From Bargain Booze to Conviviality: the transformation under Diana Hunter

Hunter believes the image change would not have been possible without the risky decision to change the company’s name just before it floated on the stock exchange.

The 49-year-old is speaking from Conviviality’s sunny offices in Primrose Hill, which has a well-stocked bar downstairs.

However, office lock-ins aren’t often on the cards for Hunter, who spends most of her time on the road working from her “mobile office”– a Porsche Cayenne Hybrid, which has a portable printer on the back seat, ready to print takeover agreements on the go.

Disappointingly for a boss in charge of booze, she plumps for a “glass of red” as her tipple of choice rather than professing a love for a particular Pinotage.

“I genuinely don’t have a favourite because I always like to try what’s new. I’m a maître d’s dream because at restaurants I love recommendations. It’s not that I can’t make my mind up – I’m actually very decisive.”

Just two months after going public, Conviviality paid £1.6m for rival off-licence Wine Rack in a move that boosted its presence in the south of the country.

It then went on to buy 26 shops in Yorkshire and the North East from rival Rhythm & Booze for £1.7m and swiftly followed that up with the £6m purchase of Midlands-based off-licence chain GT News.

However, it was a £200m swoop on the UK’s biggest drinks wholesaler, Matthew Clark, in 2015 that signalled things to come.

The business, bought from pub chain Punch Taverns and Australian-owned Accolade Wines, instantly gave it combined sales of over £1bn and marked its entrance into the “on-trade” market.

It then followed this up with a £60m move for wine specialist Bibendum and a stake in Peppermint, which runs the bars at large festivals and outdoor events.

“We have fundamentally changed our business,” Hunter says proudly.

As well as a share price that has soared, the size of the company has ballooned from a couple of hundred employees when Hunter first took the reins to 2,700 staff across three offices in London, Crewe and Bristol.

“I knew that there was a clear opportunity and an absolute requirement to change”, Hunter says. “That was mainly driven by my aim of building resilience and ensuring that we were there for the long term. When you’re only serving one type of customer you are exposed”, Hunter says frankly.

“I realised when I joined in 2013 – which feels like a lifetime ago – that the core competence of our business was wholesaling to our franchisees, who then sold on to consumers. And while we did a really, really good job of it, why would you only serve one group of customers if you’re a wholesaler?”

Beefing up the group’s wholesale arm is also a canny move to diversify from retail at a time when the sector faces significant challenges. However, Hunter insists the group’s franchisee model works well and the retail business is “in a good place”.

In January, Conviviality reported that franchisee like-for-like sales dipped by 1.7pc in the six months while sales lifted by 2pc.

“All we’ve done [through our deals] is extend our reach to different customers”, Hunter says, downplaying any suggestions that it has been hard work.

Hunter is warm, smiling often, but has a sense of self-assuredness, no doubt honed during many hours of deal negotiations.

She has already crossed the retail rubicon, moving from Sainsbury’s to upmarket food chain Waitrose before joining Bargain Booze. At Waitrose she was credited as the driving force behind the grocer’s charge into convenience stores, a move that has seen it become the best-performing part of the business.

But while she had experience with the grocer’s smaller shops, Bargain Booze stores cater to a wildly different customer than those found perusing Waitrose’s aisles for antipasti.

So is she just trying to shed Conviviality Retail of its downtrodden Bargain Booze image and give it the Waitrose treatment?

“That’s a rather controversial question,” Hunter says, attempting to laugh it off. She describes Bargain Booze’s core customer as “working families on relatively low incomes that are not going out every night and might stay in to watch the X Factor with their dinner and a bottle of Pinot Grigio or a few beers. We’re very family orientated”.

While the big four supermarkets have taken swipes at the discounters Aldi and Lidl, it was Bargain Booze that really got under the German grocers’ skin when it launched an audacious advertising campaign: “Aldi Schmaldi”.

Threatened by the shift of shoppers to the low-cost rivals for cheap plonk, Bargain Booze went on the attack by price matching Aldi’s copycat own brands with the likes of Carlsberg and Smirnoff.

The company acknowledges it was a “cheeky twist”, but one that ended up in a High Court spat.

Hunter says the two companies reached a “confidential settlement”. Like most naughty marketing campaigns, the slap on the wrists and Aldi’s outrage ended up generating more publicity than it would have otherwise done.

“Bargain Booze is a great business because it saw its way through the recession at a time when others didn’t,” Hunter says. “We offer great value on commodity products, like a case of Carling, that’s recognisable to customers and they trust our prices because it’s not going to be one price one day and one not. We are an everyday low-price retailer”

To ram home its reputation for low-prices, the off-licence recently launched a mobile app that was called: “As if it wasn’t cheap enough”.

Since bulking up with Bibendum, Peppermint and Matthew Clark, Conviviality now supplies 17,000 outlets and 600,000 customers including supermarkets, independent corner shops and fine-dining restaurants including The Ivy.

It stocks 10,000 different types of alcohol, including 450 different types of gins. The business also works directly with restaurants and hotels to design wine menus, based on its data of best-sellers in the area and growing trends. Bottles of Picpoul de Pinet and Beaujolais have been rising in popularity this year, Hunter reveals.

Later, whilst giving a tour of a Wine Rack store in Muswell Hill, she points to an entire back wall that is dedicated to various gins, upmarket tequilas and at least 50 different types of craft beers and ale. “A few years ago we wouldn’t even have beer in the shop,” she says.

By serving the leisure industry, Conviviality is also now well-placed to take advantage of the shift in consumer trends away from pubs and shops towards restaurants. In the last three years, almost 4,000 pubs have closed while 2,700 new restaurants have opened.

The emphasis on services is crucial for Hunter as she looks to ensure the company’s future, particularly as the wholesale market is about to undergo a huge shift if Tesco secures its takeover of Booker. The retail giant would not only threaten the convenience stores, but also plans to expand its wholesaling to the catering industry.

The tie-up might leave corner shop chains like Costcutter, Nisa and Bestway concerned about a concentration of power. It is unlikely that Conviviality will be too badly affected as shoppers tend to visit its shops for alcohol, rather than food.

However, it remains to be seen what effect the merger will have on other items like snacks and cigarettes, which make up just under a third of products.

“We believe that customers should have the opportunity to have choice and differentiation on the high street and that we have traded alongside both brands for many years, which we don’t expect will change going forward”, the Conviviality boss says.

Hunter’s plan is to turn the company into a “one stop shop” for the drinks industry. That means no slowing down just yet.