California finds ray of sunshine

31 October, 2008

As OLN's research into the independent

arena enters its next phase with new sponsor, the California Wine Institute, its UK director John McLaren tells us why good merchants are such a vital part of the trad

e

Until relatively recently, independent wine merchants represented the great unknown, even for seasoned trade experts like John McLaren. When a few years ago Californian producers asked for the lowdown on this diverse and confusing part of the UK trade, McLaren was not able to provide a comprehensive answer, at least at first.

"A number of wineries in California felt they would like to be in the UK, but weren't, and were asking me about routes to market," he recalls. "A lot of them are clearly not going to sell to Tesco and Sainsbury's, so they were saying 'we'll sell into the on-trade'. But the on-trade is as difficult to get into as

Tesco and Sainsbury's if you're not with one of a handful of major importers.

"When they asked about independents I had to say, back then, 'I've no idea really'."

The California Wine Institute's UK office proceeded with a study of the independent sector, concentrating on specialist wine retailers rather than generalist off-licences. The picture that emerged was of a sector in ruder health than many had suspected. The dead wood that had been talked about for years had largely disappeared.

"When we started looking at them we found their average selling prices were much higher than in multiples, and they had real points of difference," McLaren says. "Everyone had been telling them they had no future and they were dinosaurs. But the economic clear-out had already happened; those that had found their niche were operating very well, and had the skill sets they needed to run a business as well as knowing a bit about wine."

To McLaren's dismay, but not to his surprise, California was found to be underperforming in the independent sector. "To be honest California didn't come out very well," he admits. "Independents had this thing about very strong brands or very fine expensive stuff and not much in between. For years we've been trying to demonstrate that California is very strong in the £5 to £10 area, the very area independents were claiming was their strength.

"Something somewhere was missing in the translation. Clearly there was an element of education and familiarisation to be done. They didn't all come to the London wine fair or our tasting because they're busy people."

Armed with a better understanding of the sector,

California Wine Institute is now trying to work more closely with the independent sector and achieve a more representative market share.

What role does McLaren feel independents play in the UK off-trade? " It's vital for consumers to rub shoulders with people who see wine as a fun thing. In the supermarkets wine is efficiently delivered, but in the language of the supermarket: the ranges and the pricing are strictly controlled. It doesn't really give an opportunity to the quirky, interesting, oddball and the very outré offerings you get from

all regions, and certainly from California.

" The enthusiasm with which these people sell their wines ... they feel they represent them in some way, and they get worked up about them. The on-trade shares that

, to a certain extent but they don't have shop windows and promotions and people gathering for tastings.

"It's just part of the restaurant mix, in most cases, whereas the independents are making a big song and dance about it.

"If you're a supplier making a quirky wine in Santa Barbara, you want

it sold by enthusiasts who can say 'I've discovered this wine - discover it for yourself'."

McLaren cites the example of Oddbins in its prime - a shop which did not appeal to some wine shoppers, but many others "wouldn't go anywhere else". That kind of passion and polarisation has largely disappeared with the "everyman" approach of the multiple grocers, he feels.

"I think independents vary considerably and I'm glad that they do. It would be awful if you could just download [a formula] from a website. As a former retailer, I recognise that the skill set to run something like this is quite considerable, and not everyone will have every skill in spades. Some people provide a nice store environment, but their enthusiasm is a little tempered by English reserve - and also they tend to recruit arms and legs rather than people who will really deliver the concept they originally had."

The problem is, McLaren says, that the customer experience can vary wildly if the person behind the counter happens to be the owner's daughter-in-law or

just a hired hand. When asked to highlight another area of improvement, he suggests that many independents could do a better job of marketing themselves, particularly in terms of their databases and follow-up communication with customers.

This is something he argues many American retailers get right. "Independent wine shops in the States tend to be quite hoity-toity and upmarket and have a huge swathe of interesting Napa wine and leave the everyday priced wines behind," he says. "But they have a much healthier and more vibrant mailing list and website, and members really feel like members.

"In the UK, when you leave a wine shop the owner will often thank you for your custom - as if that was the end of the relationship."

McLaren: my favourite independent wine store

McLaren's stand-out independent wine merchant is The Winery in Maida Vale, London.

Owner David Motion does a "great job", he says, and not just because he's an avowed California enthusiast: "He shows what you can do not just with California but anywhere else.

"The shop feels great

and David and his staff are intuitively not over-dressed or under-dressed - they look the part. They have the right level of engagement with customers."

McLaren adds: "He's very keen on Californian and German wine, not the two most fashionable things to sell in Maida Vale. He's been able to find wines and import things that are his own. He can say 'I've found this wine and you can't find it anywhere else'.

"Most independents would think that's impossible, but it can be done and you end up with exclusives and decent margins - or at least margins you control, because they're not known value items."




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