Copestick Murray uses ingenuity to adapt to a changing UK marketplace

Wednesday May 09 2018 by Sharon Nagel

Robin Copestick, director of British import and distribution company Copestick Murray : 'Consumers are more comfortable with grape varieties but the wine proposition is still complicated. They wanted simple, inspiring wines.'Robin Copestick, director of British import and distribution company Copestick Murray : 'Consumers are more comfortable with grape varieties but the wine proposition is still complicated. They wanted simple, inspiring wines.' - Photo credit : Copestick Murray
Robin Copestick, director of British import and distribution company Copestick Murray, explains the major challenges currently in the UK market and how the company is tackling them.

Described recently by the director of Accolade as “the sleeping giant with enormous untapped potential”, the British wine market is quite clearly in a state of flux and transition. Consumers are increasingly favouring quality over quantity, forcing firms to demonstrate ingenuity and listen more closely to what their clients are telling them. Robin Copestick, director of import and distribution company Copestick Murray, explained the major challenges currently in the UK market and how the company was dealing with them.

 

You are now wholly owned by Henkell. What implications has this had for the business since Henkell bought a stake in the company in 2013?

Henkell has brought us financial stability and backing. It also gives us access to good wines and has led to increased growth. Our turnover in 2013, before Henkell bought a stake was 15 million, rising to 55 million last year with sales of 33 million equivalent bottles. This growth could not have been achieved without Henkell.

 

In November last year, you acquired a controlling stake in the online retailer Slurp. How do you see the way forward for online wine sales in the UK?

Online and digital technology will be very important in the future. The purpose of buying Slurp is less in terms of volumes and more about understanding consumer behaviour and what consumers want from us. We want to help Slurp grow – their sales are relatively modest still from a customer database of 20,000 - and we want the acquisition to help us sell to other consumers. The weakness of the UK trade is that we don’t understand what consumers want.

 

You have been very successful with your iHeart brand. What are the key components that have made this brand successful?

There are several reasons why the iHeart brand has been successful. We did consumer research in 2010 and 2011 to find out what consumers wanted. We found out that heritage and country of origin were not important. Consumers are more comfortable with grape varieties but the wine proposition is still complicated. They wanted simple, inspiring wines. In 2017, over 15 million bottles of iHeart wines were sold worldwide to 25 countries, including destinations such as the Netherlands, China and the Republic of Ireland. There is definitely something very real behind the brand and we have the potential to develop it in countries similar to the UK.

 

Where do you source iHeart?

From everywhere. The whole idea of the brand when we created it was that we knew that Pinot grigio and Prosecco were popular, as well as Sauvignon blanc and rosé. We have a winemaker and a buying team and every year we just find the best wine from any country that wants to offer us the wine and can supply it to us for the best price, provided we are happy with the quality.  The one thing we discovered in our consumer research is that our consumers are a lot less worried about where the wine comes from than we all thought. Country of origin was very low down on their list of priorities, so that gave us the confidence to have a very flexible buying policy.

 

Have the global wine shortage and price increases at source encouraged you to change suppliers?

We have changed them a few times in the last five or six years. We are very open. Clearly with grape varieties such as Pinot grigio, there are only a few countries that produce it at the right price and the right volume. But there is a lot more flexibility with varieties like Sauvignon blanc, Cabernet-Sauvignon and Shiraz.

 

Do you have plans to replicate your success with iHeart in other projects?

We do have a couple of brands in the pipeline at the moment that we are developing along similar lines, maybe going up a few price points. I do think there is room for traditional brands that do have heritage but I also think that more lifestyle brands like iHeart seem to be grabbing the attention of consumers, making wines more fun, less intimidating and more approachable. iHeart does grape varieties that are already popular – we have an idea for a brand that will help people explore less well-known grape varieties. I hope these plans will come to fruition in the next six months or so.

 

Many observers are pointing to a surge in private label sales. Would you agree with this and if so, what are the drivers in the UK?

I would agree that they are successful but I wouldn’t say they are more successful than they have been previously. When I worked for Australian firm McGuigan, before setting up Copestick Murray, we did lots of private labels. They’ve always got a place because they give the retailer some flexibility on price and margin whereas with brands, retailers feel that they have to be at a certain price point and they can’t have their competitors being less expensive than them. Private label just gives them some security so that they know that a) they can dictate the price and b) they can influence the quality and the style of the wine more than they can with brands. Perhaps private labels are coming to prominence a little more. If you look at the statistics, two of the biggest selling brands of Prosecco are private labels – one is Tesco and one is Asda.

 

Copestick Murray distributes the popular Mionetto Prosecco brand. Do you see an end to Prosecco mania in the UK or is Prosecco here to stay?

I don’t think the level of growth for Prosecco can be sustained. But I think that certainly for key Prosecco markets like the UK and the US, Prosecco has found a place, in the same way that Champagne has, and that’s very good for Prosecco. I think that people’s drinking habits of sparkling wines have changed. They used to be for celebration and now if people feel like enjoying a glass on a Monday, they open a bottle. That has changed very much and the figures reflect this. I think Prosecco will be very strong in the UK for a long period of time and I can’t actually see what can replace it on the basis that drinking sparkling wine remains very popular because there are only a few drinks that have the volume and style and the price point that can compete with Prosecco. Cava, which is already strong in the UK, is one of them and it’s not impossible that Cava can compete with Champagne. A lot of people are talking about Crémant. I think Crémant is great, it has a very nice style and I can see how it works but it’s never going to have the volume or the price point that Prosecco has.

 

Do you see an increase in the popularity of Crémant?

I definitely do. I think that’s due to the fact that people in the UK are so open to trying different styles of sparkling wine because it’s such a popular drink. People are very happy to change and a lot of it is down to the retailers. They govern the distribution and if they give Crémant some good distribution, then I can see it increasing markedly in the UK.

 

Eastern Europe is being touted as a viable, cheap alternative source for wine. Are you tapping into the region for your wines?

I’m fairly certain that we are the biggest importer of wine from Eastern Europe in the UK. Henkell own one of the biggest wineries in Hungary, called Torley and we buy a lot of wine from them and source some of our iHeart wines from them. We do a lot of work with a Romanian winery called Cremele Recas. One of our buyers recently went to Moldova. Eastern Europe is making an extremely good quality of wine. They offer good prices and the varietals the UK consumer likes and also have very interesting indigenous varietals that I’m sure will become very popular in time. So it’s a very exciting area for us. I definitely see more wines from Eastern Europe making their way to the UK.

 

Is France regaining popularity in the UK?

It is for Copestick Murray. I’m not sure that the image of France has changed with the consumer unfortunately. We bought a wine importer called Free Run at the end of last year and their expertise is in France. Copestick Murray was quite weak in France so it’s opened up access to some very good suppliers in Champagne, Burgundy, the Rhone, the Loire and Beaujolais. So as a company, we are taking France very seriously and already have new listings. I’m very excited about working with French wineries again.

 

Your 2016 profits bore the brunt of Brexit and the devaluation of the pound. How do you see Brexit affecting your company in the near to midterm?

Brexit has definitely cost us money in terms of profitability, basically because of exchange rates. I can feel that there will be more disruption if Brexit goes ahead. It’s going to be more difficult, but it is our job to manage those complexities. I do feel that whatever happens, the UK will be fine. We’ve always proved that we are resilient and entrepreneurial and we’ll find ways to get things done. Obviously, being part of the Henkell group, I just hope that whatever happens with Brexit, products from Europe are not unnecessarily penalised and supply routes and trade agreements remain open. I’m sure there are going to be complexities ahead but we will find a way around them.

 

What are your plans for 2018?

We are launching at least two new iHeart lines – iHeart Provence rosé and iHeart Champagne are coming out. We are definitely going to be doing more work with France as a business. Generally, we are in a good place and are very optimistic. We’ve already had a great start to the year. There are lots of confirmed new products with many customers. I’m sure it’s going to be a good year for Copestick Murray.

 

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