THE INTERVIEW - NICK RICHARDS

Published: 23 July, 2008

Nick Richards, Managing director, Vinoceros Ltd, Cornwall. Interview: Josie Butchart

Vinoceros Ltd, Stanley Way, Cardrew, Redruth, Cornwall TR15 1SP

Tel: 01209 314 711

www.vinoceros.com

Last month, New World wine specialist Vinoceros celebrated its 10th anniversary as a national wine importer and distributor. The Vinoceros business was formed in 1990 as a trading arm of regional wholesaler Cornwall Wine Merchants (founded by Nick Richards in 1986) but when the wholesale business was sold in 1994 it took on its present form. Last year the portfolio expanded to include Old World wines when Vinoceros bought Spanish wine specialist wine merchant Laymont & Shaw. Richards ran his own restaurant (Bugsy Malone's American Diner) before moving into the wine business.

How did it all start? Working on my own as a regional wholesaler back in the '80s, with a 600 overdraft. I was really just selling out of the back of my car to local hotels and restaurants. In my first month I took 49 - that was a tough month! But the business grew, so after a while I sold my car to buy a van, then eventually I bought a new car and got a driver for the van and a part-time assistant for the office. It all happened quite rapidly. I think that was because I was completely passionate about giving a fantastic service. Every restaurant I supplied became a friend. They would ring me up at home on a Saturday night and say: I've just had a big booking for 9 o'clock and they want Champagne.' So I'd drive to the office, grab a case of Champagne and drive 30 miles with just one case.

Why did you decide to change direction? In the early 90s we had a pretty nasty recession. As a tourist area, Cornwall was badly hit and a lot of restaurants went under. Although our sales continued to expand it was becoming increasingly difficult to grow, as a profitable wholesale business in that environment. Wholesaling is very labour- and capital-intensive. The more you grow the more duty paid stock you need to keep and the more vans and drivers you need. It's also very difficult to maintain the 100% service level that I wanted. So, in the last year or two of our wholesaling days, we began to look for ways of increasing our margins and our buying power.

What did you come up with? We had been a regional distributor for Jacob's Creek, looking after the brand exclusively in Devon and Cornwall until it went into Safeway in 1989. Then our restaurants started phoning us up to say they didn't want it on their wine lists any more. Having worked really hard to build reasonable sales, we didn't want to get bitten again, so we decided to try and create our own brand from Australia. We sourced the wine through a broker and created the brand Jarrah Ridge, which we still have. But obviously we had to commit to reasonable volumes and buy full containers, which in those days was a bit difficult for us, so we got a couple of other wholesalers to chip in. That was really how the idea of getting into national distribution was sparked.

How did you make the transition? In 1993 we took on our first major agency, Brian McGuigan Wines, and it really started to fly on a national basis, so we set up regional distribution through the wholesalers we were already working with. Then in 1994 we decided that was where our future lay and, in October, we sold the wholesale business, Cornwall Wine Merchants, and Vinoceros, a trading arm of our company, became our entire focus. As we'd been an independent wholesaler, we understood the pressures of being in that sector, so it was easy to give other wholesalers what they wanted.

Why did you buy Laymont & Shaw? When we set up Vinoceros as a New World specialist, it was probably a good decision because it gave us a USP. There was really no one in national distribution entirely focused on the New World, although it was, and still is, a very exciting area. But increasingly, with consolidation all around us, independents and multiples are looking to buy more products from fewer suppliers, so to be attractive to the market you've got to have a broad portfolio. We decided about 18 months ago that we were going to try and build up an Old World portfolio. When the opportunity came along with Laymont & Shaw, it seemed to make so much sense. They are eight miles from our office, we knew them well, and they have a fantastic reputation and lots of knowledgeable people.

Are you planning any more acquisitions? If we could find a similar company specialising in Italian or French wines that would be nice, but I'm not sure there are that many around. We are certainly looking, but one of the problems when you are a fairly mature company is that you immediately have conflicts between portfolios. Our commitment to our wineries is such that we wouldn't take on any conflicting products, and there is no point in buying a company and then just dumping the portfolio, because that's what you are paying for. What we are looking for now in the Old World is more of what we are doing in the New World: strategic partnerships.

How does the partnership with McGuigan Simeon Wines work? In 1994 we set up a joint-venture company with Brian McGuigan Wines, as it was then called, which was probably the first of its kind. Then last year, following the McGuigan takeover of Simeon, we took it one stage further and they purchased our 50% of the joint-venture company. That company became McGuigan Simeon Europe. We have a 10-year contract to administer its business. It has its advantage and disadvantages, but philosophically we made the decision that because of the way in which the market is evolving, buyers want to get closer to the producer, and the producer wants to get closer to the buyer and the consumer. Price pointing is so critical that the old traditional distribution route is always going to be vulnerable.

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