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Looking ahead: Andrew Bewes, Hallgarten & Novum Wines

Published:  03 August, 2022

With the first half of 2022 already history, Harpers asked key trade figures to highlight the current challenges, ongoing trends and opportunities.

We continue our series with insights from Andrew Bewes, MD, Hallgarten & Novum Wines

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

In many respects, we are back to normal, and indeed exceeding our pre-pandemic norm. June was the biggest month in our history, and to the end of June we are 25% up vs the same period in 2019. In London, so heavily affected by home-working and a lack of tourism, trade is now exceeding expectations, and we are thankfully winning new business in all sectors of the trade across the country. There is no doubt, however, that like-for-like sales are under pressure as our customers start to feel the effects of consumers tightening their belts.

How, if at all, have drinking habits changed post-lockdown?

Lockdowns heralded a huge change for consumers as they swapped to drinking at home rather than at hospitality venues. From a pure off-trade perspective, many consumers increased the volume they were drinking at home, therefore, and our sales to the retail sector indicated both trading up and a more adventurous choice of wine.

The surge in sales of Champagne and sparkling wine was certainly noteworthy as fizz became the go-to option for an after-work aperitif. Post-lockdown in 2021 when the on-trade reopened, consumers certainly celebrated with bubbles and despite the December/January blip, our sales of Champagne have now exceeded pre-Covid levels.

English wine, both sparkling and still, is also on a roll, and there is a huge appetite from consumers to support local and home-grown produce in both the on- and off-trade. We have seen a substantial increase in sales in 2022 compared with 2021 and 2019 - this is in large part due to adding new suppliers to our range, including Blackbook Winery and Simpsons Wine Estate.

Overall, the market has yet to find its equilibrium. The incredible Off Trade sales of 2020 carried on through 2021 but did start to wane in the second half of last year as the British consumer once again embraced our great hospitality sector. This year, sales to the off-trade have struggled to keep up with pandemic levels, but I suspect that this might change over the next few months as consumers pull their horns in and reduce spend in hospitality.

How has the first half of 2022 been when compared to the same period in pre-pandemic 2019?

With sales at record levels we have enjoyed a resurgent period, despite the severe challenges being thrown at us by post-Brexit red tape, the international logistics crisis (lead-times doubling) and the lack of available labour for customers and our warehousing and logistics partner. We have recruited heavily over the past eight months, increasing headcount across the business by over 10%, including six new salespeople across the country and a similar number in the office to support our growing business.

What were the highs and lows for your own business in the first six months of 2022?

The highs this year lie with people – our team, our customers, both old and new, and our suppliers, again, both old and new. Our annual tasting was a real high, for the first time in two years we were able to catch-up with so many people that we hadn’t seen face-to-face, and share our mutual passion for wine and for the industry which we all serve or work in. It is also a real pleasure to see our sales grow to the extent they have, as this is a clear indication that our beleaguered customers are starting to come out the other side, despite the challenges they continue to face.

The lows – the worldwide logistics situation continues to challenge us all, and there is little indication that the situation will markedly improve before next year. Add to this the simultaneous and severe strain on stocks of New Zealand Sauvignon Blanc, Chablis, Sancerre and Prosecco (you couldn’t make this up!) and the general strain on all producers relating to sourcing dry goods, most notably bottles, which has resulted in delays and increased cost. Our resilient and unwavering Demand Planning and Shipping Team have managed the situation impeccably and kept out of stock issues to a minimum.

What, currently, are the biggest challenges for the trade in general?

Following Brexit and a global pandemic, we are now finding ourselves face-to-face with a cost-of-living crisis. The cost of everything, wine included, is inevitably going to rise as inflation, now at 9.4%, continues to rise. Consumer spending will be affected and we all need to brace ourselves for a tough few months. We know from CGA’s Future Shock Report in July that 40% guests in the UK on-trade will be going out less in the next few months. The other big challenges are the continuing shortage of labour which, unless we reverse the catastrophic implications of Brexit, will continue to impede recovery of the hospitality industry and finally the prospect of dealing with the proposed new duty regime. Although in the wake of HMG’s current travails, we would appear to have a temporary reprieve from expected 1 February launch, this is only a delay. I would urge everyone across our industry to actively support the WSTA in their battle to change the minds of the Treasury and find a more workable solution to levelling up the playing field that is the UK duty regime.

What are your priorities and predictions business-wise for the second half of 2022?

Whilst the first half of the was better than we could have expected, we do expect to see this buoyancy tail off in the second half of the year as the cost-of-living crisis begins to take effect. As ever, our priorities will be to continue to provide a first-class level of service to our customers, ensuring their wine racks are constantly stocked. We will continue to expand our portfolio, recruit for talent where required and build on the positivity from the first half of the year.

What will the focus be on with regard to your portfolio (and any updates) and why?

We have already taken on a significant number of new producers and wines in the past six months and will be doing the same again over the next six months ahead of our 2023 Portfolio tasting and pricelist. These additions will add to both breadth and depth to our range, boosting the classic regions and further building upon our reputation for emerging regions, new producers and even the eclectic. Above all, prioritising producers and wines that offer our customers something exciting and exceptional.

For you, what are the most significant emerging trends in the wine & spirits worlds?

Wines from emerging regions and wines with a sustainable focus.

We know from industry research that UK wine drinkers have a growing appetite for trying new and exciting wines on a regular basis. We see this every day when speaking to customers as they are increasingly enquiring about wines from regions slightly off the beaten track. This appetite for wine exploration was fuelled by the lockdowns in 2020 and 2021, when consumers had the time and curiosity to expand their wine knowledge and discover new wines.

Second is sustainability. Being able to champion the green credentials of a wine is of paramount importance to consumers. We recently carried out on-trade focused survey, in partnership with KAM, which revealed 48% believe sustainable wines are important to them. This is applicable to not just the wines, but the businesses that produce and source them. We are now on our own journey towards becoming carbon neutral by the end of 2023 – Hallgarten’s 90th year.

What innovations in the drinks world do you believe will have the most impact going forward?

Sustainable packaging is without a doubt one innovation we are going to see more of in the coming years. Individuals such as Philip Schofield have championed box wine and companies such as Frugalpac have made huge strides in sustainable 75cl bottle-shaped packaging. These will help steer the wine industry to a greener and future. The rise of the NoLo sector is also significant and something we, and our customers, are watching closely.

Lastly, if you could make one change in legislation/red tape/tax tomorrow, what would you choose?

There are a few front-runners for which is the best legislation to remove: A temporary reduction in VAT – this would put money into consumers’ back pockets and drive consumer spending, fuelling our economy. A cut in tax on fuel; again, this would put money into the pockets of individuals and lower the logistics costs for businesses. And the complete rethink of the proposed changes to wine duty in 2023.

Quick-fire questions:

Bordeaux or Burgundy?

Bordeaux. Often under-appreciated, white Bordeaux has become a very exciting offering in recent years – particularly around this time of year (I am writing this during the 40 degree heat!)

Riesling or Chardonnay?

Riesling. I really enjoy both the European styles and those made in Clare Valley.

USA, OZ or South Africa?

So hard to choose, however if pushed I would say South Africa. The quality of wine for the value is phenomenal.

Cocktails or slow sipping spirit?

Slow sipping spirit.

English fizz or Champagne?

English fizz. We are seeing some world-beating sparkling wines made on these shores and we should be embracing it.

Favourite fast food and drink pairing?

Fish’n’chips and a glass of Wild Ferment Assyrtiko from Gaia in Santorini!