Its turnover may be massive compared to the average indie. But as Jeroboams approaches its 40th anniversary, it’s honest about the challenges it shares with other merchants, with whom it hopes to forge new relationships. Report by Graham Holter
A wine business with a turnover north of £35m might not seem like it’s part of the indie community. But that’s how Jeroboams thinks of itself, both in terms of the way it runs its retail estate, and its relationships with smaller merchants.
As the company, founded in 1985 by Peter Rich, approaches its 40th anniversary, its sales are roughly evenly split between retailing, private client business and its wholesale activities via Jeroboams Trade.
Under the stewardship of wine director Peter Mitchell MW, the company has put together a string of agencies, including Moss Wood from Margaret River, Castello dei Rampolla in Chianti Classico and the pioneering Marlborough producer, Hunter’s. It’s on a mission to offer these wines to indies across the UK and looking for regional wholesale partners to help make that happen.
But Jeroboams has also been busy with its own shops, all of which are in affluent, residential parts of the capital. A rolling refurb programme has given the stores a sunny, airy feel, the light wooden fixtures configured in a way that avoids intimidating customers with an impenetrable wall of wine, and the lighting designed to banish dingy corners.
The estate has been growing, too, with recent openings in Wimbledon village and King’s Road in Chelsea. There are now 10 branches, and more will follow, according to chief executive Matt Tipping.
“We’re definitely aiming for two or three more shops,” he says.
“Opening in Wimbledon is really interesting for us. We love our community there. It feels very much like an indie kind of village. We like being in communities within London. And then King’s Road just expands out of the heartland, really. We knew that we weren’t really covering Chelsea very well.
“But at the moment, the way the market is, we’re just taking the foot off the gas. We’re more about waiting for things to come to us rather than go hunting them out.”
Tipping acknowledges that some wine merchants in the capital are struggling, and owners could be looking for an exit. Might such distressed assets fuel the Jeroboams expansion?
“We’re seeing those coming through, and it’s one route to go down,” he agrees. “But from my perspective, I’m much more interested in it being a healthy indie scene.
“I’m doing work with The Drinks Trust at the moment around the business advisory platform, which is an idea of getting the industry together and using combined purchasing power to help smaller companies.
“I’d much rather it was a more diverse scene and businesses were standing on their own two feet.”
We’re giving the teams more responsibility with less central control so the shops are being run more like an indie
In its most recent Companies House accounts, for the year to April 2023, Jeroboams made a gross profit of £8.7m on sales of £35.5m, reinvesting all free cash back into the business and not paying a dividend. But as consumers think harder about discretionary spending, Tipping acknowledges that even Jeroboams must take its share of the pain.
“I think the London wine scene is healthy, and long-term is healthy,” he says.
“What’s difficult at the moment, for us anyway, is not that people coming through the door are not spending money. Actually, if anything, our average spend has gone up. But what we see is there’s fewer people coming through the door.
“I would say people are retreating back to buying wines from supermarkets. With the cost of living, even in these areas, there are people making decisions about where they’re spending their money and how they’re spending it.
“Our very simple reaction to that is, you control what you can control. Lucie [Parker, sales director] has put in some incredible work with the teams in terms of the training and being really clear about what it means when you walk in through the door of a Jeroboams, and what you should expect as a customer.
“It’s relatively easy to get peaks of good experience. It’s hard for it to be consistently high, and that’s what we’ve been working on; making sure the teams are really motivated. We’re giving them more responsibility and taking less central control, so the shops are being run more like an indie.”
In a typical branch, 70% of the wines will be from the core Jeroboams range, with the rest selected by managers from the wider list.
Parker says: “We feel like we are part of the of the local area, and that is a really big part of our ethos. We want to be people’s treasured wine shop.
“There was this article by Mary Portas a few months ago. She was saying, if people are going to shop, they want to go and have an experience that’s enjoyable, but that also gives them something else. You know, it’s not just a transaction.
“She mentioned specifically that one of her favourite things is going to her local wine shop. Because you have a conversation with somebody. You might have a conversation about wine, or you might not.”
The staff training that Jeroboams is providing goes beyond product knowledge.
“We’ve made some changes to the training already, but we’re about to launch a new training platform that is based online,” says Parker. “We’ve built it with a lady called Lucy [Beckett] from Liquid Education.
“We have a lot of younger people coming through retail. Most of them have some wine knowledge, but not all. So it’s just allowing people to learn from this kind of platform that is relevant to them.
“We realise that the world is changing, and not everybody wants to sit and do WSET. So we’ve created this content where they’ll learn about wine, but they’ll also learn about how to do high-end selling with consumers and tell stories.”
Jeroboams is happy to continue with dedicated off-sales rather than create wine bars on its premises.
“We started as a cheese and wine shop, and more of our shops now have food within them, which is building on that experiential side,” says Tipping. “We’re not going to go down a hybrid route. We feel [with hybrids] there’s often a lack of clarity about what a customer’s walking into, which can be confusing. And more often than not, I see that it’s more of a wine bar than a shop; eventually, that’s the route it goes down. So it’s not right for us.”
We share their mindset about exclusivity and we’re well positioned to understand other indies’ demands
Jeroboams Trade has been “one of the big developments for us as a business over the last few years”, Tipping says.
“The focus historically was more around leisure and travel companies as well as neighbourhood restaurants and good-quality pub groups, those kinds of things. We’ve realised that the range is good. We know customers like the wines.
“We share the mindset that says exclusivity is really important within a region. If we’ve got a wine that suddenly goes into supermarkets, we’ll delist it. We understand that mentality, and we also understand what makes financial sense in terms of having a wine on a shelf, and the margin you need to make. So I think we’re well positioned to understand other indies’ demands.”
Parker adds: “When I joined, the attitude was a little bit ‘we can’t possibly sell to other indies in London, because we are also an indie in London’. My attitude was more like, we know these wines sell.
“There’s a market for them. We’re agents for them, and as long as our pricing allows people to match us and make their margin, there is no problem at all.
“We can offer them some preferential pricing, but also winemaker visits, sample stock, POS material and access to our brand managers.
“They’ll have exclusivity in their region, because we don’t have a sales team north of London. So rather than building our own sales team and spreading ourselves out that way, we want to work with these regional people, and form those partnerships.”
The range is strongest in the new world, and Italy, and is likely to see more evolution in the coming years, with regional France identified as an area where improvement, and growth, is possible.
Parker says: “As time goes on, anything that we share as an agency we’re trying to go exclusive on or find something [else] that’s ours and only ours. In five years, I’d like to see that the range has got a bit bigger so that we can offer more to our customers, whether they be trade or retail.”
Jeroboams is still owned by Switzerland-based Peter Rich via its parent company Holland Trading, incorporated in Bermuda. Both he and his son, Ed, are said to take a keen interest in the business.
“We see Ed and Peter every month and they’re very much involved,” says Tipping. “I mean, the reason we’re talking about things like giving control to the shop managers is because we’re looking long-term. We’re making decisions in a difficult market and we want to come out stronger.
“If I was having to hit a quarterly target each time, I’d be making different decisions. I’m not. The idea is that we’re going to be here another 40 years, and we’re going to be true to our beginnings.
“My remit from Peter, and indeed from Ed, is really simple: to run a wine merchant they’re proud of. Part of that pride is knowing that their team is well looked after and happy and motivated, as well as in how the shops look and everything else in the business generally.”
Tipping promises new developments to coincide with the 40th anniversary, which are under wraps for now.
“I think the way to describe the company is that we’re restless, we’re keen, we’re enjoying ourselves,” he says. “There’s a great feeling in the company at the moment, and we’re really keen to just continue exploring what’s possible.”
