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Looking ahead: Andrew Bewes, MD at Hallgarten

Throughout August, Harpers will be running a web series that will include interviews with some of leading voices in the trade, to discover what trends and challenges they’re expecting to face in the latter half of 2017.

We continue our series with Andrew Bewes, managing director at specialist importer and distributor, Hallgarten Druitt & Novum Wines.

1. How has the first half of 2017 compared to 2016?

Hallgarten has enjoyed a buoyant first half with double-digit sales growth and significantly more new accounts opened than in the same period of any of the previous five years. We believe that a number of different circumstances have combined to create this period of growth for Hallgarten.

Internally, these include the continued evolution of our portfolio, our investment in new and highly qualified sales staff and significant investment in our customer service, particularly our MW-led customer wine and front-of-house training team.

Externally, whilst the market is highly competitive and changing rapidly, we have seen the premium On-trade, which accounts for over 70% of our business, consolidate and further professionalise, and this has brought additional volume from many customers as they reduce the number of suppliers that they work with.

2. What’s your strategy for the second half of the year, through autumn and leading up to the Christmas trading period?

Our aim in the second half of the year is to work ever more closely with our core customers to improve their wine sales and mitigate the challenges that we all face. On pricing, a wine listed at £6 on our trade list back in January 2016 should be on our current list at £6.46 through a combination of duty and FX rises – in total a rise in price of 7.7%.

The pound is under relentless pressure – down to nearly €1.10 today and significantly below the rates at which we calculated at for the year. Given the cost increases and commercial pressures that our customers are under, simply putting up prices of the wines they currently list is not always an option and I suspect that this September we will be working harder than ever to help change restaurant wine selections to allow our customers to maintain their key price points in their peak trading period.

Apart from this, it is very much business as usual with a packed programme of supplier visits, over 50 customer trips to wineries, tastings, promotions and customer events.

3. What will be your main focus during this time?

Our sales team will be out meeting our customers to help equip them with the practical support they need to enable them to maximise sales and profits through the peak trading period. This will include training to provide their front-of-house teams with the confidence they need to talk about and sell wine and, as ever, we will be focusing on upselling to try to coax punters away from ‘the norm’.

Behind the scenes we have more back office support than ever to manage the increased numbers of orders; both in terms of technology – our customer online ordering system goes live in September – and people, with an expanded customer service team.

Following a busy year on the buying front we will be launching a revitalised Champagne and Burgundy portfolio in early September.

4. Are there any specific challenges that you’re planning for?

We are prepared for continued pressure on costs with the weakening pound, continued Brexit-related uncertainty within the market and for our ‘immigrant dependent’ customer–base and, finally, continued market consolidation, both on the supply side and within the on-trade as it tightens belts and reduces wine lists and suppliers.

We plan to continue the battle against homogenisation of wine styles and the associated reduction in consumer choice. This challenge is ever more acute with the current trend to reduce restaurant wine lists; quite often, once the commercially driven ‘must stock’ wines are accounted for (Prosecco, Pinot Grigio, Malbec and MSB to name a few) the number of slots available on an average list for wines of real interest can be counted on one hand.

The excellent work done by craft beer and craft gin producers (among others) prove beyond doubt that the consumer is willing to firstly experiment and then change their drinking habits to embrace premium products which champion innovation and provenance. It is our job to bring that sense of adventure into the wine selection and our task to convince the ‘gatekeepers’ of the on trade that simply yielding to the pressure to reduce to lowest common denominators is not the way forward – there is an alternative way that can drive increased wine sales and increased profits.

It may not be the easy route, but it is certainly the most rewarding and we are here to work in partnership with them and their teams – building the confidence and sales acumen of their front-of-house teams has become a primary function and service for us as a partner-supplier to the trade.

5. Any specific trends you anticipate?

We believe that the current consumer trend for less (volume) but better (quality) will continue and our premium and very diverse portfolio (including a leading selection of wines from emerging regions) is ideally suited to help trade customers maximise the potential of this opportunity.

We therefore hope to see our customers further embrace wines from new or emerging regions, and to embrace ways of actively selling these wines – more wines available by the glass, better constructed wine lists and more staff training to give their team the confidence to sell a diverse selection of wines.

We genuinely see a massive opportunity for the trade to champion quality and diversity and, for our restaurateur customers to set themselves apart from their immediate competitors. There will continue to be a huge advantage to any wine company which can best exploit social media marketing which in terms of wine is still in its infancy.

6. Have there been any early indications as to what this period has in store for 2017 and what the trade can expect?

There have been many indicators over the past 18 months including consolidation within the wholesale sector, a general reduction in the size of restaurant wine lists, the rationalisation (reduction) of suppliers by on trade operators, increased costs related to the weak pound, increased commercial pressures on restaurateurs and retailers as rents rise, costs soar and the uncertainly of the labour market as Brexit approaches.

All of these factors, and many more, have led to increased pressure on us, the wholesale sector, to work at unsustainable margins. The trade can expect more of the same and the forward thinkers have already recalibrated to accept and work round this new reality. The only certainty is that uncertainty will continue for some considerable time to come. We all need to be ready for that.

• Hallgarten
• August web series