Who Dares Wins - 5 Tips for Wineries Looking to Find a UK Wine Importer
The UK market is worth over £14 billion and is the world’s largest per capita importer of wine, accounting for some 20% of the world’s total wine imports.
The UK market is a fiercely competitive arena – ask Walmart! So you need to be fearless and brave, but the rewards have great potential if you produce the wines that consumers want to drink… at prices, they’re happy to pay… and if you understand the market dynamics. As the world famous secretive British special forces motto declares ‘Who Dares Wins’.
Yes, the UK market is a difficult one to crack for any wine producer… and, yes it has very high alcohol duty rates, high business rates and consumers who demonstrate little loyalty, buying mainly on price, and usually on promotion… and yes, it has many wine trade buyers whose agenda only extends to their own, narrow, timelines and who seem to be interested only in price promotions and discounting.
So, with all these challenges to face, why bother?
Well, the UK market is worth over £14 billion and is the world’s largest per capita importer of wine, accounting for some 20% of the world’s total wine imports.
Whilst this fierce trading arena is big and complex, it is also very influential across the global market with many competitions drinks and wine-specific journalists and publications being UK based. The UK, therefore, can play an important part in your brands’ and business’ total export strategy.
In this difficult and highly competitive, price-driven market, if you’re a winery that’s still keen on finding the best way to sell in the UK, you can perhaps use some marketing and sales tips so you end up producing the right products, pricing them right, marketing them correctly, and optimizing the distribution opportunities.
Tip 1: Producing The Right Wines
First and foremost it’s about the wine itself. As ‘New World’ Australian producers found some 25 years ago, if wines reflect what consumers want to drink, there’s a ready market and lots of good business to be done. By asking buyers what they (and their consumers) were looking for in terms of taste profiles (and price points), Australian producers effectively took the UK market by storm, not only helping to grow the market – today, the Brits consume some 26 bottles of wine ahead a year – but, in the process, also stealing the market from ‘Old World’ producers. These producers had been growing their regional wines – products that wonderfully reflected their ‘terroir’ and traditions, sometimes for centuries – but which, as the sales figures testify, were not what UK consumers actually wanted to drink.
It’s therefore important to go to UK buyers with an open mind and be willing, and able, to make wines to a brief.
Tip 2: Understanding Market Dynamics
Wineries need to understand the UK wine market dynamic. Notwithstanding the planting (and, sometimes, re-planting) of vineyards and the development of a number of successful UK-based wineries in recent years, the UK actually has little tradition and almost no history of indigenous wine production and therefore no industry to defend, so creating what is essentially a free market from myriad sources in terms of supply.
This presents its own set of challenges, pressures and issues for producer and wine buyer alike. Yet, if wine producers can work to find solutions to these issues, with answers on, for example, logistics and distribution, as well as making the most effective use of the supply chain, like facilitating stock availability both on their home territory and in the UK, any of this would enable a producer to go a wine buyer with ideas that will help them meet these challenges, with the result that these same often-difficult-to-contact people are more likely to want to talk.
Tip 3: Getting The Right Importer On-Board…
For all its difficulties and complexities, the UK is too important a business opportunity to ignore.
First things first, whilst relatively unregulated until 2017, the Alcohol Wholesale Registration Scheme of that year now requires every business that trades in alcohol to be registered. So it’s absolutely necessary to make sure that any businesses you approach are registered. Falling foul of the UK tax authorities can be expensive for your business.
Actually, it can be said that finding the right importer is more important than any listing – all too often producers and importers are mismatched – so it’s a task that needs to be taken seriously and needs to reflect your on-trade and off-trade channel strategy to work out where your wines should be sold.
It also pays to be cautious about ‘putting all your eggs in one basket’ so as to minimize any risk to your business if a particular listing is pulled.
Tip 4: … And The Right Distributor
It may seem obvious, if not actually strange to say, but it’s important to understand the product you’re selling and the outcomes you’re after: this includes whether it’s aimed at a high-end niche market, or the higher volume, mass market because different types of product, and different marketing strategies, require different types of distribution partners.
It may be that the wine importer you find will also be able to handle all the distributions strands you need – but it’s probably unlikely.
Before looking for a distributor, it’s also important to carefully consider the resources you’re prepared to commit to (and not just at the outset, but to provide on-going support) in order to find the right distributor, one who will best reflect the positioning of your product.
From a purely marketing perspective, it really would pay to develop a simple business model, which help identify those specific resources and necessary capabilities. These can then be brought to bear during the decision-making process.
Yet, finding the right wine importer and right distributor is only the start: it’s an on-going process and you have to take account of churn rates and the on-going need to keep the distributor focused on your business. This may include staff training with the objective of creating ambassadors for your products. Put simply, business success is all about building and maintaining relationships, including your relationships with the ultimate client, be it the on-trade venue or the off-trade wine buyer, in order to ensure you continue delivering on your business objectives.
Tip 5: Getting The Pricing Right
To stand a chance of success, your wines will need to meet expectations and provide the right quality and value for money at the various price points set.
It’s a matter of horses for courses, too, in terms of whether the wines being offered are being targeted via the on-trade or off-trade. For a start, whilst it’s possible to sell the same wine to both channels, you cannot use the same labels, as the price points will be very different depending on which market sector, and where they’re being sold.
In terms of the on-trade, the demand for margins is a significant factor and have to be factored in. In restaurants and bars in London, it’s actually quite common now for operators to look to make a gross profit of 80%, plus VAT, so whatever your ex-cellars, or trade, price it will be sold at a much higher premium in the UK.
There are difficulties to be faced, certainly. But the size and dynamism of the market truly can make the efforts worthwhile and the business rewards considerable.
About the Author
The article is contributed by Alistair Morrell, Wine Inspector, wine industry consultant, journalist and, commentator. Over 30 years as a wine business professional, Alistair shares his global knowledge, network, and experience of growers, importers, distributors and buyers.