Two Good, 2 Bad for 2013, 2 Hopes and Fears for 2014: David Gleave, Liberty Wines

By Richard Siddle

Published: 01 January, 2014

As we welcome in the new year, David Gleave, managing director of Liberty Wines, looks back on his 2 Good, 2 Bad memories of 2013 and looks ahead at his hopes and fears for 2014.

2013

2 Good

While 2013 has remained a challenging trading year, we are seeing positive signs that the sector is picking up. Our average selling price per bottle has increased, and sales from many of our premium producers have been strong this year. This indicates a willingness by consumers to trade up, which is great news for premium wine companies like us.

1 Timbermill Way. We completed the build of and move to our new temperature-controlled freehold warehouse and offices in Clapham, London in January this year. This was a huge investment for the company but one we are delighted to say is paying off, with improved storage conditions for the wines, a bigger warehouse and better staff facilities. Internal metrics show that we have been able to improve our customer service offering with more efficient van loading helping timed deliveries. For example, in the week starting December 2 we despatched 26% more cases out of Timbermill Way than in the same week in 2012.

2 The growth of Charles Heidsieck. Charles Heidsieck's award-winning Champagnes are among the most respected in the region, but we needed to extend its reputation to consumers. We are doing this by taking the product directly to them, hosting a wide range of tasting events in conjunction with independent merchants and retailers across the country. We have seen listings increase significantly in both the on trade and the independent off trade as a result, fuelling the growth of sales in both channels without resorting to heavy discounting or the loss of brand equity.

2013 Bad

1 Italian price increases. Our portfolio from around the world continues to grow, but Italy is still the single biggest category so price increases from the 2012 vintage put pressure on margins. The reduction in supply caused by a combination of poor harvests and the EU 'grubbing up' of vineyards has naturally had an impact on prices. We mitigate such increases where possible by working closely with our suppliers, but if we want quality wines, we need to pay the market price. This has led to inevitable price increases.

Business Challenge

Personnel. Our status as an 'Investor in People' underlines our commitment to recruiting, training and retaining the best people in the industry. Keeping the balance right between staff and revenue can be challenging with a growing business, but having invested significantly across the company this year - especially in our Scotland and the North of England sales team - we believe we have a great team in place to take us through 2014 and beyond.

2014

Hopes

1 Premium Australia. As firm believers in the quality and diversity offered by premium Australian wines we hope to see sales continue to grow. Following our Australia week focus in September, there has been increased interest from customers around the UK. Sales of Willunga 100 McLaren Vale Grenache and Dandelion Vineyards Lion's Tooth Shiraz Riesling from the Barossa both saw good growth year on year in off trade sales in Scotland in October/November 2013.

2 An end to heavy discounting. We hope to see an end to this culture that has dominated the trade for many years. This 'commoditisation' of wine is not good for the industry, as it does nothing to promote a wine's sense of place The increase in our sales of premium wines is encouraging, and hopefully heralds a move to 'drink less, but drink better'.

Fears

1 Selling premium wines in a challenging market. Market conditions remain difficult, yet we are determined to persevere with selling premium wines. The average selling price of our wines is £13.99 a bottle, so we are operating in the small niche that is the premium market. Despite this, we saw volumes increase by 13% in November 2013 and our average selling price increase by 11%.

Continuing to sell more premium wine will be our challenge for 2014.

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