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Living with lockdown – Bibendum

Published:  28 April, 2020

Michael Saunders, Bibendum CEO and chairman of The Drinks Trust and WSTA, dives deep into the challenges thrown up by the current crisis. Andrew Catchpole reports

Support for The Drinks Trust has been incredible. Has that exceeded your expectations?

Yes, and thank you everyone for support for The Drinks Trust, it's really appreciated. The rebranding seems to have landed well with people, it does definitely sound much crisper, more approachable than [its old name] The Benevolent. As a name I found ‘The Benevolent’ rather Victorian, which is why I agitated to change it. It went really well and, because of the crisis that hit us, that's obviously allowed The Drinks Trust to come out with a really big splash under the new banner, so I suppose that's a sort of slight positive out of [the coronavirus crisis].

You've had your own brush with the virus?

Quite badly actually and I was in bed for a couple of weeks, working (when I could) but I couldn't really walk without stopping and having a rest. I've been through the wringer of it and I'm just coming out of it now.

What was the immediate impact of lockdown on the company?

We'd nearly closed down the office pretty rapidly before we were told to, and we had contingency plans in place for that, and got a good number of people working from home successfully, so it stood up to the immediate test with no blip at all.

And then the work, we have three areas really, one of which is the on-trade which is obviously shot, but we are in pretty good dialogue with our customers over a wide number of issues. So we've gone from the immediate crisis at the time to now working alongside customers to figure out how we get everything started again. Every customer has got a different view of what they need, what they'd like to see, even given the lack of knowledge of when and under what circumstances [businesses can reopen], so that's kept a number of my trade colleagues very busy.

The Walker & Wodehouse business, which sells to the independent merchants, is doing well. If there is a sector that it’s good to see thriving it’s the independents and, hopefully, that'll continue post-coronavirus because it’s good to see people using local merchants and getting good advice and good wines. There’s been a substantial sales uplift, so to be able to support them comprehensively with stock and a really good team is very heartening actually.

Then the [multiple] off-trade business is obviously doing pretty well. We're working closely with our customers to make sure that they have the stock that they need and that can be more complicated than in normal circumstances - but so far so good. And that is simply because supply chains, delivery, etc., are stretched and staff are furloughed or off self-isolating.

What of the supply and delivery side?

Production isn't running full steam in many wineries, for all the obvious reasons, and the whole haulage system has been slightly pulled out of joint. You've got empty trailers going here, there and everywhere, and for a normally very efficient freight forwarder such as Hillebrand it’s less easy. But what we're doing is being very proactive and managing that whole process on behalf of our customers to make sure that wine gets on shelf.

And, obviously, it is crucial for wine to be on shelf, even more so now. The initial rush may have peaked but I think sales will remain very strong. I'm delighted for our producers and it goes some way to remedying some of the hurdles that I have as a business given the challenges of not having an on-trade to supply.

What shape might the re-opening of the on-trade take?

I think it's another of those million dollar questions. Everyone has got an opinion, but nobody's got any facts.

How has the new joint Bibendum-Matthew Clark on-trade app Local been received?

The new app was done purely on the back of this crisis. What we wanted to do, as a number of my competitors have done, is find a mechanic that helped our on-trade customers. We decided to take the skills we have and give customers a platform to get online fast for almost zero cost - we take a tiny commission to pay for the cost of what we've done. And it allows people to be visible to their audience and other audiences and the takeouts have been good and growing.

If you are an independent restaurant and you are not set up ready for online orders it's complicated and expensive to set up, and time consuming, perhaps not their skill set, so we chose to go a route where we felt we could contribute, doing something for our customers.

You haven’t gone down the B2C route?

We launched the app for very altruistic reasons. What we felt was two things: one is we needed to do something to actually help our customers; and the second thing, which goes back to the Walker & Wodehouse conversation, is that we've really decided not to go the B2C route because we want to support our independent merchants, so where we do get inquiries we cycle them out to our [on-trade] customers. We feel that is the right thing to do, rather than take a slightly opportunistic dive into the consumer world, which is something I pulled out of some time ago.

There’s been a lot of speculation as to what the drink landscape will look like post-crisis – what are your thoughts?

The market we sell into and the on-trade is not going to look the same when we do reopen. And that's not necessarily worse or better, it’s just going to look different. Second, what [businesses] are going to need from their suppliers is going to be different, so I think a lot of people will be looking at how they've been supplied and the arrangements they've had. And indeed what they're selling to them to make business easier for themselves. And thirdly, I don't believe that the supply base will look as it did when we went into this crisis in March.

I think there will be an emphasis - even if you're part of a bigger group - to give really excellent local service, to really connect emotionally with your customer. Not just through good service - we are learning to live locally and act locally and connect in slightly different ways as human beings, which is interesting. We've all got time to contemplate what really matters and I think that'll be the same with eating out. People will go where they really feel they're valued and where they can connect with [the business].

How will the supply base fare?

The unfortunate fact is there simply hasn't been enough money to go around – and I’ve been saying this for some time - so the number of suppliers chasing a market and making no money doing it is probably going to have to change. That's going to be unfortunate for certain people in certain businesses. We're also still wrestling with the two other difficult issues of Brexit and the deposit return scheme, which are still marching away in the background.

What’s different for Bibendum?

I'm very lucky, I'm under the umbrella of [Bibendum owner] C&C Group. There's certain elements, like the job retention scheme and diving into those other financial aids, that are done by smart people within the group. And, frankly we do have a security that allows us to plan looking forward with a sense of confidence, which I think is relatively unique. I'm in a very fortunate position.

The other thing worth touching on is that putting people on furlough sounds great and we obviously support them beyond just the base government rate, where necessary. But actually more important is the emotional support that people need - I've been working from home now for several weeks and that's a long time to be away from your colleagues, the buzz, the banter, that general feeling of being part of a community. So we're working very hard to make sure that our community is thriving as best we can, while we're not seeing each other, be those people at work or on furlough - keeping that spirit alive.