Remember that British spin doctor who infamously described 9/11 as 'a good day to bury bad news'? Well, I don't know who put together the announcement for the Bibendum PLB purchase by Conviviality, but they could hardly have timed it better.
The story broke on bank holiday Monday, less than 24 hours before the London Wine Fair. This ensured that everyone in the UK booze world knew about it, but not in any great detail, and all but guaranteed that practically every single conversation at Olympia was prefaced with ‘What do you think about Conviviality and Bibendum, then?’
What I think about it, for the record, is that it's a bold move. Despite their size, there's relatively little overlap between the two businesses, with Matthew Clark specialising in national on-trade accounts, and Bibendum much more single-venue and London-focused.
For Conviviality, acquiring PLB, in particular, adds a very definite extra string to its bow, whereas from Bibendum’s point of view, having access to a company-owned fleet of delivery vehicles and 14 regional depots ought to remove (or at least ease) one of the biggest problems for all wine suppliers: logistics.
'Better customer service is what [Conviviality] are focusing on,' said Michael Saunders, Bibendum PLB’s CEO. 'The last mile to market is very expensive and intrinsically complicated.'
Few in the on-trade, I'm guessing, would argue with that. The ability to get what they want, where and when they want it remains a bugbear for venues from the Savoy to the Dog and Duck on the High Street.
The interesting thing about Conviviality now is that it can supply literally anyone, from big pub groups to small restaurants, on-trade chains to supermarkets. Plus, of course, it owns Bargain Booze and Wine Rack.
Just five years ago people used to talk about the likes of Gallo, Constellation and Accolade as power players. But in under a year Conviviality has raised the stakes to a whole new level. The Matthew Clark deal, let’s not forget, was only completed in the autumn…
Broadly, then, this is a big – and decisive – deal. But there are one or two questions.
Matthew Clark, for instance, has been making a real effort over the last two years to talk up the upper end of its colossal portfolio. It's not an idle boast, either. It picked up a hatful of expensive medals in the Sommelier Wine Awards and was rewarded with our Fine Wine Merchant of the Year Award as a result.
These wines, needless to say, are far more white tablecloth than national chain oriented, so I'm not sure where this deal leaves that side of the portfolio. Michael Saunders assured me that there would be 'no portfolio bleed', but I don't think there's ever been a purchase in history that didn't see some innocent parties injured in the fall-out.
Arguably the biggest factor at play here, however, is what it means for the remainder of the wine trade. Competitor merchants who I spoke to this week were remarkably gracious about the deal; almost jealous, in fact.
They recognise, I think, that for all but the smallest players the days of operating solely in one area (on-trade/supermarkets/independents etc) are, if not gone, then certainly numbered. And it’s only through mergers and acquisitions that companies will find the necessary extra skill-sets to add on to their current specialisms.
Enotria&Coe, I'd say, are clearly gearing themselves up for a sale (or acquisition) in the next year or two and mid-size merchants like Hallgarten, Liberty, Berkmann et al are sure to be considering their options. Meanwhile, north-west giants Boutinot are, I'm sure, an attractive partner for London-centric operators.
This, in other words was a bold move. And though nobody saw this particular deal coming, it’s part of a trend that the trade has recognised for a while.
Indeed, arguably the biggest side-effect of the Conviviality/Bibendum deal is that it will make similar deals both more likely to happen, and more likely to happen soon.