Bibendum PLB takeover will allow Conviviality franchisees to boost margins, says chief executive

04 May, 2016

Bargain Booze, Thorougoods and Wine Rack franchisees should see margins boosted as they benefit from greater buying power after parent company Conviviality snapped up Bibendum PLB for £60 million, according to its chief executive.

Since joining the firm three years ago, Diana Hunter has floated the business on the stock market, snapped up a host of rival chains – including Wine Rack, Rhythm & Booze and GT News – grown its retail estate and purchased Matthew Clark, the largest independent drinks wholesaler in Britain, for £200 million.

Now it has taken on Bibendum PLB, which was formed when two of the UK trade’s biggest suppliers joined forces in 2014.

Hunter told OLN: “The franchisees are really excited. It’s more strength in the organisation, more buying power and better margins. Over time the franchisees should see a strengthening of their position.”

News of the deal broke as suppliers were setting up their stalls at the London Wine Fair, and it has been the talk of the show.

Bibendum PLB chief executive Michael Saunders told OLN that it has since been approached by several wineries at the fair that are keen to join the Conviviality revolution.

He said: “We have had quite a number of approaches from suppliers, which will only fuel the fire of success. It’s a sensible move because they can see which way the wind is blowing.”

There are now three divisions to the Conviviality business: Conviviality Retail, which includes its entire retail offering; Conviviality Direct, which encapsulates Matthew Clark and Bibendum; and Conviviality Trading, which includes PLB, Instil, Peppermint and The Wandering Wine Company.

Hunter told OLN: “Now that we have the off-trade and the on-trade, which makes us a very unique business, we can connect all of the data and insight across all the different channels and that gives us the opportunity to influence every consumer drinking occasion.

“In the UK today we probably have the best data and insight into UK drinking habits. That helps us to help our customers in both the on and off-trade make the right choices to match their target consumers’ needs.

“If you think about the nature of alcohol wholesaling we have the most assortment of drinks. We have access to over 7,000 SKUs across beers, wines and spirits. That’s a very complex assortment to navigate if you are a buyer. We can provide the expertise to help them navigate that range and assortment. It gives us this unique view across the alcohol market, which I personally think is fabulous and a great opportunity for the business.”

Both Hunter and Saunders believe the firm can now grow and take on more wineries thanks to its increased strength.

Saunders said: “Under Conviviality and Diana’s leadership we will be able to grow with the ambition I have as her vision matches what I want from the business.

"We are going to do what we have set out to do. The customers have been really pleased with what they have seen so far. It will be more of the same and better.”

When asked if she anticipated the astronomical growth the company has seen since she took the reins just three years ago, Hunter said: “It’s always part of your vision when you join a business to build and strengthen it. It was very clear to me when I joined Convivality that we were an alcohol wholesaler wholesaling only to one group of customers.”

She added that The City has reacted “very positively” to the news. “I was out with some investors last week talking about the opportunity and they were hugely positive because they can see it as complementary to the whole business,” she said.

When asked if we can expect to see more acquisitions soon, Hunter said: “Never say never. There are no acquisitions in our current plans, but you never rule anything out.

“Right now we want to make sure that Bibendum PLB team is settled and a full part of the Conviviality family.” 

Many among the trade have also reacted postively to the news.

Patrick McGrath MW, managing director at Villa Maria and Champagne Taittinger supplier Hatch Mansfield, told OLN: “Diana Hunter is a breath of fresh air to the industry. She's got good experience and can see it coming in from the outside. 

“I really applaud her. She's doing a great job. She's got great vision and is really ahead of the game, which is great because we are seeing a blurring in the sector, between on and off-trade, with independents becoming wholesalers et cetera.

“It's a natural coming together, with Bargain Booze and Matthew Clark and we will wait to see what happens with Bibendum PLB.”

Miles Beale, chief executive at the Wine & Spirit Trade Association, said: “The recent consolidation of Conviviality and Bibendum is an indication that the lines between the on and off-trades are becoming increasingly blurred, and why not? UK consumers are seeking more of everything and this is just another example of that.

“The UK is the most diverse wine market in the world but also UK consumers have lots of other drinks to choose from. It's encouraging news."

When asked if one stop shops for the on and off-trade will become more commonplace, he added: “It is seismic. It feels as though the architecture has changed. If it is successful – and there is no reason to think it won’t be –  then things really will have changed.

“The on-trade looks quite different anyway now. We have an expanding hospitality sector. It feels as though there are opportunities particularly in the on-trade but the industry requires rationalisation.”

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