As the dynamic head of Conviviality, Diana Hunter has managed to turn a budget high-street retailer into the most powerful wine company in the UK – and the most influential operator in the on-trade to boot. Chris Losh finds out how she did it, what it all means to you, and what might happen next
A year ago, it's safe to say that hardly anyone in the on-trade had heard of Conviviality. Not surprising, perhaps, since 12 months ago, it was, as owner of Bargain Booze and Wine Rack, a peddler of plonk to the off-trade and a million miles removed from the rarefied world of hospitality.
Then, in September, it bought Matthew Clark for £200m. Barely had the trade got its head round this game-changing move than it followed it up with the £60m buy-out of Bibendum PLB in May this year.
Bibendum will not become Matthew Clark, and Matthew Clark will not become Bibendum
In not much more than six months, this corporate double-whammy had made Conviviality the biggest operator in the UK's wine world by some distance, with a powerful presence in the high street and across every aspect of the on-trade, from pubs to events, and national chains to white tablecloth.
The person responsible for this dramatic rise is Diana Hunter, the CEO of Conviviality, a woman with gifts of forensic analysis that Sherlock Holmes would be proud of, and a clear penchant for Getting Things Done.
'When I joined three years ago, it was very clear that we were an alcohol wholesaler who was only serving one group of customers,' she says of an operation that was, at that time, just Bargain Booze.
Well – it didn't stay that way for long. If the decisions to expand the off-trade operation geographically from the company's north-west heartland, and to add a top-end retail arm
in the form of Wine Rack, were both pretty straightforward, the move into the on-trade was rather more radical.
Common thinking has it that the on- and off-trades are as unmixable as oil and water; the Lampard and Gerrard of the drinks world. Yet Hunter simply blasts her way through such tangled prejudice.
'We went back to that first observation,' she says, 'that we're an alcohol wholesaler only serving one group of customers, [the off-trade] and asked, so how do we extend our reach. That's when we started to look at the on-trade.
'It was clear that to access the on-trade organically would have been incredibly difficult, therefore our only route in was through acquisition – hence Matthew Clark and then Bibendum. If you look at the business today, we've gone from being an alcohol wholesaler to franchisees in the off-licence and convenience market, to being a wholesaler not only to franchisees, but to 25,000 outlets.'
No wonder, perhaps, that if you canvas opinion on Hunter within the trade, the answer is pretty much universal. Words such as 'driven', 'focused', 'formidable', and 'impressive' crop up regularly – albeit through gritted teeth in the case of her rivals. There is acknowledgement of a woman who, rather than throwing money around carelessly, has spent the sizable pile of investment cash to maximum effect – and with a clear overall plan.
Two is better than one
The on-trade, of course, tends to be suspicious of larger companies – not always, it must be said, with good reason. Most restaurateurs I've spoken to are mildly sceptical about the tie-up of two of the wine trade's most influential operators.
Our only route into the on-trade was through acquisition. Now we're a wholesaler to 25,000 venues
Yet the message from Conviviality, Bibendum and Matthew Clark has been utterly consistent: the two merchants will continue to run completely separately, with any benefits taken where they naturally occur, rather than the companies having synergies thrust upon them.
'Each of the brands has a role to play,' says Hunter. 'Bibendum will not become Matthew Clark, and Matthew Clark will not become Bibendum. We have bought Bibendum for very valid reasons. It has significant expertise, and a distinct group of customers that it will continue to serve. We're not about to erode the value that we saw when we bought the business.'
Whenever wine merchants merge, there is inevitably a certain amount of portfolio bleed, as duplicate wine lines are junked. After all, how many different Chablis suppliers does a company need?
Currently, Bibendum's Andrew Shaw MW is working with Matthew Clark's wine controller Laurie Davis to reshuffle the portfolios where necessary. But Hunter is adamant that there will be no bonfire of the suppliers.
Diana Hunter's CV
2013-present CEO of Conviviality
2004-2013 Director of store development then convenience director at Waitrose. Rolled out the Little Waitrose chain
1991-2004 Held various roles at Sainsbury's, including leading investment programmes and heading up the format development of Sainsbury's
'When you are an alcohol wholesaler with the number of customers that we have, it's really important that those customers feel they have a choice, and that they have differentiation either for their formats or their outlets,' she says. 'So we won't be going through a process where we do significant review of individual SKUs. It really matters to us that our customers have choice. And it really matters to our customers that they feel they are getting the expertise and advice from our business around those choices.'
Pooling of expertise, in fact, is one of the undoubted benefits of the merger. By operating across broad swathes of the on- and off-trade, the company will be gathering quite exceptional data on the consumption habits of the great British public over the coming years.
'We have unique access to how the consumer across the UK is either shopping for alcohol or consuming alcohol in a number of outlets, whether bars, restaurants, hotels, festivals or events,' says Hunter. 'So we can be hugely beneficial to the customers that work with us about how to select the right ranges and tailor it to their specific needs, whether that's by format or by location or by venue.'
When news first broke of Conviviality's acquisition of Bibendum earlier this year, cynical hacks such as myself spent hours trying to find weaknesses in the deal, and came up empty handed. It soon became obvious that this was – incredibly, for a transaction of its size – a merger with very little cross-over.
Matthew Clark was strong in the regions, Bibendum's heartland was London; Matthew Clark was more about larger national accounts, Bibendum venues were typically single outlets or smaller groups, lesser in size and rather more wine specialised.
'It's one of the reasons why Bibendum PLB was so attractive to us,' she says. 'I did not see duplication in any of the business units. I only saw complementary fits.'
That said, it wouldn't be surprising if the two event-supplying sides of the business, Peppermint Bars (which Conviviality acquired last year) and Bibendum's Wondering Wine Co were merged into one entity in the near future, while the exact role of Bibendum's indie/wholesale arm Walker & Wodehouse might be up for a review as well.
On the whole, however, it's extraordinary quite how good a fit these two companies are, and Diana Hunter is justifiably excited at the thought of having created something close to a one-stop shop for the entire on-trade.
'If it was me running a restaurant, I'd be looking to Bibendum or Matthew Clark to fill the gaps that I've got in my range,' she says. 'I'd rather have one go-to person than lots of people, because that takes time and it's expensive.'
For the on-trade, the thought of having such a vast number of wines available from one supplier is enticing. Their combined wine portfolio is 6,500, including around 1,600 each from Bibendum and Matthew Clark.
And there's no shortage of good stuff. Bibendum won New World Merchant of the Year in this year's Sommelier Wine Awards, while Matthew Clark picked up Fine Wine Merchant of the Year. Between them, they garnered over 250 medals, and over 70 Golds.
Diana Hunter on…
Entering the on-trade
'We are not a retailer – we are an alcohol and impulse wholesaler to people who then re-sell. When you remember that, that's when [the Bibendum purchase] becomes quite an obvious progression.'
'We have bought Bibendum for very valid reasons. It has significant expertise, and a distinct group of customers that it will continue to serve. We're not about to erode the value that we saw when we
bought the business.’
Their attraction to suppliers
'Where a supplier wishes us to extend distribution we have a much larger platform to work with than we would have done had we remained as Conviviality Retail, Matthew Clark, or Bibendum PLB.'
'We expect to only pay the same price for the same product across the group. That's only fair and reasonable. It's how any business would approach the cost of goods.'
Logistics and distribution
'If you're a franchisee, a large regional chain or a national account, you want to ensure you have consistent availability and service, no matter where you are in the country. Having a nationwide next-day delivery distribution chain is really important to us.'
And yet arguably the biggest benefit of this merger to Imbibe's readers is logistical, rather than portfolio-driven. Conviviality now has 16 depots across the company and, thanks to Matthew Clark, a fleet of delivery vehicles as well. Shrewdly, they have recently taken on a former top bod from DHL to review their logistics.
The plan, clearly, is for Conviviality-owned vans to be dropping cases from Matthew Clark and Bibendum on the same run – ideally even to the same venues – daily. The company hopes to have this going by autumn.
It's an enticing vision, and one that would go a long way to addressing the single biggest gripe of many on-trade operators: that their suppliers are too often unable to deliver what they want when they want it. In the days of shrinking wine lists and consolidation of suppliers it's a particularly powerful argument.
'Many restaurateurs don't want to carry large cellars because that costs money. We can become their cellar,' says Hunter, who explains that, down the line, the plan is for the two companies' salespeople to be able to do a certain amount of cross-selling.
'If you were buying your wines from Bibendum but your beers and spirits from elsewhere, there's naturally an opportunity for your Bibendum account manager to bring in the Matthew Clark team, provided it's appropriate to that account – and the opposite is true as well,' says Hunter. 'It opens up a much wider portfolio that those customers can have access to.'
To increase co-operation, the sales teams from Bibendum and Matthew Clark have apparently been doing 'speed dating' to get to know each other across the country. While Hunter says that it's 'going brilliantly – we couldn't be happier', sales people are famously tribal and protective of their patch, so it might be a while before the two teams are genuinely working together.
That said, the ability to think the unthinkable then make it happen seems to have characterised Diana Hunter's whirlwind three years at the helm of Conviviality thus far, so it would be unwise to rule anything out.
And while the company maintains that it is not actively looking to add any more strings to its bow, I'd be amazed if there aren't more purchases over the next 12 months.
We continue to review the market. Standing still is never an option
European Food Brokers (owners of Oddbins, among others) might be on their radar, and I wouldn't entirely rule out the possibility of the company dipping its toes into the pub world either.
'There's no doubt that we continue to review the market,' says Hunter. 'We must. It's full of constant change, so standing still in my view is never an option. We will always keep a keen eye on the market – and we know that our competitors do. So we will settle the business down, but always be mindful of what is happening out there.'
The on-trade might not have known of Diana Hunter or Conviviality a year ago, but they're unmissable now. And we certainly haven't heard the last from them either.
Conviviality by numbers
Total wines: 6,500, with 3,200 on-trade lines
On-trade venues served: 23,000
Off-trade stores: 716*
No of regional depots: 18
No of delivery vehicles: 260+ (with several hundreds more operated by trade teams)
Strengths: Distribution, range of portfolio, consumer data
Weaknesses: Very few. Some duplication in various areas. Possible discontent from some venues or suppliers
*Franchised and owned