Bouncing Back Q&A: David Gates, Direct Wines

By Andrew Catchpole

Published: 31 August, 2021

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 is catching 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 David Gates, CEO, Direct Wines.

How ‘back to normal’ are you as a business?

As a DTC business our sales boomed throughout lockdown and, as you’d expect, we’re seeing that slow a little as the on-trade re-opens. We expect September to be something of a ‘bell weather’ month as by then the schools will be back and the country should be settling into the ‘living with Covid’ scenario that the government is aiming towards.

We are also in the process of moving to a new hybrid way of working. At the end of last year we asked our people about the way that they wanted to work post-pandemic. Overwhelmingly, those in office-based roles wanted to work a few days a week at home and a few days a week in the office. So, we are moving to that arrangement at the end of September. We believe that this will deliver the best of both worlds; collaborative creative working in the office and more individual ‘solo-thinking’ based work from home. Clearly for our distribution centre that is not possible, and we continue to operate with the social distancing restrictions that have been in place throughout the pandemic. We hope to be able to move to more ‘normalised’ working conditions and shift patterns there once we have the vast majority of our workforce vaccinated.

What are your priorities and predictions for the second half of 2021?

Our number one priority remains the health and wellbeing of our people – making sure that they feel safe and providing the right level of support for those anxious about returning to the workplace. The last 18 months have not only been difficult physically for people, but also mentally and emotionally.

From a sales-perspective, we recruited a huge number of new customers during the pandemic and it’s key that we convert those people into regular customers. This is a big area of focus for us.

In terms of predictions, a big question that we’re all asking is to what extent the customer behaviour of drinking at home and shopping on-line will stick. Clearly there will be a return to eating and drinking away from home, but we believe that the shock of on-trade prices for wine combined with the convenience of home delivery will mean that a good percentage of that behaviour will remain.

What kind of Christmas are you anticipating and how are you prepping?

We are anticipating a big Christmas as people ‘double-down’ on the festivities they missed in 2020. Our concern is about staffing levels for this peak period. The supply chain & labour market has been severely impacted by Brexit and we are focused on ensuring that we have all the people we need to deliver our award-winning customer service.

How did the pandemic change your business – do you need to recover, or maintain?

As a DTC business, we were one of the fortunate companies that benefited from people wanting to have wine delivered to their homes. This has given us strong growth over the past 18 months to build from.

How heavily have you been impacted by staffing issues?

Up to now, we’ve been fine. We have amazing teams in Gloucester, Bristol and Theale that have shown incredible agility and flexibility. But, as the impact of Brexit bites, we are finding it increasingly difficult to recruit into our distribution centre.

Were you affected by Covid-related restrictions on your business? What about your suppliers?

Yes, of course. But compared to other people, it was relatively manageable. We saw delays in shipping, but we had made the decision to hold larger stock levels to anticipate any possible disruption in January 2021. This helped us meet the significant demand that lockdown 3 triggered.

What drinking trends have you spotted in each lockdown?

Sales of rosé have been strong throughout (despite the terrible weather this summer!). Also, interestingly, we saw that people were becoming more adventurous in their choices and were branching out from the tried & tested varietals into styles and origins of wine that were perhaps more ‘unusual’. The jump we’ve seen in Viognier and Albariño sales is a good example of that. We’ve also had some big success stories with wines from Bolivia and Lebanon – hardly the first countries that spring to mind for wine!

Lastly, if you could make one change in government tomorrow, what would you choose?

I would like to see the introduction of proportional representation, which would hopefully lead to less extreme and polarised politics.

Quick-fire questions:

France, Spain or Italy?

Piedmonte, Italy

USA or Oz?

Aussie, Aussie, Aussie

Port or Sherry?

White port

English bubbles or Champagne?

English, of course: Harrow & Hope, Wyfold, and Windsor Great Park!

Go-to drink to watch with the Olympics / tennis / football?