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Kim Wilson: Back to Business Q&A

Published:  05 August, 2020

As the trade measures up to extraordinary times and swings into the height of summer, leading businesses and operators take stock of trading conditions in the new normal.

Kim Wilson, managing director at North South Wines, continues our series with insights into where business uplift has come, adapting to change and transparency in labelling.

How is the business performing and what are sales like compared with pre-lockdown?

Sales have been really strong for us since lock down; our multi-channelled model has definitely paid off during Covid-19. Approximately 20% of our business is within on-premise and we were very quick to react to support wholesalers as they diversified to selling direct to consumer and setting up online platforms.

The impulse (convenience) channel has been one of the fastest growing – we have just over 25% of our business here and have seen growth in some account at over 200%, outperforming the market.

This has been further supported with Reh Kendermann buying 16% share of North South Wines (NSW) in April 2020. We took control of their Black Tower business within impulse and have seen very strong growth from existing and new accounts.

What are the biggest changes and challenges in adjusting to the ‘new norm’?

Stock has to be one of the biggest challenges for us - just when you think you have it right more orders come from left field and wipe you out. The logistics team have done a great job here by keeping out OTIF (on time in full) at 97.3% over the last four months.

Which government measures, if any, have had an impact on your business and have you been passing on or absorbing savings?

We have taken advantage of what was available to us:

CBILs – banks were criticised for not acting quickly enough, but we were one of the first for our banking business unit to get this loan meaning that we can continue to grow and invest in the business.

VAT – we have delayed payments.

Furlough – we furloughed 50% of the team (11 people) to begin with and then realised very quickly that the remaining team were too stretched, due to the amount of business coming in, so we brought back two people in May, three in June and then the remainder in July. We supported the team throughout furlough by topping up salaries to 100%.

I was also very keen to ensure that we remained a team while some were on furlough, so we started a Friday 4pm pub quiz and beer every week, regular catch ups with the full team and also virtual yoga on a Wednesday morning for all. It’s been an unnerving time for everyone so we wanted to make sure the team felt supported.

Have you seen any significant shift in type and price of wines and spirits sold and, if so, what has that been?

For us it has just been a complete shift in that everything is growing. Sparkling as a category has struggled but La Gioiosa Prosecco has performed really well and I think that the brands that have the consumer loyalty have shined throughout this – Black Tower has had amazing growth too as consumers fall back on brands they trust.

North South Wines have always over indexed in organic wine and there has been a real step change in growth here – some of our organic brands have over 150% year-on-year growth, which is extremely positive and sets us up well for the coming months.

Covid-19 has ignited discussions around health, not least the government’s anti-obesity campaign which could see mandatory ‘hidden calorie’ content on alcohol labels and menus in the on-trade. In your view, what would be the impact of this?

Consumers want more information on the food and drink that they are buying (I know I want this too). I think this is a positive and if anything will only improve the overall quality of product that we are giving the customer. Transparency will be key going forward.

We have a strong range of no and low alcohol products and we are seeing strong growth in this category. One of the key messages with this range is around calorie content. We also sell a Prosecco from La Gioiosa with reduced residual sugar, which is clearly labelled with calories to reassure customers and give them clarity about what they are buying.

And what of other government-backed schemes like the Eat Out to Help Out initiative, on the health of the trade?

I think these are great initiatives and should be supported. The general public are still scared and anxious about going out so only time will tell how this helps.

The end to the Brexit transition period is just around the corner on 1 January. How have you been preparing during and post-lockdown?

Yes, as much as we can with all the unknowns. NSW has a Brexit committee and we meet monthly to discuss how best we can support customers and try and minimise any disruption to stock flowing into the country. One challenge for us will be New World Wine packed in Europe and shipped into the UK, and also UK packed stock shipping into Ireland, so there is plenty to discuss.

Have the past few months led to any positive change that the trade can and should adopt going forward?

There are so many… I think we can all agree that the new way of working is much more productive and kinder to the environment. For me personally, I have filled my car up twice during lock down, where as previously it would be twice a week. I am still a huge supporter of face-to-face meetings and travel, but I think we will all be questioning whether each trip is essential going forward.

Adapting to change more quickly – some of the things that have had to happen during lockdown would have usually taken months to implement and a team of consultant would have come in to advise, but we were all forced to adapt quickly and proved that it can be done.

Overall I would say communication has got better in all areas. I know that my team are closer than we have ever been and having platforms like Teams and Zoom still make you feel like you are interacting in the meeting. This has been the same for customers, I think we have all been able to get more of their time and them us too.

Virtual tastings have been great and can be really interactive too, why we didn’t do more of this before I just don’t know!

Covid-19, recession, Brexit, climate crisis – we’re living though extraordinary times – what will the biggest challenges for the drinks trade going ahead?

Adapting and adapting quickly. When we set up NSW the focus was to have a business that was fit for purpose and future proofed. I am not saying that we had a crystal ball and saw any of the above coming but what we have done is build a business that can sustain and weather the storms that are heading our way. Having a true multi-channelled business has paid dividends for NSW, our supply partners and most importantly our customers.