Andrew Shaw, wine director of Coterie Holdings, did not hold back in last week’s interview with The Buyer when he described the changes that have taken place at Hallgarten & Novum Wines over the last year as being “revolutionising”. Transformative for a business that can now look any major operator in the eye and go toe-to-toe and win major national supermarket and on-trade corporate accounts.
A change in strategy that has seen it strike deals with the likes of The Jockey Club, The Ivy Group, the Royal Albert Hall, Sticks’n’Sushi, Tree House Hotels, Various Eateries and the Gordon Ramsay Group, and a whole lot more in the last 12 months.
Hallgarten & Novum Wines' annual tasting last month was a real statement event underlining how far the business has come in a remarkably short of period since the Coterie Holdings takeover
All of which, Shaw was quick to stress, would not have been possible if it was not for the foundations and core strength of a business that has been led by Andrew Bewes and his senior management team for the last 15 years.
As Shaw told The Buyer: “Hallgarten Wines is a beautiful business, with such a good base to work with.”
It is the company’s “core culture and DNA” that has helped Coterie fast track the changes it wanted to make, says Shaw. It is now in a position to put its feet “on the accelerator and open as many doors as possible” and provide the strong distribution arm the 300 plus wines it has brought into the portfolio now needs.
It’s a challenge and responsibility that Bewes and his team are ready and able to take on. He too is quick to turn to the “accelerator” metaphor to describe where the company now is after 12 months of sourcing, buying, and putting the framework in place to now go ahead and sell, sell, sell.
But this is certainly not the case of Coterie coming in with a magic wand to a struggling business. Hallgarten went into 2024 on the back of winning a string of national distributor awards and achieved £62 million turnover in the year to March 2024.
But it’s the speed of change and what lies ahead that is turning heads across the UK and global wine industry. Bewes says he expects turnover in March 2025 to be close to £75m and claims once all its new business has been factored in it will actually be closer to a run-rate of £90m. Putting £100m and above firmly in its sights.
Whilst that would put Hallgarten – a business that prides itself on being the best, not the biggest - in the Premier League of distributors, there is still some distance to go to be one of the UK’s largest national distributors. The key, though, is its figures are all on the up. Which is not the case for many of its direct competitors.
Stars aligned
The deal to sell to Coterie Holdings had been a long time coming, says Bewes. Not to Coterie specifically, but the brief from Hallgarten’s previous owners, the German-based Pieroth company, pre-Covid was to sell.
So the approach from Coterie in the summer of 2023 came “at the right time for the business and the shareholder” he says.
“They came with a real authority to grow something special,” he adds, but crucially wanted to work with the existing management team to make it happen. “We sat down to see where the possibilities were and went very quickly from there.”
In fact, Bewes is happy to admit the timing of the Coterie Holdings deal could not have been better in terms of market dynamics, “the state of its competitive set” and a time when a lot of major international producers were looking for new significant UK partners to work with.
“The stars aligned,” as he puts it for a “real wine specialist” to emerge that could behave very differently to the more “composite” make-up and strategies of other big drinks distributors.
“There was a real opportunity to invest,” he adds. “A lot of customers were also looking for new solutions. We were lucky with the timing. It all come together for us very well rather than us having a ready-made blueprint to work to.”
He perhaps, though, did not expect things to move quite so quickly as they did once the Coterie Holdings deal was signed in December 2023. Whilst you might expect a business of Hallgarten’s size to be constantly churning and bringing in and replacing producers, you don’t expect them to recruit 30 in a year. So many, in fact, it had to print a separate tasting book at last month’s annual tasting to accommodate many of the new arrivals.
But then Hallgarten did, admits Bewes, go into 2024 with one of the “smaller portfolios of our competitive set” and came out of it in far more bullish position.
Andrew Bewes says the deal with Coterie Holdings came at the right time for the business but also in context to what was happening in the drinks industry
It is also seeing more of a balance in the business between the on and off-trade. Prior to the Coterie take over around 73% of its turnover was through the on-trade, confirms Bewes. Now it is nearer to a 68% to 32% split with those percentages likely to move closer again in 2025.
“We are now driving growth in all sectors,” he adds, with a marked new focus on both national and regional off-trade, and reinforcement of its well documented focus in the on-trade.
Its current off-trade share is 50/50 between national players and the independent wine merchant sector. That is now expected to move to a 60/40 split as it “tightens” relationships with the major multiples thanks to the profile and importance of many of its new major producer partners.
“We have seen a significant jump in those areas,” adds Bewes pointing to the impact and added responsibility that comes with taking on the distribution for major power brands such as Nicolas Feuillatte and La Rioja Alta S.A.
Skills and support
Which is why it has also had to increase its workforce by nearly a third - up from 100 to 130 employees - with careful recruitment in all areas of the business to ensure it has the infrastructure and support services in place to cope with what is an extra 300 wines on its list.
“We have needed to gear up across the business to manage all the new suppliers and customers that we have brought in,” he stresses. “We have gone out and sought the right talent.”
As you might expect, Bewes was not prepared to see the business grow exponentially if that would adversely affect their renowned levels of customer service to existing customers and the great success story for him is that service levels have actually improved, with virtually no wines, it says, being out of stock through the year, and on time and In full delivery metrics higher than ever.
It’s interesting and notable that some 14 months on from the acquisition there have been no high-profile departures from the senior Hallgarten & Novum Wines team, only incomings. This remains very much their business to run and whilst the main Coterie business has attracted some high-level recruits, the “core culture and DNA” of Hallgarten remains firmly in Bewes, and his team’s hands, to manage.
Beverley Tabbron MW has been with Hallgarten close to 50 years
Steve Daniel and the rest of the senior Hallgarten wine buying and management team are very much parrt of Hallgarten's future following the Coterie deal
A team that can boast an average length of employment of around ten years. Bewes himself has racked up 15 years, with Beverly Tabbron MW way out in front on 46.
Key new additions to the Hallgarten team include Will Oatley, former managing director of Louis Latour Agencies, as commercial director; Julian Adcock, as head of channel national HoReCa and Joshua Butler, as business development director for regional off- trade, as well as bolstering the business with a new senior designer, PR & communications manager, three new brand managers and 10 new account managers across the country.
“We have looked to have balanced recruitment across the board to also include finance, customer service, logistics, marketing and operational roles. It is the spread of people in the business rather than necessarily the scale,” says Bewes.
He says they have been looking for people that exude “the Hallgarten ethos” and “get what we are about”.
But there is an “excitement” across the business, whether you have been there for years, or are new to the company “as success breeds success and growth itself is exhilarating”.
He accepts the pace of change has also “been challenging” for the overall team, which is why he has worked hard “to make sure they understand why we are doing the things we are”.
Thankfully the work that has gone on over the last 15 years within Hallgarten has meant the “fundamentals of treating everyone in the business as a grown up” has put it in good stead to manage all the change and upheaval over the last 14 months or so.
Foes to friends: The Coterie deal has brought Michael Saunders and Andrew Bewes together as part of the same team - rather than competitors in Saunders' long Bibendum years
The deal also brought Bewes and Michael Saunders, the chief executive of Coterie Holdings and former co-founder of Bibendum, together for the first time as colleagues, “rather than competitors” as they have been for the last few decades.
It’s not just Saunders, though, with so many of the senior Coterie management team being made up of industry veterans.
Bewes says it has been invaluable to have their expertise, knowledge, and experience to support as and when it is needed.
“Michael and Coterie have bought into the Hallgarten DNA,” he says. “They want to build on what is already here. That team element is really important to us. Which is why an event like our annual portfolio tasting is so important as it reminds everyone that this is what it is all about.”
Managing market demands
He also does not shy away from the fact much of the last year has been “challenging” in terms of the speed of change and growth in the company. Which has required everyone in the business to step up and be prepared to pull up their sleeves and embrace the upheaval rather than fight against it.
But that is also indicative of the market conditions everyone in the wine industry is having to work to.
“There is real pressure in the market on our customers and it is going to be really tough, which means we have to create our own enthusiasm and genuinely find ways to add value to their businesses. Every wine list and retail shelf in the country has had to change because of the new duty regime and we are going to see a big repositioning of wines between 12% and 14.5%. But we also have a responsibility to find alternative wines at those alcohol levels and work with our customers to introduce them,” he explains.
“We know vintage changes and the potential for a change in ABV and therefore price are going to be difficult, but it our job to manage that as seamlessly as possible. We are all in the same boat. You also have to remember a lot of our on-trade customers rely on us for 100% of their list so we have to make sure we do as good a job for them as we can. Which is also why we have worked so hard on the strength and breadth of our portfolio.”
He says if you take 20 wines on an average wine list then 10 of them might have to change because of the new duty system, so it is down to Hallgarten and its collective buying and sales teams to make sure it has the right alternative wines to fill those gaps at “key customer price points”.
It is why Hallgarten is also looking to push its automated IT systems and get as many customers as it can using its online ordering services. It offers speed of service for the customer and huge efficiencies for Hallgarten allowing them to pass this on to customers through keen pricing.
“For us it is all about efficiency, driving down bottle picks, optimising the number of deliveries for example, but there is no one size fits all solution. It is about having business discussions with customers to see what they can do to help us so that we can keep prices keen and maximise their margins.”
It has been an exciting but challenging year for the Hallgarten team - that now includes so many new, and familiar faces
Bewes also sees Hallgarten making far more use of technology and AI in helping to drive efficiencies across its business as it grows, and agrees these developments are hugely exciting.
But he has also great confidence in how the drinks and hospitality sectors are going to respond to the huge demands now placed on them.
He explains: “The biggest change in the last 10 years has been the professionalisation of the industries the wine trade supplies. Both hospitality and retailer operators have professionalised and their expectations of the suppliers they work with has risen accordingly.The industry Bewes joined 40 years ago was really very amateur and needed to change. Customers now expect a business partner rather than a supplier.”|
It’s why Bewes has worked so hard with his sales team to ensure it “fully understands the needs of their customers and their businesses”. “They need to know their P&L and understand what it is we can do to help them specifically. We need to understand what that venue offers and where we can fit into that. Our customer education and training programme, for example, is 50% about wine and 50% about front of house skills and confidence because this is what the customer needs.”
He adds: “Yes, we are seeing on-trade difficultly, and we fully understand the devastating implications on the costs of employment due to hit us all in April, but we firmly believe that wine sales can be part of the solution and their firm commitment to customers is to help drive their margins through creative management of their wine selection and front of house training.”
This is also a time when Hallgarten really has to live up to its own mission statement that “Hallgarten strives to be the premium wine supplier and business partner of choice”.
Whether it is how it works with its producer and supplier partners or on and off-trade customers being a “true partner is the key, we are not just in a transactional relationship”.
“We are a partner to build our customers’ business, drive margin, and to reinforce the wine category as a significant contributor to customer margin” he adds.
Group opportunities
The Coterie deal means Hallgarten is now operating in a much wider group that is covering all channels - including new ones such as supplying wines to luxury yachts with Global Wine Solutions
Similarly, the deal has also brought Hallgarten into the same family as Lay & Wheeler and Global Wine Solutions .The opportunity for the group is to see what synergies and efficiencies can be achieved under what Bewes refers to as the Coterie umbrella of “complementary collective businesses”.
The good news is all of its business areas are primarily operating in the growth areas of the industry - the premium and luxury end.
“As the group grows there will be more group synergies,” he adds, but says it is too early to say what, outside the portfolio, they are specifically, but there are “crossover” opportunities to explore. What Bewes is very sure about, however, is that Hallgarten will remain a trade-only supplier, supporting rather than competing with its trade customers.
Lay & Wheeler were customers of Hallgarten before the Coterie acquisition and, although now sister companies, the relationship between Hallgarten and Lay & Wheeler will remain very similar, with Hallgarten being one of a number of its suppliers, competing for listings alongside its competitors.
The advantages of the group, though, can be seen in how it is now far more attractive to a business like Bruce Jack Wines in South Africa. Where it can take advantage of its relationships with the major multiples for its commercial, branded wines, but also have potentially greater distribution into the premium, sommelier end of the on-trade for its top end wines.
That is the sort of relationship and producer partner that Hallgarten and Coterie are looking for, he explains.
Chef Raymond Blanc at Hallgarten's annual tasting
It is not interested in only taking a producer’s off-trade wines and not working with them on their premium restaurant offer - or vice versa.
“We are either partners or we are not,” he stresses. “We want to work across all channels with them. We are trying to align the needs of all channels, and we have to be able to manage and control that.”
It’s been an unprecedented year for Bewes and all the Hallgarten & Novum Wines team and you get the impression that only now are they starting to see the dust settle around them and come to terms with exactly what they have built up in that time.
There are also a lot more businesses to please and keep on top of, be it their producer partners or existing customers. The challenge - and opportunity - now is to find and recruit more customers that can take advantage not only of all the wines now in Hallgarten’s portfolio, but all the additional premium services the wider Coterie Holdings businesses can offer.
* You can read our interview with Andrew Shaw on how Coterie Holdings want to be the top power in fine wine here.
* You can read more about Hallgarten & Novum Wines here.
* Hallgarten & Novum Wines is a commercial partner to The Buyer. Click here to find out more.
