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Pete Kelly: ‘Looking Back, Forging Ahead’

How has business been for you in the first half of 2024 and how do things compare to where you were last year?

We continue to positively address the variety of conundrums posed by the wine industry. Fortunately, our strength in the depth of our range, along with a strong presence across all major UK trade channels, is proving to be our saviour. The investments we have made in developing our ‘Homes’, which puts our winemakers in control over quality, production and sourcing capability in South Africa, New Zealand, Rhone and England, continues to pay dividends too.

It’s clear that the fundamental shift in the UK’s relationship with wine, driven by both economic and lifestyle factors, will continue to force us wine producers and distributors to adapt quickly to meet the challenge. We are seeing a shift from out-of-home occasions to in-home occasions continue versus last year, which is benefiting our off-trade business. Our on-trade business however remains buoyant. The teams on the ground are adapting brilliantly and continuing to find hard-won success in often challenging circumstances.

• Read more: Klearhos Kanellakis – ‘Looking Back, Forging Ahead’

How has the cost-of-living crisis played out across the year and what – if anything – have you been able to do to mitigate that?

Thankfully, the indication is that consumer confidence is returning as inflation retreats to a level of normality, which brings some relief. However, there is no doubt that the cost-of-living crisis has contributed to overall wine category decline. Unfortunately for us in the wine industry, this issue was exacerbated by a government who pushed through the largest hike in duty in almost 50 years. This meant the wine industry is now grappling with cost inflation, squared!

Average retail prices increased as a result, which pushed wine out of reach for some customers and drove further consumption decline. Wine is now pushing the boundaries of affordable luxury in some households and becoming an increasingly considered purchase. Mitigation in this environment is tough. However, our winemaking teams around the world, along with our agency partners, continue to delight us with their creativity and efficiency to provide some of the best value-for-money solutions in the country!

What are you most proud of achieving this year? Have you managed to achieve any specific goals?

I am personally proud to work for a company that has put sustainability and our impact on climate front-and-centre of our thought process in every aspect of what we do.

This year, we have embarked on a programme to support our producers across the world to evaluate and improve their sustainability commitments. I am proud of the positive engagement we have had across the business and from our partners. This culminated in the release of our Green List which recognises our partners who are operating with the highest focus on sustainability. It has been received well in the trade and allows our customers, who are becoming more inquisitive in this area, to make informed choices from our portfolio. We are working with Sustainable Wine Roundtable and their Bottle Weight Accord and are making big steps toward reducing our overall bottle weights, which is a major contributor to carbon emissions. We also continue to evaluate and develop other light weight formats. We are looking forward to sharing our efforts with the trade at the Sustainability in Drinks exhibition in London later this year.

And what is the biggest cause for concern?

It would be impossible to respond to this question without mentioning the looming duty changes that are being planned for 1 February 2025. The significant cost and administrative burden this will cause our customers, our UK operations and our producers globally must not be underestimated.

Specifically, what will be the likely impact on your business of the planned end of the temporary easement on wine duty on 1 February 2025?

Finances across the industry are in a perilous state and resilience to the worst impacts of the new duty regime will inevitably cause casualties. The overall negative economic impact will dwarf the diminishing benefit of duty receipts to the Exchequer. It pays to remain an optimist in these circumstances. So far, the new government has proven to be pragmatic. I hope this pragmatism is extended to the wine industry and there is positive engagement with the WSTA and industry representatives.

What are the biggest drinking trends at the moment, and how do you expect that to change going into the autumn?

We’ve seen evidence of wine being a more considered choice for at-home occasions and the mix appears to show a move to premiumisation, following the ‘drinking less but better’ trend. This is reflected in our sales to independent specialists throughout the UK, as well as national grocers.

Traditional regions are also having their nostalgia moment. Bordeaux, Chablis and Beaujolais are hot at the moment, even with Gen Z, and are driven by some experimental and exciting winemaking by a new generation of winemakers.

The upturn in wines aimed at the conscious consumer will, I think, continue. Wines and drinks that are underpinned by sustainable credentials, such as third-party accreditations or packaged in better recyclable options, such as aluminium, will continue to be launched. And of course, low & no alcohol products. Along with Araldica, our partner in Piemonte, we’re excited to be launching, a range of authentic low alcohol options in the Autumn and securing new listings with their canned wines.

Any other predictions for the second half of the year?

Thankfully, it won’t be possible to make wines using AI... I think?

Quick fire questions…

France, Italy or Spain? France, specifically Cairanne, obviously!

English fizz or Champagne? English Fizz, specifically Henners Vintage

‘Normal’ or ‘natural’ wine? Neither, just great wine

Brown or white spirits? Brown, preferably mixed into an Old Fashioned

Mixologist or mix it at home? Mixologist. Why settle for my ham-fisted efforts when there are pros out there?

Sharing plates or structured meal? Sharing plates, always

Post-prandial preference? A good digestif and a long chat with a friend

Desert island treat? Heaphy Moutere Riesling, or a cold pint of Guinness, preferably poured at Eugene Kelly’s in Tullamore

• Boutinot
• Looking Back Forging Ahead
• Pete Kelly