Peeble power

From "wee" beginnings, the award winning Villeneuve Wines has cornered a significant niche in the Scottish wine market, largely by giving brands the boot, says Penny Boothman

"IT WAS so tiny, we started selling wine without premises in 1982, selling to friends, parties and things like that," says Kenneth Vannan, founder of Villeneuve Wines. 

"And then we opened shop in Peebles in November ‘83." Since then the empire has grown to three shops, a thriving wholesale business and an ever-growing mail-order and internet sales network.

"We started buying through agents, mostly in and around Edinburgh.  But that’s 20-odd years ago and now we mostly deal direct with producers," he explains.  "Just under half the business is to the on-trade – smart restaurant and hotels, that kind of thing – so we have to have our own individual things that our on-trade customers are happy with, and that means exclusivities."

It’s the familiar problem of restaurants not wanting their diners to nip down to the local off-licence to compare prices, and from an independent’s perspective sourcing individual wines from small producers is the best option.

"We don’t do brands," Vannan explains, "so we deal with small, 2,000 or 3,000 case a year producers, but the wines are spectacular."  But these individual wines, imported in small quantities, do tend to come in at higher price points. "£10-£25 is our strongest retail line.

Which is quite high, I know," concedes Vannan, who believes it could be partly down to location. "I’d say our Edinburgh shop would be even more exaggerated [in terms of price] but our shop there is in a very trendy, bohemian part and most of what we sell is by the bottle – single bottles, two bottles.

The guys there have achieved a very, very high average.  They sell more £10-£25 bottles than we do here [in Peebles]."  Sales figures like these would make most retailers green with envy, but as impressive as this is, the mail-order business operates at higher prices still.

"It tends to be higher value stuff," says Vannan.  "This thing about selling cases of wine for £40-£50 is ideal for people like Virgin who are selling brands, but our customers tend to want individual, interesting things.

We seem to sell a lot more top Italians through mail order than we ever do through the shop.  I think that’s because some of these are allocationonly, so customers who want access to them just pick up the phone and speak to us." 

Unique pricing Even with a loyal and adventurous customer base, the more esoteric wines are not necessarily an easy sell.  Promotions are always a sticky subject in the independent sector, where devaluing a product can mean the end of a beautiful friendship.

At the same time it’s vital to maintain your point of difference if you don’t want to end up competing on the same turf as the multiple specialists.  "We tend to shy away from what everyone else does," says Vannan.

"Our price points don’t end in ‘.99’. It’s all straight £8, £10 and £20 – a lot of people think it’s brave,  but one or two accuse us of putting the prices up.  Really it’s just another approach."

Vannan is also careful not to devalue his core products. "What we tend to do is we get a hold of, say, a £20 Californian Zinfandel that another importer can’t sell, that’s reduced in price, and we’ll do a buy-one-get-onefree, but the wine has to be good at £20 to qualify for our promotion.

We don’t agree with this thing that’s happening where people make up a price point for a new wine, they’ll say it’s an £8 wine and sell it BOGOF through supermarkets – the wine’s only worth £4 and it’s never likely to be worth £8.  So we only do a promotional thing if it’s worth the true value." 

But Vannan and co-founder Alister Rae don’t see multiple retailers with deep discounts as real competition to Villeneuve’s business.  "The multiple specialists have actually made it easier for guys like us, as they have a dreadful range and they sell brands – and they sell them at a high price.

In Thresher or Victoria Wine there’s an ordinary Touraine Sauvignon that we’ll have for a fiver and they’ll have on for £7 or £8.  So we have to deal with people that go into a Thresher one day and buy this for £7 and think ‘Well that’s okay’ and then come to us and get something better at £5.

"It’s very, very easy to demonstrate quality," Vannan believes. But hand-selling requires the support of the staff, and there has to be agreement as to what to sell.  "When we do our tastings there are normally six of us.

If we forced a wine on our Edinburgh shop and the guys didn’t like it they wouldn’t recommend it and, therefore, wouldn’t sell it.  Whereas if we all get together for tastings then when a wine is bought and it arrives on the shelves, everyone knows exactly what it’s like."

And retail is the major part of their business.  "The main part would be retail which, between the three shops accounts for about 55% of turnover.  The wholesale makes up about 40% and the mail-order internet is about 5%."

Winning ways

Villeneuve Wines won the International Wine Challenge Scottish Retailer Award and Which Wine Guide Scottish Retailer of the Year in 2003, but do these accolades really make a difference to sales in the independent sector?

"It does actually. I hate to admit it, but it does," says Vannan. "We’re not so much interested in winning awards, we’re just more comfortable being in a position where we’re not not-winning.

If there’s going to be an award we’ll try to get it rather than our competitors."  "I know these gold medals and things are really quite valuable because generally the gold medal winners tend to be pretty good. I understand that there’s someone in a supermarket going along a huge shelf and seeing something that’s won. It helps make their decision for them."

Brand buying

But the approach to buying, and selling, is different in an independent retailer.  "We choose the wines that go on our shelf.  We’ve got a panel of experts deciding what we should have.

A lot of our wines would never get into competitions anyway, and a lot of the time we actually struggle to have enough stock for the year!"

However, Vannan admits that this attitude within the independent sector has led to a trend in the types of wines that do receive promotion.  "It’s like the London Wine Trade Fair; you don’t see many dusty Frenchmen there anymore.

It’s all these big, glitzy companies who are selling larger amounts of wine.  It’s all big and clean and shiny now whereas, before, you used to meet some real artisans.  When you look at the results of the Wine Challenge it’s basically big companies, big brands.

But maybe that’s my fault because we don’t put our individual producers into these things." With further expansion on the horizon and growth in all areas, the future looks bright.  Today Peebles, tomorrow the world.