Spier gears up for on-trade

Four months after Spier took the bold decision to withdraw from the UK multiple grocer sector, the South African brand is set to launch its new fleet of premium, on-trade focused wines.

The next six months at least will see Spier’s cellar master Frans Smit hard at work building new partnerships to lay the foundations for Spier’s fresh UK image.

With the difficult decision made, the brand is wasting little time in implementing its new strategy. “By February we will be out of the multiples completely and the new wines are arriving in the UK sometime next week”, Smit revealed.

The corner stones of Spier’s new UK portfolio are the Private Collection, Creative Block and Frans K Smit, a Bordeaux-style blend currently being represented by its 2004 vintage.

Available through Spier’s UK agent PLB, both the Private Collection and Creative Block wines come in at an RRP of £11.99-£15.99, while the Frans K Smit is offered at a distinctly premium RRP of £49.99.

For Smit, the current upheaval may represent a major strategic shift from a UK perspective, but in fact it brings the brand’s image in line with the reputation it has built in other European markets. He explained: “If you look at Spier and our philosophy, it’s about developing the premium side.

“We’ve invested a lot in building a new winery and are producing considerable volumes of top-end wines and yet that’s not been reflected in our UK business. The on-trade is the place for that.”

Continuing this theme, Smit denied that the shift was a direct consequence of the margin squeezing UK multiple grocer environment, not to mention the 20% strengthening of the Rand against the Sterling and significant cost increases from the growers. He maintained: “The decision was always to have Spier in the on-trade; the financials just sped it up.”

This move by Spier looks set to help bridge that important premium gap for South African wines in the UK. After all, despite its shift away from entry level territory, this is still a producer with the capacity to produce significant volumes.

Smit describes Spier as a “big boutique seller”, calculating that the winery currently produces around 300,000 cases of “top end” wines.

By pulling out of the multiple retailers, Smit estimates that Spier has lost volume sales of “close to 400,000 or 500,000 cases”, observing: “When we pulled out of the retailers business came almost to a standstill.”   

This is not to say that Spier has closed the off-trade door entirely, nor that the company believes South African wines have no place in the sub-£5 bracket.

Indeed, Smit believes “The big brands must carry on building that sector”, it’s just that where Spier is concerned, “financially and from a profile perspective it didn’t make sense.”

As for Spier’s own future activity in the UK off-trade, Smit confirmed, “When there’s an opportunity to do business with the retailers we will”, pointing out that Spier will continue to be available in Majestic and a number of UK independents.

The combination of a number of factors here means a similar move is unlikely to be possible or even desirable from other brands struggling to maintain margins in the UK multiple retail sector. However, that is not to say that there won’t be a few watching Spier’s progress with interest.

Gabriel Savage, 08.12.09