NOVATO -- Winery Exchange has expanded its international reach with a new office in London to serve U.K. and European markets.
The U.K. alcoholic beverage market works quite differently from that of the U.S., according to Dan Irving, managing director of international operations.
"These significant differences require a very different approach than how we work in the U.S. market," he said. "To be successful in the U.K. long term requires that we have a dedicated team of experienced professionals on the ground [who] know how the market works and have strong relationships with key industry players."
In the U.S., alcoholic beverages reach consumers often through state and local variations of a three-tier system of distribution -- producer, wholesaler and retailer. The retail tier is further bifurcated into sales for on-premise consumption such as restaurants, bars, hotels and events, and off-premise, such as wine shops, liquor stores, grocers and other retail venues.
By contrast, most U.K. sales for off-premise consumption, called off-trade, is directly from producers to retailers. In that country, four large supermarket chains make up more than 70 percent of retail wine sales, Mr. Irving observed.
Tax on alcoholic beverages, especially on wine, is much higher in the U.K. than in the U.S. The U.K. market is much more heavily weighted toward entry-level, usually low-priced, products than in the U.S.
Winery Exchange opened with U.K. office in January and recently added Mike Bentley and Rufus Weston as directors of commercial sales from there.
The company has been operating in the U.K. for several years. In 2006 Winery Exchange launched the Ogio wine brand in partnership with London-based retail giant Tesco, the parent company of the Fresh & Easy Neighborhood Market now expanding in the Bay Area.
The Ogio brand has grown to annual sales of more than 1.5 million cases. Six new varietal wines were added for the brand in the last year.
For the retailer Coop, Winery Exchange created the Frenchhouse wine brand.