Saunders: Coterie Holdings reveals ambitious plans to expand internationally

Coterie Holdings has revealed ambitious plans to grow the business internationally and become a “repository of fine wine data”, as it signs a new commercial deal with fine wine company Cult Wines.

The deal with Cult Wines, which was announced last week, will see Coterie become Cult Wines’ exclusive storage partner, as well as giving the fine wine specialist’ clients access to Coterie’s wine-lending platform, Jera.

Cult Wines will use Coterie Vaults, the state-of-the-art, 10-million bottle capacity facility that opened in in Great Blakenham, outside Ipswich in 2023 to mature wines in a temperature and humidity-controlled environment, “to our knowledge, the largest purpose-built fine wine storage place in Europe”, where stock is in “an ideal situation in terms of service and storage”, according to Coterie Holding’s CEO Michael Saunders.

(It should be noted that while sister company Lay & Wheeler, which is also owned by Coterie Holdings, is a customer of Coterie Vaults, the businesses are run entirely separately “because we want to service other professional wine sales companies likes Cult”, Saunders said).

In addition, Cult Wines’ customers also have access to Jera, which provides collectors and investors with access to asset-backed loans at competitive rates.

The new deal with Cult highlights the ambitious plans the privately owned business has and the first in a series of planned development. Speaking to the drinks business on Friday, Saunders said the company has plans to be an ally “and useful partner” for the industry.

“What we are going to do is align with people intelligently in a way that works for both parties to succeed, for ourselves and to let their businesses flourish,” Saunders said.

This vision includes having “complementary arrangements” with businesses that fit in with Coterie’s wider game plan of where it is heading, and the ability to treat “each opportunity on its own merits”, even if certain things – vineyard ownership, spirits and a spree of acquisitions – have been ruled out.

Meanwhile, Jera has developed since its inception. While the original premise was for it to be an avenue for private clients to leverage loans based on their fine wine collection, increasingly the team are finding it is helpful for businesses to find liquidity which helps them “execute their business better and faster”.

In terms of the UK, while there is “a lot to do”, Saunders is confident that “a number” of well-known agencies will move across to Coterie, either into Lay & Wheeler or into Hallgarten.

But the team have ambitious plans to grow beyond the UK as well.

International plans

“This is a private business being set up to thrive in a premium and fine wine arena, so we’ve got ambitions to grow in all areas of our business.” Saunders said. “If you take storage, we will be having other units around other jurisdictions and that will allow us to take Jera into those jurisdictions on the back of it.”

The team are already looking at Europe, and the plan is then to take the business into Asia.  He points out that while everyone accepts that someone should set up a network of fine wine storage, in practice, it is complicated for two reasons. “One is you need business control across multiple jurisdictions, and secondly, you need the capital to do it. Well, we have both.”

“Once we roll Coterie Vaults out, then we can roll Jera on the back of it. Once we do that, we can then roll Lay and Wheeler on top of that, because we can have a different service proposition to some of our peers who operate out of the UK. And then we can potentially start looking at hospitality provision in other jurisdictions as well.”

Saunders said that the uniform view within the industry is that the wine trade needs something different to happen “because it had been quite static” and because Coterie covers a number of interlocking touch points, it has the potential to do this.

Data-driven

Data is another key plank of the business’ ambitions. “What we’re trying to do across all our businesses is become the repository of the best fine wine data in the game,” Saunders explains.

For this reason, Saunders brought in James Scott as chief data officer in February to build a “bedrock of very, very good data” at Coterie.

“We can do that through a different lens to other businesses, because of Lay & Wheeler, because it can see what wines are in storage, and the valuations coming through Jera. Importantly, we can also have a very good read of what’s going on in the on-trade as well through Hallgarten,” he said. “And then as we add other bits and pieces into the Coterie family, that’s only going to broaden our knowledge of what’s going on in the market.”

“Yes, we’re going to be friendly competitors. Yes, we’re going to go at pace, but we want to be really supportive of the trade overall,” he said.

This perhaps says a lot about the difficult period for Saunders after Bibendum, which he had helmed since 1982 until it was bought by Conviviality (the then owner of Wine Rack, Bargain Booze and Matthew Clarke) in 2016. It had risen quickly to become the UK’s largest drinks wholesaler before going through an unexpected, dramatic and rapid collapse, although the Bibendum business was rescued by Irish drinks group C&C, and Saunders returned to the helm. Saunders is candid on the subject, which he says taught him “a hell of a lot”.

“What it’s informed me is that you’ve got to have people who know the industry, that really lead the industry because our industry is not just intellectual, it’s relationships both ways, to the customer and to the supplier. Ignore that at your peril”.

Another lesson from the Conviviality experience is to build team of people “that you really trust and really know their game” he said, pointing to Coterie’s chairman, former Berry Bros. & Rudd CFO Chris Robinson and “a board of really smart people”, along with COO James Kowszun, chief data office James Scott and wine director Andrew Shaw, who three of whom all worked with Saunders at Bibendum.

“You need a certain ambition to do this and nobody is trying to do what we are on the path to do,” he said. “This was all thought through before I arrived [at Coterie], my job is to accelerate it and bring it into reality. And with the support of my colleagues, we’re doing that quite quickly.”

“I’m having the best fun I’ve had in years!”