The just-drinks Interview - Dan Jago, UK & group wine director at Tesco - Part I

To coincide with this week's London International Wine Fair, just-drinks managed to secure some time yesterday (20 May) with Dan Jago, the UK and group wine director for Tesco. In the first of this two-part interview, we look at Jago's time in the wine industry, Tesco's relationship with the wine consumer in the UK, and the 'E' word.

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Dan Jago's reputation precedes him: He is known within the wine industry in the UK for his straight-talking approach, his preparedness to disagree – often bluntly – and his candour. All of this is cliché, of course, but, for the press corp, all of this is also manna from heaven. Indeed, it's better to have someone use the word 'crap' (and he will) than someone who prefers to stay safely on the shore.

Naturally, one would expect the wine director for the Tesco supermarket chain to hold strong opinions and possess a certain bluntness. Yet, despite this bluff and bluster, Jago also has a strong and deep relationship with both wine and the wine industry.

He started off delivering wine by bicycle during his time between school and college. Nine years in the navy was followed by 16 years at UK wine merchant Bibendum – the last five of which as joint MD – before he moved to Tesco in 2006 as category director for beer, wine and spirits. When the retailer split beer and spirits from wine, Jago plumped for the latter, driven, I'm sure, by his love for the product.

"Wine is an extraordinarily powerful and emotive subject first of all to consumers, and to retailers - if they're doing their job properly," says Jago. "When it lacks some of that emotional engagement or focus by the retailer, then consumers will be able to see that quickly and clearly. I think that's been some of the challenge for some of the high street retailers of wine in the past. It's hard enough as a grocery business to communicate consistently with our customers. I think, at Tesco, we set quite a precedent with our consumer engagement in wine – a lot of other parts of the business will look at what we're doing with wine for ideas."

The phrase "consumer engagement" reminds me of the eagerness – and general failure - in recent years of the wine-producing companies to 'educate' wine consumers. "When you look at who has engaged consumers," he says, "it's multiple grocers and independent merchants – it's the ends of the spectrum who have done all the legwork. It's not really been the wine producers. There are many passionate wine makers who have been used effectively to communicate the overall industry's passion for wine. But, due to over-supply and over-ambitious plans by certain parts of the world, there is less profit in this industry than there was before and, therefore, less available to re-invest in the consumer."

Jago is also guilty of once having seen education as the silver bullet in the UK. "I used to say that we need to educate the consumer," he confesses. "I'm not sure I believe that any more. Education is too narrow a broadband; it implies teaching. We've got to find ways of making wine more interesting to them and it's got to be more applicable.

"What some mean by education is teaching consumers why they should pay more. My position is that we can find ways (for them) to pay more if they want to but if they don't want to pay more, we've got something for them as well. 'South-facing slopes' and 'malolactic fermentation' are still alien to the vast majority of consumers. We've got to be a bit more broad-minded about the way consumers live their lives: They want something refreshing and cold at the end of the day; if it's made from wine, fine."

This suggests, as one would expect, that Jago is focused solely on giving the wine consumer what the wine consumer wants. So, I ask him, what is his definition of 'doing the right thing' for Tesco's wine customers? "I could go on for hours," he warns. "It means meeting their needs and expectations, and at the same time holding their interest and excitement in the wine category. So, there's quite a lot of follow and just enough lead."

I'm surprised that as dominant a wine retailer as Tesco would give any attention to 'leading' consumers. "The last two months has seen a lot of leading, with things like innovation and new ways of retailing," Jago notes. "Yet, every day in our stores, there's a lot of following, for example with promotions. That's what our customers want, and that's what we do. There is an ever-evolving balance between lead and follow. We need to keep that balance right."

Jago is all too aware of the unique position wine holds both in the national psyche and in the supermarket aisle. "There are very few parallels between the wine industry and anything else," he says. "There aren't that many other industries in the broader food remit that have as many professional journalists or number of products, combined with so few established brands and established processes of route-to-market. That's why, I think, a supermarket will treat the wine category differently to grocery. You need a professional team who have broad experience in the industry as well as commercial experience within Tesco."

And, what of wine's fragmented status, with market-leading brand Blossom Hill accounting for a paltry 4% market share in the UK? Jago believes the industry's back-story helps explain: "Have a look at where the industry has come from," he says. "Since 1985 until now, the industry has been in a period of over-supply, it's been over-populated and it's been vocational – the vast majority of people in the wine industry are in it because they have a passion for the product, not because they have trained to qualify them to do it. You can't criticise this, but most people are in it because it's fun. In my world, there has to be a balance of fun and productivity, and I'm not sure it's seen that way by enough people within the industry. That's the challenge it faces."

Part two of this interview, in which Jago considers minimum unit pricing, the launch of lower-abv wines and the presence - or otherwise - of innovation in the wine industry, can be found here.

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