Ahead of its time?

29 October, 2010

First Quench wasn’t just unlucky – it went to the wall because of the decisions it took, many of which were bad ones.

The withdrawal of credit insurance pushed the business over the edge – but before then the company had abandoned the internet, rejected warehouse formats, alienated managers with automated stock ordering, sold all its freeholds and attempted to become a sandwich retailer.

The list could go on, but a year after the company went belly-up it serves little purpose to chronicle every wrong turn in the company’s chequered history. It may be more illuminating to focus on some of the things that it got right – or at least, ideas that may have simply been ahead of their time.

One is the own-label range crafted by former buyer Jonathan Butt. Long before three-for-twos and viral discounting, Threshers was attracting consumer and media attention with the launch of Origin. The range first appeared in 2003 and consisted of 14 varietal wines, which came mainly from the New World.

Butt recalls: “Origin entered the business at a time when there was some worry from the shop and field teams, because they didn’t really know where the company was going. It had just been bought by Nomura and it was a time of much uncertainty.

“Once the investment went into the Origin brand, it pulled together the whole team – and that was ahead of its time.

“It was launched with a roadshow that went around the country and pulled in every store manager and, where applicable, assistant managers too.

“We tasted with them, we told them how it was going to be merchandised – it was a brilliant job. It gave everyone a lot of pride and enthusiasm because the product was good too. Overall it was a really good success story. Margin-wise it was healthy and it gave store staff pride in what they were selling.

“It allowed us to scour the world and find good products and different products. Whenever the vintage was good we could go and find it, if the price was right. We could use lesser-known varieties – Grenache, Verdicchio and things like that weren’t out there at the time.”?Butt adds: “It did promote discovery, which is something I read about a lot in the press now – but this really did it. I don’t think journalists understood the concept.”?Origin sold more than 3 million units in the first six months, the equivalent of a 500,000-case-a-year brand.

Buoyed up by this success, Butt and his team began working on more own-label concepts, starting with Radcliffe’s (a smartly-presented range of European classic wines); Vineyard X (a lower-end brand, allowing Butt to be opportunistic with wine he discovered in various Spanish wineries); and Flinders, an ultimately doomed attempt to challenge blockbuster brands from Australia.

Radcliffe’s began to outperform Origin, but the own-label project was not something that Vision Capital, which bought the business in 2007, was ever comfortable with.

Origin was relaunched as an “ethical” brand, but the earlier support the company had provided fizzled out as the business focused on three-for-two promotions.

Another First Quench success story was Wine Rack – at least in the form the team originally envisaged for it.

“Wine Rack was a strong brand at its height,” says Butt. “When the relaunch was initially thought about it started as an 80-strong store concept.

“When we looked at the profit and losses of all the stores, it was extended to 180 that could have been very strong Wine Racks, strategically placed across the country.

“The wine range we conceived was good and it was bought for that number of stores. We put the best people in there. That started off with double-digit growth and we had customer buy-in.”?The problem was that First Quench started rebranding other stores as Wine Racks, beyond the 180 which had already been identified, whether or not they were in the right locations and attracting the right demographics.

“We overstretched the brand,” Butt explains. “Wine Rack was delivering good figures compared with the rest of the company.

“They started stressing the brand and just saying ‘this works and?the other stores don’t’ and that was absolutely suicidal.

“They just absolutely destroyed it by stressing it too fast and going against the initial concept.”

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