Waverley boss hails craft drinks trend

The rise of craft beers and speciality spirits presents valuable opportunities for the UK on-trade sector and its suppliers, believes Jeremy Blood, executive chairman at WaverleyTBS.

Jeremy Blood, chairman of WaverleyTBS

Highlighting the recent emergence of small-scale vodka and gin distillers in particular, Blood predicted a continuation of this trend, forecasting: “There’ll be a smaller number of big brands but a huge number of smaller brands.”

Blood set this prediction within a wider industry shift, observing: “Drinks categories are more and more important for the on-trade; it’s important to differentiate yourself from what people can get at home or other places in town.”

Conceding the current UK on-trade environment was “tough”, Blood observed: “The people doing well are the people doing something distinctive.”

What’s more, Blood observed of this growing collection of boutique drinks producers, “It’s good for us. Most of those small distillers won’t invest in their own distribution network.” In line with this, he confirmed a plan to strengthen further Waverley’s offer of “craft beer, speciality spirits and fine, unusual wines,” explaining: “People want a one-stop shop.”

Having stepped into the role of executive chairman in February, Blood was one of the partners involved in the buy out of WaverleyTBS from Heineken in 2010, which saw the drinks wholesaler sold to investment and advisory firm Manfield Partners.

“Heineken decided it was non-core so there was a great opportunity for us to do something with it,” Blood recalled as he summed up a “fascinating two years” spent strengthening Waverley’s structure and offer.

The first step saw Waverley reduce the 19 depots it had accumulated to just four, cutting £9 million in costs and tightening up service standards in the process. “Before then our stock was in all sorts of different places,” remarked Blood, who added: “There are still more costs to come out but not as much.”

The impact of these cost savings was evident when Waverley released results from its first full year of trading since the split with Heineken. Despite an 11.6% revenue drop during 2011, which Blood attributed mainly to the loss of a number of small accounts, the company saw a 5.5% rise in pre-tax profits to £4.2m.

While its 8,000-strong customer base within the UK’s independent free trade remains the core of Waverley’s business, the company has focused on bolstering its national account trade, aided by what Blood sums up as “a better service proposition and sales force.” This includes an 11-strong team of wine development managers, who offer customers specialist help with structuring and presenting their wine lists.

As part of a wider drive to improve the flexibility of its service, Blood confirmed that Waverley is “completely revamping our website.” This will create “a full transactional service”, including live pricing, stock and credit records, as well as a history of customers’ previous purchases.

Blood believes this improvement will not only make life easier for the 5% of customers who already choose to order online, but will hopefully encourage more to consider this option. “I’m convinced more and more people will appreciate that flexibility,” he remarked, predicting: “I’m sure half of our customers will order from the website in time.”

Considering the drinks wholesale sector as a whole, Blood anticipated further consolidation, drawing parallels with the food service industry as he observed: “There are six or seven wholesale networks in the UK and we probably don’t need quite so many.”