As it celebrates two years in business, online retailer WineTrust is already gaining a reputation for sniffing out great wines and bad business practice. Produce Business UK investigates how honest marketing really does pay dividends for retailers
For a retailer that’s offering honesty as one of its customer benefits, WineTrust picked its business name wisely, and it’s the company’s transparent pricing policy that is helping to gain not just off-trade but also on-trade customers.
The online wine trade has seen huge growth over the past decade. In 2005 industry research agency Wine Intelligence estimated the business was worth £170 million, but by 2013 the same agency valued it at £800m, an increase of 470%.
However, John Valentine, managing director and founder of WineTrust, believes there are still issues surrounding the marketing of wines by some online retailers.
Valentine, who started his career with Tesco during the Terry Leahy years and in 1996 launched RED, the UK-based marketing and public relations agency specialising in fresh food and drink, has a deep understanding of the retail landscape, and it's this knowledge that Valentine says has helped the company give its customers such excellent service.
“WineTrust is now two years old, and one of the aspects of wine retailing that consistently surprises me is how much dishonest marketing there is in the industry,” he explains.
“It’s endemic. Some retailers are artificially inflating their prices so they can publish lower ‘angel’ discounts; and as the wines are not on sale anywhere else in the UK it’s impossible for consumers to compare.
“It’s definitely something I’d like to see the Trading Standards Institute investigate. They have looked a lot at malpractice in the shops but they don’t seem to have done this for retailers who are operating on the web only.”
In contrast, WineTrust has a team of experts that meets at least 10 times a year to review its list, and whose job it is to agree what new lines it lists, and which ones come off the menu. The idea is to sell the very best wine in different price brackets, so if the site is offering a Muscadet at £10 the customer understands that The WineTrust believes the quality of that wine is the best for the money it’s charging.
The experts score each wine, and their opinions influence the pricing of each bottle. Valentine adds that they try to have a selection representative of the classic types available from across the world of wine, as well as some interesting wines that most would not usually be stocked. Included on the site are wines from Lebanon and Canada – not places automatically associated with producing great wine.
One variety the business champions is sparkling English wine, with three currently available on the site, including a 2010 Brut Reserve from the award winning Henner’s vineyard in East Sussex.
The UK has embraced the sparkling wine trend, with Wine Intelligence reporting last year that 21 million consumers sipped a bounty of bubbles from Champagne to Prosecco and Cava. Valentine says that in order for the English sparkling industry to take advantage of this trend it needs more marketing to raise awareness of the quality available.
“The English wine scene is extremely exciting. Some of the best English wines are absolutely superb, and it’s great to see these competing head-to-head with traditional Champagnes,” he comments.
“This fantastic quality and strong trend towards buying local products is fuelling the growth. However, the sector does require more marketing to build consumer awareness for it to reach its full potential.”
Another growing area is that of organic wine, and again WineTrust is building a reputation for stocking some of the most exciting bottles to come out of this method of growing and making wine.
“Many of our wines are organic, whether officially certified as such or simply produced using organic methods,” says Valentine.
“The specific type of wine makers we are working with – small, family, quality-oriented producers – want to produce their wines in the most natural way possible.”
The buying habits of WineTrust customers reveal an interesting picture of the way the British like to take their tipple, with the site selling more red than white wines, and consumers opting for great value wines for mid-week drinking, and more special wines for the weekend and entertaining.
Given the attention to detail, and the passion that is obviously poured into the selection of wines, once would expect the site to only offer premium priced bottles. Yet bottles start at £6, when bought as part of a case of six, and currently the most expensive wine costs just £38.
True value at competitive prices
Such is the competitive pricing, for hand-selected wines, that the retailer is comfortably growing its business at a time when supermarkets are using wine as one of the front line products in the continued price wars.
“Our business is growing substantially year-on-year with consumers who are looking for true value, which is the relationship between quality and price,” says Valentine.
“Our objective is to be the best value online retailer out there, with 52-week honest pricing and quality wines. The customers who are buying regularly from us understand this.”
Apart from the increased sales, surely one of the biggest validations for the retailer is the interest by the on trade customer, that is pubs, bars and restaurants, in WineTrust developing their offer.
“Increasingly customers in the on trade are also expressing an interest in our proposition, which is to have their wine lists developed for them by Masters of Wine,” confirms Valentine.
“We are increasingly being approached by restaurants and clubs to be a one-stop shop for their wine; and I see huge potential to develop this side of the business too.”
This certainly appears to be a smart move as figures from the Wine and Spirit Trade Association show that last year wine and spirit sales accounted for 41.5 % of all on trade business.
By developing a great wine offer, and a reputation for honest pricing, WineTrust is on the road to fulfilling its goal of being the best value online retailer in the UK.
For the second year running, WineTrust sampled some of its finest wines at the London Produce Show and Conference on June 3-5 at the Grosvenor House Hotel.