The top distributors in Denmark

With more than 1,000 distributors at work in the Danish market, there’s somebody for everyone. Elsebeth Lohfert identifies the top ten.

Thomas Pedersen; Henrik Dahlgaard
Thomas Pedersen; Henrik Dahlgaard

Unlike the other Scandinavian countries, Denmark has never had a state monopoly for alcoholic beverages. This means that wine can be bought everywhere: at the gas station, the florist, the supermarket, the specialist store, your newspaper wine club, Vivino app, and numerous websites – and every media, new and old, is used to attract attention, from Facebook to Instagram to television and newspaper inserts.

Nothing, though, is quite what it used to be. The newspapers have become wine retailers offering subscribers good bargains sourced from the established trade. The two biggest multiples, Coop and Dansk Supermarked, have become publishers, printing ‘wine magazines’ and giving them for free to their supermarket customers.
 

Vivino use their app to sell wine from a wide range of big and small importers, with a 30% to 50% discount. VildMedVin.dk also use their digital platform to sell wine from the portfolios of established Danish wine importers. How is this possible? And why is everybody dealing with everybody, often with a complete lack of transparency to the consumer? A wine trade responding to ‘disruption’ is the explanation used by insiders to describe what’s happening. And one wonders: who will succeed, how, and why?

Digital giant

Will it be IT entrepreneur Thomas Pedersen? He had a success online business called Computerstore (sold in 2007), where brands such as IBM were sold on the virtual shelves. Then Pedersen invested the money he made from IT on doing business with wine – his way. In 2006, he established a company called VildMedVin (Crazy about Wine) with a friend, Peter H. Petersen, a wine professional working for Østjysk Vinforsyning.

Using a similar model to Computerstore, he created an umbrella platform with a big selection of wines from many Danish importers. Today, more than 40 Danish importers supply more than 6,000 wines to VildMedVin.

With the business a success and growing year by year, new business ideas came to Pedersen’s mind. As he got to know the Danish wine trade from the inside, he became aware it was possible to make profits of 50% rather than the 10% he was used to in the IT trade. “As a consequence wine prices are very high in Denmark,” he says and explains that it led him to create a new concept called Winefamly. Opening its digital door on 11 December 2016, it’s a wine club where members pay 75 DKK ($11.93) every month to get access to the wine sold, which is imported directly by the club to avoid any middlemen and to be able to offer the lowest possible prices. Famous former Michelin- and TV-chef Thomas Herman is part owner and ‘the face of the company’. Every type of media is used to shout out the news, broadcasting his well-known boyish smile and cap on his head via Facebook, Instagram, and television, plus a traditional 12-page insert in the big Danish newspapers. No one’s to miss this new possibility.

“Online marketing is not enough,” says Pedersen, as he also believes that people will keep on buying wine in shops. He forecasts that his one VildMedVin shop will develop into a chain of shops where the wines of the Winefamly club also can be sold to members. Other future possibilities for Pedersen are to take sommelier education and challenge Christian Philipson’s Philipson Wine, the reigning king of online retail in Denmark.

Reigning monarch

Philipson was originally, like Pedersen, an outsider in the wine trade. He was the CEO of a steel factory in Burgundy when, in 1987, he began an import of his favourite wines, selling them from his grandparents’ garage. An entrepreneur par excellence, he was appointed ‘Gazelle of the Year’ six years running by the financial newspaper Børsen, and in 2007, Philipson Wine was ranked as the ninth-biggest wine company in Denmark. During the 1990s, Denmark’s wine trade was struggling to adapt to the rise of the supermarkets. Into this milieu came the youngster Christian Philipson, for whom rules didn’t exist; in 1992 he introduced the ‘cash and carry’ concept of selling only 12-bottle cases. He was thrilled to sell wine at reasonable prices and earn a good return from the strength of his buying skills. He bought big quantities of classified Bordeaux at very low prices from the Norwegian and Swedish monopoles, who had more stock than they could sell, and became famous nationwide in 1993 when he sold Château Latour 1987 for a mere 199 DKK ($31.50). This created an uproar in the established wine trade, because his actions threatened not just pricing, but many years of fat profits. But he just carried on and still does. In 2015, after almost 30 years, a new structure of the company dividing sales and purchasing activities between Philipson Wine ApS and Philipson Wine Trading was implemented. Christian Philipson became the Chairman of the Board for Philipson Wine ApS and appointed his first CEO, Peter Wedelheim. Philipson Wine Trading is now Christian Philipson’s playground, which he uses to look for new brands from round the world at a steady high speed. Vertical VIP tastings at the three-star restaurant Geranium is another of his newly developed specialities.

Supermarkets

Not only is the supply of wine in Denmark endless, but so is the variety, from vin nature to English sparkling. This is thanks to more than a thousand small importers, many for whom wine is more con amore than profit. They work in contrast to the great concentration of the estimated 83% of wine distributed by the three big multiples with their supermarket chains. Coop with Kvickly, SuperBrugsen, Dagli’Brugsen, Irma, and Fakta, has the biggest share of almost 50%, followed by Dansk Supermarked and their chains Netto, Føtex, and Bilka, and then Dagrofa with Meny, Spar, Min Købmand, and Let-Køb. They fiercely compete for customers using wine as bait. What is found on the shelves is decided by the three powerful category manager of wine: Brian Karstens from Coop, Henrik Dahlgaard from Dansk Supermarked, and Mogens Alexander Krasilnikoff from Dagrofa. But how much of the wine they sell comes from their own imports? Meininger’s asked the three giants. From Coop the answer was more than 80%, Dansk Supermarked 90%, and Dagrofa 50%.

The remaining percentages are typically filled out by the three companies: AMKA, Globus Wine, and Taster Wine, which represent numbers four, five, and six in the top ten of the biggest Danish wine companies. This means that it’s possible to access the big retail supermarket chains through these importers.

AMKA not only does business with the three big multiples, but also with wine shops, B2B, HoReCa, duty free, and travel retail. Taster Wine has a similar profile, with a nationwide distribution to chain stores, supermarkets, grocers, discount chains, specialist shops, and duty free/travel retail.

Other major players

In 2007, three colleagues from Taster Wine – Henning Skov Andersen, Nicholas Hammeken, and Uwe Petersen – met privately and decided to establish a company of their own. They called it Globus Wine and opened state-of-the art filling facilities outside Copenhagen. Huge quantities of bag-in-box and bottles pass their lines today before being delivered to large and small distributors in Denmark and Scandinavia. For instance, they bottle Spier and Savanha for Coop; Mulderbosch, Eagle Crest, Robertson, and Ankerbaai for Dansk Supermarked; and Nugan Estate for Dagrofa. Part of their success has been the considerable rise in the Danish bag-in-box consumption, from 5% in 2007 to 35% today. Growth is still on the agenda with a total of 70 employees in Denmark and Harrislee, just across the German border, and a new investor – Norway’s Credo Partners – which has a 51% majority holding.

The last three companies in the Danish top ten are H.J. Hansen, Kjær & Sommerfeldt, and Sigurd Müller. H.J. Hansen has exclusivities with about 100 producers with whom they build long-term relationships and sell their portfolio of 2,500 wines to HoReCa, business-to-business clients, or online, or through the national Vinspecialisten chain of 53 shops. Kjær & Sommerfeldt is privately owned by CEO Mads Stensgaard and his partners. They have modernised the 140-year-old company and today focus on HoReCa and business-to-business sales.

Sigurd Müller Vinhandel is owned collectively by restaurateurs and was established in 1975. Ib Bergkjær, CEO of the company since 2009, has a number of famous and exclusive brands in his portfolio. One such is Pol Roger, which he recently learnt was offered to a spot price online. “It was quite a detective’s work to find out what had happened,” he says, “and it’s made us realise that new ‘holes’ of parallel imports inevitably will turn up again. There is nothing we can do about that.” He says the company will continue to say no to Vivino and others who would want to “make an online parallel discount sale of our wines. We might be more expensive, but our customers value other advantages. Based on a good economy we can give them credit, but also what matters much to them – delivery security. And I must admit that we have never done better than today.”

There might be disruption – but it seems a merchant is still a merchant.

 

What the Danes drink

In 2016, Danish wine imports amounted to 178.2m L. Almost half of it, 46%, was bulk, and 17% was re-exported. Looking at the market share per country, 21% came from Italy – the favourite wine country of the Danes since 2010. In second place was Chile (15%), followed by Spain (13.2%), South Africa (12.7%), France (12.6%), Australia (6.6 %), Germany (5.3%), and the US (3.1%), with other countries collectively amounting to 8.9%.

  Red wine dominates, with 119m L in 2016 as opposed to 59m L of white wine. However, Nicolaj Larsen, the deputy chairman of the Wine and Spirits Organisation of Denmark (the VSOD) points out that in the statistical figures VSOD receive, red wine and rosé are put together, but it’s assumed that rosé has now reached a market share of 10%. Sparkling is also on an upward curve – there has been a 60% rise of all sweet and dry bubbles since 2016.

 

 

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