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Topping up the market

Timothy Feather, general manager of local wine company Claret Wines

Some industries are more closely linked than you would expect. So explains Timothy Feather, general manager of local wine company Claret Wines. Feather points out that the downturn in the MSAR’s casino industry has had a direct impact on his business, and that in order to be sustainable in the long term, diversifying wine product ranges is key.

When was your company established?
I started my business at the end of 2014. It is still a relatively young business and has been operating in Macau for about two years. I have actually been in the wine business for a long time already. Before opening my own business I was working for a wine company, called Summergate, a wine distributor, for eight years in Macau. It was always in my mind that I wanted to do my own thing. When you work for a big company, it is great to have all the advantages. But you are not choosing the products you are selling. They were chosen by somebody else, so I wanted to set up my own business and choose my own wines to sell and think of which wines would be good for the market.
I was saving my money and the year of 2014 came along and I made the move. Sometimes, you have to do it, or you never do. You never know if it is the right time or not, but you just have to take the risk. There is always a risk when you start your own business by yourself.

Was it a good time in the industry to start the business?
To be honest, I did not pick the best time to start my company. If I could look back to choose a perfect time to start my business, I would have done it three years before. It was when the Macau wine industry, in 2011 or 2012, seemed to be “the sky was the limit”. It was because the casinos were buying huge quantities of wine, when the Macau gaming industry was growing every month.

How are the two industries linked?
The wine industry is connected to the gaming industry because we feed the gaming industry with the wines they need. When the gaming industry is successful, we are successful. When the gaming industry drops a bit, we drop a bit. 2014 was the year when the local economy dropped down a bit.

Do you mainly sell your wines to the casinos?
I am still here selling mainly to the casinos, probably about 90 per cent of our total sales are coming from the casinos. But I don’t really like to have 90 per cent of sales from the casinos. I would prefer to be more balanced, because the casino industry is not doing great right now, so I would like to diversify and sell more to private businesses, private individuals, shops and supermarkets.

Has your company benefited from the opening of new casino resorts?
Yes, sales are definitely growing. The wine industry and the gaming industry are following each other quite closely. The drop in the gaming industry was quite dramatic sometime in 2014. Our imports of wine sales dropped too. But it was not as quite bad as the gaming industry. Although the current trend for the casinos is to buy the less expensive wines, in the old days they were very much buying fine wine for the high rollers. But the market is changing: the casinos are getting away from VIP gaming, that means they are spending less on expensive wines. However, they are buying more cheaper wines.

Do you consider Macau as a profitable market for selling wines?
Yes it is. It is not that easy compared to the past, but it is still possible to make profits if you work hard. I would say the wine market is getting crowded though. When I started with Summergate in 2007, back then it was a much easier market. There were only a handful of wine distributors, but now there are a lot of them. Some of them are staying but some of them are leaving the industry. I am a small company and I want to grow but it is a competitive market now. The competition is not only from Hong Kong, but also from a lot of new companies who have opened in Macau. Over the last two to three years, the casinos, especially the Venetian, has a lot of programmes that reduce the amount of vendors they are getting from other countries. Instead, they are trying to support more the local SME (small and medium enterprises) suppliers for wines. I need that support as we have a lot of competition coming from Hong Kong.

What is the most popular wine that you are selling?
I import wines directly from all around the world. France is always the most popular country for wine. French wines account for 85 per cent of the total amount of the wines we sell. The rest is followed by Portugal. Portuguese wines account for 4 per cent by volume, but about 20 per cent of the total sales because the Portuguese wines are cheaper to sell in Macau.

What are the services you provide to private companies?
I am always looking for new opportunities to work with other businesses. We do private events as well. If a bank wants to hold a wine tasting for their top clients, we can come in to set up a wine tasting and present a talk about wine for them. We also do wine tasting in the hotels. We do as much as we can to promote the wine business.

Do you find it hard to sell your wine to the local supermarkets?
Selling to supermarkets is not easy. Probably it is my problem, I think it is the language barrier. If you are talking to the big groups of supermarkets, you need to build a relationship with the managers of the supermarkets. In Macau, there are a couple of big supermarkets, which have 20 to 30 stores. If you want to sell your wines, it is like a full-time job, driving a car around the city to these shops to sell to the managers. If you can build a good relationship with them, the wines will sell really well. But if you don’t, the wines are just sitting on the shelf. At the moment, I don’t have someone yet to work on this job. I hope I can find somebody to do it soon. It is not easy because you need to hire somebody with the local language, local knowledge and wine knowledge. Having wine knowledge is good, but not essential, as wine knowledge can be taught. As long as you have somebody with good business acumen and somebody who is good with people and can talk with people. Those are the key and definitely a bonus.

Are you selling different wines to the supermarkets than you sell to the casinos?
You need to be careful with supermarkets regarding what brands you are going to sell because the casinos don’t want to see the same wines in the shops. In fact, I have developed different wines, which are only sold in the supermarkets. Usually, we sell cheaper wines to the supermarkets. The casinos have two concerns: one is that they don’t want their wines to be seen in the supermarkets; and another is that they don’t want their customers to be able to compare the prices. I was the first person in Macau to bring up the concept of selling unique labels only to be sold to the supermarkets. However, I need to get back on it and I don’t have the human resources to do it. Hopefully, I can do it this year. Also we have big companies that do gifting for Chinese New Year, Christmas, Mid Autumn Festival, etc. They order hampers with fruit and wines. That can be a really good business.

How do you perceive local habits for drinking wines?
The locals are much more open now and they are trying new things. People who are between their 20s and 30s, with jobs and a decent disposable income, are drinking wines. They not only want to know about wine, a lot of them actually are learning wine online or casually going to wine courses. All of these wine courses are getting more popular. People who join the courses are not from the industry. You see 80 per cent of students in wine courses are young people and housewives. Now a lot of people are interested in learning about wines and they want to taste new stuff. If you look back at the wine industry in Macau 15 years ago compared to now, it has really changed, as the industry now has wider variety. It has been driven by the people who want to learn more about wines.

What are the challenges?
Hiring people is tough. I have one vacancy which has been open for one year already. It seems like locals are more interested in working in the casinos with a higher salary. It is getting harder than even before. I have never had such a long vacancy. Also, we don’t pay the biggest salary, but not the lowest. We offer competitive salaries. Within the wine industry, a lot of wine companies, when you get a good person and you train them up, all the other wine companies are watching and trying to grab the talented workers from you. So once you have them, it is also hard to keep them.

Is your location important for your business?
The current location comes with the parking space, but it is not the best part of town. To be honest, we don’t do much business around where we are located. Almost all of my meetings, 90 per cent of them, I would go to meet my clients so they don’t have to come to meet me here. We provide services to them so I have to be convenient for our customers. I have to go to meet them with wines and make it easy for them. Macau is small and nowhere is more than 20 minutes away. Therefore, most of the meetings can be done outside the office.

What new trends are emerging?
I have brought a fresh concept to Macau. All my wines in the profile are small family-owned wineries. I don’t deal with big wine companies. I only deal with small family-owned companies, which people like. I also sell organic and natural wines. People are interested in buying organic wines. It is a trend. The difference in selling wines from a small family-owned winery is that people are interested in hearing the story behind the wine made at the small wineries. If the wine has a story, people will love it.

How do you promote your business?
Promoting wines to the casinos is easy for me because I have been in Macau for a long time. Before opening my own business, I was working in the casinos for food and beverages, so I have a deep connection with a lot of people who I worked with before. The only money that I spend on advertising is on Facebook. It actually helps and does not cost that much. I have not advertised in a magazine for years. I did it when I was in Summergate. To be honest, I don’t see the advantage of doing it. It seems like advertising on social media is the only way to do it nowadays. We want to do more with social media such as Instagram. I have started to do more advertising on Instagram.

What is your strategy for sustainability in the industry?
It is to build a long-term relationship with customers. We are not here to sell wines quickly and then not see the customers again. We are here to build relationships that can last a long time down the road. We want to deliver a clear message to our customers that we are here for the long-term to work with.

What is the most challenging thing you face daily?
Being fresh and not becoming boring, not allowing people to say that I have seen your product profiles many times and have tried out all of your wines. It is a matter of having something new, not all the time, but keeping yourself fresh all the time. Adding new product ranges to the existing products so as to keep people talking about you and keep the market aware of where you are. We keep our company fresh on social media every few weeks by adding new wines and holding events. You cannot let people forget about you.

What are your future plans?
I would like to expand my company organically, as I am not in a hurry. Obviously, my goal is to grow and my company has grown over the last two years. I don’t plan to take over the wine industry, but I would like to be a major force in the wine industry in Macau to keep providing wines which people find interesting and provide them with good quality wine.