Within three years of Paul Schaafsma taking over Accolade Wines in the UK it is now the number one supplier to each of the Big Four multiples. It has, no doubt, helped him now become the chief executive of the entire global business. So who better to give a ringside seat to the changes and challenges facing not just the UK wine trade, but the world's wine industry.
NB: This is an extended version of the profile piece that appeared in issue four of Grapevine, published on January 6, I produced for the London Wine Fair.
The supermarket’s grip on the UK wine trade is as tight as Darth Vader’s stranglehold over any troublesome Stormtrooper.
We’ll leave the Star Wars’ references there, but it certainly helps paint the picture of quite how much control the country’s Big Four retailers have over the future of not just the UK wine trade, but the thousands of suppliers and wine producers around the world that supply it.
However, over the last two to three years, that stranglehold has been slightly loosened. The fall out from the economic recession has resulted in a very different consumer for the British supermarkets to deal with.
A more fickle, cash strapped, budget conscious consumer, who, armed with a smartphone, can tell who has the best deals available at the download of an app.
It has not taken them long to realise the likes of Aldi and Lidl have the cheapest shopping baskets on the high street. And the food and drink can be just as good as the big boys across the road.
Such a revelation has set the proverbial cat amongst the pigeons.
Changing UK wine scene
Now that the feathers are starting to settle the UK wine scene is a very different beast to one year ago, never mind two.
Each of the major UK multiples have cut hundreds of wines out of their ranges as they look to simplify their offer to compete with the scaled back, super efficient discount retail models.
But where there are losers, there are also winners and the big supermarket wine shakedown has created a Premier League of suppliers that will now be expected to raise their individual games in order to earn the right to play with them.
The biggest winner of the lot is undoubtedly Accolade Wines. Over the course of the last couple of years it has become the number one supplier to each of the Big Four multiples.
Which is an even greater achievement when you consider it has got to that position largely through re-positioning brands that have been on our supermarket shelves for years, and in some cases, decades.
Paul Schaafsma: looking after number one
Which brings us to Paul Schaafsma, the new chief executive of Accolade Wines, who first joined the business in September 2012 as general manager for the UK and Ireland and EMEA.
All down to brand power
So how has he got Accolade in to such a dominant position? Well it all comes down to what is usually wine’s greatest weakness, brands.
“Brands are the key,” he stresses. “The wine industry is crying out for brands.”
Particularly now the supermarkets have turned their backs on wall after wall of wine, with much more limited and tighter wine ranges.
He explains: “They won’t get it all right straight away, but consolidation of wine ranges is a good thing for the wine trade.”
He adds: “Brands now have to come to the fore. With all the changes taking place in the major supermarkets you can’t rely on price promotions any more.”
Accolade Wines just happens to have some of the biggest wine brands in the country. If not the world. But that does not automatically guarantee you success.
In fact, prior to Schaafsma’s arrival many of Accolade’s brands, whilst not exactly languishing, were certainly underachieving. Their performance in the last two years only goes to prove that.
Take Hardy’s. It has long been a top five wine brand in the UK, but on the back of a global re-launch in 2013 it has gone on to a level not seen before in the UK branded wine market.
In 2015 it was some 30% bigger than any other wine brand in the UK with a 5.7% share of the market ( Nielsen 52/we April 26, 2015). The brand increased its sales by over 10% in the year and was already worth £316.5m in the UK off-trade, selling more than 60m bottles, up to April 2015 (Nielsen), selling six million more bottles than in 2014.
So what’s the secret?
For Schaafsma it’s all about following and implementing good FMCG principles.
Treat a brand like it is the best thing on the shelf and people will pick it up. In the same way we turn to Persil, Walkers, Nescafe, Coca-Cola, Kellogg’s in all other parts of the store.
“Consumers have been confused by wine and are looking for solutions. They are looking for confidence in brands,” he explains.
Big brands are big business. They are in our face. They are on the TV, the radio, the billboards. They become part of our lives.
We understand and buy, literally, in to their values. We like what we see and go out and buy it.
But that’s the key. We have to be able to see it first before we even know we like it and that’s historically been the problem for the wine trade.
The vast majority of wine brands can’t afford the level of investment that allows enough consumers to see it in the first place.
So in order to stand out on shelf it is the big 50% off price tag or three for £10 that gets consumers picking it up. Not the fact it is a brand in its own right.
Hardy’s enjoyed its unprecedented success in 2015 on the back of its high profile advertising support of England cricket team and the exposure a dramatic Ashes wine over Australia that brand marketing dreams are made of. A campaign said to have been in the region of £4 million.
But crucially the execution of its English cricket sponsorship has been a masterclass in what is already a highly acclaimed field of sports sponsorship.
Blanket advertising across Sky Sports and on pitch advertising were backed up in-store with new wines and ranges
It resulted in Accolade selling 1.5 million more bottles of Hardy’s wine in the summer alone.
Noticeably Schaafsma has backed up the acquisition of Accolade’s first Chilean brand, Anakena Wines, with a three-year deal to sponsor the Lawn Tennis Association and British Tennis and will get high profile branding opportunities at Queens and Wimbledon as a result.
“Our supermarket partners want brand awareness for the wines they sell and we have done that,” says Schaafsma. “We have demonstrated our strong commitment to brands.”
Getting what he wants
Now you don’t get to a position like chief executive of Accolade Wines without stepping on a few toes and Schaafsma has a reputation of not suffering fools and being pretty ruthless in getting what he wants. But is there a chief executive out of there who is not?
He certainly appears to have a formula in getting what he wants when it comes to driving the big brand message in all the main markets he is operating in.
Another feather in Accolade’s cap is that it claims to be the world’s largest supplier of premium New World wine. To do so Schaafsma has been quite happy and prepared to go up against the majority view, the generic body and trade associations in those respective countries, in order to put across Accolade’s view that brands are best.
Schaafsma first cut his teeth on brands with McGuigan Wines. Another Australian wine brand, from another major Australian wine family, owned by mega wine producer, Australian Vintage.
During his time at Australian Vintage he lobbied Wine Australia hard to concentrate its resources and efforts on promoting the country’s big wine brands.
To do so meant putting himself at loggerheads with many senior and popular figures in the Australian wine industry.
For it was at time when Wine Australia, and the bulk of its smaller members, wanted to talk about regionality and the diversity of its winemakers. Big brands were seen as the antithesis to what good Australia was trying to do.
The wider debate has not gone away, but even Schaafsma’s biggest distracters would struggle to argue against the impact and importance big brands have had in turning Australian wine fortunes round.
He is currently going through the same debate with Wines of South Africa, which is at a similar stage in its history where the trade and media interest is in the smaller, diverse and exciting wines being made there.
Whilst Schaafsma recognises how important that is to the overall story about South Africa, and with chief winemaker, Bruce Jack and Flagstone Wines is going some way to contribute to it, he is also adamant the country needs bigger brands if it is really going to make a mark on the international stage.
It will be interesting to see what he now does with Chile having taken over the Anakena brand. We can expect to hear similar calls for Brand Chile and Wines of Chile to stand up and make a difference.
FMCG mindset
There are not many Paul Schaafsmas in the global wine trade. Someone who thinks brand and consumer first, and is always on top of the bigger picture. Yet such attributes would be ten a penny in mainstream FMCG sectors.
There is certainly an element of the campaigner in Schaafsma. Whenever I have interviewed him over the years he always has an agenda, a story he wants you go to away with.
It might sound an obvious thing to do, but he is one of the few in the higher echelons of the wine trade to recognise the importance of the press, and the trade media in particular.
Brands vital in driving new categories
He is also recognised the role of brands in truly driving new categories of wine with the consumer.
Take Echo Falls Fruit Fusion. For years the wine trade has struggled to come up with a brand that really captured the imagination of the consumer when it comes to marketing lighter styles of wines.
But Schaafsma and Accolade development team realised it was not wine per se they were looking for, but a sweet flavoured alcoholic drink that was easy to drink on a night out. Just like a flavoured cider or a fruit cocktail.
He explains: “We have to give consumers flavour profiles they can understand and relate to."
He adds: “The real challenge facing the wine industry is how do we get to 18-25 year olds. We are competing with sweeter taste profiles of ciders, beers and cocktails.”
It’s wine Jim, but not as we know it
Accolade’s Echo Falls Fruit Fusions range has demonstrated quite how powerful brands can be in taking the consumer with you.
You only need to look at its sales figures to realise that. In its first year from launch, at the end of 2014, it has sold over 1 million 9 litre cases. All from a demographic that normally does not drink wine never mind engage with it.
The Echo Falls Fusion Facebook page had 700 likes before it was even launched.
“We now have a brand that people feel comfortable with,” he stresses.
Big picture, little picture
As he now takes on the reins as chief executive it will be interesting to see how much he is able to look at the micro issues taking place in each key market with the major global challenges he now faces as the big chief of Accolade Wines.
But, he stresses, his predecessor, John Ratcliffe, has left him with a full hand of opportunities.
“It is a business with a lot of opportunity. We are the leading branded wine company in the world for premium New World wines. We have a good platform in Asia, good growth in the UK, Europe and Australia and have great opportunities in the United States.
“We saw 7% year-on-year growth in the UK and double digit growth globally,” says Schaafsma.
He says he plans to spend two weeks in the UK and two in Australia, but unless he is prepared to give up one weekend in two he is going to be spending two to three days a fortnight up in the sky.
But then he has become used to being a high flyer.