Keeping it quirky

Justin Howard-Sneyd MW, wine buyer at Waitrose, feels free to list more “eccentric” wines with an Old World bias – territory that he feels the other multiples have been too hasty to abandon.  Patrick Schmitt reports

What’s it like working for a supermarket which sells more Minervois at £8.99 than many New World brands at half the price? “Liberating,” says Waitrose’s wine buyer Justin Howard-Sneyd MW, who joined this upmarket, expanding UK multiple in August after over five years at Sainsbury’s. Such a sales skew is also a sign that Waitrose customers are content “with characterful, authentic and individual wines from the Old World”, which as Howard-Sneyd believes, “is a territory that the major multiples have abandoned rather too readily”.

Having said that, Howard-Sneyd admits that Waitrose has a rather different customer base from your average major multiple, being both “older and more affluent” and, for that reason, more willing to experiment in the wine aisle. This perhaps also explains why Waitrose’s head office is happy to treat “individual buyers’ decisions and views with great respect” according to Howard-Sneyd.

“Whereas at many other retailers there are a lot of other people with their hands on what you are trying to do, pulling at it in different directions, at Waitrose there is the opportunity to be commercial at the same time as being slightly eccentric, giving you the chance to list things that are passions, that you believe have a future. Bigger retailers on the other hand are perhaps a bit more hamstrung by category management and following what the market is doing,” he elaborates.

And even if a new and unusual listing doesn’t instantly achieve a rapid rate of sale Howard-Sneyd points out that, “Buyers at Waitrose are judged on the overall performance of their range and, therefore, individual products within it don’t get the same scrutiny as they might in another retailer which is looking on a SKU- by-SKU basis.”

Thankfully for Waitrose, however, far-from-mainstream lines such as Austrian Grüner Veltliner “do well” in the supermarket, mainly because of the “fantastic customer base”, meaning Waitrose “can sell some relatively obscure wines which wouldn’t sell as well if they were sold at Sainsbury’s, Tesco or Asda”.

But Waitrose is still in competition with these retailers. “We see ourselves competing both with multiple supermarket retailers and multiple specialists and also with single-branch, small-chain specialists and internet retailers. We overlap more with all of those different outlets for wine than mainstream supermarkets; we compete very much with Majestic, Oddbins and The Wine Society just as much as we do with Tesco and Sainsbury’s,” says Howard-Sneyd.

Francophile aisles
As for Waitrose’s wine range, “In terms of sales there is quite a big skew towards the Old World and especially France. Partly because that’s the natural tendency of our customer base and because we have consciously cultivated that as our territory. I think it is territory that the major multiples have abandoned rather too readily, in the belief that what the world wants is more and more New World varietals when, actually, we see in our sales that that isn’t true of our customers, who are very happy looking for characterful, authentic and individual wines from the Old World. Our job is to do our best to present and explain them so that customers are going to feel comfortable about buying them.”

The core range of wines that Waitrose stocks hasn’t increased, although there was “quite an expansion at the top end when the Canary Wharf branch opened [at the end of 2002],” according to Howard-Sneyd. “Also, the number of branches has grown and they are bigger.”

Wine is certainly a “champion category” at Waitrose according to Howard-Sneyd, along with “fresh veg, fruit and meat”, while something Waitrose has historically earned respect for from the trade is its decision not to price-promote wine to an extreme level. But in practice how different is Waitrose’s approach to the other major multiples?

“We haven’t done a single price promotion at half price – and at this stage we don’t intend to,” begins Howard-Sneyd. “But we are aware that if you walk into any major multiple in any given month you are likely to find between two and six half-price wines on offer. And it’s certainly true that a customer who shops in Waitrose and Tesco will be tempted by those types of deals in Tesco and next time they visit Waitrose they won’t buy wine because they’ve already got a full rack at home – so that is a concern for us. So we are maximising our points of difference rather than doing the same as everyone else.”

On-line opportunities
Howard-Sneyd also reports on the success of Waitrose’s on-line business, Waitrose Wine Direct. And although the retailer doesn’t have an extended range just for on-line sales, it does offer mixed cases which give customers a chance to “explore a grape variety or region and it builds a sound customer base of people who buy on a regular basis rather than those just motivated by deep-cut deals”.

Own-label too is an important aspect of Waitrose’s business. “We don’t have a very large number at Waitrose but the Sherry and Champagne own-label ranges are very strong. It is more difficult with somewhere like Australia where the big brands do a very good job.” Howard-Sneyd admits, “We are having a look at what we are doing with own label – in particular those areas where we don’t do very much – but we are not announcing any direction at the moment.” He adds, “We are keen not to debase own-label quality by not buying on price. Waitrose is a very well thought of brand and we don’t want to put that on anything we don’t think is very good quality.”

Discussing the issue further, Howard-Sneyd says, “Price promotion of Champage around Christmas is a good illustration of both our own-label and price promotional policy. We sold our own-label Champagne at £14.99 down to £9.99 and, in fact, most of our competitors were retailing a no-name third-party brand at £19.99 at half price, so the ultimate selling price was the same. In addition the quality wasn’t as good and the brand wasn’t anything one would recognise other than as a half-price victim brand. That exemplifies where we would differ from our competitors.”

As for dealing with suppliers, Howard-Sneyd believes he has probably more requests for listings as a Waitrose buyer than many other multiples, quite simply because, as he puts it, “The big supermarkets can only deal with fairly large suppliers and a lot of the small people just don’t even bother ringing them up. They do ring Waitrose because they want to be in it and regard Waitrose’s ethics as setting us apart from other retailers.”

And Howard-Sneyd would like to emphasise to suppliers that, “If you are trying to supply the UK with a modernised branded wine because your old-fashioned appellation wine isn’t perhaps working as well, then please try to understand what the UK customer actually wants before developing and finishing your product.

“There are a lot of people, especially in France, and I’m sure the same is true of Italy and Spain, who are trying to develop brands which they think will appeal to Anglo Saxon speaking countries. One look at them and you can tell they won’t sell regardless of what they taste like. It is a matter of understanding customers; come over to England, look at wine shops, talk to people, see what sells.

“I think the people who must be making all the money in the wine business are the label designers,” he quips. “Every year I go to some shows and see the same wine in new packages. Most of the time you’ve never seen a single bottle on sale in the UK.”

He also says, “Getting a management consultant in to tier a product range into premium and icon can be very inappropriate
in some cases. Something that works on its own as an appellation system doesn’t necessarily need that kind of New World branded structure imposed upon it.”

Matching expectations
Howard-Sneyd continues, “To take a theoretical possibility – imagine you have a brilliant wine which, although quirky and unusual, is exceptional and then put it into a bottle which is very distinctive and unusual. There is a subset of people who would like that wine but not a single one of them likes the label and so they don’t buy it. Therefore no one discovers it. I think the key is not only to have something that people like, but that matches up with the people who are going to drink the wine.

For example, it is no good going around the office asking everyone if they like the label if it’s a £25 Pomerol because most people in the office are not going to be routinely buying it. You’ve got to ask people who buy £25 Pomerol what they think.”
Lastly, what about Waitrose’s treatment of suppliers? Does it take an aggressive stance?

“I genuinely think Waitrose is different and does like to work with people over the long term,” says Howard-Sneyd. “It makes no sense at all in working with someone who’s going to go out of business. But we have to be careful we are not talked into overpaying for things because we feel sorry for the suppliers. We have to be tough and know our business and when something simply isn’t working we have to be unemotional about it and say to the supplier ‘this isn’t working and we need to do something else’.

“There is an oversupply situation and there are a lot of people who want to sell to us. We are also in a privileged position of having access to a lot of customers who are happy buying quite expensive wine.

“Our average retail prices are way higher than other supermarkets because we’ve got a good customer base and we sell the right kind of products to them. In that context the pressure is not on us to squeeze our suppliers.”

Bringing up the issue of duty increases and price points, Howard-Sneyd adds, “The problem is if a wine that customers used to like at £4.99 goes up to £5.29 or £5.49, and they stop buying it, you must say to the supplier ‘Well you are now selling quite a lot less than you were before; what do you want to do?’ If a supplier says ‘I’d rather give you a slightly lower cost price so you can bring it back to £4.99’ rather than accept the fact that they will sell a lot less wine, that is very much their decision. I don’t think you’ll find us putting pressure on suppliers to make that decision, but we will be communicating with them and showing them the effect.”

However, as he concludes, “When a supplier is happy for prices to go up and sales continue because it is a strong brand then that’s a great situation; we have all added value to the product and that is effectively the holy grail.” 

Justin Howard-Sneyd key facts
Degree: Biological Anthropology at Cambridge.
Godmother: Hugh Johnson’s wife Judy.
First job: Working for International Wine Challenge, salary £35 a day
Next role at: Fulham Road Wine Centre with Angela Muir MW.
Followed by: Brief spell at Oddbins after Fulham Road Wine Centre closed.
Then: Travel for two to three years doing vintages in a range of countries, firstly South Africa, where he worked for Hamilton Russell, Thelema and Neil Ellis. Also did a vintage in Eastern Europe and Bordeaux.
Returned to: England, where he worked for Chapel Down Vineyards in Kent and then for Safeway for over three years.
Prior to Waitrose: was a buyer at Sainsbury’s for five years.
Now: buyer for Bordeaux, South of France, Rhône, Italy, Germany, South Africa and England at Waitrose.

© db July 2006