Bouncing Back Q&A: Jay Wright, Virgin Wines
It’s been a one-of-a-kind 18 months for the trade. Here, as we begin to push into the second half of the second year of the pandemic, Harpers catches up with businesses to find out how they’re focusing on recovering from the shock, and what challenges and opportunities lie ahead.
We continue our series with views from Jay Wright, CEO, Virgin Wines.
How ‘back to normal’ are you as a business?
Our initial priorities during Covid-19 were threefold – maintaining operational excellence, creating a safe, socially distanced environment for our warehouse team and implementing immediate home working for everyone. Whilst our teams adapted excellently to working from home, with the offices open again, we are now able to offer our staff more flexibility when it comes to how and where they work, so most people have adopted a hybrid working model. Social distancing and working in a Covid secure environment are still in place across the warehouse.
We were really pleased to be able to make these changes seamlessly, and recently announced that we expect revenue of £73.8m for FY21 – an increase of 30% on FY20 and 74% on FY19 – higher than previous expectations. EBITDA has increased to £6.4m, up 45% from £4.4m the previous year and up 183% from FY19.
What are your priorities and predictions for the second half of 2021?
We anticipate that customers will continue to favour online for wine buying following the accelerated shift to this channel during the past 18 months. We are confident the underlying growth drivers in the direct-to-consumer wine sector and customer behaviours towards online retailing will remain strong through the second half of 2021.
This is reflected in what we're seeing as sales momentum has continued positively into July despite the lifting of lockdown restrictions and reopening of hospitality in England.
As always, our priorities are to deliver exceptional quality wines, beers and spirits, provide outstanding value for money and excellent levels of service to our existing, loyal customers whilst driving large numbers of new customers into our business.
What kind of Christmas are you anticipating and how are you prepping?
With more and more consumers shifting to online following the acceleration to this channel during the pandemic, we are anticipating another successful Christmas. Based on last year’s sales Prosecco still seems to be the ‘go-to’ choice for a Christmas tipple, so we are making sure our sparkling range is strong.
There are a variety of global logistical challenges all importers are experiencing, so we have brought forward our ordering process to ensure customers are unaffected by any delays in shipping or at customs.
We expect our advent calendars to continue to be in high demand and we started the planning on these from January as it is a complicated project worked on by all areas of the business. From our original wine calendar, we now have three wine options plus a beer and gin calendar, and we are confident we’ll have another successful year.
Do you anticipate making a full recovery from the pandemic? What timeframes are realistic?
The business has grown significantly over the past two years with 33% sales growth in FY20 followed by 30% growth in FY21. Underpinned by our dynamic online model and strong levels of customer service, we revealed in our most recent trading update that revenue and EBITDA for the current financial year will be ahead of expectations.
We have also grown our customer base by 24% over the past year and by 48% over the past 24 months so are well positioned to capitalise on underlying growth drivers in the direct-to-consumer wine sector and customer behaviours towards online retailing.
Whilst we will all be watching with interest consumer trends that may develop over the coming year, we have seen nothing but encouraging signs over recent months that the customers we have acquired are staying loyal, our subscription schemes are as robust as ever and that our ability to attract new customers at a competitive cost per recruit remains.
How heavily have you been impacted by staffing issues?
We have put in place wide ranging measures to keep all our staff safe during the pandemic and these have been successful in ensuring we have continued to operate at full capacity throughout the past 18 months.
As we have grown, we have increased staffing levels throughout numerous departments to support this and have continued to implement a rigorous onboarding process. This has been more crucial than ever with remote working given the importance we place on our values and culture.
How have drinking habits changed post-lockdown?
As more and more customers became aware of the value, quality and convenience of purchasing from Virgin Wines during lockdown, we have been delighted that those habits have continued in recent months as the economy has opened up more fully.
Over the summer months we have seen an increased demand for rosé and premium wines in the £10-£15 range, building on the shift to premiumisation that we have seen over recent years. Furthermore, the low and no alcohol category continues to be a growing trend and the group is expanding its low/no range across all product ranges.
Quick-fire questions:
France, Spain or Italy?
Italy
USA or OZ?
Oz
Port or Sherry?
Sherry
English bubbles or Champagne?
English bubbles
Go-to drink to watch watching the tennis / football?
I’m a big fan of oaky Aussie Chardonnay to watch the football with
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