Looking Back, Forging Ahead Q&A: Steve Moody, Fells

By Harpers Editorial team

Published: 09 January, 2023

In the last of our end of year Q&A series, Steve Moody, CEO at Fells, reflects on the highs and lows of 2022, plus the hopes and plans for the business in the year ahead.

How has business been for you across 2022 when compared with 2019?

The volumes this year have been broadly in line with 2019 – which all things considered is maybe what we should have expected as everyone moves back to a post pandemic way of living.

What has changed from a Fells point of view is our team on the ground. We have always had a strong regional business, but we took the decision to strengthen the London and regional team as we moved out of lockdown. We hired Stefan Neumann MS as our wine consultant, who has made great strides supporting our sales efforts to the on-trade in London and we added two people to the regional team. This investment by the business is helping us serve our customers better and open up new opportunities.

What, for you, were the specific highs of 2022?

We were one of the first wine companies to run a portfolio tasting in February this year and when we took the decision to go ahead with this event there was still much uncertainty about the possible impact that Covid might have. As it turned out the trade were ready to get back to tasting wine and meeting face to face, so it proved to be a roaring success. In fact, it was the most successful portfolio tasting we have run for quite some years. We look forward to going one better in 2023.

Regarding the trading landscape, I think the highlights for a business such as Fells were the strong recovery of the prestige on-trade and the continuing positive performance of fine wine.

And the lows?

The low has been the deteriorating economic outlook. Last year started out looking very positive with Covid all but nearly behind us, but other events quickly took over and this positive outlook faded.

We now find ourselves navigating choppy waters. We are likely to experience a prolonged period where the watch word for many consumers will be value. The cost-of-living crisis presents a challenge to all but a few of our customers and we are already seeing a change in the buying behaviour of many.

What as a business have you done to help mitigate the effects of inflation for you and your customers?

Where possible we have adsorbed additional costs such as freight and exchange rate to enable us to maintain our issued price list for the full 12-month period [of 2022]. Unfortunately, we are not able to shield our customers from these costs increases in the medium term and we will see prices rise in 2023.

We are constantly looking at ways we can support our customers by working collaboratively with them to agree plans around the wines and brands that are important to them.

How much of a concern is the proposed change to the duty regime?

The proposed duty changes are a real concern to Fells as I am sure they are to the wider drinks trade. We are one of the most highly taxed markets globally and the new system being proposed is likely to add to this burden with additional administration. This is not what Fells or the trade needs. We need a simplified and fair duty regime that is easy for the trade to administer and fair to the end consumer. As an example, new duty and VAT on a 75cl bottle of 20% Port could increase the retail by £1.09 a bottle. This is extremely concerning to us and would be a most unfair additional expense for the loyal Port consumer to bear.

In terms of the product itself and drinking occasions, which current trends in the drinks world would you predict to continue to grow and why?

The cost-of-living crisis will likely drive an increase in at-home consumption. A trend we experienced after the financial crash in 2008. Retailers looking to capitalise on this will have to think about their offering carefully. Interesting, eclectic ranges that help consumers navigate to something interesting or unusual, while still delivering value, will capitalise on this ‘at-home’ opportunity. Ranges which meet some of the underlying trends in the wine sector, such as sustainability, indigenous grape varieties and new regions, while offering lighter styles of red and white wines, will do well, in our opinion.

When in the on-trade consumers will want to make sure their night out is special and worthwhile – leading to more adventurous choices in food and beverages. Customers will be looking for indulgent experiences and making their choices accordingly.

No & Low wines continues to grow, which is indicative of an underlying trend we have been aware of for many years as consumers try to moderate their alcohol intake. What I might add here is that the potential change to the way duty is calculated next year may accelerate this trend into the mainstream wine category. Lighter-in-alcohol wines may be one of the key beneficiaries of the chancellor’s plans.

As a business, what goals have you set for 2023 and how do you expect to achieve them?

We have some exciting plans for 2023 already in place, the first of which will be opening the doors to our portfolio tasting on 21 February. The Fells 2023 Portfolio Tasting will be bigger and better as many of our wine producing families are attending this year and eager to pour their wines for our customers.

We will also be running our London focused Fells 100 Collection event for the on-trade, organised with the help of Stefan Neumann. We have had lots of positive feedback from the trade about this more tailored approach to the on-trade and we are looking forward to continuing this in 2023.

I can’t say much more about our other announcements for next year at this stage. All I would say is watch this space!

More generally, in terms of business, how do you predict the drinks landscape will look this time next year?

We are expecting the trading landscape to be like the close of 2022 with consumers making tough decisions about their discretionary spend. The last few years have been tough on many importers and wholesalers, and I wouldn’t be surprised if there was more talk of consolidation. Fells is well placed to weather these turbulent waters and we will endeavour to support our customers as best we can during this period, however long it lasts.

Quick fire questions:

Champagne or English sparkling?

Both

Cocktail or straight spirit?

Straight Spirit

Riesling or Chardonnay?

Riesling

Pinot Noir or Bordeaux-style blend?

Bordeaux style blends

Michelin starred or relaxed bistro?

Relaxed Bistro

Desert island tipple?