When asked what impact it would have on wine consumers, Lloyd warns we should expect price rises and volatility. “Overall, you would think prices would have to go up, because the cost of shipping is a big component in the cost of moving wine around the world, and that has gone up significantly,” he says. “On most of our routes it’s gone up by a third. The route from Asia to the US has gone up sevenfold, so some routes have just gone crazy.
“What does it mean for the wine consumer? A bit more volatility. The choice won’t go. The supply is erratic, so the challenge is to smooth that out and get enough stock at different places in the supply chain.
“That’s where our scale helps. We’ve just invested $1 million in being able to store an extra 100 containers of wine around the site so we’ve got wine ready to bottle, and we’ve also got this 80,000-pallet warehouse of finished goods, so for us it’s about having enough inventory around our supply chain to cope with the volatility.”
On land, a major challenge is the lack of qualified HGV drivers – an issue caused by Brexit, Covid and other factors. A Road Haulage Association survey of its members estimates there is a shortage of more than 100,000 qualified drivers in the UK. That includes thousands of drivers from EU member states who were previously living and working in the UK.
“It is a challenge,” says Lloyd. “It has impacted us, but probably not as much as others. Our scale means we have been able to mitigate a lot of the challenges. It’s at times like this where you see the strength of your supply chain.
“We’ve dropped by a couple of percentage points on efficiency of delivering on time, but versus a number of other businesses, we’re in a reasonably healthy place.
“Leading up to Christmas, there will continue to be challenges with driver shortages, but ultimately businesses like ours have learned to ex their supply chain. We have taken a number of actions to ensure that we will get back to our service levels, because some of them have dropped throughout this.”
However, there is light at the end of the tunnel. The worst of the pandemic appears to be behind us, shipping companies are gradually smoothing out the container issues, thousands of people will be trained as HGV drivers to help tackle skills shortages, and the ‘pingdemic’ has largely ended.
“The end is in sight, but there’s still a challenging couple of months to go,” says Lloyd. “Christmas is the peak period in the drinks industry, therefore going into the peak period with some of these shortages does make it challenging.
“There’s a huge amount dialogue with retailers. I still have 40,000 pallets of wine at the warehouse. That will grow to 50,000 by Christmas, so we’re not going to be sat there without any wine to move. It’s just about working on the phasing. We’re looking at different distribution because of the driver shortages. We’re looking at more weekend deliveries, night deliveries, just to smooth things out. The supermarket depots are really struggling, so we’re trying to find different ways to make things work – whether it’s time of day or volume.”
