Published On: Fri, Dec 2nd, 2022

Laithwaites’ success reveals how smaller is more beautiful for wine lovers and makers | City & Business | Finance

Now the UK’s largest direct-to-consumer wine seller, the family-run business was begun by Tony Laithwaite 53 years ago after he saw the opportunity to buy bottles of Bordeaux direct from makers. Using a loan from his nan to get going, he transported the stock back home himself. 

Last year the company, whose formal name is Direct Wines, toasted a £450 million turnover and delivered 7,500 different products to domestic customers sourced from 450 producers.

As well as retail operations in the UK and Australia, it also imports wine into the US.

Although now an industry grand cru employing 700 in the UK, Berkshire-based Laithwaites’ modernising, down-to-earth approach has never wavered and it remains a dedicated debunker of wine snootiness.

“Our purpose is to connect wine makers with wine lovers, We sell great quality, good value wines, but not so many of the famous brands,” explains group chief executive David Gates.

“We’re wine nuts, we taste 40,000 wines a year to select our range. As a family business we prefer buying wines from small, family-run vineyards – people who love making wine. It creates an eclectic mix that customers love.

“For decades Tony has found wines from across the track, on one side of a boundary, they can sell for hundreds of pounds, while just a few metres away, so the same everything including grape varieties, they can just cost £25.

“We’re in this for the long term, we don’t have a target multiple to hit for a listing. We always pride ourselves in finding the latest new thing in wine, at present that’s great wines from Greece, Moldova, and Uruguay.”

In parallel to subscriptions holding up held up well and gifting sales continuing to climb, the development of sustainable packaging is also now top of Laithwaites’ agenda. 

Both lighter weight and 100 percent recycled glass along with paper bottles, more eco-friendly closures, and labelling all feature in its products.

A new Tetra Pak has just been launched while bag-in-box wines have become a fixture, their quality now beyond question.

“Sales are up 400 percent in this category. We are working to be net zero by 2035,” remarks Gates.

This year was a vintage summer for grape growers, however, next year has a “stormy feel”, he says as like all companies Laithwaites contends with rising overheads and supply constraints including glass, cardboard, and energy charges.

“We’re still waiting for an upside to Brexit,” observes Gates. “The deposit return scheme launching in August in Scotland and the UK Extended Producer Responsibility in 2024 will both increase administration. Packaging recycling proof notes cost 20 times more than they did 18 months ago.”

The big beast in the room, alcohol duty increases, remains however quiet at present and the hope is a rethink is happening.

Previous tax rise mentions were set to hit the wine industry especially hard with a combined hike of some 20 per cent next year, creating a massive knock-on effects for producers and the hospitality industry.

“We are resilient but are really, really concerned many small businesses such as bars will shut up shop,” says Gates.  

Along with further warehouse automation and digital experience development, Laithwaites will be growing its US operation where it sees big potential delivering European wines to doorsteps.

Championing small growers with multicultural roots, such as those whose heritage is in African and Latin American communities, will be another key focus, epitomising Laithwaites’ approach.

“Currently these growers are under-represented, yet it was their families who picked the grapes,” says Gates. “We are very good at spotting opportunities, now it’s their time.”

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