Running the UK’s largest wine company in a declining market is tough. But as Paul Schaafsma says, enabling a business to thrive in difficult times isn’t rocket science. And the energetic Aussie, who was parachuted into Accolade Wines by its PE group Champ in September 2012 to turn around the former Constellation Wine’s UK and Australian business, has made some pretty smart moves so far.
Schaafsma’s ambition was to create a culture “all about the customer and consumers, and putting them at the heart of everything it does.” So how has he gone about achieving this? Is the strategy working? And what’s next for the business?
“This isn’t brain surgery - we’re all here to do a job and if you work hard and are transparent and honest with people, then hopefully things will work out”
One of his first decisions was to “right-size” the business, embarking on what he describes as a painful but necessary journey to flatten the structure, promote greater cross-fertilisation of ideas and instil a more flexible approach geared toward the strategic rather than transactional.
“We’re doing what some smaller companies have done quite successfully, with a flatter structure and a small team - embracing that quick, responsive mentality within a larger business, so we can be as agile and competitive as some of those smaller, niche suppliers,” he explains. “I don’t want [Accolade] to be perceived as a big battleship that can’t react - and I don’t think we are any more.”
supermarkets are looking to deal with fewer partners - and ones that can offer insight and guidance for the category as a whole, he points out. “The days of negotiation and Mexican standoffs are over - it’s got to be a collaborative way of working for everyone to succeed.”
Name: Paul Schaafsma
Job title: General manager, UK Ireland and AMESCA, Accolade Wines
Lives: Clapham Common
Status: Married with four children (11, 10, 7 and 5)
Hobbies: I love spending time at home with family. Sailing used to be a great hobby - but it is too cold in the UK. I also like watching cricket and rugby, and cooking, when time permits.
Favourite food: My grandmother was Italian, so gnocchi with meat and tomato sauce, slow-cooked for six hours.
Favourite wine: At the moment, I’m loving cabernet, so I’d choose Hardys HRB cabernet sauvignon 2007.
Business mantra: There needs to be a commercial intensity and energy and hopefully I bring that. I am passionate about relationships - and I try to lead by example and lend my experience to everything in the business. I don’t like losing.
Idea of a good night: I love hosting dinner parties, so 12 people for dinner at home with great food, great conversation and great wine.
Favourite films: Goodfellas or The Godfather - there’s a theme there!
This new approach means there’s greater potential for longer-term alliances between retailers and suppliers, he believes, citing Accolade’s groundbreaking three-year JBP with Tesco, which has seen it take on packaging for much of Tesco’s branded, exclusive and own-label wine, as well as working with the retailer in Asia and Central Europe. Accolade has also started bottling some of Morrisons’ own label.
The benefits of long-term planning work both ways - the supplier can start planning what grapes are needed and how many as far back as the vineyard, enabling it to deliver greater value for the retailer and consistency of supply. And where Accolade leads, Schaafsma hopes the industry will follow.
“As the largest wine company in the UK, if we can lead the way in that type of collaboration it should help the rest of the industry,” he says.
Collaboration on category management is just part of the equation, however. Celebrating the 160th anniversary of UK number one wine brand Hardys with a £10m revitalisation programme involving new tiering, a national ad campaign and a three-year sponsorship deal with English cricket, Schaafsma is determined to bring down the level of promotional activity - particularly on the Hardys brand - and boost the average price per bottle to a more sustainable level.
“We can’t just turn on £5.50 in six months’ time, but the fact that Hardys has come from £4.75 to £5.17 in 18 months is fantastic,” he says. “We’ve seen deals reduced by 10.5% year on year, while the average price across the off-trade is up 5% to £5.17.”
This is, he feels, better for the category in the long term - and appears to be paying off already for Accolade brands. Three of its top 10 brands saw growth, with Hardys rising 12.6% on volumes up 6.4%, South African brand Kumala up 35.8% on volumes up 34.4% and Banrock Station up 21.2% in value on volumes up 13.4%. [IRI 52 w/e 1 Feb 14]
Wine at the heart of the business
Another priority for Schaafsma is ensuring wine is still the focus. “It’s easy to get caught up in the fmcg side of the operation, but we are a wine company and need to remember that,” he says - though this renewed focus is far removed from the fusty image of old.
“Some parts of the industry get caught up in the tradition of wine, but at a commercial level we should be thinking about how we package wine and the styles we produce,” he says. With cider continuing to snap at its heels Accolade recently introduced a new range of fruit-flavoured wines under its Californian Echo Falls range.
Packaging innovation is next, Schaafsma says. As well as an “exciting” new premium bag in box, a new filling line being installed at the Accolade Park bottling plant at Bristol will not only boost capacity from 19 million nine-litre cases to 26 million, but cater for a multitude of shapes, sizes and weights. “Each year we need to improve our packs and do something additional for consumers to make them want to buy,” he says.
The final piece in the jigsaw - the ultimate Accolade, if you like - is acquisition. Having secured a £180m global refinancing deal in late March, Schaafsma is cagey about industry speculation. The company bought Californian winery Geyser Peak in June 2012 and New Zealand brands Mud House and Waipara Hills in November.
“In terms of further acquisition, I’ve nothing to comment on yet - but we’ve openly said we want to be a New World one-stop shop solution,” he says. “The important thing is that Champ has stated its intentions to invest, which is very encouraging.”