As the first half of 2018 draws to a close, Harpers asked key trade figures to highlight the current challenges, ongoing trends and opportunities
We start our series with insights from Liberty Wines founder and MD David Gleave MW.
How has the first half of 2018 been when compared to the same period in 2017?
We have enjoyed strong double digit revenue growth in the first half of 2018. Across the country, in both the on- and off-trade, sales were up. June slowed considerably, but thankfully July has returned to growth.
What, currently, are the biggest challenges for the trade (excluding Brexit)?
The economy. In the past two years, we have gone from being the fastest growing economy in the G7 to the slowest. In the past year, business rates have increased, as has the minimum wage. Immigration has slowed so restaurants are struggling to find the quality of staff they require. At the same time, they are coping with higher prices on food and wine due to the continued weakness of sterling. In short, costs are going up and consumers are spending less.
And challenges that are Brexit-related?
The uncertainty that remains around our future trading arrangements with the EU is a cause for concern, as are the difficulties many of our on-trade customers have in finding good staff from outside the UK. Perhaps worst of all, the sheer incompetence and incoherence of our political class does little to instill optimism in consumers, so they are reining in spending.
Taking current trading conditions into account, what’s your strategy for meeting those challenges during the second half of the year, through autumn and leading up to the crucial Christmas trading period?
Our strategy won’t change – we focus on helping our customers sell better wine. We do that by providing education for their staff and by finding exciting wines that strike a chord. Getting the fundamentals right day in, day out is a given, but being flexible and meeting individual needs is a key component of our business all year round.
And where do the opportunities lie?
There are myriad opportunities, as sales of premium wines remain robust. The consumer may be more reticent about spending money, but we find they will spend if given a good enough reason to do so. Interesting, exciting wines that have a strong sense of place, great service, good glasses, a well-compiled wine list and well-trained staff who can connect with their customers are, combined, the key elements that support sales of premium wines.
Specifically, what will the focus be on with regard to your portfolio?
The focus of our portfolio will remain on offering value and, we hope, excitement at every price point. We look for wines with a clearly identifiable sense of the place, wines that will give consumers a reason to spend their hard earned money. This means looking for wines that are as good as possible, regardless of price. This search takes us into our areas of strength – Italy, France, Australia, New Zealand, Iberia and South America – as well as to countries like India, China, Greece and Israel. Experience of past economic downturns has taught us that the consumer does not necessarily spend less, but instead looks to spend more wisely by searching out value. And by value, we mean value for money at whatever price tag.
Any other trends that you anticipate?
While the breadth of the offering in the UK will continue to expand as new countries and regions break into the market, our sales indicate that our customers retain a strong interest in native grape varieties. This can mean varieties like Nebbiolo or Sangiovese from Italy, Areni Noir from Armenia or Alfrocheiro from Portugal, but it also means Cabernet/Merlot blends from Bordeaux and Chardonnay and Shiraz from Australia. As a trend, the term ‘classic’ is now applied to a much wider spread of wines and regions, something which should cheer all of us who continue to champion diversity.
How optimistic are you – will business for the drinks trade be better or worse between now and 1 Jan 2019 compared with last year and why?
On current trends, it seems likely that as an industry we will sell less wine, but that the value of what we sell will increase. That can only be good news, as it means premium wines from around the world will have a strong market in the UK, and importers, retailers and restaurateurs can focus on selling quality rather than quantity.