Cave Direct

CAVE

Cave Direct has over 40 years’ experience delivering speciality and craft beers directly to the on- and off-trade throughout the UK. Managing Director Colin Gilhespy and Director Neil Kitching outlined the distinctive business model and portfolio of beers in discussion with Phil Nicholls.

After

a two-year break, Oktoberfest in Munich is officially back for 2022. Cave Direct embraces the spirit of the biggest event in the global beer calendar with an extensive support pro gramme to bring all the fun of the festival to venues around the UK.

“We like to create relationships with the customer base by having events and the biggest one is Oktoberfest,” Director Neil Kitching explained. “Every year we do an Oktoberfest event. Last year, we had about 80 pubs around the country running Oktoberfest parties.”

Cave Direct began in 1979 as a beer and wine import company. Retail premises followed in 1984 with a focus on Belgian beers. These Belgian beers proved so popular that Cave Direct slowly built up the wholesale trade, expanding into a range of European craft beers. Cave Direct was perfectly positioned to embrace the boom in craft beers in the UK from 2010 onwards

Today, the business supplies between 400 and 500 beers from depots in Kent, Bristol, Manchester and Newcastle, with over 5,500 sqm of warehousing. The 70 employees deal with every aspect of the beer distribution, according to Mr Kitching: “We call our model ‘closed-loop logistics’. All our import customs documentation is done in-house utilising various means of transport, including two of our own articulated trucks used for multi-brewery collections around mainland Europe.

“Those trucks, plus the rest of our fleet, then deliver and col lect direct to on and off trade throughout the UK, covering 95% of the population.”

Aside from the last two years blighted by Covid, Cave Direct has enjoyed steady, yearly growth. The forecast for 2022 is that Cave Direct will sell 80,000 hectolitres of beers, which translates to over 14 million pints, bringing in £25 million turnover. Almost 80% of this business is with the independent free trade segment.

Online stock

Cave Direct’s website hosts its extensive portfolio of over 350 per manent lines of the best beers from around the world, Europe and the UK, boosted by a weekly specials list with around 150 draught and packaged beers. Created after heavy investment, the live online ordering system benefits both the client and Cave Direct. 80% of the company’s product in terms of volume is imported with the remaining 20% for the domestic market.

“When our customers put their orders in, they know precisely what stock they’re getting,” explained Managing Director Colin Gilhespy. “Our online system puts us ahead of a lot of other suppliers.”

Part of this system sees Cave Direct utilise Skynamo’s advanced reporting and automated tracking of sales activities. The service gives managers and business owners more confidence in the infor mation they are getting from the field and better control and clarity of their sales process.

Cave Direct’s website features beers and spirits from over 120 breweries, sourced from 13 different countries in Europe and North America. About 80% of the Cave Direct beers are imported from

Managing Director Colin Gilhespy

Director Neil Kitching

PAULANER

editorial mention

Skynamo helps reps to do what they do best – sales!

Cave Direct is a family-owned importer and wholesale distributor of speciality and craft beer across the length and breadth of the UK, to approximately 5,000 customers.

That large cohort of customers is serviced by a sales team of just 12, 11 of whom are in the field, and a national accounts manager.

Having the ability to input data on the go allows reps to focus on selling, said Laurence Smales, Cave Direct’s Head of Sales. “If you’re a field rep, you don’t like being sat at a desk. You’d rather be out and about, talking to customers. It’s also allowed the man agers to get an overview of what’s happening out in the field.”

Cave Direct has been using Skynamo for about four years now: “Once we were presented with what Skynamo can do, we were pretty sold,” he said.

editorial mention

Paulaner is Munich’s most famous beer brand – brewing since 1634 beer is brewed according to the German Purity Law: relying on all-natural materials alone, without the addition of aromas, flavour enhancers, or beers are being the

Europe and 70% of the range is exclusive to Cave Direct. And the warehouses remain stocked thanks to its involvement in the supply chain.

“We have two articulated lorries operating on the continent, visiting Germany and Belgium, which are the two main European countries we work with. Most of our stock comes in on our own trucks,” Mr Kitching said.

“Notably, this gives us the ability in Belgium to work with 20 or 30 different breweries. We can visit each brewery, picking up what ever small amounts we need on a regular basis. Plus, this collection method keeps the beer fresher and means we’re able to work with returnable kegs and keg systems.”

Sustainable beer

Over 75% of the trade features returnable kegs, but this is just one aspect of Cave Direct’s sustainability strategy. The company keeps a close eye on the efficiency of its fleet of lorries, notably the engine specifications. Electric engines are not currently an option, given

the Cave Direct logistic model, but the company ensures it runs lor ries with the cleanest Euro six rated engines.

The company also utilises returnable bottles and packaging, minimising landfill. Added to this, many modern craft brewing businesses are choosing cans over bottles, which makes recycling easier and more efficient.

To further ease the operation of its two lorries in Europe, Cave Direct took an unusual step for a beer importer:

“In 2020, we become customs agents,” explained Mr Gilhespy. “This put us in a very good situation and our strategy has always been to do our own logistics.”

The personal connection with European breweries is only the start of the relationship Cave Direct enjoys with suppliers. “There’s about eight or nine core breweries on our list, which we’re exclusive with,” Mr Kitching said. “We invest quite heavily in promoting these breweries and we have marketing budgets for the biggest ones. For all of these suppliers we have a dedicated sales team whose job is to push these core breweries first.”

Popular brands at Cave Direct includes Kona Brewing Co in Hawaii, amounting to 10-15% of turnover. Kona is the top US imported craft ale in the UK, brewing sustainably crafted lager and ales. However, the most popular product at Cave Direct is the beer from the Munich brewery Paulaner, accounting for a massive 30-35% of the com pany’s business. Paulaner brew lager and weissbier, or wheat beer, along with special beer produced for Oktoberfest.

Festivals large and small

Cave Direct embraces beer festivals such as Oktoberfest as a key marketing tool. The company regularly runs events promoting Oktoberfest or individual breweries. Last year, the company ran the very first Paulaner Oktoberfest Official Tour of the UK. Nine venues around the UK hosted opening and closing parties with Paulaner on draught throughout the two-week event. It offered a similar level of events for this year’s festival.

This summer, Cave Direct also attended the Craft Beer Festivals in Manchester and London. More elaborate is the support offered for the Prize Pils Omnipollo Launch and the Garage x Cave Porron Tour. Both of these events at select locations across the UK mix trade tastings in the afternoon and tap takeovers in the evening which are open to the public.

Alongside importing the beer direct from European breweries, Cave Direct fulfils the entire supply chain role by delivering onwards from its four “We’vewarehouses.probablysold into 2,500 to 3,000 outlets around the UK,” said Mr Kitching. “These range from Greene King and Tesco, the big guys, but all the way down to the corner shop and the specialist bottleCaveshops.”Direct also supplies to pubs and bars around the country. The company believes education is the key to growing the quality beer“Wesector.have a lot of experience in bar setup,” Mr Kitching continued. “Our reps are good at giving advice, but the biggest thing we have is

a very good training programme based around a core list of beers. We make sure the client has everything they need, such as the right glassware and knowledge about the right pour for the draught beer.”

Inspirational growth

Operating this innovative package of services brought Cave Direct recognition in the 2020 edition of the 1,000 Companies to Inspire Britain, compiled by the London Stock Exchange and the Financial Times.

“2019 was our busiest year, ever,” Mr Gilhespy said. “Previous to 2019, we’d had about four years of 20% plus growth, which contributed to our Financial Times award. However, 2020 and 2021 were strange years for us, as they were for many, because of DealingCovid.” with the impact of Covid shutting down every bar in the country was a major challenge for Cave Direct. Open communica tion, strong relationships with clients and a sensible attitude towards repayment plans enabled Cave Direct to survive relatively unscathed. The worst seems to be over, and growth has returned, according to Mr“TurnoverGilhespy. is now about 8% higher for the first five months of this year, compared to our benchmark of 2019.”

“We’ve got a very good structure,” agreed Mr Kitching, “We’re very well placed within the industry with our structure. The future is just about growing the same model that we’ve been pushing for the last five, six years with our core list and exclu sives, maybe introducing a few new breweries, depending on theCelebratingportfolio.”

the return of Oktoberfest in 2022, there is plenty to be excited about at Cave Direct.

“When you’ve got a beer list like ours, it’s not difficult to be excited,” concluded Mr Kitching. “There’s a lot of people in our company who are ‘beer nerds’. We get excited about visiting brew eries, speaking to brewers and seeing what new beers are coming.”n