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Photo for: 30 Minutes with Elliot Awin, Co-owner of ABS Wine Agencies

Interviews

30 Minutes with Elliot Awin, Co-owner of ABS Wine Agencies

Elliot Awin on their wine importing business - ABS Wine Agencies and premiumisation in the current UK market.

Multi award-winning importer and distributor ABS Agencies is a family business run by Mike and Elliot Awin. Their focus on the independent wine trade has been maintained for 30 years in the UK and forms a good synergy for their producer principals who are family run.

Elliot spent 30 minutes describing their business and the current UK market.

Tell us more about your business?

We are family run small wine importing business supplying mostly the independent retailers and regional wholesalers with some of the larger off trade specialists and grocers. We do a lot of export into Europe, Asia and the USA. At an entry level, we own all of our own brands in order to build economies of scale for the UK. All the wineries that we represent on a non-entry level basis and in fact most of the wineries that we get own label from are all family run, which is just a perfect fit really for our customers. We all have a longer-term goal in that we have a mutual strategy for marketing.

We have 20 people working for us now including 2 Masters of Wine, who are the guardians of our quality, especially at the entry level.

In Felsenberg vineyard

What is your business’ target market?

Independent retailers and regional wholesalers are our core. We aren't looking to supply the on trade directly or direct to consumers, as we don’t want to supply our customers’ customers. We believe that is the best way in which wine can be marketed. As a regional wholesaler, your first allegiance should be to your restaurant customers building the best list for them. For example, if you have a Chablis agency and it sells by the glass, then a poor harvest, the price goes up Chablis becomes too expensive for the restaurant, so they might have to look elsewhere. As a wholesaler, you want to be able to be flexible according to your customers' needs. As the importer, ABS is able to be much more focused on our suppliers and we will supply those wholesalers with wines that are appropriate in the market.

How is the market currently?

Independent wholesalers supplying restaurants are having a tough time as more and more smaller on-trade groups are looking for single service supply. A lot of those are seeing wine as a profit centre as opposed to the pointing of difference so there aren’t a lot of places where one can go to a restaurant and experiment with wine. They end up with something that they know well - a banker - the classic Malbec and Marlborough Sauvignon. They know that when you go and have a steak you'll have a bottle of Malbec and it is incidental whether it has quality or interest. However, we are doing more with the regional wholesalers increasing our numbers of listings as they pull away from some of the large wholesalers. Our volumes with them maybe shrinking but to compensate the average price is increasing.

In independent retail, we've seen the volume is decreasing, but the average price increase. So it is definitely moving towards a drink better drink less. I don't think that many independent retailers are selling by the case as they used to 10-15 years ago so our volume of that medium level range is shrinking but a lot of people are up-selling. Point of difference is critical. That increase in frequency has transferred into the wine trade so we have to adapt to that. The ABS range has done that in a couple of areas such as Australia and Oregon where we are representing a few more wineries but fewer wines per winery.

All the stats show premiumisation of the spirits market – how is your business adapting to that?

In 2015 we started a project that introduced 15 new Australian wineries under the banner Australia’s Best Kept Secrets (ABKS). We noticed that the independent retailers in the UK are very similar to independent restaurant trade in Australia. The wines that are sold in that sector are really dynamic and interesting. We set about replicating that putting together a list of wines that predominately sell to the local restaurant trade in their respective areas Melbourne, Sydney, Perth. We don't hold UK stock, which maintains exclusivity whilst reduces cost and risk.

The plan was to hold 3 tastings per year and ship orders for our independent retail customers so they have quasi-exclusivity. They take delivery of the wines as they arrive in the UK, filling a container about 4-5 months. It keeps that idea of dynamic ranging, new funky marketing, plenty of social media. The winemakers are coming over doing tastings & dinners with a difference - not really classic winemaker dinners – more sit down and talk to customers, perhaps getting local producers sitting in.

We also started working with Division an urban winery in Oregan that release their wine twice a year and very limited availability. We ship a pallet every 6 months but the wine is normally sold out before it arrives.

So it is these smaller parcels, if you will, from wineries like Peyton and Jones,

Gun Dog from Four Pillars and the other ABKS 15 wineries which is really addressing our premium sector maintaining exclusivity for the trade, selling at full retail, but with low volumes.

Supermarkets dominate the UK drinks market, will they be still as powerful in 5-10 years time?

Yes and no. Recently I was with an export director of a large Germany bottler she was explaining how there are no premium wines sold in the supermarkets. That really helps the consumer understand the difference point at which quality in wine occurs. There is a big division between commodity alcohol in the supermarkets and premium wine with provenance, great story and interesting to drink comes from a specialist store.

It is very difficult for people to tell the difference between the two when they are both on the same shelf as in the UK. If you went to a wedding and there was a bucket of beers of various different brands nearly everyone at the wedding would be able to put all those beer brands in order of how premium they are. Whereas with wine, even as a part of the wine trade, you may not even be able to put them in premium order.

So I always say to my friends ‘where do you buy your meat for weds night’

When you are buying mince making a spaghetti bolognese, of course, you buy it in the supermarket, you wouldn't make a special journey to the butcher. But if you were having a roast leg of lamb or joint of beef you might go to the butchers. I think that’s where we should be pushing wine towards.

People are looking for contact, in terms of social media and people like to talk to people. I still think there will always be a place for an independent wine merchant as much as there will always be a place for a butcher. But of course commodity alcohol in supermarkets ‘stack it high, sell it cheap’, brings people in and makes wine far more accessible. It is the same as the craft beer and generic lager. I don’t think that small pubs and breweries will ever not exist because supermarkets sell craft beer. It is more than just the product itself; it’s having that one-on-one contact having that immersive retail experience that is so important for wine.

What are the specific trends that you are seeing emerge?

Alternative packaging is the trend. ABS has started a project for wine in a can and launching into the supermarkets hopefully in February next year. It comes back to convenience bringing good quality wine to more convenient packaging.

If you pay £10 it doesn't matter whether it a quarter bottle or 250cl or single bottle you are still only spending £10. Quality wines in smaller packages formats are going to be the key to getting people to experiment. If you walk into a boutique craft beer shop there are 330ml beers from £3 to £12, which is more expensive than an average bottle of wine in an independent retailer which is £11.50. I really like the Enomatic model in independent wine merchants, where you can try 25ml before you go for the 175ml glass or 75cl bottle. I still believe that it has much market space to fill. Getting these smaller units on the shelves in independent retailers is really contributes to people’s experimentation.

Should the UK market still be a priority for global producers?

I really think it is in terms of proving themselves in terms of quality and where they fit on an international quality spectrum. The UK market is so crowded, it is still the best place to test that. If you can succeed in the UK then you could succeed anywhere in the world purely because it is such a noisy crowded market that is so competitive. Should it be their main target in terms of producing a viable business? Perhaps not, but if they want to test themselves in terms of where they fit in a global spectrum there is no better test.

How should the ambitious producer approach the UK Market?

It is immersed in building relationships with your end customer and the final gatekeeper. So getting to the independent wine merchants, spending time with them, telling your story, proving the wine quality and building relationship is very important. Approaching an importer such as us with an email with just the wines and prices are never going to work. It has to be a business plan that is structured, including what they intend to do over the next few years. You might start by spending time on the ground with 2 visits per year getting to know independent wine merchants building maybe a new social media platform which helps build the brand with end consumers. Gone are the days of placing it with importer and job is done for you.

The Millenial / Gen Z agenda of sustainable, environmentally friendly, natural, organic, biodynamic seems to be a growing force. Is the drinks market embracing it as quickly as they need to?

Perhaps not as quickly as required, but I do think there are underlying initiatives bubbling away. It is an oil tanker that takes a long time to move. There are plenty of millennial winemakers now so a lot of them are moving their estates to organic, biodynamic and more sustainable farming. The use of key kegs, minimal glass, aluminium cans is increasing. An organic wine in completely recyclable aluminium cans with a social media presence ticks a lot of millennial boxes.

There is definitely a movement but its there are always going to be the traditionalist independent wine merchants that will struggle to embrace the new millennial culture. They have to take in on board at their customers' pace. Do millennials like shopping in the store? Probably not as much as they might online so building that online presence is very important to tell the story for the people that are listening where they are listening rather than just being in a shop.

Will Alexa ever replace sommeliers?

No, I don't think so. People like talking to people if they are talked to in the right way on the same level. There may be technology that helps you understand wine you like because you like another one. I am sure that should exist. At the same time going back to walking into your butcher who knows your name and what about bacon for Sunday, Alexa is never going to have given you that warm fuzzy feeling that you are known and that someone cares about you, which is so important in real retail.  

About the Author

Alistair MorrellThe article is contributed by Alistair Morrell, Wine Inspector, wine industry consultant, journalist and, commentator. Over 30 years as a wine business professional, Alistair shares his global knowledge, network, and experience of growers, importers, distributors and buyers.

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