Independents are just too good

At least two companies want to build retail empires that tap into a wine market that’s been built, to a large extent, by independents

 

Humble Grape is not a household name, but perhaps that’s going to change over the next few years. If this happens, the implications for the independent trade could be significant.

The business was established in 2009 by James Dawson: one of many ventures in which wines are directly imported from producers and sold to wealthy clients, without the aggravation of having to operate out of retail premises.

the wine merchant august front page

Click on image for the August 2014 digital edition

This year, the model changed. Dawson and new business partner Cameron Gordon decided to raise some money to create a wine bar in Shoreditch. Again, nothing mould-breaking about that, except that the crowdfunding goal of £250,000 was surpassed and the company began talking about four more sites, to follow in the next five years. After that, the plan is to open 60 franchised wine bars and to become “the Starbucks of the wine world”. The company wants to “democratise and demystify wine for all through the development of a high-street brand”.

So it’s not just Oddbins and Wine Rack that are on the hunt for franchisees. Humble Grape clearly sees a gap in the market, and it should embarrass the nation’s pubcos that it’s been able to do so. The on-trade wine offer, outside of certain metropolitan areas and well-heeled commuter towns, remains pretty dire. No wonder that Dawson and Cameron are picking up the heady aroma of consumer cash.

This is, of course, the exact same market that so many independent wine merchants are seeking to exploit at a local level, often with remarkable success. Barely a week goes by without a new start-up enoteca appearing somewhere, or an existing merchant knocking down a wall and placing orders for seating, and charcuterie.

Dawson and Cameron haven’t expressly said so, but the recent boom in independent merchants has partially paved the way for ideas like theirs. The public appetite for good wine has proven, and  nurtured, by small merchants in towns and cities across the country. Anyone drawing up a business plan for a chain of wine bars would be mad to ignore the contribution that these independents make.

Oddbins, too, is gearing up for renewed expansion, and in its case it doesn’t merely acknowledge the groundwork of independents – it plans to hoover them up to fuel its ambitions.

We should expect more of this to come as more crowdfunded entrepreneurs and sleeping-giant operators look at the independent trade and wonder why more of that consumer spend isn’t going to them.

It won’t spell disaster for the sector as a whole – in fact there may be unexpected benefits, as reported by some small retailers in areas that Starbucks sought to colonise.

It’s a back-handed compliment. The independent trade has, to put it bluntly, done too good a job of selling wine.

 

This article appears in the August edition of The Wine Merchant.

 

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