Own Label Overdrive

06 September 2005 By db staff writer

“standfirst”>Landmark has tailored its Vintners Collection for the specific needs of the cash and carry sector, much as the big US brands have done, says Robyn Lewis

With the amount of attention the Big Five get in the UK it is all too easy to forget about the independent retail sector, and even easier to forget about it’s less glamorous counterpart, the cash and carry. But you would be foolish to do so, as the cash and carry provides a golden opportunity to target consumers through independent retailers. What’s more, alcohol – and wine in particular – is increasingly becoming a key part of the sector’s offer, as Steve Mayes, trading controller for wines, spirits and beer at Landmark – The Independent Wholesaler for the Independent Business, as it brands itself – confirms.

“Alcohol especially is a big market for us and has always been an important part of our business,” he says. “It has its own dynamic really and at the moment is evolving at an exciting rate, culminating in the fact that our wine business is now one of the fastest growing categories we have. Our growth here was just over 20% last year, which far outperforms the market.” According to Mayes’ figures the overall wine market is seeing relatively flat growth of between 5% and 6%.

His company’s performance has been achieved, he explains, through a twopronged approach to the sector. Firstly, the branded proposition had to be tackled and made right and then the own-brand range got the same treatment. “With the branded range there is, as you’d expect, a heavy New World bias and, in particular, we hugely overtrade in California – somewhere near a third of our sales are Californian wine. That’s partly, I think, down to the strength of brands like Paul Masson, Blossom Hill, Gallo and so on, but also because the owners of those brands have been very attentive to the independent sector, right from the early days. They saw what we, not just Landmark but the whole category, had to offer the wine business and saw what was required. They developed and provided an accessible range, at the right price and on a duty-paid basis, whereas the big Australian brands were all FOB. That meant you had to buy a container load and not everyone wanted to do that. It’s expensive, there’s a lot of stock, long lead times and it’s fraught with logistical problems. If you can buy what you want from London City Bond or wherever each week, it’s a much nicer way of doing things from our point of view,” says Mayes.

When it came to the own-label range, he had to balance the strength of California within the sector and the need to provide a point of difference and so the Vintners Collection range, as it is now known, slowly began to take shape.

“The aim with the own-label wine offer is to make sure we match exactly what we need to supply. People often get too absorbed in trying to compete with someone else but quite often their focus will be quite different. We wouldn’t be able to compete with the multiples’ offer, for example, and by that I don’t just mean on price either – we are talking about a totally different proposition. For me it is more about knowing your market and knowing what you need to do to service that market, and it was on that basis we developed the Collection.”

The range has already been highly successful. In its first year retail sales amounted to around £7m, which is better than had initially been anticipated and the range has already grown from the original 33 wines to 40.

Mayes shaped the range, he says, around the idea of a high quality, well presented, value for money product. “As much as you romanticise the wine market it is becoming increasingly commoditised and it is very competitive,” he says. “So, yes, you would essentially have a similar set of criteria if you were going to launch an orange juice. It’s about quality, presentation and value for money. It’s a fairly straightforward formula but it was a challenge to be able to execute it and do it on a scale that was fairly substantial.

“What was invaluable was the tremendous amount of support we received from all of the key points along the supply chain. For example, all our suppliers have worked extremely hard to put it together. It was developed in continuous conversation with our members to make sure we were doing exactly what was needed, and when we launched their support was phenomenal. So everyone got behind it and it has generated this kind of wave that we have managed to maintain through this first year, culminating in some very flattering praise, several awards and some tremendous customer feedback.”

The central core of the proposition was an offer that would cover all wineproducing countries, but when it came down to it Mayes wasn’t sure a Californian wine was needed, or that it would be able to compete with the already strong branded Californian wines in the range. However, even designers of a brand this successful can sometimes get it wrong. “Fortunately, we rethought that decision, and guess now what our number-one and number-two best selling wines in the Collection are? Yes, California and California. Can you believe it?” asks an astounded Mayes. “However, in general the range was designed with an Old World bias as there is very little branded offer here and no one is really pushing the category. The idea was to pick all the key AOCs, vin de pays, vin de table, give it some structure and rely on the New World confidence that runs through the Collection. We did the same with Italy and a bit with Germany as well and we covered off the New World countries too.”

The packaging also takes its cues from the New World and Mayes has consciously tried, he says, to “make it a bit quirky through the packaging and some of the tasting notes.”

Thus, rather than the usual recommended food matches, the Claret is matched with cheese on toast.

Merchandising the range has also needed some thinking, since the variables within independents limit what can be done. “Because there’s no common format in the shops we have been held back in terms of point-of-sale exercises and the like. We’ve worked hard to come up with a display format that is simple enough for people to apply and is clearly marked and navigable because I think that’s where the opportunity lies. The danger is that you make it too complicated and customers are thinking they wouldn’t mind something French but then they can’t find the French section and so they end up going for a Jacob’s Creek again, or whatever. And those principles are just as relevant in wholesale as well. For us, selling wine onto retailers or catering companies, trying to have a navigable fixture here makes sense too.”

Landmark has already had success with other own-label drinks brands – with claims that its Scandia lager brand is “by far the best selling independent lager” in the UK, and its White Storm and Spectra own-brand ciders have done well too. It remains to be seen whether this will be repeated in the wine sector with the Vintners Collection, but with £7m sales in the first year the signs are clearly very positive.

It would be nice to think that Landmark has the opportunity now to start a new age of wine retailing, focused on the independent sector rather than the multiple grocers.

LANDMARK KEY FACTS

1) Formed in 1972 to provide a centralised operation for independent wholesalers

2) Landmark is a consortium run by its member companies

3) Current turnover of £1.4 billion per year

4) 30 Members operating 67 depots, of which 44 are licensed

5) Over 200 products carried in the beers, wines and spirits range

WORKING TOGETHER

Hot House – perhaps a term more associated with tropical flowers and an ’80s Irish band than with independent retailers – is Landmark’s successful store development programme. The initiative is designed to bring the retailer, wholesaler and leading suppliers together. “We are working to regenerate the sector by developing fresh in-store propositions, raising standards and building stronger ties between ourselves and our customers,” says Landmark’s marketing director, Chris Rose.

It has been a high-profile strategy and has delivered some spectacular results – especially for the drinks business. The Landmark figures show that retail sales in converted stores increase on average by 38% with all product categories showing substantial growth; most noticeable is off-licence ahead by 46%. Drinks suppliers involved in the programme include Anheuser- Busch, Carlsberg, Constellation Europe, Coors, Diageo, Interbrew, Pernod Ricard and Scottish Courage.

Thus far some 160 stores nationwide have been converted under the scheme – mostly convenience or CTN’s expanding into convenience – with more to come as the programme is rolled out.