Michael Saunders on bringing back Bibendum
Michael Saunders was sitting at home, twiddling his thumbs and annoying his wife when Conviviality collapsed in spectacular fashion last year. He could only watch on from afar as his beloved Bibendum was pushed to the brink of extinction by a series of calamities at the parent group. Saunders was pleased to see C&C swoop in and save Bibendum PLB and Matthew Clark from the wreckage, preserving hundreds of jobs, but he was still acclimatising to life outside of the firm he joined in 1982.
Then he received an unexpected call from C&C chief executive Stephen Glancey, inviting him to return to Bibendum PLB and turn it around. He was instantly catapulted back to the sharp end of the wine trade. One year later, he feels Bibendum is “fully motoring again” and he is loving life once more. He has gone from having way too much time on his hands to managing 250 staff and serving thousands of accounts across the country, while he is now chairman of The Benevolent and the Wine & Spirit Trade Association.
He is in buoyant mood when DRN heads to the Bibendum office in London’s Chalk Farm on the first anniversary of his return to the company. Saunders led Bibendum until May 2016, turning it into one of the UK’s leading wine suppliers and purchasing PLB in the process. It was snapped up by Conviviality and he continued as business development director until December 2017, when he was let go. It did not take long for Conviviality to crumble.
“I wasn’t expecting to be sitting back here,” he says. “When I got let go by Conviviality, I assumed that would be that. My wife would say I was a giant pain up the arse. I had a few consultancies here and there, but that doesn’t really suit me. I have been here since I was 18 years old. I’d never not had a job. My friends always took the piss out of me, said I never had the imagination to work anywhere else.
“When it did happen, I figured out that I like working. I like running a business and a team and all the different emotions that go with that. To have the ability to do it again in a business I’m very familiar with is a great privilege.”
There was a lot of work to do. The first thing Saunders did was reinstate former chief operating officer James Kowszun, and they set about reinvigorating the business. “Everybody knows it wasn’t doing terribly well,” says Saunders. “Stephen Glancey has been on record saying it wasn’t going very well, which is why he asked Steve Thomson to go back and run Matthew Clark and me to come back here. Frankly, that shows his great wisdom and humility.
“The fact we both came back is interesting, because Steve was my bitter enemy for 25 years. Much as I respected him, we were at each other hammer and tongs, so to be on the same team now is great. There aren’t many of us out there now who really know the on-trade backwards. I’m not being rude about anybody else, we’ve just done it for a number of years. I suppose we’re coming to the tail end of our careers. To have him at the end of the phone or email to bounce thoughts off, issues off, knowing that he’s going to be as motivated to do the right thing for me as I am for him is great, because he’s wise and he’s smart, and there’s a reason he beat me, and there’s sometimes a reason I beat him. To be in the same camp is fantastic.”
The reputations of Matthew Clark and Bibendum PLB took a battering during the Conviviality collapse, as producers feared they would not be paid. Yet Glancey went a long way towards reinstating trust by paying everyone in full. Saunders then set about repairing relationships with customers and suppliers.
“Our customer service wasn’t good enough,” he says. “Our customers weren’t terribly happy. Our suppliers were worried about whether they were going to get paid or not. To C&C’s credit, it paid everyone in full, which was great. I question whether I would have come back had Stephen not done that.
“In wine supply, you need the support and trust of the people you’re selling on behalf of. Many of them are small, family businesses from across the globe. They need to feel the business is honourable, regardless of what Stephen could have done technically, so he did the right thing.”
He is pleased with the progress he and Kowszun have made over the past year. “We knew what we had to do to turn the business back to where it needs to be. Here we are, a year on, and we are absolutely killing it again. It’s really exciting. Our sales are ahead of last year, our customer service levels are the best I have ever seen, our business retention has got better and we are winning new business. That’s going well.”
It comes after a great deal of logistical work, which involved repatriating staff from Matthew Clark. “Not all the staff wanted to come on that journey with us and fair enough,” says Saunders. “I get it – 2017/18 was really tough for people and some just didn’t want it, or didn’t want my leadership. That’s up to them, and they have moved on. I want a group of people who want to work here, who understand our culture, are willing to deal with the tough days, because there always are some. You’ve got to enjoy your work. If you don’t enjoy it, don’t stay.”
He promoted a number of staff to more senior roles and brought in outside expertise, and the team is now firmly focused on the future.
“I have drawn a line under the past. I don’t want to hear about what happened at Easter last year. We’re fully motoring again. It’s been a huge, huge privilege. It’s probably been the most rewarding 12 months of my life. To take a business I spent all those years growing, see it go down as not great and to have it back again in 12 months thanks to the great efforts of so many people is hugely rewarding.
“The difficult times have brought into the business a humility that might not have been there before. You see what the alternative could be. There’s a modest confidence here, which we’re all enjoying being part of.”
Focus on premium
Saunders is very much answerable to C&C, but he says he is, by and large, left to run the business according to his own judgement. One major change that Magners supplier C&C did request was an increased focus on premium spirits, which makes sense considering the growth that segment of the market is enjoying.
“I was pretty stupid years ago,” says Saunders. “I said spirits over my dead body. And it gets quoted back at me by the old lags regularly. It took me far too long to realise that selling premium spirits is incredibly similar to selling premium wine. I came into it slightly later than we should have done. It’s now absolutely hammering it. I am invested in it and people trust C&C’s credit. I am buying a lot from major spirits companies, so my outstanding debt is pretty enormous, because the value is so high. C&C has a fantastic credit rating, so these spirits companies know that if they work with us and invest in us, their business with us is rock solid. That’s quite a unique play.
“It’s not for me to comment on others, but the financial wherewithal of some of my peer group is not on a par. A year ago, Bibendum and Matthew Clark were dicing with no money, and we’re now part of a fantastically successful financial group, and that’s great for me. They’re not frivolous with their money, but we are fully supported by people who understand the way to get the best out of us is to give us the appropriate resources and let us run our businesses.”
The wine trade is arguably as competitive as it has ever been, with Brexit fears putting pressure on foreign exchange rates, consumer confidence faltering, moderation gripping the country, business rate rises hitting the trade and duty increasing. Saunders admits that there is no growth left in the market, and it is simply a case of trying to seize share of a dwindling sector from his rivals. Yet he believes Bibendum is now well placed to succeed.
“It’s tough, but it’s always been tough. For years I had to fight with Matthew Clark. I don’t have to go toe to toe with it any more, but I have a lot of other worthy competitors out there, all of whom want their fair share, and my job is to take a disproportionate share, as is theirs.”
He admires Liberty and the work his friend David Gleave MW has done there, but he feels many other suppliers are vulnerable in the current climate. Gleave has previously told DRN that he fears Brexit will be disastrous for the trade, but Liberty is still reporting strong annual growth, and Portuguese giant Sogrape recently took a controlling stake in the business.
“Although there are macro pressures such as Brexit and political uncertainties, I don’t think there’s any company better positioned than us to go forward, so I’m hugely confident for the team here,” says Saunders. “However bad David thinks the market is going to be, I want my share of it, and I want some of his share of it too. There’s no growth, so it’s all about taking a greater share of the market.
“We have to convince the market, not just on price, that we’re the best possible partner for them. We have evolved our added value services over the years, so we can help people to construct a drinks list. We have a large training team. Product is one thing, but that’s only the start of it. We can give you the market context.
“People are drinking less but better, so it’s about giving them the right product. We work hard to make sure the serve is correct, the proposition is correct. That’s the right way to go, for health and lifestyle reasons.”
He adds: “We just have to deal with Brexit. We have an advantage being owned by C&C. We are a ship in a calm port, rather than being on the raging seas, because it manufactures in euros, it has given me a budget for stocking up quite significantly for Brexit, it has given me warehouses to put it in. We have access to resources that no other wine suppliers have. We can’t change macro stuff. I just have to focus on running the business.”
The firm has shut down the Catalyst and Bibendum Europe subsidiaries in order to have a more streamlined offering, but it remains committed to Walker & Wodehouse and the independent sector that part of the business serves. When asked for his message to indies not currently dealing with Walker & Wodehouse, Saunders says: “Talk to us. I tried to listen very hard to what was required and came up with a solution that is match fit. I want to support this sector, because I think it’s important for interesting wines in the UK. Otherwise where are people going to sell really interesting, small volume, quality wine in this country?
“We have unique wines for them, a unique team for them, a unique company that really specialises in them. Much as that business suffered during the difficult year, it’s fully fleshed out to give the service that they require.”
Overall he is confident of Bibendum’s ability to flourish under the C&C umbrella. “It has been interesting to be overseen by people who understand how to let entrepreneurs do their business,” he says. “The future is incredibly bright with C&C. We have launched Bibendum in the Republic of Ireland and Northern Ireland. That’s a great benefit. I’ve wanted to go into Ireland for a number of years. We now have one of the top sales teams in the country working our portfolio out there. We will make some changes in Scotland soon.
“With the continued support of C&C, I am afraid to say to my competitors, you are staring down the barrel of a few problems, because we’ve got it all, and we are going to show a clean pair of heels to my competitive set.
“I’ve said to C&C I’ll stay around for as long as it wants me, and I’m talking years, not months. I sometimes dream about doing 50 years here. I’ve got a few more years to go yet. With its support, I think we can go a hell of a long way.”