Friday 16 November 2018

Not all wines get better with age...It's crucial to ensure that you stay relevant in your industry

Alan O'Neill is a change consultant and non-executive director. For 25-plus years he has been supporting global and iconic brands through change. Alan-oneill.com. Business advice questions for Alan can be sent to sundaybusiness@independent.ie. Stock image
Alan O'Neill is a change consultant and non-executive director. For 25-plus years he has been supporting global and iconic brands through change. Alan-oneill.com. Business advice questions for Alan can be sent to sundaybusiness@independent.ie. Stock image

Alan O'Neill

Most good wines do improve with time, but it's a misconception that all wine gets better with age. It's also a fallacy that wine sales are growing in Ireland.

As a nation we experienced significant growth in wine consumption over the last 30 years. But that growth has now almost flatlined as it becomes more normal to drink beer with food. Millennials, in particular, enjoy craft beers. Exchequer receipts in 2017 from excise duty were €1.2bn, of which wine made up €382m. The rest of the market is made up of beer, spirits and cider.

I find it fascinating to see that 80pc of all wine sales are in the 'off-trade' (stores and off-licences). That tells a lot about how our preferences have changed over the years.

In 2015, Valeo Foods bought Findlater & Co from DCC. Now the biggest distributor of wine in Ireland, they've come a long way from their humble beginnings in 1824 as a bottler of Scottish whisky. They offer a unique and exclusive portfolio of some of the most sought-after producers from across the wine world.

This includes iconic wine producers such as Bollinger, Jadot, Chapoutier and Penfolds, with new stars like Fedellos do Couto, Gut Oggau and Le Grappin. It was one of the first Irish importers to introduce new world wines.

Servicing the 'on-trade' (restaurants, pubs and hotels) and the 'off-trade', they are a leader in the industry. They provide their customers with a dynamic portfolio supported with market insights and extensive wine knowledge. Employing 80, they have a highly experienced team of on- and off-trade professionals and sommeliers. They have a strong reputation for supporting restaurants in developing a wine list engineered for commercial success. And they will soon launch a B2B online business.

Despite their size, heritage and track record, up to a few years ago, Findlater & Co became less relevant and their market share declined.

In their attempt to be all things to all men, they sold the same portfolio of wine to both the on-trade and the off-trade.

The impact of that was that the consumer would often complain about paying €25-30 for a bottle of wine that they recognised from the supermarket shelf, at €10. If you owned a restaurant, what would you do?

Also the industry had become more commercially sophisticated. There was an abundance of basket-level data about consumer preferences, that was not being turned into actionable insights to drive more sales.

There was another issue as well. "Although we had a strong core team of great people, as leaders in the industry we felt that we needed more people with global expertise," said managing director Oliver Sutherland.

This became a catalyst for changing their business model.

Change Tips: how Findlater & Co became relevant again

1 Build credibility through expertise

Findlater & Co made some key appointments. Shane Murphy, an Aussie 'with wine in his veins', joined as category director, coming from La Rousse where he had developed their on-trade business. They also added global influencer of wine Mick O'Connell, Master of Wine, along with additional highly-qualified sales people.

2 Develop a strong product portfolio for each customer segment

Findlater & Co refreshed its ranges for both on and off-trade so each sector has its own portfolio and identity. This applied not only to recognisable brands like Wolf Blass but to grape varieties too. By avoiding crossover, restaurants in particular had more differentiation and received much less consumer price resistance.

3 Invest in basket-level data that gives real insights into how people shop

One trend that was identified in the insights was that consumers purchased a more expensive bottle of wine in the off-trade at the weekends. However, there was little choice at the €15-a-bottle level. They enhanced the 'wine price ladder' and added more premium wines for the off-trade. They also discovered that consumers in restaurants were becoming more adventurous in their willingness to try new grape varieties. So they also expanded the on-trade portfolio and supported that by providing intensive product knowledge training for restaurants. As the world continues to change, I see commoditisation becoming more of an issue in business. For example, a man with a van could quite easily sail to Roscoff every weekend and fill his van with a great collection of French wine to sell to restaurants.

There is an increase in globalisation and barriers to entry are lowering across the board for many industries. Consequently differentiation in the marketplace is a challenge for most of us, regardless of our sector. Why should customers buy from you in particular?

What makes you more relevant than your competitor? This is a real issue that I see wherever I travel. For example, there is no growth in the Lebanese local economy due to political turmoil and the huge influx of Syrian refugees. Their best hope for growth is in import substitution and export markets. But because the economy is in a downturn, business owners are stressed and sometimes can't see the wood for the trees.

In the last few weeks I have been to Beirut supporting a university which is championing a growth agenda in their business community. My speaking events and workshops with local businesses were heavily focused on how to differentiate and 'be more relevant' in both a local and global market.

The issue of relevance is not just for developing countries like Lebanon. It applies to every organisation too, regardless of industry or size.

Alan O'Neill is a change consultant and non-executive director. For 25-plus years he has been supporting global and iconic brands through change. Alan-oneill.com. Business advice questions for Alan can be sent to sundaybusiness@independent.ie

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