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New Horizons Q&A: Nik Darlington, Graft Wine Company

Published:  15 December, 2020

With an end game to the coronavirus in sight sometime in 2021 as vaccine rollouts begin and up-to-the-wire Brexit uncertainties playing out an extraordinarily tough year, Harpers has been canvassing drinks businesses to discover their predictions for the new year.

We continue our series with Nik Darlington, director at Graft Wine Company.

Given everything that’s going on, from Covid to Brexit, what are your three predictions for the next 12 months?

Some aspects of life will never return. I read a fascinating account by an American epidemiologist about Spanish flu and how most restaurants had spittoons for chewing tobacco. It was realised during a pandemic of an airborne respiratory disease, rooms of people spitting wasn’t a great idea, so spittoons disappeared and never really returned. We can’t be quite sure what yet, but we’ll have our own version of the spittoons.

Virtual wine tastings won’t disappear, though will become less frequent.

And the Lions will win 2-1 in South Africa.

This is an uncertain future for all concerned, when you and your team sit around the table what conversations are you having?

First and foremost, we ask about each other and how we’re doing. The biggest change internally this year has been the time spent apart from colleagues. We’re a distanced bunch anyway based as we are around the UK, but this period has put that distance in stark relief.

What is your biggest concern about Brexit?

The impact on the wider economy. As much as we’re all relieved wine shops were declared “essential retail” during lockdown, wine isn’t a truly essential product in people’s lives. In particular, the more premium, specialist bottles we sell are a good-time product. If the economy tanks because of the actual fallout from Brexit – because let’s face it, Brexit hasn’t truly been felt yet – then people won’t be spending as much on good-time products like nice wines. Yes, there’s a huge amount of pent-up demand as a result of Covid-19 restrictions and that counts in our favour to some extent, but if Brexit makes everyone a bit poorer or less certain for the future, nice wine will be one of the first savings people make.

How do you feel the trading environment is going to play out post Brexit?

I think for a time people will tentatively tighten their belts, though this could be mitigated by the release of pent-up demand as we hope Covid-19 restrictions ease during the first half of 2021.

For wine itself, with the decision on VI-1 forms kicked into the summer’s long grass (at which point I am inclined to believe everyone will see sense and quietly remove them entirely) trading should continue broadly as before. There are additional duty costs to be absorbed and/or passed on for EU wines, bringing them in line with things like CCT on Australian wines so pocket change in comparison to our own excise duty.

What areas of your business has Covid had the biggest impact on?

Sales to the on-trade, which status quo ante provided roughly two-thirds of our revenue, even more if you include sales to wine merchants with on-premise drinking.

Anecdotally Brits have been drinking more during the pandemic - do your sales reflect that?

Our sales to the off-trade certainly increased but unlike some sizeable competitors we couldn’t satisfy demand for very cheap wines, so I wouldn’t say we’re a bellwether company in that respect. Direct-to-consumer sales are appreciably bigger than they were pre-pandemic, albeit from a very small base.

What have you done to take advantage of the rise in off-trade sales during lockdowns?

In contrast to some competitors, we went into the first lockdown with a relatively balanced multi-channel business. We didn’t have to build a direct-to-consumer channel from scratch because the Red Squirrel website has been around for eight years – it just needed a spring clean.

For our excellent independent merchant customers, during both lockdowns we created a series of targeted promotions to help them meet their customers’ demands. We’ll probably always be undercut on price by bigger competitors, but we offered some excellent deals, and these were very well-received.

If you had to pick the next big thing in wine what would it be?

A palatable zero-alcohol wine, or pace some of the zero-alcohol beers you can find now, a really enjoyable one. It doesn’t exist yet, but it will and when it does it will be a game changer.

If you could change one thing about the wine industry, what would it be?

Less focus on wine, and more on the people and places who make it.

Quickfire questions:

New versus Old World?

Old. Because South Africa is Old World!

Red, white or rose?

White.

Screw top or cork?

It’s a Janus-faced view, but both! I like but am not persuaded by the “it’s tradition” argument, however a well-managed cork forest is rich in biodiversity and brings many other environmental benefits.

But that said, anyone who’s still dismissing screwcaps – which seal many of the finest wines we sell – is a bit bananas.

Bottle versus box?

Bottle, but mainly because I like lots of variety. If you have a house favourite and it’s available in box then sure, box over bottle every time.

Still versus sparkling?

Still.



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