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Rumour confirmed

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For those of us outside the SAQ, trying to understand the machinations, motives and plans of the company’s decision-makers is like being an inmate in Plato’s cave. Sitting with our backs to the entrance and forced to face a wall, we attempt to divine what is happening beyond the cave by studying the shadows the actors cast upon the wall.

For several years now, the shadows have seemed to indicate that the SAQ was preparing to make a major shift in its sales model: to begin selling private imports directly to consumers (instead of forcing them to pass through an agency) and to stop requiring that all private imports be purchased by the case.

Though rumours to that effect abounded, concrete signs were few. One of the earliest was the announcement that the SAQ intended to double its offer from the current 12,000 or so products to somewhere between 20,000 and 24,000 products in the next few years. How could it quickly and cost-effectively pull that off without massively expanding its store network, sales force and supply chain? Selling private imports online seemed the only answer. That in the neighbourhood of 10,000 to 15,000 products are currently available through the private import channel – exactly the number needed to pull off the trick – lent credence to the hypothesis.

Other signs? The monopoly’s increasing focus on online sales, including its recent introduction of products available only on SAQ.com. The roll-out of the Click, Purchase, Pick Up service. Factoids like the Montreal Distribution Centre’s reportedly setting aside a large area for an unspecified purpose.

In an interview with Bill Zacharkiw in today’s Gazette, Alain Brunet, the SAQ’s president and CEO, finally puts the rumours to rest (emphasis mine):

BZ: Now we are seeing a complete fragmentation of the market. Go to any wine bar or fine restaurant, and the vast majority of wines on the list aren’t even available at the SAQ, only as private imports. I don’t even know most of these wines.

AB: The private import market has really developed over the past five to 10 years. Over 70 per cent of the sales of private import wines are restaurants.

BZ: But that’s mostly due to restrictive policies that allow these wines to be purchased only by the case, which limits the individual consumer access to all this choice.

AB: We know this is an important trend and it’s over a $125-million business. We aren’t trying to slow it down; in fact, we want to accelerate it. What we have lacked is an effective way to distribute all these niche products. Now we have the technology, and within two years our goal is to have all wines available by the bottle on SAQ.com.

Insiders I’ve spoken to say the target launch date is the fall of 2018.

Agents I’ve spoken to don’t appear particularly excited about the concept. Then again, like the rest of us, they’ve been kept in the dark and have little idea of how it might work. That being said, most feel it is unlikely that every product in the private import channel will be available through SAQ.com.

This change and the overall push toward online sales will probably have major implications for the SAQ’s store network. Look for some thoughts on that in a future post.

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Written by carswell

February 25, 2017 at 11:23

Posted in Commentary, News

Tagged with ,

5 Responses

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  1. “Agents I’ve spoken to don’t appear particularly excited about the concept.”
    Though it’s understandable – how will they keep some clients captive with the allocation system ? – it seems very shortsighted to me. An opportunity like this to expand so much distribution and pool of potential buyers will have a cost, but still it is an incredible opportunity.

    JB

    February 25, 2017 at 14:40

    • Increasingly, it has become part of the selling proposition of restaurants and wine bars to offer private imports and the surrounding aura of exclusivity. Not to mention making the markup more opaque. I suspect intrusion into this relationship is what feared.

      thomasein

      February 25, 2017 at 16:17

      • A corollary of this, I think, is that we’ll see a surge in the number of restaurants and wine bars availing themselves of the private order channel, i.e. having the SAQ import exclusively for them products that are otherwise unavailable in Quebec.

        carswell

        February 25, 2017 at 16:22

    • Point taken, JB, though in their defence the half dozen or so agents I’ve spoken to seem less concerned about keeping clients captive than wary about things like uncertainty, being forced to jump through new hoops, having to learn the ins and outs of yet another excessively bureaucratic system and being obliged to shoulder even more financial risk than the significant amount they already bear.

      From the consumer’s standpoint, however, this could be a godsend. Not only will the number of easily available products double, some of the products involved are super exciting. If it works out, Quebec wine lovers could have straightforward access to a range of wines virtually unparalleled worldwide.

      carswell

      February 25, 2017 at 16:19

      • I understand this, and I was probably shortsighted myself by pointing out only this. But I sometimes have the feeling that some agencies, during recent years, developed themselves by using this leverage to make clients buy more. Fair enough, they have to live in a very competitive business. But once again, this is a formidable opportunity for development and they should embrace it.

        JB

        February 26, 2017 at 11:14


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