Focus on wholesaling

Wholesalers have upped their game to compete with an increasing range of suppliers.

Wholesalers have sharpened up their act in recent years.

For the major players, at least, it is no longer a matter of simply selling it cheap but of offering their trade customers a quality of service that can build their businesses.

Price is still important, of course, but the wholesale marketplace is so competitive that to win and keep an account companies are striving for ways in which they can add value and be more than just a delivery outfit.

For the wholesaler the main competition comes from national and regional brewers, which will usually deliver wines, spirits and soft drinks along with the beer.

But their natural advantage in the marketplace, the tie, is now weakened and wholesalers are able to play a bigger role today than they have ever done before.

Still, you get the impression it's tough out there. Beer Seller concentrates its efforts on the traditional freetrade. As marketing manager Liz Guilmant says: "We deal with the out-of-the-way pubs that big brewers can't be bothered with."

It is proving pretty successful at doing that and is a bright spot in parent company Bulmers' otherwise gloomy financial state.

But that doesn't mean it doesn't have to fight for the business. Although, as its name suggests, Beer Seller is best known for its cask ale deliveries - it is the only wholesaler to gain Cask Marque accreditation for its operation - cask ales only account for 12 per cent of its sales.

In fact, the firm has some 3,500 product lines, a similar number to Sainsbury's, in order to give licensees a service that's as complete as possible.

As well as brewers, national wholesalers are fighting against smaller competitors. Despite some consolidation, the wholesale industry is still a fragmented one with local wholesalers targeting a narrow geography, selling in largely on price but also aiming to give a more personal service.

There are the cash and carries too, these days not only offering convenience but having a delivery service themselves especially for wines and spirits.

Even supermarkets come into the equation when their low prices make it possible for licensees to buy goods at the checkout and still make a profit selling them at the pub.

Then there are the shady "white van men". Not smugglers but wheeler-dealers buying drink cheap on the spot market and selling for cash to publicans, forming a hard-to-measure grey market.

Not only that but, as Liz Guilmant points out, the freetrade market is shrinking dramatically as the giant leased and tenanted pubcos, which tend to deal direct with brewers and drinks companies, expand their estates by buying up freehouses.

All this means that service, the added value a large organisation can offer, has become a vital element in wholesaling to the licensed trade.

"Price will always be a dominant factor but we ideally want to sell to people who also value support and service," said Liz. "It is difficult to find a level of support they will pay for, though, and it's usually a case of matching the best price and then giving support on top to win the business.

"Once we have the business, we can work with them to develop their sales and we grow that way."

While brand owners have, in the past, looked down their noses at wholesalers, that is beginning to change meaning that licensees can get promotional support through a wholesaler supplier.

Spirits giant Diageo, for instance, is now working closely with Beer Seller and Matthew Clark Wholesale currently has Coca-Cola, Britvic and Strathmore on board in a series of initiatives to increase licensees' profits from soft drinks.It has also linked up with Interbrew to push forward the quality campaign for Stella Artois.

One of the most successful ways for wholesalers to bring added value to their service is through wine.

The UK's two leading wholesalers to the pub industry, Matthew Clark and Scottish & Newcastle subsidiary Waverley, have developed high levels of expertise and support that, as the case studies on these pages demonstrate, really can increase wine sales through pubs.

Even The Beer Seller, probably better know for its cask ale distribution, is seeing the value of its wine sales to the freetrade growing at twice the pace of any other category and it has set up a separate identity - Folio - for its wine wholesaling.

The thing that licensees must remember is that wholesalers need your business and they are acquiring a valuable range of skills and services to help them win it. Make good use of what they have to offer and your business can benefit too.

Thorley Taverns link-up brings grape rewards​

Like any relationship, success comes from understanding. Kent-based multiple operator Thorley Taverns has worked closely with Waverley wine development manager Gil Scott over a number of years and in the last six months it has really begun to bear fruit.

Wine sales across the 40-pub estate have leapt by 20 per cent thanks to a focused approach to the category and strong incentives for managers and staff.

"Over a long period we have developed a fantastic relationship with Waverley," said operations director Philip Thorley. "Gil knows our business inside-out and he knows our people. He is committed to the idea that if Waverley gives us the support we need we can sell more wine.

"We have seen our biggest growth in wines come over the last two years when, with the help of Waverley, we have actively promoted them across the estate."

The last six months have seen that growth accelerate as a result of a push to convert customers to higher priced wines. Managers and staff were incentivised to sell more of Thorley Taverns premium Italian range with Waverley taking the top managers to Tuscany as their prize.

That followed a similar promotion last year which offered a trip to Champagne as the incentive and saw wine sales rise by 25 per cent.

"These promotions have captured our people's imagination and they were proactively selling in a way they hadn't done before," said Philip. "We jointly fund the projects with Waverley which made sure we had top quality point-of-sale to support the promotion."

He believes price and service are equally important in the relationship with a wholesaler. "The price has to be right, of course. But if the service isn't right you still won't get off first base. It's about adding value for our customers."

Gil Scott personally carries out wine training for managers and staff, "giving them the confidence to go out there and sell".

Encouraged by Waverley, Thorley Taverns has recently introduced Jacob's Creek into the pubs, and that has proved to be another success.

"In the past we didn't want off-trade brands because we thought customers wouldn't like the price differential," said Philip.

"But we've come away from that now. People are looking for brands they can have confidence in."

More on wholesaling:​

Wine is a profitable part of a pub's offering if marketed in the right way - we look at Wizard Inns' example.

Wholesalers offer advice to help publicans reap benefits from the right wines - click here.