Dan Jago: Tesco's finest

You could say this is a sensible approach for a man who has barely tasted, let alone got his teeth into, a job as the category director for beers, wine and spirits (BWS) at the UK's largest booze retailer. But you get the feeling - hands gesticulating, sentences thrown out in rapid-fire fashion - that his enthusiasm is heartfelt. Bibendum - a company he helped grow from a minor on-trade distributor to one with a 75 million turnover - if not forgotten, is certainly now in the past.

If his sudden departure from Bibendum was unexpected, then his elevation to arguably the biggest job in the UK drinks market was even more so. Jago calls his new position perhaps the best job I could possibly imagine in the whole wine industry and one that I hadn't considered as being available'. A wine importer being given the UK's top BWS retailing job - a move described by Hatch Mansfield's managing director Patrick McGrath MW as brave and inspired' - is certainly a departure from the norm. So will his approach differ from that of his predecessor, the arch-retailer Mark Murphy: I fully appreciated that I didn't have the same experience in retail as my predecessor, I made that point to Tesco and Tesco made that point to me. Mark was Tesco through and through, and had a phenomenal understanding of the business. My expertise is in the structure of the industry and the supply chain, the process and product, particularly within wine it's about bringing an alternative viewpoint to the role.'

He also recognises his lack of experience in the B and S parts of his job title: The spirits side is new to me and I'm finding it absolutely fascinating. There are a lot of large, experienced players in the market and it is very different to the wine structure. And there are some skill sets here that the wine industry would do well to study and emulate. The same could be said for beer.'



Ringing the changes

He is circumspect, naturally, about any changes he might make to the business at this early stage - it really is too early to say, and as a business it is currently performing phenomenally' - but he does, apparently, have a vision. I have a very clear vision and we are already a long way towards it. I want Tesco to be regarded as the world's best wine retailer within three years. Internationally, I don't know who the competitive set is, and that is work I have to do, but I believe that customers aren't fully aware of what Tesco has to offer.'

So how do you define the world's best wine retailer? On price, on range or on profits? The definition for me is that the customer says: "I have no need to go anywhere else for my wine". No matter what level of wine they want to buy.' According to Jago, Tesco's current strengths - the phenomenal success of its Wine Club (which has more than 540,000 members), it's dot.com business (which accounts for around half of all online sales in the UK), as well as initiatives like the recent wine festival and the new 50-strong fine wine range, are central to this. It's about having the structure in place so customers can source the wines they need through us without us having to have it in store in the first place.' When asked about en primeur sales he says: I wouldn't dismiss anything'.

He's also keen to highlight the skills base of the Tesco BWS team- which is as good, if not better, than anything in the industry' - particularly the three category managers: Jason Godley (wine); Simon Dunn (spirits); and Andrew Carpenter (beers and ciders). And he dismisses the idea that a retailer having a large team of wine specialists is unimportant: We've got five full-time wine experts in the business whose job is to do nothing but understand wine. I then have a team of buying managers who have great commercial knowledge and understand the very complicated process of getting a wine listed, delivered, on shelf and promoted. If you tried to share those two roles in one person it would prove challenging. The model works extremely well.'

He points to the success of the fine wine selection introduced in 200 stores (25 lines in 110, 50 lines in 90) as proof of the team's expertise. They have been fantastically well received. They look great, they do exactly what it says on the tin and customers seem extremely responsive to them. These are not just expensive wines, these are good wines that represent the next level for customers to trade up to - beyond what is available on shelf.' He adds that he can see a place for some of the range beyond the upmarket neighbourhoods where it is stocked in store: There are a lot of stores in the estate that might benefit from a more vertically challenging range. There is no reason they shouldn't take three or four wines from the fine wine range for example and stock them in a Tesco Express.'

His most immediate focus, however, appears to be communication, especially with the trade, an area he excelled in at Bibendum. As he says, you can't operate an effective business without the strong support of your suppliers: The business accepts that in the past it has not been the best in the world at communicating, whether that's with the suppliers or the press. The one area where it is clear to me, having been a supplier, that we need to me more proactive and slightly faster, is in talking to our supply base. I've made changes and I've written to our suppliers to tell them what they are we've got a proactive communications strategy rather than a reactive one.'



Discount and be damned

So what of the love-them-or-hate-them question of deep discounts? As you would expect from a retailer (even one who used to sit on the other side and publicly express his displeasure), he's vociferous in his defence of them. The wine trade is a bit schizophrenic about discounting; depending on who you talk to there is a different argument, either for or against. Everyone knows the commercial benefits of promotional activity, and if the customers didn't say they liked them we wouldn't be doing them. And we have asked.'

So what of the recent decision to launch a range of Finest wines - such as San Juan from Argentina and Rawnsley Estate from Australia - apparently designed to be periodically offered at half price? Does that not negate the whole idea of offering a Finest range? Apparently not: If you look at the way that the Finest range is packaged, merchandised and selected, it is clearly another part of the Finest range that is doing those sort of offers. Consumers have said they love being introduced to the sorts of wines they wouldn't normally drink through half-price offers. There's no rule that says only the brands can be on half price. And wines such as San Juan and Rawnsley Estate were given strong write-ups by the mainstream media before they have gone on promotion. They are categorically worth their full retail price.'

Moving on to the question of staff training he is dismissive of the much-touted idea of having wine advisors in store. We did some work on this with Tesco while I was at Bibendum, but the research showed that they were not particularly welcomed by customers. They already find the wine aisle intimidating, and I'm not sure having someone patrolling the aisle actually makes it less so, maybe the opposite. There are better ways of communicating with customers.'

He also doesn't feel, as some in the trade do, that there should be a continual focus on convincing consumers to drink more expensive wine. We, of course, would like to move customers up the value ladder and we have range in place to do that, but I don't think it is the retailers' job to try and force it. Not everyone wants to drink expensive wines or can be convinced that they should, and you run the risk of alienating the customer. We are here to supply what the customer wants - across the price range.'



Moving abroad

An interesting part of Jago's new job is that his role will not just be confined to the UK. Tesco is well on the way to becoming a global player in retailing, with branches in 13 countries, particularly in Eastern Europe and the Far East. Tesco is sure that the strength it has built up in the retailing and selection of wine can be applied to the other 13 countries we operate in around the world. One of the things on my list of objectives when I joined Tesco was to get stuck into that and see how we can help on ranging and merchandising.' A chance to work with his predecessor, who has moved to head up Tesco's burgeoning Japanese operation, perhaps? I'd love that, I really would,' he says.



A man apart?

Since his transformation from poacher to gamekeeper, does Jago still feel part of the wine trade? Yes, absolutely. I made dozens of friends during my time in the wine trade and I still consider them friends, and I've seen nothing to contradict that yet.' And how has the spirits trade welcomed him? Very well, I've already had my first meetings with Diageo and they went very well, and I have full round of meetings with spirits suppliers, as I have for beers and wine, coming up. I'm passionate about discovering as much as I can about all the industries I am going to work with.' He adds that he's keen to see the disparate groups that make up the UK drinks trade brought a little closer, as they might just learn something from each other. We are holding a supplier conference in the autumn, which will include beers, wines and spirits suppliers. We want to bring them together to share their ideas and expertise.'

A final question. Is it Jago's father, Tom - the first-ever new product development manager at Diageo (then IDV), responsible for developing Malibu and Piat d'Or, among others - who can take credit for inventing Baileys Cream Liqueur? It is an accolade claimed by an impossible number of people and has become a running joke among the spirits industry and trade press. I was there, so I know, and I can tell you it was created by a team of people from the UK and Ireland, one of whom was the new product development manager at IDV.'

Like many of his contemporaries at the top of the UK wine trade, Jago's entrance into the booze business was more by luck than design. As well as a successful early career sailing the ocean seas with Her Majesty's forces, he almost went into advertising. Or banking. Or even marine underwriting.

However, his first job, during a gap year, was the one that proved the most fateful. When I was 16, I walked into what used to be Capital Radio on the Euston Road. At that time they had Capital Job Finder on the ground floor and the first advert I saw was "wine delivery boy needed, Belgravia, 22 a week", so I went down here and it was Andre Simon on Liverpool Street. My job was delivering wine - on a bicycle.'

A career with the navy followed - nine years going round the world, going from one cocktail party to another' - where he rose to become Navigator Lieutenant Jago - it's still got a ring to it' - a career cut short by poor eyesight.

When I left I didn't know what I wanted to do, I didn't have strong desire to get into wine. I was interviewed for jobs in advertising, banking and marine underwriting but didn't get any of them, so I went back to the owners of Andre Simon, which was by then Layton's, and said "Do you think I could deliver some wine for you while I look for real job?" They said: "No: but you could work as a salesman." Two years later I met Willy Lebus who asked me if I could come and work for him at Bibendum.

Jago's 16 years at Bibendum ended earlier this year after the powers that be decided one managing director was better than two. I knew when I became joint MD in 2001 that there would be a time when we would go down to one, I took the job with that knowledge.' So did he want the top job at Bibendum? I'm not sure I did, in some ways I think I was just about young enough to get away with doing something else, if I'd been there two or three years longer, I might not have felt so confident about leaving.'