Matthew Clark: Life after Conviviality
Almost a year on from being “hours away from collapse” after the fall of former owner and UK wholesaler Conviviality, managing director of Matthew Clark, David Phillips, and director of wine buying, Simon Jerrome, reveal the changes the company has made to turn its fortunes around.
Speaking to the drinks business at the first of Matthew Clark’s Uncovered events in London yesterday, Phillips and Jerrome revealed how the company had worked to get things back on track following the collapse of its former owner, Conviviality, in April last year.
In April, Matthew Clark, along with Bibendum and subsidiary businesses Catalyst, Peppermint, Elastic and Walker & Wodehouse were purchased by the C&C group, the owner of brands including Magners and Bulmers cider.
In May, the C&C Group announced that it would would be repaying the debts racked up by Conviviality and had agreed a repayment schedule with both HMRC and three banks which lent money to former UK drinks wholesaler, with the money owed totalling c. £138 million.
Since then Matthew Clark has done some restructuring of the business, but has largely remained quiet as it re-grouped following the acquisition. It is now changing changing tack, unveiling a re-vamped event series called Uncovered.
Uncovered, which returns this year after a hiatus in 2018, will also see portfolio tastings scheduled in Edinburgh, Manchester and Bristol. Asked why it was returning this year, Phillips said: “It’s important for us to make a statement to the trade and to especially promote one of the key themes of the event, that of ‘discovery’.
“Investing in our customers is vital and we’re expecting upwards of 5,000 visitors to our Uncovered tastings, making this the biggest event series in the country.”
Commenting on the progress made since April 2018, Phillips said that the company had been quietly working to get back on track as well as safeguard the business for the future.
“The business was hours away from collapse in April, but since then we’re spent a lot of time, energy and effort getting it back on track,” he said.
“It took us five months to get our wine stocks back to normal levels. We also paid off all debts owed, both to our customers and also the crown – this was particularly important for us going forward.
“Our biggest focus has been on the service we provide to our customers. Last year we concentrated on getting our operations in order so that we could support our customers through their busiest trading period. This we did and over Christmas we recorded the highest service levels we’ve had in two years.
“Our job now is to get people out from behind their TVs, watching Netflix and eating Deliveroo meals into the on-trade. To do that, we must provide choice and an experience.”
Delivery and IT
One of the areas in which the company is investing is their logistics and delivery services. Phillips recalled how under Conviviality, the business had become more centralised, a measure Matthew Clark has now reversed.
The business now has five separate business units covering different regions in Britain with dedicated sales, marketing and operations teams. Now boasting 11 depots across Britain, meaning it “can provide localised delivery across the country,” Phillips added that the company had opened a new 65,000 sqft depot in Southampton just last week
“We’re doing these regional events for a reason,” he continued. “We supply over 17,000 outlets, so for us, it’s about spreading our message and taking our story on the road.
“We want consistency across all our uncovered events with the theme of discovery, or indeed re-discovery for many. We’ve got 7,500 product lines, over 120 sales people and have 200 vehicles on the road everyday.
“We’re a national distributor and we’re really proud of that. But we’re also a regional business with goods delivered by people that have a real local knowledge of the area.”
Asked whether they were trying to emulate the Amazon model, Phillips added: “It’s more of a defence against Amazon, if we’re honest. We can offer next-day delivery, but are don’t have the technology and scope that Amazon does. That said, part of our efforts now is to put our head above the water and keep an eye on progress in the same-day delivery service sector.
While the company has committed funds to developing its IT software and digital platforms, Phillips stresses that “you can’t have a one size fits all approach.”
“Last week we had our first million pound day on our platforms, but it’s about having a blend of physical and digital and leaving our customers to choose how they want to conduct their business.”
In particular, Matthew Clark has invested in making its platforms easy to use from mobile devices, while still retaining a large telesales and customer service team for those who prefer to speak to someone over the phone.
“While we’re living in a world where people do their shopping on their phones, on the other hand, we’ve got customers that want to fax things into us,” said Phillips.
“In Bristol, we’ve got a 120-strong telesales team, plus a 30-strong customer services steam. There’s still plenty of people that prefer talking over the phone.”
Phillips told db how the company has committed to a multi-million investment in wine which will see it double its wine stocks held in the UK ahead of 29 March. Matthew Clark will be holding the stock in its bonded warehouse in Bristol before it is then transported around the country.
“Like many others, we’ve gone down the stockpiling route in order to protect supply to our customers for as long as we can do. Our beer and spirits partners are also doing likewise,” Phillips said.
Trends and targets
Speaking about the trends in the industry, one element that Matthew Clark is particularly focusing on is the domestic wine, beer and spirits industry. Asked whether this was in response to the pressures of Brexit, Phillips said that he believes it’s “wider” than that, and reflects a trend that has been gathering pace for many years.
“This is something the food industry has been doing for years,” he said. “We were discussing this earlier and came to the conclusion that the drinks industry is about 10 years behind the food sector in this field.”
As part of its efforts to “future-proof” the business, Matthew Clark is actively identifying and responding to trends, for example veganism and the rise of low- and no-alcohol products.
Commenting on the process, Jerrome said: “We’re really just responding to what our customers are telling us. 70% of the wines we carry – that’s 800 wines – are vegan-friendly. We’ve got producers coming to us and talking about exploring new options, experimenting with p-proteins for example. I really believe that it’s possible for our wines to be 100% vegan friendly in a few years. We’re adapting to what the consumer needs and we feed this back to our producers.
“The key is providing choice and quality at all price levels. It’s no good just saying ‘here’s our no- and low- range’ and that’s it. We’ve got to have the best out there. If you’ve tasted the ranges at some supermarkets, there’s a real difference between the offerings.”
Asked about changes made to the portfolio following Matthew Clark’s acquisition by the C&C group, Jerrome said the focus had been on consolidation.
“We’ve re-looked at and re-tasted everything,” he said. “We’ve brought in new products, for example this is the first event where we’ve had wine in cans.
“Then we’ve got Hardys who have now developed an alcohol-free Chardonnay. The alcohol-free market is developing and there’s been a lot of improvement in production techniques and how you actually remove the alcohol.
“People like Torres are doing it really well, but many of the options in the supermarkets are very sweet. It’s about making sure you get it right and for me it should be no different to a normal glass of wine. This isn’t necessarily something everyone is going to drink, but we need alcohol-free drinks to become part of a range offered by an outlet.”
Jerrome also noted a change in the price that people are prepared to spend on wine in the on-trade.
“10 years ago if you mentioned selling a glass of wine for £9 people would think you’re joking, now they’re prepared to spend that,” he said. “In the venues where you’ve got the trained staff who can explain the different options to guests, people are more prepared to try different things. For us it’s often when people trust the house wine that they’re more willing to try another recommendation.”