Broadland feeds thirst for exclusivity

A UK wine producer and importer believes it can “comfortably” grow fivefold in the next decade thanks to an efficient business model and new products that meet demand for private label offerings.

Recent years have seen Broadland Wineries move away from its contract bottling roots to focus on sourcing wine for a portfolio of its own brands, many of which are designed to meet what the company reports as a growing desire among both retailers and consumers for exclusive label offerings.

“What a lot of our customers want is exclusivity,” reported Ben Cameron, marketing manager at Broadland Wineries, as he highlighted the 50 new products and 73 private label lines introduced by the company in the last year.

Estimating that private label now accounts for around half of UK off-trade volumes and “is growing very quickly, Broadland Wineries’ CEO Mark Lansley explained its growing appeal.

“Brand is important but if you talk to retailers, do they need them? Yes. But do they want them? No,” he told the drinks business. “Private label sales grew up because retailers are seeking exclusivity and to personalise their brand to be more relevant to their consumer.”

While marketing experts such as John Hegarty have criticised the wine industry’s fragmented nature, Lansley argued that, if anything, further fragmentation was needed “because you have a lot of different types of human.”

In his view, “some people want to follow brands, they want nice clear signposts; however there are a lot of other types of consumer who want something different.”

He extended this argument not only to a need for more wine labels on the market, but also to the case for a wider variety of packaging formats on the grounds that “a greater understanding of how and where people drink wines will lead to greater differentiation.”

In addition to the quality emphasis and producer contacts brought by Broadland’s wine director Arabella Woodrow MW, who joined the business in 2013, Lansley highlighted the firm’s ability to blend, package, design and distribute wine while promising “the lowest cost base in the UK,” a claim bolstered by the Norfolk-based company’s proximity to the port of Felixstowe.

Broadland’s decision to expand its service was largely sparked by the 2012 demise of the company’s major customer D&D Wines International.

“The role of the middleman is dying out,” maintained Lansley, noting that many retailers had begun approaching Broadland directly with a view to it providing more than just a bottling service. “We can bring things in that people said were too expensive,” he remarked.

One of the new private label brands introduced this year by Broadland, made in the UK from grape concentrate.

Although this bottling arm has now become a smaller part of the business, Lansley emphasised the company’s efficiency and flexibility in this area. “We can personalise the packaging and split a tank into five or six different formats,” he outlined. Broadland can also keep costs low by fermenting on-site from grape concentrate.

This expanded business model has had a marked effect of Broadland’s revenue. “With contract bottling we used to make 40p a litre ex-VAT,” recalled Lansley. “Now it’s about £1.40 because we’re buying and selling the liquid too.”

Suggesting that Broadland currently holds a 2-2.5% volume share of the UK wine market, Lansley remarked: “We can easily get that to 3% or 4% – we’ve been growing at 20% on average in the last eight years and we shall continue that in the UK and then the US as well.”

Lansley tracked the company’s growth in turnover from £8 million in 2006, when he joined the business, to £50 million last year, predicting “we’ll do five times that in the next 10 years comfortably,” as he pointed to Broadland’s new sales office in the US and plans to build its customer base in Scandinavia too.

Taking a wider look at the UK wine trade, which has recently seen the major merger between Bibendum and PLB, Lansley argued that further consolidation was needed.

“When I joined the industry in 2006 I couldn’t believe how much waste there was,” he remarked. “There are warehouses full of obsolete stock. There’s still a long way to go.”