On-trade’s back on the agenda

News analysis

Despite some challenges, many indies are seeing increasing business with their restaurant clients, reports Nigel Huddleston

 

The return of the on-trade is bringing a mini-boom in wholesaling for many wine merchants – though the ongoing uncertainties caused by the pandemic are making things anything but plain sailing.

After the delays caused by Brexit earlier in the year, the summer Covid wave’s impact on the haulage industry and staff shortages in hospitality have brought further headaches.

“The biggest issue since the on-trade reopened has been trying to get enough stock,” says Dafydd Morris at Cheers Wine Merchants in Swansea. Argentine Malbec and New Zealand Sauvignon have been hardest to keep flowing.

“We’re being told by suppliers they can’t get enough hauliers,” Morris adds. “I had a delivery from a bond yesterday that turned up in two separate white vans that would normally come in a single lorry.

“It helps when the national press run stories on haulier issues because accounts are willing to accept they won’t get everything they want and that there are delays, and that it’s not just us fobbing them off.

“It’s been such an unusual time,” adds Morris. “We thought Brexit and lockdown were bad enough but coming out of it has been just as mad.

“Our wholesale business is normal in terms of volume and better in terms of value.

“House wines are normally a huge percentage of wine list turnover but there’s definitely a move towards better quality.

“I think people have got used to drinking slightly better wines through lockdown from shops and when they go out are thinking, ‘we haven’t been out for 18 months, let’s just go for it’.”

 

 

Wholesale accounts for 85% of the business of Regency Wines in Exeter. “Since June we’ve been trading above 2019 levels,” says director April Marks. “We’re in the west country and everyone’s staycationing. There’s also just a huge appetite for hospitality and people have missed it. Some of our customers have been fully booked for weeks and weeks.”

Marks says she feels recent decisions by larger wholesalers, including Matthew Clark and St Austell, to increase minimum order sizes have brought benefits.

“We’ve picked up new accounts,” she says. “Some of the larger wholesalers have increased their minimum orders and people have come to us. Their service levels aren’t as sharp as they used to be, and I think we’ve gone the other way.

“We’ve definitely seen an increase in customers since lockdown without actively going out there and targeting new business. They want to support local businesses and they’re not being serviced properly by their larger suppliers they were using.”

While the changes to major wholesaler T&Cs have aided some smaller operators, others may find competition intensifying on a localised basis.

Majestic is using some of its recent bigger store openings as commercial hubs to serve both retail and wholesale customers.

The company ramped up its commercial sales team before the easing of this year’s lockdown, securing over 100 new commercial on-trade accounts, and chief executive John Colley said in the spring that he was “very optimistic” about the chain’s prospects in wholesale.

Charles Wharton, at Ellis Wharton Wines in Cornwall, has also been courting new accounts.

“We took on a sales rep for the first time three months ago,” he says. “That has helped us pick up quite a lot of new business.

“We’ve had a good handful of customers approach us, but we’ve been actively chasing business.

“For the last seven months we’ve either been operating on 40%-50% of normal, or running at 140%-150%. It’s gone from one extreme to the other. There was no gradual build-up to the summer season. It was like turning on a light switch and a question of just making sure we had enough stock to push out the door and keep everyone happy.

“The last two weeks the pinging from track and trace has affected us. I reckon we’re 20%-25% down on previous weeks.

“A couple of accounts with staff shortages have shut their doors for a week and others have gone from seven days to four or five days a week, which suddenly takes a third of your potential turnover away from that account.

“From the highs we’ve had, the heat’s been taken out of it a little bit.”

 

The venues doing well are those with a good outdoor area, because I think people are still cautious

 

Louisa Fitzpatrick at Old Chapel Cellars, down the road in Truro, says on-trade business has recovered to 2019 levels. “It felt like the year started again once the on-trade opened in May,” she says.

“Orders were really healthy and places were busier than we expected. People can’t travel abroad, so the holiday trade in Cornwall, even before the school holidays, was significantly increased.”

Staff shortages within hospitality have caused some problems. “It’s been tricky when a restaurant that orders regularly has to shut because of staff shortages,” she says. “There’s a bit of to-ing and fro-ing.”

On the upside, Old Chapel’s own logistics have gained efficiency. “When wholesale was shut and we were just doing retail we did home deliveries,” says Fitzpatrick. “Once wholesale started up again we could tie in the on-trade with our retail delivery routes. It made that all more efficient.”

Edward Wilson, at The Wine Press in Stourbridge, says that “wholesale has come back with a vengeance”.

He adds: “We’ve found quite a few venues utilised lockdown to refurbish and start afresh, so we’ve managed to secure some good new on-trade accounts from that.

“The ones doing well are those with a good outdoor area, because I think people are still quite cautious.

“It’s been more of a struggle with smaller indoor restaurants. Before the restrictions lifted completely, they were a good 30% down.”

Morris at Cheers says his business managed to hang on to all its regular on-trade clients from before lockdown.

“We kept in touch with them all the way through lockdown and offered them any help we could give,” he explains.

“Some were doing takeaway to keep ticking over, so we were able to help them with dribbles of wine.”

Morris is unaware of major players’ moves on drop sizes but adds: “We’ve picked up some new accounts just because they were getting wind of how good our service was – and the fact that we’ve actually got some stock, because I know some people haven’t got much at all.

“We’ve picked up a few small restaurant chains in London. They’re paying upfront so I’m not really worried on that score.

“We supply two wedding venues locally, and they just kept pushing back the dates, which means one now has a wedding every day bar two for the next three months. Between them they have 170 weddings in that time, which is enough to keep anyone going.”

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