It naturally began when the World Health Organization declared Covid-19 to be a pandemic back in March 2020. Billions of people were forced to stay at home, so they quickly switched from paying for services to buying hardware – home gym equipment, electronics, and so on.
Shipping companies had anticipated that the global economy would suffer a slowdown, so they stopped producing containers. Instead, they received an immense spike in demand, causing a global shipping crisis that is yet to be resolved. Throw in a chronic shortage of HGV drivers, workers regularly being forced to isolate amid “pingdemics”, port delays, the Suez Canal blockage, and issues caused by Brexit, and you have a perfect storm of problems for Europe’s largest wine packaging company.
The Park is based in Bristol in the west of England. It is a subsidiary of Accolade Wines, the Australian company that produces Hardys and Echo Falls, but it also imports wine in bulk from suppliers such as Treasury Wine Estates and Henkell Freixenet. The team bottles the wine and sends it to retailers and bars across the UK. It also moves around 6 million cases per year into the EU. It is gearing up for the Christmas trading period, its busiest time of year, while continuing to battle a variety of disruptions to the global supply chain.
General manager Richard Lloyd admits it is the most challenging period he has ever experienced. However, The Park has just achieved its strongest year of growth. It now accounts for one in four bottles of wine consumed in the UK, its European export business is booming, and it is packaging wine, spirits, alcohol-free drinks, and hard seltzers for eight other companies.
The Park packaged 250 million bottles of wine over the past 12 months, and it is currently packing around 1 million bottles and 150,000 bags of wine daily.
“It has been a challenging year, but it’s been a year that’s enabled businesses with the right foundations to flourish and grow,” says Lloyd.
The company’s scale gives it an advantage in the current climate, according to Lloyd, which has allowed it to emerge relatively unscathed. “We’ve got a critical mass of volume now, with the Accolade brands and the other brands, and we can therefore ensure that where there are challenges with shipping, we’re at the front of the queue,” he says. “Our supply chain model can help other businesses as well, so we’re becoming a bit of a consolidation centre for the UK wine industry.”
Despite the strong growth, the shipping crisis has caused problems for The Park. “You’ve got this huge demand, and at the moment it’s just all out of kilter,” says Lloyd. “Shipping is about moving a container full of something, but then it’s about moving the empty container back to the right part of the world. The global shipping lines have just got themselves out of balance with where the containers need to be, and there aren’t enough containers at the moment. Global shipping will cause us trouble for another three to six months.”
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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.”
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BULK SHIPPING
A decade ago, bulk shipping was generally viewed as a cost-effective way to move low-priced wine around the world. Many within the trade looked down on wines that were shipped in bulk, but they are now starting to realise the process can actually lead to superior quality and freshness.
“It gets shipped in these huge plastic bags, and the oxygen barrier within that is phenomenal,” says Lloyd. “If you bottle in th
e country of origin, you introduce oxygen, so its life of oxidising will start then, while it’s moving around the world on a ship. If you move it in bulk, it hasn’t met any oxygen until it is bottled. In the old method, it had months out at sea.”
He adds that a lot of bottling lines around the world have not been upgraded for a decade or more, so the oxygen control during the bottling process often leaves a lot to be desired. The team at The Park bought the best fillers from Germany, meaning that “the oxygen ingress is almost zero”, according to Lloyd. “There’s a number of scientific reasons from a quality perspective that mean we will get our wine to the consumer fresher in bulk.”
The Park initially shipped entry-level wine in bulk, but now it also ships wine that would fall into the premium category. “People in the industry have to go through the journey,” says Lloyd. “At ¢rst, they thought they had to get it in the bottle as soon as possible at the vineyard. From a quality and sustainability standpoint, it’s brilliant. It is absolutely the way to go.”
Bulk shipping is also more sustainable, as shipping emissions are reduced by 40% when compared to traditional transportation in bottles. The Park has worked hard to reduce its overall emissions in recent years. It installed a large wind turbine to generate half of its energy, and it has produced zero waste for landfill for more than three years, while plans are afoot to add solar panels on the roof.
The facility is not yet carbon neutral, so it offsets its remaining emissions by sponsoring various green projects around the world. Yet the team is constantly working on ways to bring the total carbon footprint down.
“Everyone who works at The Park has bought into this, whether it’s waste segregation or just finding different ways to make our facility run more efficiently,” says Lloyd. “We’re not stopping. We will be the first guys to have the first electric HGV on the road. Everyone is passionate and the team at all levels is looking for that next way that we can lessen our impact.
“We 3D print some of our engineering parts. We are now looking at closed loops. The labels we put on the products have a plastic backing, but we’re going to take that plastic backing and convert it into the plastic used for 3D printing, so basically our waste product will end up being made into machinery – and printed on site, so we don’t have to ship parts in from somewhere in Europe. That’s the sort of leading thinking that the guys at The Park are enthused about and enjoy. We’re lucky to have the ownership that allows us to go out and buy 3D printers and bring some of this technology to life.”
