“A peep into the future, gives us a reflection of the past, and a picture of the present”

Ernest Agyemang Yeboah

 

The Year That Was…

Written by Stuart McCloskey / Founder The Vinorium

Now a firm tradition, we start the New Year with a look back at the past twelve months and share our performance with you all. I accept that it is unusual for a wine company to be so open with their in house statistics however, without you, there is no Vinorium, which fully supports my decision to share. 2020 will certainly be unforgettable and remembered for a time when everything changed. The year that will become an embodiment for all that was wrong with our world. 

Without exception, the year was shaped by the coronavirus pandemic and continues (certainly in the United Kingdom) to be worsening. We give thanks to the scientists and doctors who have worked tirelessly on the various vaccines which are now in circulation. I will be forever humbled by the doctors and nurses who have physically put our welfare above their own. I cannot imagine the intense and conflicted emotions which they must endure each morning when they wake. Equally, I am saddened by those who lost their lives, and unnecessarily.

Our planet cannot accept the same level of punishment which it has tolerated for the past 100 years. The horrors of global fires and floods is one way of demonstrating that it is fighting back and with heated retribution.

I wonder if God is having a ‘good old clean out,’ making way for the magic of new life, but I am far from persuaded. Humanity is to blame and one thing is for sure, we are on a fast collision course if we do not unite with the same goals.

More than ever, global leaders have been under the microscope with many failing to lead. There is a caveat to that with many female leaders showing their male counterparts how to handle a national and global crisis. New Zealand’s Jacinda Ardern and Tsai Ing-wen from Taiwan are just two examples of how to protect their people. Conversely, our own Prime Minister Boris Johnson, along with Donald Trump (there are others too) have shown the world how incompetent they truly are. I respect they have their followers, but and following the horrors of the past 12 months, I am truly at a loss to understand why.

Brexit also joined last year’s full table, which created more worry for UK businesses. Thankfully, a deal has been agreed however, it is far too early to assess its soundness. For the wine industry, our government has confirmed that no VI-1 certificates will be required for EU wine imported into Great Britain from 1 January to 30 June 2021, which is welcome news for many. However, this is a temporary solution to what could be a major issue for the wine trade if this is overturned post 30 June. We are accustomed to VI-1 certificates, as it is a matter of law for all Australian importers to provide one for each wine shipped into the UK. They are a costly investment for producers, which is often the obstacle for those producing tiny volumes.

We are faced with most carriers unable or unwilling to offer their services for deliveries into Europe and Northern Ireland however, and with some optimism, we hope to resume our Europe (and NI) service at some point in February.

The UK has slipped hard against all major currencies with the GBP versus the Aussie dollar falling close to 10% in the past 12 months. Today, we are buying at 1.75 whereas February 2020 we enjoyed 1.93. Consequently, all wines shipped and delivered during the last quarter of 2020 and until the FX tides turn in our favour, must have this cost added to our wines.

To compound a difficult year, international shipping (sea freight in particular) has ground to a halt. Ordinarily, we would expect our Aussie shipments to arrive within eight weeks however, and since the pandemic, we are now suffering from anything up to twelve weeks. Schedule reliability of vessels is at its worst recorded levels, resulting in UK container haulage being booked and subsequently cancelled as container / vessel arrival dates change on a near weekly and sometimes daily basis. Many vessels are being diverted to other European ports (call for the UK omitted) for containers to be subsequently arranged via feeder vessels and arriving into the UK weeks later. Pre-Christmas deliveries from new agencies; House of Cards, Shadowfax and a full pallet of Tassie fizz from Ghost Rock is finally being delivered to our HQ today.

The hospitality industry has been hit incredibly hard and I wonder how many will return. The furlough scheme has helped many, but countless are unable to pay their rent and other business overheads. Inevitably, many will decide to wind down their operation as the recovery seems a long way off. Those wine importers servicing this industry equally ‘furloughed’ much of their staff and one notable wine importer decided it was the right opportunity to disband their operation, to the amazement of the wine industry. Some went into survival mode and directly competed with their independent wine merchant customers – effectively selling to private clients which is a no-no and a clear conflict. But, and from someone who sits on the outside, I understood the survival motivation, but the mid to long-term naivety of said action has created a deep rift with many independents.

There are few human beings and businesses which have not been affected (whether directly or indirectly) by the pandemic with Brexit being the icing on an inedible cake. From a commercial standpoint, one could consider the year as a separation of the wheat from the chaff with only those who operate a commercially sound business model surviving. I believe luck has played an important role too as our government’s decisions regarding which businesses can and cannot operate during our various lockdowns was very much a roll of a dice-like twist and often served with an enormous helping of ‘where’s the sense in that?’

We, The Vinorium, have been incredibly lucky to be allowed to continue our operation. We closed our HQ shop during the first lockdown, and it remains closed for the near future. Our saviour (no, it is not you, Boris) is the years of hard work which have gone into our website and e-communication to you all. Without this, my cycling times and distances would almost be Olympic, but I could not afford to buy myself a new inner tube. So, it is time to reveal the nitty-gritty of The Vinorium’s 2020 year that was…

 

Facts & Figures…

 

Visitors by Country

 
 

UK visitors
increased by 58.01%

2020 – 58,202   

2019 – 36,835

Australian visitors
increased by 102.33%

2020 – 8,435 visitors      

2019 – 4,169 visitors

 

France is up by 27.22%

2020 – 1,262 visitors      

2019 – 992

Hong Kong is up by 21.66%

2020 – 1,230 visitors      

2019 – 1,011 visitors

 

Singapore increased by 57.80%

2020 – 920 visitors

2019 – 583 visitors

Netherlands increased  by 49.63%

2020 – 817 visitors

2019 – 546 visitors

 

New Zealand increased by 90.61%

2020 – 812 visitors

2019 – 426 visitors

 

USA fell by -27.22%

2020 – 6,133 visitors

2019 – 11,325 visitors

 

Germany fell by -13.84

2020 – 772 visitors

2019 – 896 visitors

China fell by -10.39%

2020 – 940 visitors

2019 – 1,049 visitors

 

Our top selling wines & producers

Top Ten by Sales

 

Top Ten by Bottles Sold

 

The most visited website page being
‘buy wine’ which received 33.60% more visitors

2020 – 123,410 page views

2019 – 77,969 page views

 

Website visitors increased by 35.56%

2020 - 90,172    

2019 - 66,520

 

Devices used

 

Smart Phone

2020 - 44,457 mobile
increased by 60.70%            

2019 - 27,664 users

Desktop

2020 - 41,049 increased by 25.10%        

2019 - 32,813 users

 
 

Tablet

2020 - 4,548 a reduction of 26.25%   

2019 - 6,167

Google visitors
increased by 71.85%

 2020 - 62,538 visitors    

2019 - 36,390 visitors

 

Sales statistics
January 1 to December 31, 2020

From Wuhan, China, Covid-19 has spread to nearly every country on the globe in just under nine months with devastating results. Well before the UK signalled its first case, The Vinorium discovered the direct financial problems ahead of many of our colleagues. For the past 4-5 years, we have built a strong trade arm throughout Hong Kong, Macau, Singapore and the like. Immediately, emails, enquiries and orders stopped resulting in a direct loss of £293,000 of sales. To date, there has been little sign of recovery with the expectation that our Asian trade sales will drop further. At the current rate, we expect to lose £600,000 in sales, but sitting back and accepting such losses does not fit in with the culture of our company.

As I referred to in my opening, parts of the wine industry were super lucky and were allowed to stay open for business, during all lockdowns. Those which offered an online and delivery service quickly benefited from those, traditional merchants that favoured the personal approach of owning a wine shop.

Wine merchants differ from many other businesses in the respect that we either specialise in online retail or operate a shop. It is rare to find one which operates both divisions successfully, but there are a few obvious exceptions.

Operating a successful website is quite frankly an enormous undertaking. You cannot throw a few quid at it and expect the sales to flood in. In our case, we have spent years, many tens of thousands of pounds and most importantly, we dedicate at least eighty hours per week to our craft. In turn, and with a unique collection of wine – an Australian collection exclusive to The Vinorium, we enjoyed the benefits as the UK entered lockdown I. 

2020 is not a year to gloat as it represents losses for us all. Yet, it provides us with the opportunity to examine life and our work which are intrinsically linked. From nowhere, the pandemic and to some degree, Brexit, provides commercial clarity to what has and what has not worked. Of course, without the generosity of you, our customers, the following figures would be an entirely different picture.

 

Figures compared to 2019

 

Organic Google sales increased by 57% although
the average order fell by £28.00.

• Organic Google Zalto glassware sales increased by 57% which is an extraordinary figure given that we stopped selling their collection for six months.

We hope our mid-week and Sunday emails / musings generated a welcome relief. Sales increased by 128% with an average order value of £254.00.

• We provided a few ‘sales’ opportunities which helped fund charitable contributions and The Vinorium Foundation. Sales increased by 94%. As ever, we thank you for your kind support. 

New customers coming directly to our website (and not using the Google search function or any other search function) rose by 54%.

• Existing customers (under their own fruition) purchased 48.6% more wine.

Shop sales understandably fell by 28%.

• The number of physical website orders also increased by 50.3% with 6392 orders leaving our HQ warehouse. This figure does not include wines delivered by our bond, LCB.  Consistently, and since 2017, we have demonstrated a year on year growth of 50% which bodes well for this year (with fingers crossed).

Across all inhouse and online platforms, sales from private customers increased, representing a monetary growth of £439,000.00, which bridged the gap from the loss of trade sales.

 

Exactly 1,999 ‘new’ customer orders were received during the year ended 31 December 2020.

However, the decisive test centres on repeat orders rather than one-offs. In short, we must keep you engaged, but 438 first time buyers have unsubscribed. Nonetheless, it would be an extraordinary achievement to keep the remainder of you. Two countries produced the majority of new customer orders; the UK with 1,690 and Australia with 186.

Grace from Devon

“I only recently became aware of The Vinorium on a recommendation from an Aussie friend who uses them to send some special treats to her UK friends, and what a gem it is”.

The customer service is very professional and friendly. It's a small company and I love that you get all the benefits that come with that - a family feel about it, genuine passion from those at the top, and a quick response from the same group of people if you have a query about your order. I also LOVE your packaging as it is completely plastic free.

Ray from London

“Having ordered wine from at least 10 online retailers, I would say that the customer service experience with The Vinorium is by far the best. Simply put, they do what they say they’re going to do. I’ve had a LOT of wine deliveries from them (not sure I should admit that) and not one of them has been late.  Not one. That, combined with them taking the time to get to know my tastes and make personal recommendations that are spot on, makes The Vinorium the best place to buy wine in the UK”.

Michael from London

“I found The Vinorium when I was looking for specific Australian wines, and I am a loyal and frequent customer since. Especially for Aussie wines, the choice at The Vinorium is unparalleled, and moreover, I find the prices very fair and competitive. Cherry on the top is the wonderful, personal customer service – they were always able to help me with me sometimes very special requests”.

What were the busiest online months?

From a percentage increase perspective, the months of May and June increased 108% & 126.7% respectively. December represented the busiest month of the year, which and despite lockdown, kept with tradition.

 

Biggest sellers by varietal

Red Wine

 

White Wine

 

An increase in deliveries translates to the inevitable; an increase in costs…

We offered free delivery from our HQ on all orders exceeding £100.00. Regardless of the order value, delivery charges from our bond, to international destinations and to the Highlands and Islands applied. Orders under £100.00 benefited from one of the cheapest next day delivery prices of £6.95 which and at the end of the year took its toll.

Our UK carrier, DHL have performed well but we do not dare to send any wine without careful repacking to ensure safe arrival. The total packaging spend being £19,372.00. 

Offering the benefit of free next day delivery on all domestic, mainland orders cost The Vinorium an incredible £31,266.00 which is money simply lost, but that is the nature of the beast. 

However, and effective from 1 January 2021, we have been forced to increase our prices from £6.95 to £8.95 and our free delivery threshold has risen to £125.00. 

We monitor the performance of DHL very carefully. January to the end of November proved to be very good with an overall delivery performance of 97.11% (wines delivered within 24 hours). However, December was far from acceptable with 85.14% of your orders being delivered on time. Moreover, and as a direct consequence, the administrative work which Shontelle faced was and still is, commercially unviable. Some may believe that our expectations are unrealistic or too high, but we set a high standard and one which we never lower. Not one single parcel left our warehouse late and we expect 99.99% of these to arrive safely and on time.

Consequently, we will be moving to DPD who offer a fantastic customer and client tracking management service. Granted, they are more expensive and we are forced to use their partners packaging (rest assured it is 100% biodegradable), but we are seeking a flawless service for you. We are currently integrating their system with ours, with the hope to switch over once all of our existing packaging has depleted (We envisage 3-5 weeks).

 

"The Vinorium has celebrated three Decanter awards for ‘Australian Wine Specialists of the Year’ in a row which we are immensely proud of. This is a celebration of the best wines of 2020 which my team, you and I have all enjoyed."

 
 

For myself, I found the year challenging and one which triggered more attention to detail than ever before. There are so many positives to share too, from winning Decanter’s Australian Wine Merchant of the Year (2018, 2019 and 2020) which my team and I are immensely proud of. Despite the downturn, we tackled the year with much vigour and kept to our promise of increasing our collection of amazing Australian winemakers, which we have achieved spectacularly. We now exclusively represent 37 Aussie wine producers with more partnerships forming in the coming 3-6 months.
Despite the turbulence and worry, I believe we are in a strong position, but I can assure you that we never take our foot off the pedal as complacency is a treacherous road to follow. Changing how we operate before we are forced to is very much at the forefront of our commercial approach. Whilst spending years climbing in the Himalayas, the Alps and Scotland, travelling light whilst climbing was especially important when spending months above 6,000 metres.

You become obsessed with carrying less weight, to the point whereby the handle of one’s toothbrush is snapped off. Loo roll is counted in sheets and unnecessary empty pages from a book are ripped out. Often, a book is shared… Wherever I climbed, I carried a small book of quotes which I loved and often (wistfully) refer to for moments such as today; “There are times when it is hard to believe in the future, when we are temporarily just not brave enough. When this happens, concentrate on the present. Cultivate le petit bonheur (the little happiness) until courage returns. Look forward to the beauty of the next moment, the next hour, the promise of a good meal, sleep, a book, a movie, the likelihood that tonight the stars will shine and tomorrow the sun will shine. Sink roots into the present until the strength grows to think about tomorrow.”

Next week I will return to share our plans for the year ahead. Until then, keep safe and well.

My very best wishes, Stu