Bouncing Back Q&A: Matt Tipping, CEO, Jeroboams

By James Lawrence

Published: 22 December, 2021

Matt Tipping reflects on keeping the wheels turning through 2021 and how valuable new custom should bring cheer into the new year, despite the looming additional tax burden on wine.

The beginning of January marked the end of the Brexit transition period – how well has your company adapted to this new normal?

We’ve adapted well enough, I believe. The WSTA has provided some excellent and useful advice over the past couple of years and our logistics partners have done a really good job for us. Of course, it has meant increased costs and admin, but we have managed those so far.

The WTSA contacted Government in November, outlining suggestions to help solve the current transport crisis. What measures have you put in place to cope with the inevitable delays and disruption?

We began increasing our lead times for ordering (and thus our stock holding) at the start of the year when we first saw supply chain issues. As a leadership team, we spent a lot of time revising the forecasts for our business and we invested in extra stock for our ongoing requirements, not just for key periods. Therefore, with a very few exceptions, we have managed to keep all of our lines in stock.

For delivering on to our customers, several strategies have been used, most crucially regular communication to help manage their expectations, so in turn they increase their lead times. We have also increased our use of couriers, held stock outside of our bond and taken on extra van capacity of our own, allowing greater flexibility in case things go wrong.

What is the most important business lesson you've learnt during the pandemic?

Communication – both internally and externally. We were quite good at this already, however the pandemic has really pushed it to a new level. Keeping the wheels turning and growing the business in times like this has meant every individual within Jeroboams has needed to stay on top of things, and the selecting the most effective way to communicate is top of mind throughout the business. This focus has also brought improved structure to many of the processes within the business and a welcome by-product of these changes is that new opportunities and ideas from across the team easily percolate upwards.

Has a succession of lockdowns fundamentally altered consumer behaviour?

For now at least, people still seem to be drinking more at home, but whether this carries on when the impact of Covid recedes, is open for debate. We saw many customers in our shops during the first lockdown who had never bought wine outside of a supermarket previously, and whilst many of those have returned to old habits, we have found a significant number who appreciated the enhanced quality and advice they discovered and have remained shopping with us. This new segment (for us) is an exciting addition to our customer demographic – as they are new to our portfolio they are particularly receptive to trying new wines and staff suggestions. As on-trade business has recovered, there has been a noticeable shift to higher quality wine.

Are you happy with Government responses to trade concerns and the budget announcements made in the autumn?

Whilst it should be acknowledged that they supported businesses through the lockdowns they imposed, any Government that enthusiastically pursued the type of Brexit that this one did cannot really be said to be on the side of business, especially SMEs. Tax increases and the continuation of a rates structure that lacks fairness, are also not the actions of a business-friendly government. The budget announcements of the duty freeze and the overdue action to make the duty system fairer and less complicated were welcome. However, the devil will be in the detail and the initial proposal still favours some types of alcohol over others and we are yet to see clarity on how the taxing of wine by abv will be assessed – bearing in mind the abv written on the label is only within 0.5% of the actual abv - will this system lead to vast amounts of new paperwork? Also, as is currently proposed, all wine over 12% (over 90% of our total list for example) would see an increase (in some cases very significant) in duty, so the proposal will lead to a shift of the alcohol tax burden onto wine.

In light of the reintroduction of stricter covid measures, what are your expectations for Christmas 2021?

The latest measures are unlikely to have any great effect on our business and we are expecting a strong Christmas trading period. Early indications are that fears of shortages are sending people out to stock up early.

What are your predictions for 2022?

In terms of predictions (which come with a health warning); shipping will continue to be a major issue and there will be intermittent shortages of some lines in the UK. A combination of short harvests, supply chain costs and dry good costs will see the biggest increases in wine prices in over a decade. Sauvignon Blanc will be in short supply for much of the year following on from the short harvests in Marlborough and in France, opening an opportunity for other varieties. Sustainability credentials have become increasingly important in the on-trade and corporate supply worlds and will start to become more significant in the off trade. Shopping local is here to stay with so many workers now spending more time at home and consequently in their local community. Those customers are still driven by convenience as well as experience though, so a strong service and digital offering is vital if independents are to capitalise on the trend.

Quick fire questions:

Red, white or rose?

Red

Film or book?

Book

Champagne or English sparkling?

Champagne

European city break, or UK staycation?

Staycation

Favourite part of the year?

Spring

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