The Lidl effect on the changing off-trade landscape - Interview, Lidl's UK head of beer, wine & spirits, part I

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As is often the case when meeting a person widely held to be “one of the most important people in the drinks industry”, Ben Hulme doesn't appear to live up to such superstar perceptions. Since joining Lidl in 2010, Hulme has progressed from its graduate trainee scheme to become the German-headquartered supermarket chain's head of beer, wines & spirits in the UK - a position he has held since June.

Ben Hulme joined Lidl straight from university in 2010. Today, he is the companys UK head of beer, wines

Ben Hulme joined Lidl straight from university in 2010. Today, he is the company's UK head of beer, wines

Whilst being softly-spoken, mild-mannered and not (yet) spoiled by such high-falutin monikers as “the eighth most influential person in wine” (according to UK trade publication Off Licence News), Hulme is all too aware of the importance of what he does for Lidl. “It's a pretty high-profile category,” he admits. “When people are judging a retailer, they'll often look at their drinks offerings. We've pumped a lot into wine because there are a few areas where you have to build up trust with the customer: Fruit & vegetables, meat & poultry and wine. If people can trust you to buy enough of any of those three things, then they'll buy most things. It's a good category that you can target and really show your competency, which I think we've been doing over the last year or so.”

The arrival in the UK of the likes of Lidl, Aldi and their precursor, Netto, has shaken up the UK off-trade in the last decade. The retailer - don't call Lidl a discounter: “That's a term I don't really like,” says Hulme - has found great success in its drinks aisle. At the same time, that aisle has stayed the same size throughout the 21 years that Lidl has been in the UK. 

“The challenge for us,” says Hulme, “is that you go into a larger retailer and you go to the beer, wines and spirits section and you're overwhelmed with choice. That's something that UK customers have always been blessed with. The first challenge for us is a very practical one: We have less space in our stores. That means we have to make our space work harder for us. We have to make sure that our range is absolutely right - if we don't, then we're going to be losing out. We've got about 60 permanently-listed wines, I have to make sure we cover as many bases as we can within those wines. If I don't have an Australian Chardonnay or a red wine from Bordeaux, what am I doing?”

The key question in all of this, then, is how does Hulme choose the products that will appear in that limited space in Lidl stores? “In terms of the listed range,” he explains, “the decision-making process is a combination of internal and external market data. We look at what is selling for us and what is not selling for us. We do range reviews typically once a year where we get a big warehouse and buy from ourselves and all the other top retailers everything that we and they have got. Then, we'll set it up - a line for us, and a line per other retailer. Then, we go through it all. It's quite old-school, in that we look at what the market is doing for, say, Italian white wine. If every one's doing a certain wine and we're not, then it's fairly obvious to us that it's something we should be considering.”

There are occasions where the retailer deviates from the norm, however. “We sometimes find that there are wines that have no presence in the UK market that we sell that have gone really well,” he says. “We list a Chilean Pedro Jimenez dry white, for example. I don't think there's any other retailer that's doing that yet it sells by the truckload. In that sense, that's when our internal market data is really useful.”

As a (relative) newcomer, Hulme - and Lidl - can provide valuable insight into the UK wine consumer; what they like, what they don't like and how they choose what they buy. “I don't think they're hugely set in their ways,” Hulme says. “There's a lot of exciting stuff happening in the wine market and certainly in the UK, I believe customers are very savvy. UK consumers don't have any hang-ups about buying wine from any country, so they're absolutely spoilt for choice.”

This isn't news to those in the industry. What is of note, however, are Lidl's attempts to drive up-trading - the golden goose of the wine trade in the UK.

“If I want people to trade up,” says Hulme, “I need to talk to them about why. I can't just suggest they have a go with that. Look at the marketing activity we have undertaken for (higher-end, limited-run range) 'The Wine Cellar': We carry detailed price tickets featuring tasting notes from Masters of Wine. Since we started doing this, our wine sales have gone through the roof. We've had 38% growth year-on-year.

“We've kept it reasonably simple,” he continues. “Our customers aren't bombarded by a million different options. We have a wine collection, we have a brochure that takes them through it - there's no smoke and mirrors. There are far fewer variables that we, as a retailer, have to think about, such as pricing. It's not GBP10 one week and then GBP5 the next. It's everyday low price. Our market philosophy is we have to be the best value in the market. We put customers' minds at ease - the price isn't going to jump around. And, we will have scoured the market to make sure that's the best value.”

Hulme is aware that, all the while that he is working on Lidl's relationship with its customers, those customers are also keen on one other aspect, beyond price. "Customers are searching for credibility,” he says. “I am fully aware that I could write the tasting notes and I could give the ratings. But, I'm an employee of Lidl, so it would be seen to be my prerogative to do that. Bringing in a panel of independent Masters of Wine to rate the collection really adds credibility to what we're doing. We have a system where wines are rated out of 100 - I have no say in that. If the wine scores under 80, we won't put it in 'The Wine Cellar'. I have no control over that process. Whatever the rating, that goes on the price ticket."

Part II of this interview, in which Hulme discusses the challenges he faces in his job, the changing face of the off-trade and the position - or not - that brands have to play in the Lidl proposition, can be found here.

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