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Life Is A Cabernet, Old Boy
“standfirst”>Even with the current rate of consolidation in the drinks industry, there is an occasional lack of professionalism and a poor level of pay. Perhaps the two might be connected, says Roger Brownlie
The Lunches and the lively social life used to be sufficient while the salary was just an added bonus. Though those days are long gone, the drinks industry, and particularly the wine trade, is still associated with the good life and has in some cases upheld its reputation for cronyism and poor pay. But as the effects of consolidation begin to take hold are we entering a new era of corporate professionalism?
“There is a huge divide between the larger companies and the smaller drinks businesses,” says Christian Hughes who heads up the UK arm of Australian drinks industry recruitment specialist Mondo Search. “The large corporates demonstrate more understanding of specific trade disciplines; the disciplines of marketing, trade marketing and sales are more clearly defined. The smaller companies offer more exposure to front-line business but not much discipline and structure. The problem is the two are getting further apart and if this continues it will be hard for someone working in a smaller business to establish themselves in a larger company if they chose to do so.”
In a drinks business careers survey which looked at a cross-section of the industry, 12% of respondents thought their salary was far below normal and 40% thought it was below the going rate. Only 2% believed they were being paid more than what they considered normal for the position. This, of course, could be down to human nature. It is common to consider ourselves undervalued in any hierarchical organisation, particularly if you are at the bottom. Nevertheless, while 45% considered their salary was the going rate there is clearly some disappointment and salary expectations are not being met.
Recruitment agencies are in a unique position to observe the industry. They carefully watch the ebb and flow of staff and the effects of industry trends on employment patterns. There are not many recruitment agencies dedicated to the drinks industry, which may reflect the manner in which people are usually employed, but all agree that the wine trade is particularly poorly paid. “Invariably the salaries are either similar to or worse than other industries,” says Hughes. “Again, the wine trade has historically been a poor payer in comparison to other industries. It is slowly having to improve as the industry looks to attract talented individuals with desirable skill sets from other industries. The spirits industry is generally on a par or just below some FMCG industries.”
“It’s fair to say,” comments Helen Webster of drinks industry recruitment agency Pilkington Webster, “that people coming out of another industry to go into the drinks industry must know they will have to take a cut in pay. It’s not a well-paid industry. You don’t go into the wine trade for the money. In the larger organisations where you are quite senior, yes, you can earn good money. But compared to the Pepsi-Colas of the world you are not earning good money.”
Encouraging new talent into the trade when the salary is uncompetitive is becoming a challenge, particularly when product knowledge is not required, such as in a logistics role. “Now companies are looking at pensions, healthcare, and car allowances as a way of encouraging people to the trade,” says Webster. “But these won’t help you get a mortgage. Mortgages are only based on basic salary. It’s not that people don’t want to work for the company, it’s just the numbers don’t add up.”
But one observation is that many marketing and brand managers are relatively young compared to other industries. A phenomenon which could be considered an opportunity for budding brand managers.
“They are cheap labour,” explains David Pilkington of Pilkington Webster. “If you look at the money they can earn in other FMCG environments it’s probably greater than the wine or spirits trade. And wholesale pays less than branded companies. But, God knows why, wholesale is a tough business.”
“Employers think that because a new person is inexperienced they can pay him very little,” says Helen Webster. “And when they find he is brilliant at his job, what they can’t do then is give him a pay rise commensurate with his ability because it comes to more than an 8% or 10% rise. Companies can sometimes box themselves in by thinking they’ve done well getting somebody onboard cheaply. But then if you don’t pay them well and they are really good why would they stay with you?”
However, for some, particularly first jobbers at the younger end of the market, work ethic is lacking, explains Webster. “At the younger end of the market, if employees don’t like what they do they just walk. They have nothing else to go to, but they just give it up because they no longer like it. Their expectation of what they think they are worth after being in the business for two or three years is greatly inflated.”
But for the ambitious who are willing to forego top salaries for real responsibility, the drinks trade can be seen as a place of opportunity as long as you are in the right company, or keep the right company. Figures provided by Bordex show that at the age of appointment the youngest person to reach CEO of a public listed company was aged 39. A 31-year-old made it to executive director and the mean age for a group finance director is 44. So certainly, in the right company, a dynamic one, there are few barriers to age. However, there are still a lot of family oriented companies, private and public, where siblings will undoubtedly make it to the top first. And then there is the old boy network to contend with. But networking, of one sort or another, is key.
“The opportunities to progress in the smaller wine companies are limited because people are already there,” says Pilkington. “Two-thirds of jobs in the wine trade are filled through networking. The other third is filled through companies advertising themselves or using recruitment agencies. So if they just come to us they have a 17% chance of finding something but if they network they have a 66% chance.”
“Now when a company has a vacancy,” explains Helen Webster, “the first thing they ask is, ‘Who is there internally, or who do we know or have met recently?’ Only then will they advertise or seek an agency. There is still an element of ‘Who do we know?’ in the traditional companies – a “He’s a jolly good chap and has the contacts’ approach. However, the more professional, usually larger companies are becoming much more hard-nosed and selective, particularly using tests at the interview.
Wine wisdom
Other than networking, which can be considered both a barrier and an opportunity for career advancement, there are more practical problems in climbing that slippery pole.
“When looking to build a career in the wine industry,” says Christian Hughes, “product knowledge can be a barrier to entry with many wine companies still placing heavy emphasis on this when recruiting. This can mean that unless properly connected or highly knowledgeable on wine product, those starting out in the industry may find it tough to get started. However, once you have climbed a few rungs on the ladder, it becomes easier and opportunities abound. There is the opportunity to work internationally, to work across multiple disciplines and to be responsible for large budgets at an early age.”
“The spirits industry, however, while placing some value on product knowledge, looks more heavily towards commercial ability, market knowledge and the candidates’ competencies. Career opportunities can involve working with household brands, managing large budgets and working internationally.”
How people start out in the trade is vital in determining the calibre of characters that become the managers and directors of the future. Third-level training and professional development play a large role in finding the “right stuff”.
David Pilkington says, “Graduates get into the trade, all too often, because they did some part-time work in a bar or in Oddbins and they decide that they don’t want to be a nuclear scientist – they rather like drinking wine. So they transfer to a full-time position and that is the beginning of their career. After a couple of years they get bored, or ambitious and start looking around. So I give them some numbers as a reality check. For every 1,000 people in retail, including on-trade, there are 100 people working in sales right up to sales director level. There are 10 people in support services, which include logistics and secretarial, and only five people in marketing, PR and events, plus just one buyer. Of course you can make a good career in the trade. But the usual route is to follow those numbers.”
Another route to attracting talent to the trade is by poaching from other industries, usually FMCG companies. But there are problems here also, for both candidate and employer. “We get a lot of people who want to get out of their business and would like to get into the wine trade,” says David Pilkington. “They ask how can I get into the wine trade and the answer is with difficulty without any experience of working in the wine trade. The Oddbins and the Majestics of the trade are good routes for people to start. While some companies are more interested in the person, their attitude and their skills than in their wine knowledge, most expect a higher certificate or a diploma.”
“It’s very rare, even with a marketing degree but no wine knowledge, that you will get a marketing job in the wine trade, unless you came from Nestlé, for example, with brand management experience and a big company actually wants someone from outside the trade. At certain higher levels you can transfer over but it is much more difficult further down. Often it depends on the existing team, their experience and whether they have time to train the new person.”
According to Bryony Wright, of the Association of Wine Educators, “The wine trade can appear peculiarly old-fashioned and incestuous to outsiders, and for sales and marketing professionals from other industries with good commercial experience but little wine knowledge, this can be very off-putting. However, knowledge of the product can be taught much more easily than commercial awareness!”
But as Christian Hughes explains, skill sets must go beyond product knowledge. “Invariably people are attracted to the drinks industry because of the fun image or because they are passionate about the products. Both are admirable reasons to join the industry, however, they need to be coupled with strong commercial skills as the drinks industry is a business and we have seen too many people getting caught up in the product without focusing on the commercial realities of the industry.”
Has the established mode of training been too product-focused? According to David Pilkington it has: “There is no industry recognised course other than the Wine & Spirit Education Trust (WSET) working up to the MW, but that’s just the product side. It’s not about the skills side of logistics, selling or marketing the product. There is a lack of commercial acumen in the marketplace at the moment. And there is a big skills gap in that people have a perception of their ability against their actual ability.”
Christian Hughes believes training is going in the right direction. “The WSET is doing a great job in modernising their qualifications and making them more relevant to the industry. I think they have got the right idea. But drinks industry businesses also need to look at how they are developing their staff. Some do, but a lot don’t. In other industries mentoring schemes are commonplace, leadership programmes are common, and meaningful internal award schemes help to improve talent in the industry and provide good career paths for those entering. You only have to look at companies like Mars or Proctor and Gamble and see the level of investment in their staff to realise we can do more in the drinks trade.”
Bryony Wright, is also optimistic for improved, specialised training appropriate to the drinks industry. “Beyond product knowledge training, there appears to be greater interest in specialist business and marketing courses for the drinks industry. Plumpton College, a corporate member of the AWE, now offers a foundation degree course in Wine Business Studies. However, the UK still lags behind other countries such as Australia, where Roseworthy College runs a range of specialist degree and postgraduate courses in wine marketing.
“There is also a tendency in the UK to transfer experienced staff from one discipline into another, such as from sales into marketing or PR, without any additional commercial training,” says Wright. “Unfortunately this does not help to promote a professional image for the industry.”