Laithwaites will not move for Oddbins stores

Justin Howard-Sneyd MW has all but ruled-out a Laithwaite’s move for any former Oddbins stores, saying the failure of the high street off-licence chain is evidence that the business model of such outlets is not viable.

Speaking to the drinks business at the Laithwaites summer press tasting in London last week, Howard-Sneyd, global wine director at the merchant, said: “It’s no secret that high street shops are extremely hard to operate. The rents are high, staff costs are high and turnover is frequently not high enough to justify opening a shop.

“That’s been the Oddbins model and they have found it very hard to make it work, so very few of their shops would be suitable for the kind of thing we have in mind for our retail outlets.

“We’re looking less for small, out-of-the-way shops and more for larger more theatrical venues in urban, high-traffic areas where lots of people will pass the door and see what we do.

“It takes a long time to find such venues and there are not any plans in place to do anything in the immediate future, but that is our long-term strategy.”

The tasting was notable for the high volume of Californian producers on show, particularly from the mid-tier.

Laithwaites resident US specialist Nick Taylor has brought over a selection of wines the company sells in the US with the belief that the difficulties Californian producers have faced in the UK market in the past are set to ease thanks to Laithwaites’ work.

Jancis Robinson MW has already said: “One of the benefits for British wine drinkers of the increasingly important role played by [Laithwaites] in the US is that its wine buyers are considerably more knowledgeable about, and interested in, American wines that most of their British counterparts. As a result, Laithwaites’ range of American wines has improved considerably.”

Howard-Sneyd believes the company has helped mid-tier producers take advantage of export opportunities that they were not previously considering.

He said: “One of the problems for the Californian mid-tier in the past has been a lack of export focus. They weren’t big-enough operations to devote huge sales structure to selling wine in the UK.

“American consumption is going up and will continue going up so its probably not very likely there will be a particularly big export push among those mid-tier wineries to market themselves in the UK, which means you have to go looking for them.

“We’re there already, selling wine in the US market and looking for them and building relationships with these people who are delighted to find, without having to try very hard, that their wines are interesting to people in other parts of the world.

“I think they are possibly surprised that people haven’t done much exporting before, but for a lot of them there is such a big and complex market to be worked on in the US that it’s difficult enough for them to tackle their domestic market, and most of them have had such success there that they haven’t needed to think about selling their wines overseas.”

Having launched its US business four years ago, and with parent company Direct Wines having recently launched Virgin Wines in both the US and Australia, Laithwaites is not resting on its laurels. Indeed, Howard-Sneyd confirmed to db that the company has futher expansion plans already in place.

“Our business worldwide is growing very well,” he said. “We have identified a number of markets that we may be interested in expanding into over the next few years and we’ve got some new brands that we’re also working on.

“We’re growing our US business very quickly and successfully, while in the UK we are always interested in good retail opportunities without needing to significantly expand our portfolio.

“Were there to be a good opportunity to find another shop like our one at Vinopolis, which allows us to showcase the full spectrum of our wines, then we would certainly be interested.”

Click here to watch our YouTube interview with Justin Howard-Sneyd at the Laithwaites tasting.

For more on opportunities for those looking for mid-priced wine from California, including an analysis of cool climate offerings by Stephen Brook, see the California supplement, out with the May edition of the drinks business. 

Alan Lodge, 09.05.2011