What lies ahead for the UK drinks industry?

Andrew Bewes, managing director, Hallgarten Druitt & Novum wines

“The wine industry is fairly adept at coping with, and adapting to, change and adverse trading conditions. For sure, the current situation is more extreme and, commercially, the combination of a relatively large increase in duty (and the prospect of a second budget this year), and the reality of a new ‘norm’ for Sterling at around 82% of its value in January 2016 (and the prospect of continued ‘Brexit’ uncertainly for at least 24 months) has undoubtedly put extreme pressure on key price points in both the on and the off trade; this can only serve to force even more consumers out of the wine market, a trend that is already evident at entry level in all sectors, and this is undoubtedly a threat to our industry.

“The trend towards consolidation of restaurant wine lists (shorter lists with fewer suppliers) on the one hand, and supplier consolidation on the other is, however, both a threat and an opportunity for the industry.  There will and always have been some restaurant operators which want or need the ease of one stop shopping and for them the trend towards composite supply is not an issue.

“However, for those seeking specialist partners – whether it be for meat, fish, spirits or wine – there will always be room and opportunity for those of us able to offer a true specialism.  At Hallgarten, we made the conscious and considered decision last year not only to remain a ‘wine only’ supplier, but to further invest in the services and team we offer to our customers. In short, the current situation has necessitated us, as a business, to step up to the plate and to work even more closely with our customers to navigate through the challenges.

“In the past, currency fluctuations or duty rises have led to retail prices rising – the more extreme changes of the past few months have meant that we have had to be far more creative, often reworking complete lists to ensure that customer price points can be maintained, even if the wine at that price point has had to change.

“The next 12 months will see this trend continue; there will be more creativity, such as selecting wines from emerging regions or of ‘alternative’ grape varieties, more front-of-house training, more use of innovative and creative wine-list construction to give the consumer the confidence to spend that extra £5.”

“Hallgarten will be exhibiting once again at the London Wine Fair and despite the challenging trading environment it will be very much ‘business as usual’ for us as we endeavour to showcase the remarkable range of wines and services that we offer to our customers.

“Change is in the air and despite the challenges that this brings to us all, change will always herald opportunity.  The first quarter of 2017 has been very buoyant for us with substantially more new business opening up than in any of the preceding five years.  The market indications are that more businesses than ever are currently considering a change of wine supplier and for us the LWF allows an opportunity to reach out to a wide audience across all sectors.”

 

For a run-down of what is in store at this year’s London Wine Fair, check out our guide in the May issue of the magazine, or click here.

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