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Published:  23 July, 2008

Dan Townsend, Managing director, Matthew Clark Wholesale, Bristol. Interview: David Williams

Dan Townsend has been at Matthew Clark Wholesale (MCW) for three years. He joined the business from Scottish & Newcastle, where he spent 14 years working in both the off- and on-trade divisions and where his last position was head of the company's West Midlands business unit. After initially taking care of MCW's Midlands business, Townsend became managing director of the exclusively on-trade wholesale business in May 2002. The move put him in charge of 1200 people, 320 of them in front-line' sales roles, and a turnover in excess of 450 million each year. Townsend describes the company as a wine-led composite wholesaler' that provides a one-stop shop' for customers in all kinds of on-trade outlets, from top-end restaurants to pubs.

You moved from a branded business at Scottish & Newcastle to wholesale at Matthew Clark. How do the two compare? I think there's a lot made of the differences between a branded operation and a wholesale one. Of course the margins are different, but at the operational end they are basically the same: you're selling and hopefully creating some value for customers so that they buy more from you. And you've got to turn up on time with your delivery vehicles and charge the right price. It's about getting the basics right, and supporting the retail operations you supply.

How is the on-trade market at the moment? It's not been the easiest of times. I joined Matthew Clark Wholesale (MCW) three weeks before 9/11, and that didn't do the on-trade a lot of good. If you look at the hotel sector in particular, there are signs that it is recovering, but it's been a tough couple of years, and getting growth for us out of there has been very tough. Latterly, getting growth out of the pub end, particularly on the high street, has also been tough.

Why has the high street been difficult? There is pressure on the retail pounds, there's been a lot of investment in outlets, whether it be by individually owned outlets or national account chains. There have been one or two high-profile casualties over the last few years, and in many cases we've been supplying them. Having said that, what you do see on the high street is that there are operators, again both individuals and national accounts, who are getting it right. The good thing about MCW is that we're fairly well spread in terms of the account base we supply. We don't have all our eggs in one basket, so we can ride the peaks and troughs.

Which drinks sectors are doing best for you? I'm happy to say that we've grown in all of the product categories that we sell. In wine and spirits we've got sustained growth, and also in beer, which is an important, if smaller, part of our proposition. Vodka and premium spirits are doing very well, but blended whisky is a hard sell. And though we've had a lot of success with RTDs over the last few years, the last 12 months have really seen that tail off, and that's been a challenge for us. With RTDs I think what we're seeing is a natural hiatus. There was a lot of excitement when they came out about five years ago, but you could plot a graph from the duty hit 18 months ago and see that that was where downturn started. There's also still a massive difference between beer and wine: 60% of beer is sold in the on-trade but less than 20% of wine. I see that as a massive opportunity for wine. Ok, there's a pub and beer-drinking culture traditionally in this country, and wine will never quite match that. But 20% is a very low number. I would say 30% is a realistic target.

What's the key to making wine work in the on-trade? To understand and be successful with wine in the on-trade, you have to understand the on-trade's constituent parts. It's not enough to think that there's a one-size-fits-all solution: not everything will appeal to every operator. You also have to understand that it is very different from the off-trade. It would be very easy to say that the on-trade will just follow what has happened in the off-trade, with New World wine taking over. But people go to drink in the on-trade for very different reasons. Yes, New World growth is far ahead of other growth, but it's important to recognise the role that brands do and don't play in the on-trade. Not everybody wants to go into their favourite restaurant and see the brand they are used to seeing on the supermarket shelf. You have to come up with softer branding.

What effects has Constellation's acquisition of Hardys had on MCW? Well, it's enabled us to strengthen our Australian and - don't forget - our New Zealand range, and we did that fairly quickly after the acquistion. Working with Hardys, we were also able to come up with three new ranges that are exclusively on-trade, MCW products. But we are not the Hardys Wine Company, we are an independent wholesaler. We make a wholesale margin on everything, so we haven't go any salesmen working harder on one product than on any other. It would be much harder to sell MCW's proposition to our customers if we did. Every product we list has to match up to competing products, no matter who they are produced by. So we've retained distribution of Southcorp's Penfolds and Wynns alongside the Hardys brands. From Chile, we've also got Errzuriz, even though Constellation owns Veramonte, and we have Villa Maria and Constellation's Nobilo. Only 15% of the business is taken up by Constellation products.