Taking more grocery staples to market is a big challenge for one food broker. Liz Hamson reports
Nobody will convince me that RTDs are a weakening market,” says John Black, the managing director of SHS Sales and Marketing in response to suggestions that the disappearance of Hooch and Gordon’s Edge from the market heralds its decline. “It’s a sector that’s here to stay,” he insists.
When it comes to WKD, the vokda-based drink it launched in partnership with Beverage Brands in 1996, he has a point. Last year the food broker, or “brand builder” as Black prefers, helped push up the brand two places in The Grocer’s Top Products survey. With a 38% sales increase [ACNielsen] it reached third spot, behind Smirnoff Ice and Bacardi Breezer.
It is not the only coup that the gregarious Scot, who is also a member of the president’s fundraising committee for industry charity Caravan, pulled off last year.
Black heads up SHS Sales and Marketing (GB), one of five operating companies within the privately owned SHS Group. Founded in 1983, the company bills itself as a one-stop shop offering sales and marketing, distribution, financial solutions, logistics and customer services mainly to drinks brands, secondary brands and overseas brands hoping to crack the UK market. Its stable includes Danone, Nurofen and Optrex but it is predominantly drinks focused and remains the only food broker with an on-trade division.
That it is the fastest growing company within the group, contributing £210m to the group’s £250m turnover in 2002, is due to the success of brands like WKD. If Black had a mantra it would be “distribution, distribution, distribution” and thanks to his team’s ability to push the brand out through on-trade as well as off-trade channels, volume sales of the RTD, which now comes in three varieties - the original Irn-Bru variety, Blue (launched in 2001) and Silver (launched in 2002), were up 18% in 2003 on 2002.
Black disputes suggestions that because SHS Group owns Beverage Brands, SHS Sales and Marketing must have more of a vested interested in RTD brands than the others it handles. “SHS Sales and Marketing is not a brand owner,” he says. “Beverage Brands is [a client] and we have the same relationship
with it as we do with Douwe Egberts.” He adds: “Our role is to get WKD maximum distribution across all sectors. Beverage Brands’ role is to invest above and below the line in the brand.”
A cursory look at the figures for some of the other brands handled by SHS settles Black’s case. When SHS took on Douwe Egberts in 1998, the coffee brand had a strong presence in the multiples but a paltry 4% share of the independent sector. That has since grown to 40%. And it looks as though it is going to be a similar story with Cobra, the Indian beer that SHS has handled since October 2002. Unusually the beer was seeded in Indian restaurants, where the brand has almost 90% penetration.
Black’s team set about pushing the beer into new arenas such as wholesale, cash and carry, impulse and on-trade and capitalised on an imaginative marketing campaign, in which Cobra adopted a stylish new packaging and launched an eye-catching TV and cinema campaign.
Now, almost a year on, the results speak for themselves. Total year-on-year sales were 66% up in the 12 months to October 2003 compared to the same period in the previous year, according to the company.
Securing broader distribution is the name of the game and Black sees the company’s private status as a particular asset. “It allows us to make decisions faster than other people,” he boasts, pointing out on a more prosaic level: “The profit margins would be hugely unattractive for a plc.”
In time, Black would like to take on more staple grocery brands. “Our challenge is to go down the grocery route,” he says. It has already made a start and last December was appointed by Jordans Cereals to represent it in the wholesale, cash and carry, independent and impulse sectors. So next month, expect to see smaller pack sizes hit the convenience and independent sectors as part of activity supported by a £3.5m marketing spend.
But for now, Black, a die-hard rugby union fan, is just anxious about the next Scotland game, although he’s not holding out much hope. “Murrayfield is where God lives,” he says gravely. “But he’s been on holiday for a while.”
Nobody will convince me that RTDs are a weakening market,” says John Black, the managing director of SHS Sales and Marketing in response to suggestions that the disappearance of Hooch and Gordon’s Edge from the market heralds its decline. “It’s a sector that’s here to stay,” he insists.
When it comes to WKD, the vokda-based drink it launched in partnership with Beverage Brands in 1996, he has a point. Last year the food broker, or “brand builder” as Black prefers, helped push up the brand two places in The Grocer’s Top Products survey. With a 38% sales increase [ACNielsen] it reached third spot, behind Smirnoff Ice and Bacardi Breezer.
It is not the only coup that the gregarious Scot, who is also a member of the president’s fundraising committee for industry charity Caravan, pulled off last year.
Black heads up SHS Sales and Marketing (GB), one of five operating companies within the privately owned SHS Group. Founded in 1983, the company bills itself as a one-stop shop offering sales and marketing, distribution, financial solutions, logistics and customer services mainly to drinks brands, secondary brands and overseas brands hoping to crack the UK market. Its stable includes Danone, Nurofen and Optrex but it is predominantly drinks focused and remains the only food broker with an on-trade division.
That it is the fastest growing company within the group, contributing £210m to the group’s £250m turnover in 2002, is due to the success of brands like WKD. If Black had a mantra it would be “distribution, distribution, distribution” and thanks to his team’s ability to push the brand out through on-trade as well as off-trade channels, volume sales of the RTD, which now comes in three varieties - the original Irn-Bru variety, Blue (launched in 2001) and Silver (launched in 2002), were up 18% in 2003 on 2002.
Black disputes suggestions that because SHS Group owns Beverage Brands, SHS Sales and Marketing must have more of a vested interested in RTD brands than the others it handles. “SHS Sales and Marketing is not a brand owner,” he says. “Beverage Brands is [a client] and we have the same relationship
with it as we do with Douwe Egberts.” He adds: “Our role is to get WKD maximum distribution across all sectors. Beverage Brands’ role is to invest above and below the line in the brand.”
A cursory look at the figures for some of the other brands handled by SHS settles Black’s case. When SHS took on Douwe Egberts in 1998, the coffee brand had a strong presence in the multiples but a paltry 4% share of the independent sector. That has since grown to 40%. And it looks as though it is going to be a similar story with Cobra, the Indian beer that SHS has handled since October 2002. Unusually the beer was seeded in Indian restaurants, where the brand has almost 90% penetration.
Black’s team set about pushing the beer into new arenas such as wholesale, cash and carry, impulse and on-trade and capitalised on an imaginative marketing campaign, in which Cobra adopted a stylish new packaging and launched an eye-catching TV and cinema campaign.
Now, almost a year on, the results speak for themselves. Total year-on-year sales were 66% up in the 12 months to October 2003 compared to the same period in the previous year, according to the company.
Securing broader distribution is the name of the game and Black sees the company’s private status as a particular asset. “It allows us to make decisions faster than other people,” he boasts, pointing out on a more prosaic level: “The profit margins would be hugely unattractive for a plc.”
In time, Black would like to take on more staple grocery brands. “Our challenge is to go down the grocery route,” he says. It has already made a start and last December was appointed by Jordans Cereals to represent it in the wholesale, cash and carry, independent and impulse sectors. So next month, expect to see smaller pack sizes hit the convenience and independent sectors as part of activity supported by a £3.5m marketing spend.
But for now, Black, a die-hard rugby union fan, is just anxious about the next Scotland game, although he’s not holding out much hope. “Murrayfield is where God lives,” he says gravely. “But he’s been on holiday for a while.”
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