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Indies: Shaken, not stirred

Published:  26 April, 2021

The pandemic has been a “wake-up call” for the industry, a panel of leading merchants told audience members told Jo Gilbert at our Think Insights retailing sector briefing, as businesses face stock and other challenges to meet soaring spirits sales. 

The Panel

Dawn Davies MW, head buyer, The Whisky Exchange

Jake Biggs, spirits buyer, Majestic Wine

Aljoscha Wright, head of buying, Oxford Wine Co

Jass Patel, co-owner, Tomoka Spirits Boutique

The years 2020 and 2021 have given new meaning to the term “survival of the fittest” for UK merchants, who have been faced with elevating their offer to keep abreast of rapidly changing buying habits.

An influx of sales has offered widespread relief for the UK independent trade, bolstering sales at a time when many other parts of the UK drinks sector have found themselves benched for the better part of a year.

But this sales uplift has had other, more far-reaching impacts, too, as the rapid shift to online and other challenges has led to a major rethink about not only what, but how, businesses keep shelves intelligently stocked.

“Week by week, I could tell you which cocktails people were making,” said Dawn Davies MW, head buyer, The Whisky Exchange. “They started with Negronis then moved to the Old Fashioned, Manhattan, then Daiquiris and Piña Coladas. It’s been hugely interesting, and I think it made us realise that, as a sector, we’ve been really complacent over the past five years. Suddenly, we had to have to go after sales and really drill down to understand what was going on. The people who sat on their asses will suffer. It’s been a wake-up call for our industry.”

Though buying throughout the pandemic was very reactive, she said, with buyers having to “react to buying habits on the day”, she added that the major challenge was having “to go out and tailor your products” as well as deal with shifting stock.

The session also highlighted the different challenges for smaller and larger merchants. While most agreed it had been “a game of two halves” between a return to safe brands and a move towards experimentation, Jass Patel, co-owner of Tomoka Spirits Boutique, said they didn’t see safe purchasing habits “at all”.

“Consumers were looking to add spice into their evenings, looking for new brands and new ways to serve them. For us, it was experimentation from the get-go,” he said.

Sales rewards

This experimentation has been particularly challenging but also rewarding for spirits sales, the panel said. Interest has probed far and wide, from mature markets like brandy and whisky to growing categories such as rum and tequila, by way of more “classic and grown-up styles of gin”. For most, the lion’s share of this investigating has taken place online.

For The Whisky Exchange, which is 100% online, the major challenge was to keep abreast of stock management as buying habits shifted wildly from week to week, along with home bartending trends. For bricks and mortar-majority businesses, however, the challenge has been to build greater synergies between the off and online experience while maintaining a strong connection to staff in store.

“If a customer orders online, that order will likely be delivered by the store, which is integral to our relationship building,” Jake Biggs, spirits buyer, Majestic Wine, said. “Customers go to what they know, but if we’ve also got a new gin to recommend, it works because the trust is there. Customers trust our judgement.”

Aljoscha Wright, head of buying at Oxford Wine Co, which is predominantly bricks and mortar, echoed this: “Learning how to communicate to the customer online is maybe why we’ve seen a slump in gin sales. Wine hasn’t been a problem. We’ve never sold more wine. Maybe it’s just that gin is more brand oriented.”

Online tastings have been the bridge this year. Transferring what is widely called the ‘hand sell’ – physically, or at least verbally, presenting new products to customers – online has largely taken the place of in-store recommendations, with Davies reporting a direct link between tastings and sales. For smaller companies, capacity for this kind of online redirection is arguably smaller.

On the other hand, smaller merchants have also benefited from greater agility and being able to respond to changing customer needs.

“If we want to move into hampers, it’s just me and my partner,” said Patel, who co-owns a Champagne specialist shop in St Albans as well as an online shop dedicated to craft gin.

“There’s no chain to go through, and it’s the same with the smaller brands. If they say ‘we need to make sloe gin for Christmas’, they can do it very quickly as there’s no one to talk to.”

Small brands have also been crucial to easing stock issues, it was suggested, which has in turn enabled them to gain ground against the major brands. While both Covid and Brexit proved to be a double whammy for merchants, “smaller brands have been great,” Davies said. “It was the smaller brands which were proactive and reacted quickly.”

Ultimately, panellists agreed that maintaining the link between in-store staff and online has been crucial to transferring sales, while being proactive enough to plan in order to anticipate stock issues.

Also significant has been learning to talk to a “new kind of customer”. This was reiterated multiple times by the panel, which agreed that the average customer has become more engaged during lockdown.

As Majestic keeps holding its Zoom tastings with colleagues, the company will continue to “pass those learnings back to the customer”, Biggs said. “We have a very engaged and educated customer coming back to the market.”

With reopening of outdoors bar and restaurant spaces less than two weeks away, stock could once again put a dampener on sales if not properly managed. Some are anticipating Christmas-level sales as consumers gear up to make the most of the improving weather, with bookings now widely tipped to outstrip last summer’s Eat Out to Help Out eating – but also drinking – frenzy.

As Davies emphasised, we are now entering a new era for both the on and off-trades, one which is switched on to new communication strategies, and greater awareness of how issues such as diversity – not only in products, but people – impact us all across personal and business lines.

“The door is open for us. It’s our job as buyers, consumers, suppliers to really embrace this new world. In some ways, the world is smaller. It’s up to us to go out there and find out what that the new thing is, I think that’s going to be more around people and producers rather than categories,” she said.