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Published:  23 July, 2008

Michael Saunders and Daniel Jago, Joint managing directors, Bibendum Wine Limited. Interview: Josie Butchart

Bibendum Wine Limited 113 Regents Park Road London NW1 8UR Tel: 020 7449 4120

Bibendum started life in 1982 as a shop in a converted flight-petroleum garage in leafy Primrose Hill. It is now a multi-channel agent and national distributor selling to all sectors of the UK wine business, with an annual turnover in excess of 45 million. Bibendum employs over 100 people and was recently voted seventh on The Sunday Times list of the 50 best small companies to work for'. Using a new methodology designed exclusively for the British workplace, the list identifies best practice and ranks companies chiefly according to their performance in eight key indicators of employee satisfaction.

What did you do before Bibendum? Michael: I left school, went to South America for a bit, went to Chteau Loville-Barton for six months, then joined Bibendum in 1982. There was only Simon (Farr), me and one other person. Simon did the buying and the talking; we did everything else. After 22-odd years, it's more than a job - it's like a family. Dan: I came to Bibendum from Laytons, but I was in the navy for 10 years before that, from 1979 to 1988.

Why did you leave the Navy? Dan: Because I was short-sighted. They said I couldn't carry on, so I left. I had worked between school and college delivering wine on a bike - cases of gin to dowagers. While I was at Laytons, I met Willie (Lebus) at a traditional wine-trade lunch: one customer and 14 wine merchants. Willie leant across the table at one of those classics moments when everyone stops talking at once and said, Come and work for me!' So I did.

Do you see yourselves as hard-headed businessmen? Dan: He is. I'm the softy. Michael: We love all the touchy-feely bits. We have great people working here and we laugh a lot, and the product we are dealing with is very interesting. But it is very important to have a commercially viable business alongside that. That is our challenge.

How does the joint managing directorship work and why did you decide to do it? Dan and Michael: We didn't! Dan: Michael has been in the business pretty much since it started. He's the old lad. Michael: Foolishly we allowed Dan in. Three years ago the board asked us to become joint MDs and we do, coincidentally, have quite complimentary skills. So far so good

What skills do you each bring to the job? Dan: On the most superficial level, Michael is an on-trade specialist and I am an off-trade specialist. We are both salespeople and are both entrepreneurial, and we believe that the process of sales should drive and motivate everything we do. Mike is focusing increasingly on sales within the UK-delivered category. I look after our producer side much more, because in the off-trade the quality of the relationship with the customer is defined by the quality of the relationship with the producer. Bibendum has always aligned itself with the producers' interests: working together with producers to work out what the market needs rather than aligning with customers and beating up suppliers.

How are your joint ventures affecting your agency business? Dan: They are unquestionably enhancing it, and I don't think we've seen the end of joint ventures going forward. We are going to cut our teeth on these two; it is a new model that the industry has not considered before. It has provided us with a huge amount of ammunition in both the on- and off-trade. With Boisset you couldn't ask for a more complete solution to the Central France category. With Lion Nathan you've got Distinguished Vineyards, ranging from the 4.99 equivalent right the way up to 50 a bottle, with some of the best-known Australian vineyards there are. It's a fantastic solution and we share the risks and opportunities with both companies.

How do the joint ventures work? Dan: In both cases they work on similar business models: they are 51%-owned by the producer and 49%-owned by Bibendum. They both have a separate limited company, based from our offices (but not from within Bibendum as such), with their own sales and marketing resources. They will be responsible for the direct relationship with existing customers, where they have them. Boisset has a lot of direct relationships; Lion Nathan is using the Bibendum sales force to go out and sell to the UK market, as is Boisset in the off-trade.

What are the advantages of joint ventures? Dan: The idea is to keep the lines of communication as speedy as possible. There is only one margin available. We discovered we were spending so much more time negotiating with the customer than with the producer, and then coming back and negotiating again with the customer. Producers were being forced to take decisions on deals they didn't want to do.

What do you gain from it? Dan: The upside is that we are sharing in the producer margin, instead of just the agent margin. With the traditional agent model, if you force a producer into doing a deal they are not comfortable with, and take a 5% commission, then you are making money regardless of whether the producer is losing shed-loads or not. That is not conducive to long-term relationships with the UK market. If we look at it together with the producer and work out how much we are going to make on a deal if we share the margin, then we won't push a producer into a deal if there is no margin to be made.

The flip-side of it is that you could lose money more easily. Dan: Yes, theoretically. But if you don't take risks you simply stand still or go backwards.