Les Caves de Pyrene turns to exports

As sales collapse in London, leading artisanal wine company Les Caves de Pyrene is forging ahead with plans to launch a new export arm. Barnaby Eales reports.

Le Caves de Pyrene
Le Caves de Pyrene

Les Caves de Pyrene, the London-based distributor, importer and retailer, has launched a new export arm to tap into new growth markets for natural and organic wines. Doug Wregg, buyer and marketing director at Les Caves de Pyrene, said the company was developing a new portfolio of between 15 and 20 ‘own label’ wines for export to Canada, the US and Asia.

The company’s move into exports comes as it grapples with tumbling sales in the UK market, which fell by 70% in March and 50% in May as a result of the Covid-19 pandemic. About 85% of the company's UK business is on-trade sales.

However, Wregg described its new export arm as a “seeding process” for growth, rather than a way of selling on existing stock elsewhere than Britain.

“As we will be taking on new lines, we will not be reducing the stockholding, but turning around stock quicker and opening new markets for more wines in the future. So, it is a seeding process, rather than addressing the results of the lockdown,” Wregg told Meininger’s.

On exports, Wregg said the company would secure exclusivity rights with growers over the ‘own label’ wines.

Alta Alella Vora La Mar (Pansa Blanca) is one of the first new wines for exports secured through a new collaboration agreement with wine company, Wine Is Social in Barcelona.
“Some of the 'own labels' will be wines from new growers for us. Some will be new labels from existing growers that we work with. Some will be from our already-existing own labels,” said Wregg.

As well as Spain, he said new natural wines bought at €7 and under, would also come from the Loire, Campania and Piedmont. “We are using existing labels from Sicily – Ciello & Baglio – and Australia, but we need to build up a much larger portfolio of these wines to create a comprehensive offer. In the short term, there isn’t sufficient volume of some of the lines, so again need to build over time,” he added.

Wregg said that “the restaurant recession” in London prior to the pandemic had led the company to look to exports for growth rather than the UK, which Wregg said was a saturated market.

Les Caves de Pyrene’s annual turnover increased 3% to £26.6m in the tax year ended in March 2019, but annual net profits fell to £624, 342 down from £759,777 in 2018 according to Companies House.

Wregg said the company had sufficient reserves to ride the current economic storm to prevent it from taking loans.

Les Caves de Pyrene has around £5m ($6.2m) of stock, which Wregg was “well above normal”. Lockdown has led to the closure to two of its wine bars in London, which may not reopen. Wregg said that its involvement as a shareholder in its distribution subsidiaries in Australia and Italy, which operate independently, had not been affected by the downturn in sales.

On-trade industry hopes are pinned on the return of greater sales in the run-up to Christmas this year; however, Wregg expressed concern over the prospect of bad debt in the on-trade in Britain. “Some restaurants received business loans and were able to pay major suppliers, but some didn’t. A lot will depend on further government support, the ability to take up interest free loans and compassionate landlords (which could be an oxymoron!). I think quite a few businesses will decide that they don’t want to work for the landlord, as it were.”

Le Caves de Pyrene was founded in London by Frenchman Eric Narioo in 1988 under the name Santat Wines. It had become Le Caves de Pyrene by 1996, when Doug Wregg joined. It is now an international company, with arms including Les Caves de Pyrene Italia in Italy, among other enterprises.

Barnaby Eales

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