markets.
PRINGLE: China has been historically driven by red, French and super premium. In India, we’re 60% white, 35% red, with sparkling getting the remainder, but the market for reds is growing and we’ve just launched a limited production Grenache rosé that’s going down well.
At Sula, we can move the dial, thanks to our 65% market share. That’s not an arrogant comment, by the way, it’s a fact. We have a winery visitor’s centre with a great environment and 300,000 people going to it every year. And that could be 350,000, or 500,000. We could replicate that further south and you could imagine two or three pop-ups of the best retail outlets across the whole country. You could do trials to give the consumers what they want. That could be super-premium reds, funky whites and sangria. And then you could do fruit-flavoured wines like Blossom Hill and Accolade’s Echo Falls Fruit Fusion, and have the same kind of success as they’ve had in the UK.
MEININGER’S: How about sparkling? It’s been slow to take off in China.
PRINGLE: It’s a huge opportunity in India. Locally produced sparkling like Sula’s and Moët’s are driving the category. Sales of imported fizz seem pretty flat, but if you go into the hotels and you can see growing interest. In China, in the medium term, sparkling will take off but my gut instinct says that a lot of it will be pink Moscato.
MEININGER’S: And packaging?
PRINGLE: In India, I would probably start with smaller formats – maybe single-serve bottles, if you can get the line and cost efficiency. You’ve got a perceived value, and it can work in the fridges and hotel rooms, and there are four-packs for retail. It could work across the board. I’ve had conversations around bag-in-box but I think this is probably a step too far, especially with the heat issues here and transportation. And I’d be looking at cans, which could travel well in India.
MEININGER’S: What’s happening in volume terms in India?
PRINGLE: Well, if you believe IWSR statistics, wine is less than one percent of the Indian alcohol category, but in some places it’s closer to 25%. And I’m predicting compound growth of 20% over the next five years. In a country with the potential of 100m consumers it would be very significant.
MEININGER’S: Even with Indian excise duty and taxes levels on imported wine of 150%?
PRINGLE: You never know what could happen. [Indian Premier] Mr Modi could do a deal with President Trump tomorrow. Or a deal with Australia or the EU, and duty rates could drop significantly. That could be one of the biggest threats to domestic wine, but you could still have local taxes.
MEININGER’S: Do you agree with the industry mantra that education is the most crucial missing ingredient in building developing markets?
PRINGLE: I think education is absolutely fundamental – all the way through the chain to the consumer. I’ve been in so many restaurants where waiters have no idea what they are serving, or how to serve it.
MEININGER’S: Again, the other mantra is food and wine matching. Is this a valuable way to market wine in India?
PRINGLE: It’s one of the roads that we can take along the journey. People say food and wine pairing in India isn’t possible. As a very well known French producer said to me. “The way to pair wine with Indian spice food is with beer.” But it’s a myth and it’s an excuse. Yes there is spice and really heavy spice. A lot of really good Indian food is very subtle. I think food paring is integral, and you come back to standalone restaurants becoming more and more prevalent. It’s not just Indian food that’s on offer in India.
MEININGER’S: Finally, what other factors do you think are going to bring the biggest changes to wine in these markets?
PRINGLE: In India, I think it’s women actually. I’m not so sure about China – I think it’s still men who are driving the market there, but 25- to 30-year-old Indian women are having a huge impact.
