Wine agencies must change tactics: poll
Traditional wine agencies will have to change their models, funding or target markets to survive in the current climate, say 38% of suppliers polled for OLN's Wine Report.
But another 37% say that, while they will trade less with supermarkets, agencies will make money from independents, the on-trade and specialist chains.
A further 17% believe that, although importers will lose market share, the best ones will continue as they are.
“The traditional agency company model may be in trouble,” says Peter Osborne Fine Wines director Martin Chapman.
“One of the main issues is the wafer thin margins the agencies achieve with sales to supermarkets, while selling to independents means holding expensive UK stocks.”
Mark Wilson, business development director for De Bortoli, which last year took a stake in newly set-up agency North South Wines, says: “Traditional agencies either need to specialise and become experts in their selected field or reduce overheads to ensure that limited extra cost is added to the supply chain – they will continue to go out of business otherwise.”
Doug Wregg, sales and marketing director for Les Caves de Pyrene, says: “The demands of supermarkets will drive wine importers to work more intensively in the other trade sectors.”
Most agree that importers will need to up their game to survive in the current market conditions.
Pol Roger outgoing managing director Nick James says: “Success or failure is down to two important factors. If you are in the lower to mid sector of the market you will really only be able to survive if you are supported by your producers and are innovative. The top end has proved to be pretty bulletproof over the past few years, but if you’ve not worked in this sector before then you will find it very difficult. Getting the right products and the right people is not something you can do overnight.”
And GM Drinks managing director Marc Patch says: “The future will be good for those that can be flexible. Our customers want to see something different, something exciting and unless we can find that, the business achieved will be limited.”