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Muriel Chatel: Back to Business Q&A

Muriel Chatel, MD of Borough Wines, continues our series with insights into the biggest changes and challenges.

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

We lost 70% of our turnover overnight – however thanks to our retail roots we managed to weather the storm by opening pop-up shops, launching an ecommerce site in three days, and we transferred our expertise in kegging to rebottling in small bottles for virtual events. We have teamed up with Sensible Wine Services to offer a rebottling service for the trade.  

Four months later we are 15% down compared to our business plan – which is a good outcome under the circumstances. However, I strongly believe that the hardest part is ahead of us. Wholesale hasn't picked up yet with the hospitality industry in tatters, and we are beginning to see a downward trend in retail.

More than ever we need to support each other in the trade if we want to get to the other side.

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

Taking one day at a time – we are operating in a rapidly changing landscape. You have to accept that whatever you do now could become redundant very quickly.

The challenge for businesses is finding a way to navigate this and remain adaptable. 

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

I am not sure that we would have survived without help from the government.

The furlough scheme has been very helpful and allowed us to keep a couple of key members of staff on our payroll. However I wish that people on furlough had been able to work part-time from the off – it would have been good for the people on furlough and it would have allowed us to stay more in touch with our industry. 

I hope that the scheme will be extended. The UK is simply not ready for it to stop now.

With regards to VAT, our retail margins took a hit back in March when we felt that it was important to encourage and maintain spending. The VAT incentive has helped mitigate that loss. 

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

Our refill business has really increased. It ticks all the boxes: great value for money with incredible sustainability credentials. The demand for organic and biodynamic has really grown too as consumers are really starting to think more about what they are buying.

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? 

Borough Wines has always been about drinking better, (less, better quality, lower abv) and we welcome any initiative that promotes drinking responsibly.

The on-trade is a very generic umbrella term – within it you have everything and everyone – and there is never a ‘one size fits all’ solution. However I do believe that once you are aware of the negative impact something has on health, there is only one way to go. 

Some winemakers are already looking at ways to reduce alcohol content in wines by combining canopy management techniques and new practices in the winemaking process.

Now is the time to move away from the "all or nothing" perspective and focus more on lower alcohol content from a wine perspective, and not simply treating low/no alcohol as a separate drinks category.

By understanding better why people like alcohol (basically why people drink to excess) the industry will be able to give "drink responsibly" another meaning, away from patronising connotations.

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

Until we get to September I can't really see how you can tell what works or what doesn’t. For many restaurants, the summer is rarely good for business and this is even more true in times of Covid.

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

We had planned to start Borough Wines in France in September which we had to postpone because of Covid, with a view to launch our 'negociant' activity in Bordeaux in March 2021. Should trade relations become tense post Brexit, the French company could become our sole supplier in the UK, with all our supplies transiting through France, making the whole process easier and slicker.

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

More solidarity: We are all in it together and now more than ever we need to support each other. This is what our pop-up shops are all about. It is a way for us not only to support our own business but also to reach out to new neighbourhoods, working with other like-minded businesses and creating employment opportunities.

Focus on sustainability: The penny has finally dropped! Now is the time to embrace the circular economy.  

Review the 'growth at all cost' model: Maybe now is the time to review how we think about business and growth and apply a more pragmatic approach to business planning. A farmer always has a harvest worth of cash in the bank in case they lose their crops to the weather that they cannot control. Now is the time to realise that the farmers are not the only ones faced by factors that they cannot control.

Workplace culture: Let's bring our personal values to the workplace and stay away from the 'this is business' mentality which has sometimes been the excuse for treating staff, colleagues, suppliers and competitors unfairly.

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

Not drinking to oblivion as tempting as it may be!

Accepting that things will never get back to where they were and still stay relevant – the world is moving faster than the wine industry for sure, but it doesn't have to stay that way.