Freixenet Copestick boss: the on-trade will bounce back

UK Freixenet Copestick says it remains confident in the long-term future of the UK on-trade despite the damage caused by Covid-19 this year, following its surprise buy out of on-trade wine merchant  Jascots.

Speaking to The Drinks Business yesterday afternoon shortly before the announcement that London would be placed back in Tier 3, Clarke said that although there had been many casulties in recent months, the future of the on-trade was viable in the long-term.

“We believe there’s a strong future for the on trade. They will get through it, and although unfortunately not everyone will survive it, as we’ve seen, there will be a thriving on-trade in the future – and this is our opportunity to be a bigger and broader supplier to it,” he said.

He acknowledged that if Matt Hancock did promote London to Tier 3, the period before Christmas was likely to be quiet, but hopefully the roll-out of the vaccination programme would means a semblance of normality by Easter 2021, although not before.

However he insisted that “he on-trade will bounce back”, citing  pent-up demand from consumers.

“We do believe in a long term future for the on-trade sector – and that is the attraction of Henkell-Freixenet to a company like Jascots, the scale and diversity of the overall organisation puts us in a good financial position to weather this.”

Long term view

The acquisition of Jascots for an undisclosed sum in little over a week fits in with the long term view on how Freixenet Copestick will develop, Clarke said.

“We have had a long term interest in finding a wholesale string to our bow, but it’s been a watching brief, we were not actively engaged,” he told db, adding that once they were made aware of the administration “a little over a week ago”, the process had gone quickly and smoothly, with a lot of hard work from the teams and “a small element of luck”.

“We want our wines to be where the shopper and consumer wants to purchase them,” he added, pointing to the company increasing its stake in online specialist retailer Slurp as well as the Jascots acquisition. “We’ve seen an acceleration of online (which was a well-established trend) due to the pandemic – we want to be there as that’s where our shoppers are in increasing numbers.”

“There really has been a variety of performances among the industry – and we saw how a pretty solid business like Jascots was overtaken by the cash flow because of their exposure to the on-trade, but at the other end, we saw the Slurp business go mad as consumers switched to online purchasing. The broader Freixenet Copestick business sits in the middle with a pretty robust performance from our supermarket and convenience customers.”

He argues that even prior to joining forces Freixenet UK and Copestick Murray were good at the multiples side of the business in both the on and off-trade, but that both Freixenet Copestick and parent company Henkell-Freixenet own a number of wines and wineries where other sales channels might  be the best outlet.

“So that fills in a missing piece from our point of view,” he explained. “Jascots has a  great reputation with its customers and to make sure we can get at  serving them with the minimum of disruption was key to the future of the business .”

“They (Jascots) deal with a set of customers that are largely complimentary to the customers we work with and they deliver on their own fleet around London, which is something else we don’t do,” he pointed out. “Obviously we look for synergies but that is not our priority – our priority is getting them back to doing what they do well in terms of their portfolio and customer base.

As the announcement made clear, Jascots will continue to manage its own portfolio but Clark added that hopefully there are wines across the wider business that would be “interesting” to the on-trade business.

The move comes off the back of a strong performance for the parent company in 2019.