Cash and carries catch up
"We want to be taken seriously," demands Ray Donelan, Landmark's wine and spirits director. "We buy wine competitively, we sell wine competitively and we can look after our customers."
Landmark is not the only cash and carry to demand respect for its wine. Booker Belmont Wholesale and Nurdin & Peacock (N&P) are both busy winning medals at wine competitions, regularly visiting wine regions around the world to source new ranges, revamping packaging, luring customers through tempting point-of-sale material (sometimes with Oz Clarke-esqe tasting notes) and generally catching up with the rest of the wine trade.
The buying power of the cash and carry is immense. Turnovers of £1.5b for N&P and Landmark, and £2.3b for Booker, have given them an ability to secure good prices on everything from a premier cru Chablis to good old Valencian red. The problem comes when demand exceeds supply, especially in South Africa," says Peter Miller, Booker's director of buying. "A way round it is to develop a good relationship with the producers. If we don't let them down, they will be more confident, and they won't go touting for business elsewhere."
Landmark's Donelan adds that customers also get value for money from a cash and carry. "Customers are paying through the nose for wine from their wine merchants." He gives an example of Landmark's muscle with an account of how in some cases enquiries from customers for particular wines "can end up by Landmark being a major shipper and importer of those wines".
But what of the image of cash and carries as cold, dimly lit warehouses, shrink-wrapped case stacked on shrink-wrapped case, aisles fading into the middle distance, and customers jumping aside to make way for a forklift truck towering with pallets loaded high with thin Spanish red?
This is no longer realistic, claims Booker, which branded its existing wines and spirits arm Malt House Vintners back in 1988 to give it an image of wine expertise. The company spent a considerable amount on marketing to rethink packaging and point of sale in an attempt to woo the customer.
Its latest venture is "fine wine units" - wooden display areas of 26 bottles in 50 outlets "to use as a focal point", says Miller, with everything from a Malt House Vintners Burgundy from Henry La Fontaine to a Mondavi Chardonnay.
The trick is to get the customers to linger. Merchandising aids such as wine racks and wood-grained backing have been installed, though Miller does not want gimmicks. "We want to provide a comfortable, sympathetic feeling to wine, a much more subtle approach, which is very difficult.
"With provisions, we know where we are," says Miller, "but when it comes to wine we scratch our heads a little bit." But according to Malt House Vintners brand marketing manager Pat Wallace, the initiative is working.
Another helpful marketing tool is the 37 awards that Malt House Vintners picked up at last year's International Wine Challenge for its exclusive wines - the award stickers sit proudly at point of sale.
N&P is also making loud noises about its awards, scooping 36 in last year's International Wine Challenge. Ten of those went to a new range of South African Wines, Rouwke's Drift, of which Rod Stevens, N&P business manager for beers, wines and spirits and ambient groceries, is particularly proud since it sourced these wines itself. N&P has 160 wines in its range, of which 78% are own-label (the largest range of any cash and carry, it boasts).
Marketing opportunities
The marketing opportunities on the back of these awards just kept on coming: the winning wines were available in a six-for-the-price-of-five deal; there was copious merchandising material, including tent cards; and free bottles were available for caterers who wanted to show off the wines to their customers.
"And the wine area is not dimly lit," retorts Stevens. "We haven't got any heaters yet, but we do have direct spotlights and backlighting - it looks a lot more professional."
N&P offers a range of wine services including wine tastings for customers, a delivery service and an own-label service for restaurateurs for their house wines, all at no extra charge.
This transformation of the cash and carry wine scene has happened over the past three years. "In the old days, we were buying commodities, buying by buying power alone," says Stevens, "but now we combine wine expertise with our buying."
N&P has a five-strong wine-buying team and imports wines from 22 different countries.
Wine drinking in the UK has changed so dramatically in the past 10 years that although Liebfraumilch is still at the top of the ratings, Shiraz and Chardonnay now trip off the customer's tongue as easily as Hock and Asti Spumante. The cash and carries are still doing a mean business in Liebfraumilch, but they have all seen sales drop away in favour of New World wines and regional offerings from Spain, Portugal, Italy and France.
Donelan and others report that Eastern Europe is coming up fast, with sales from Bulgaria up 500% and Hungary up 274% in the past year at Landmark. "Until three years ago we were in the business of selling Lambrusco and Liebfraumilch. Now we ship direct from Chile," explains Donelan.
Subtle techniques
Donelan and his team of eight, including wine buyer Liz Aked, regularly visit wine regions around the world - his latest and most exciting trip was to South Africa.
Winning over the customers has been achieved with a mixture of some subtle marketing techniques - wine racks with wines "laid down" by country and by style, in "a strong retail fashion" - and gentle persuasion in the customer magazine, published every month. Of Landmark's 300 different wines and spirits, 75% are own-brand.
Donelan says customers are looking for two main requirements other than value for money - exclusivity and label presentability. The marketing department has been busy working with wine producers for the latter, while Donelan and his team have been glugging their way around the world's wine regions to keep up with the former.
There has been a big shift in what cash and carry customers are prepared to pay - the £1.99 watershed has moved to a whacking great £3.99/£4.99. "A different market for us, and very welcome," says Donelan.
Cross-border shopping has taken its toll, though, with Landmark's sales of French and German wines "harmed greatly". It saw sales drop by a quarter for French wine last year "and there are plenty of duty scams as well", warns Donelan. But the positive side is that sales have boomed for the rest of its traditional markets of Italy and Spain.
The story is similar at Malt House Vintners. "A lot of effort went into the food in restaurants, but most wine lists were uninspiring. Now, wine has become far more accessible," says Miller. He argues that the wine producers themselves have responded to this by tightening up production methods.
Booker sends out quality control auditors to assess a prospective Malt House Vintners range. "Most wine producers now pass muster, but it used not to be the case," says Miller. "We have become a lot wiser."
Miller is adamant, though, that you still do not have to spend a lot of money to get an interesting wine. Between £2.50 and £3 (wholesale prices) is a whole range of varietals to chose from, he says.
Malt House Vintners stocks more than 100 different wines. Price points generally have slipped past the £3 mark to £3.50 with little resistance, says Miller. South African wines are its fastest-selling range, "really the icing on the cake for us," and French vins de pays is doing well, as are regional Spanish wines.
Miller reports that a lot of people are still buying the sweeter German wines, but they are definitely losing their hold on the market. Miller urges caterers to have a really good look at New World wines.
Malt House Vintners' methods of communication with its customers include: strong point of sale material with shelf-edge tasting notes and back-label descriptions; A Guide to Wines, Spirits, Beers, Ciders and Perries (second edition just published) which comes complete with pronunciation section, and is available free to all customers; and a full brief to its sales staff in the form of tastings, so they can pass on their expertise to customers.
Understanding wine
Malt House Vintners wine buyer Andrea Hargrave, a two-thirds qualified Master of Wine, runs Booker's internal wine courses. "Understanding wine better is the key to our growth, and our customer growth," says Miller.
For the customer there is a series of roadshows that travel around the country to prove this point. Six wines - three red, three white, a mixture of New World and Old - hit their palates under the guidance of a wine tutor specially employed for the event.
Landmark also sends its key wine sales staff on wine courses. "The difference now is that the staff actually want to do the courses," says Donelan. "And they have realised that they are a lot more valuable to us if they do attend. All the key figures in our organisation now know more about the wine business and they enjoy it. It ran away from us and we have had to do some catching up," he says, "but we're getting there."
