Top UK distributors and buyers look back on 2019 and share their hopes for 2020
By Richard Siddle
The focus for buyers might now all be on 2020 and looking first at the southern hemisphere and what we can expect from the agenda-setting harvests in Australia, South Africa, Chile and Argentina, but we can only go into the new year by taking stock on what happened over the last 12 months.
Particularly as we are only just beginning to take on board the consequences and impact of the 2019 vintages in Europe and the US and what impact they will have on buying decisions in the months ahead, as and when we know what is going in the rest of the world.
To help us we have been talking to some of the leading buyers and influences in the UK market, which despite its on-going Brexit and duty woes, still remains the bellwether for the rest of the global wine industry.
Strong year - in Europe
Adam Marshall, Kingsland Drinks’ European buying controller, says he looks back on 2019 with fair degree of satisfaction: “2019 was a good year for as the 2018 vintage in Europe was abundant and good quality.”
A key growth area has been Moldova which has become a “fantastic source of varietal wines” for Kingsland, such as
Feteasca Neagra and Saperavi, and are now starting to make “significant progress in the UK market”,” says Marshall. “It’s now doing much more than just fulfilling volume quotas for us.”
Spain has one again been a good hunting ground with its high quality wines and “excellent pricing”.
“Rioja continues to be a real driver of premium quality for us,” adds Marshall. “It performs well all year round.”
“Portugal has been another star as consumers really appreciate the great variation in styles combined with terrific value available from across the country.”
The situation might be a little more difficult later in 2020 as the “2019 vintage has been more challenging across Europe” concedes Marshall. “Whilst we still expect to see growth – especially in the mid to premium sectors – some pricing at the lower end could be challenging,” he says.
“The 2019 vintage is one where buyers should commit early to be sure of supplies at the right quality and price. The key for Kingsland is to have a broad supply base – bottled and bulk – that can fulfil all the market needs, propose new opportunities and remain flexible to follow vintage conditions.”
Marshall picks out Italy as being particularly well placed to “take advantage of a vintage that has been less affected than, for instance, Spain”. “I would expect to see a lot of focus on the classics such as Pinot Grigio, Chianti and Prosecco,” he says.
"Germany has had a tough vintage and this will challenge pricing a bit, however the naturally lower alcohol levels and fresh flavours from Germany really play into the consumer trends at the moment,” he adds.
Marshall appreciates the UK “has been a tough market for price for a long time” for producers, not helped by declining consumption volumes and the “fact that we are a relatively mature market so the opportunities can be fewer”.
But he has this warning for producers: “A few years ago, many saw ‘quick bucks” to be made in China and the US which compared well to the UK, but I think we are turning a corner right now.”
Decent wine at sensible prices
Danny Spencer, founder of East Street Wine Co said the fact there were “no real horror stories in Europe” has meant he has been able to source what he calls “decent wine” at sensible prices.
He adds: “The real joy is discovering new producers [to me] and who clearly punch above their weight and deliver wines of real interest. For example Fabrizio Vella in Sicily and Altolandon from La Mancha, both organic and both single minded in their pursuit of authenticity and provenance.”
In terms of value he has been particularly impressed by what he is seeing from regional Europe. “Value, quality and above all interest,” he says. “It’s always a go to. Field blends abound and they’re often fabulous.”
Matthew Cooper, wine buyer for Ellils Wines, agreed about the quality and opportunity in regional Europe: “For us regional Spain, eastern Europe, and especially Sicily have been a focus for value this year,” he says.
Outside of Europe Spencer has done well with Marlborough Gewurztraminer, Stellenbosch Cabernet Franc and McLaren Vale Sangiovese.
He concedes the “relentless” duty increases in the UK makes it “ever more difficult for quality wines to gain any traction in the UK”.
“We get further and further away from the prices charged at country of origin and producers find it harder and harder to understand. It’s a downward spiral as we then have to push for lower prices to hit price points and producers can simply sell at higher prices to other countries, and who can blame them?” he explains.
For Spencer his core market is what he terms the ‘Quality Casual’. “Gastro pubs, cocktail bars, small plates restaurants, outlets that offer high quality fare but where you can still wear your trainers, that sort of thing. So the sweet spot really is between £25 and £35 a bottle. Working that backwards wines need to cost our customers between £6 and £9,” he says.
No nasty surprises
Lesley Cook, wine buyer for Lanchester Wines, which works with major multiple retailer and on-trade customers, as well as develop its own range of branded wines, also enjoyed a solid 2019.
“With the exception of New Zealand Sauvignon Blanc, which I’m sure will have caused the same headaches for most wine buyers this year, sourcing has been as expected, no nasty surprises,” says Cook.
But, for her, there were two stand out performers: Chile and Argentina.
“Argentina, in particular, has presented us with some great new options and opportunities,” she says. These include working with producers with “excellent new vineyards and exciting winemakers who are not afraid to experiment”.
“We have also been able to unearth varietals which are unusual in the UK. New ranges will be launched in our 2020 portfolio early next year,” she adds.
Sustainability is now right at the top of the agenda for Cook and her team when sourcing wine from anywhere in the world. She explains: “As a business we are focused on quality, value and sustainability so any partners are assessed on these attributes. For example, our primary Chilean producer has been granted the Wines of Chile Seal Of Sustainability for its three tiered sustainability programme.”
“This global awareness of sustainability is not going anywhere – and nor should it. Aside from our own efforts to reduce our business’ carbon footprint through generating our own renewable energy, we’re working closely with our supply chain, including logistics, wineries etc, to make sure their own sustainability programmes are relevant and credible,” she adds.
She also recognises that the UK is a “tough” market for many producers to work in.
“Everyone’s asking about Brexit and trying to plan for the unpredictable which I guess will be the same for everyone reading this. The spectre of Brexit and the uncertainty its created around the trade and, indeed, business in general, has certainly made trading harder these last couple of years. But, while Brexit and whatever it brings may be out of our control, we have worked hard behind the scenes to bolster our personnel, our buying power and our resources.”
It’s why she firmly believes the “wine trade needs to work collaboratively to drive more value into the market which will inevitably benefit us all”. She adds: “The multiples are trying to command such a low price per bottle to attract footfall, which is resulting in a price race to the bottom. Anecdotally one supplier I spoke to at World Bulk Wine Exhibition had been asked by a supermarket buyer to supply Australian wine at the same price as Chilean!”
What the UK has, though, stresses Cooper is London. “London is still very attractive for aspiring wine producers. We are incredibly lucky,” he says.
New World opportunities
Paul Braydon, who looks after buying for the New World for Kingsland Drinks, says 2019 has been a “good year overall, with excellent quality from our suppliers in the US, Australia and New Zealand”.
But there have been some hiccups along the way, most notably early in 2019 when “volumes from New Zealand were getting tight and pricing was increasing”. “We’re fortunate to work with long term stable suppliers, so we weren’t too badly impacted, but for any ‘spot’ deals we were asked to source for, it was certainly harder than previous years to find suitable quality and volume.”
He adds: “For Australia the pressures on water and increasing input costs, coupled with strong demand – especially for reds – from China, kept pricing firm.”
“Barossa was a very tough vintage for 2019 with pressure on pricing for vintage 2019 and 2018 wines. We have a couple of Barossa programmes, so certainly felt the pinch on these. It’s touch and go as to if these programmes remain viable long term if pricing continues to increase.”
That said overall Australia “still presents excellent value for money and wine styles that UK consumers love,” says Braydon.
In terms of north America, Braydon says the “US had some exceptional value wines and we’ve had significant success with wines from Washington State, with a couple of strong vintages back to back”. "Pricing has also been more accessible, with good volumes available,” he adds.
“I recently returned from my annual buying trip to California and Washington State and saw some fantastic wines and price stability in most areas, with some softening. There is excellent quality and prices for Malbec and Pinot Grigio out of California and we’re really excited about making wines from Washington State more accessible for UK consumers. By bulk shipping and bottling in the UK we should be able to make wines accessible at the £7 – £9 range, which is really positive.”
Looking ahead to 2020, Braydon is pleased to see such good vintages coming out of California and Washington State and “volumes and quality are looking very good”.
“However, we do expect issues with long term stability due to fruit being left on the vine or vineyard floor and grubbing up of vineyards overall to have a long-term destabilising effect on the market. Finding long-term partners that will ensure consistent availability will be key,” he explains.
His eyes are firmly fixed on what happens in Austalia and New Zealand in the coming months. “Pricing and availability for the 2020 vintage in Australia and New Zealand will be very important due to the size of our business in these countries. It’s too early to know where we’ll end up, but water availability and spiralling temporary water right costs in Australia will certainly have an impact on input costs for producers.”
Long term view
Cooper at Ellis Wines prefers to take more of a long term view about his buying needs as so much of it is about building the right partnerships with people.
He explains: “We have already identified potential new partners across many regions [for 2020]. It often takes a year or even longer before a new partnership will result in new wines arriving in the market. Much of our buying activity in 2019, for example, will not see fruition until 2020. That’s not because we are slow to respond it’s just the on-trade likes continuity and wine lists may not change more than once or twice a year.
“We also sometimes hold off bringing in new wines until market conditions improve, and increasingly, we work more in a partnership where wine styles can be influenced, labels and presentation will be developed to meet market demands and this takes time.”
What he is confident about seeing is more wines from what he calls the “new wave of maverick Australia and New Zealand boutique producers”. “I also see Georgia creating more of a ripple.”
Whatever happens over the next few months it will be the kind of relationships and partnerships these sort of buyers are able to build and foster with producers all over the world that will ultimately determine the winners and losers over 2020.