SCL 2077 Sphere 12_wine

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					 R E T A I L


                 Watson’s Wine Cellar is changing the way people in Hong Kong buy wine and looking
                                          to expand the concept further afield.
                                                          By Tim Metcalfe

          o you know your Chardonnay        aspect of what is basically a simple, old-   those who haven’t. And most of us fall

D         from your Semillon? Or your
          Chateau Lafite from your
Chateau Latour? Or your 1993 vintages
                                            fashioned drink.
                                              After all, when you order a steak, do
                                            you ask for the name of the hapless
                                                                                         into the latter category.

                                                                                         Pure and Simple
from your 1983s?                            beast’s grandfather, what farm it came       Herein lies the challenge for Watson’s
  Do you detect cherries or a slight oak-   from, or what year it was born? Do we        Wine Cellars, the biggest and most popu-
iness in your Pinot Noirs? Is your          discuss superior years for harvesting        lar wine retailer in Hong Kong, as it
favourite Sauvignon Blanc citrusy           coffee? Of course not.                       embarks on an ambitious initiative to
or herbal?                                    Doesn’t it really come down to just two    expand globally by evolving, innovating
  Confused already?                         things: Is it in my price range? Will it     and adapting a retail strategy specifically
  Like most of us, you probably feel        taste good with the pasta, chicken, or       devised to meet the needs of modern
embarrassed when you admit that you         seafood I’m having for dinner?               wine culture.
are clueless about wine.                      The fact is, there are two distinct          “Wine is surrounded by too much
  Relax. You’re one of the vast majority    varieties of wine buyer – the aficiona-      mystique,” says Christian Nothhaft,
who simply enjoys wine, but is not so       dos, sommeliers, connoisseurs or             Director and General Manager of A.S.
devoted to it as to know every single       oenologists who have studied it, and         Watson Wine. “For most of us, it’s intim-

                                                                                                                           SPHERE      27
 R E T A I L

     idating, and we are too shy to ask for       whether they are knowledgeable about      Concept and Culture
     advice. It’s admitting you don’t know        wine or not.                            In response to what it has identified
     anything about the product when the            In charge of day-to-day operations,   as a vast, untapped wine-challenged
     wine community makes you feel you            Liversedge also spends much of his      market, Watson’s Wine Cellar,
     should. But you have to remember that        time buying.                            in a metaphorical sense, is taking its
     wine connoisseurs are an                                                                           wine out of the elite’s
     elite group.”                                                                                      stuffy cellar.
        Paul Liversedge, General                  Watson’s is taking its wine out                          As the company embarks
     Manager, Watson’s Wine                                                                             on expanding in Hong
                                                     of the elite’s stuffy cellar
     Cellar HK, concurs: “Many                                                                          Kong, the image of a tradi-
     consumers in Hong Kong                                                                             tional cellar’s wine-racks
     are already well educated in fine wines,”      “To make sure we have the right and subdued lighting is on the way out.
     he says. “They are generally high-income     wines, we read a lot, we go to major      In its place is a light, bright new look
     individuals and we also supply top           wine fairs around the world, and we try and philosophy – initially pioneered
     hotels, restaurants and clubs. But a far     our own producers’ wines,” he says. at new outlets in Central and Causeway
     greater number don’t know much about         “Tasting is very important. We taste Bay, but ultimately to set the benchmark
     wine, so we are trying to make it easier     everything before we stock it. We keep for the entire chain, which is eyeing
     for ordinary people to understand.”          up to date with the latest vintages and opportunities to develop the concept
        The key to success, of course, is being   compare them with what we’ve got. both elsewhere in Asia and ultimately
     able to supply the best wines at the best    If we see wines we don’t have that in Europe.
     prices so customers can be sure of getting   are highly rated, we make an effort       At the new store in Central in
     a quality product they will enjoy,           to get them.”                           the heart of Hong Kong’s business dis-

28    SPHERE
                                         GOOD, BETTER, BADARACCO

            hen Thomas Jefferson sailed      the company is not selling.”

                                                                                           for special events.
            back to America from                Founded in Lugano on the Swiss-              The company also supplies quality
            Europe in 1789, he travelled     Italian border in 1879, the company is        vintages to Watson’s Wine Cellar
with a selection of fine French wines.       today a leading wine trader with one of       and is set to play a signifi-
To ensure that no one would substitute       the largest vintage wine collections in       cant role in expansion
his bottles for inferior vintages during     Europe, which numbers approximately           plans into the European
the long voyage, the future President        750,000 bottles.                              retail market.
of the United States personally signed          Celebrating its 125th jubilee this year,     An increasing demand
each one.                                    Badaracco was bought by Hutchison             for wine tasting at
  Today, two of those original bottles,      in 2001 as a springboard into the             Badaracco’s cellars sees
a 1784 and a 1787 vintage , are              European market.                              regular groups of up to
the oldest in Badaracco’s im-                   The acquisition was seen as a good         60 people attending.
pressive collection.                         investment as the price was close to the        On the staff of
  “Their value would be whatever             value of its store of rare and prestigious    15 is Paolo Basso,
someone was willing to pay,” says            vintage wines.                                the world’s No 2
General Manager Stefan Graf, “but               The collection includes one of the         sommelier. He will
                                             world’s biggest selections of large-for-      take part in the
                                             mat (three-18-litre) bottles of old           World Sommelier
                                             wines, including a classic range of rare      Championships
                                             40-50-year-old Italian vintages.              in Athens dur-
                                                Badaracco specialises in acquiring         ing the 2004
                                             private collections from all over             Olympics.
                                             Europe, both privately and at auction,          Badaracco also
                                             for onward sale. The Badaracco Price          produces Ratafià
                                             List is a valuable guide for wine buyers      del Ticino, a tradi-
                                             everywhere and the company receives           tional Swiss-Italian
                                             daily orders from collectors and              walnut liquor.

trict, the gulf between the average punter   Rothschild 1982 will set you back             with wine magazines and reference
and connoisseur even extends to floors.      HK$10,900. Here, each bottle is not only      books so enthusiasts can relax and take
At street-level are the affordable New       kept inside the room under lock and key,      time to select what they want. Music
World vintages. With few priced over         but has its own individual security tag.      plays in the background and customers
HK$200 and some bottles as low as              With around 9,000 wine-producing            can also watch Plasma TVs for informa-
HK$88, the wines are in everyone’s           chateaux, and 13,000 wine growers in the      tion on current promotions, wine pro-
range, despite the 80% government tax.       Bordeaux region alone, Fine Wine              duction techniques and vineyards. Also
   Step up the stairs, however, and you      Manager Jeanette Peterson’s role is cru-      scheduled are regular “Meet the Maker”
know you’re going to be spending more.       cial in ensuring that the Fine Wine           tastings with touring winemakers and
Here, customers explore the pricier “Old     Rooms stock the very best vintages the        chateau owners.
World” of French champagnes, Bordeaux        world has to offer.                              “As a specialist retailer, we are a bit like
and Burgundies alongside up-market vin-        “Fine Wines is a very specific area,” she   a cigar divan,” Nothhaft elaborates,
tages from the Rhone Valley, Germany,        says. “It can be difficult to get access to   “we’re trying to make the customers feel
Spain and Italy.                             them because of worldwide demand. We          at home. It’s all part of upgrading our
   There are still bargains to be found,     travel regularly to Bordeaux and other        overall concept and culture. Like
with champagnes costing from HK$200          regions to taste from the barrel and per-     Starbucks or Pacific Coffee, we’re pre-
and some decent French country wines         suade suppliers of the importance of our      senting wine in a modern, consumer-
at half that price, but most vintages are    company. Customer relations is also very      friendly way that suits metropolitan soci-
beyond most budgets – especially in the      important. Because of the high cost, they     eties. Why sell wine from cellars anyway?
temperature-controlled Fine Wine             want to talk about Fine Wines before          We want to make Watson’s Wine Cellar
Room, which is stocked with Grand            they buy.”                                    a place customers want to come back to.
Crux, Premier Crux and ancient Italian         A new concept within this Fine Wine         If you push customers in and out, they
rarities, and where a Chateau Lafite         retreat is a mini-club-style seating area     tend to feel uncomfortable and leave

                                                                                                                                SPHERE       29
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                              TASTEFUL INVESTMENT                                                      FACT FILE

                                                                                                       •   More than 2,000 varieties of
                                                                                                           wines in stock.
            xtending wine retailing to an invest-   tificates at any time before the

     E      ment level, Watson’s Wine Cellar
            this year started offering wine
     futures, also known
                                                    delivery date, and the market value
                                                    constantly changes.
                                                                              Wine futures
                                                                                                       •   Approximately 500 French wines,
                                                                                                           100 Champagnes and sparkling
                                                                                                           wines, 300 Australian wines,
                                                                                                           and 200 American wines.
     as en primeur, over                                                   are limited in
     the counter for                                                       their availability.
     around a hundred                                                      Even Watson’s               •   More than 500 wines are exclu-
     top 2003 Bordeaux                                                     Wine          Cellar            sive to Watson’s Wine Cellar.
     vintages.                                                             doesn’t know
        While        the                                                   exactly how many            •   The oldest bottle in the Fine
     wines are not                                                         cases it will be                Wine collection is a Chateau
     scheduled        for                                                  allocated by each               Lafite Rothschild 1903 in a hand-
     bottling       until                                                  chateau, so a                   blown bottle with original label
     2006, customers                                                       first come, first               and cork. Price: HK$22,880.
     can purchase the                                                      serve policy has
     rights to cases                                                       been adopted.               •   Most expensive is a jeroboam
     in advance.                                       “When we are informed of our                        (5-litre) of Chateau Haut Brion
        Just as with buying futures in coffee,      allocation, and calculate how many                     1989, priced at HK$99,990
     sugar or pork bellies, the main advantage      cases we can spare, customers are                      and rated 100 points by
     of buying en primeur is the price.             contacted for payment in order                         Robert Parker.
        Prestigious wines can easily double in      of the time they reserved the wine,”
     value by the time they come to market.         explains Jennifer Tse, cluster manager             •   The second-most expensive
        A wine priced in shops at HK$1,000          of the new Watson’s Wine Cellar store                  is a magnum (150cl) of Chateau
     a bottle, such as Chateaux Clerc Milon         in Central.                                            Mouton Rothschild at HK$79,800.
     for example, sells en primeur for                 Leading chateaux only offer futures for
     under HK$300.                                  a limited period, usually between April
        Wine futures are also exempt from           and July, ahead of the following
     government tax, which is 80% in Hong           year’s harvest.
     Kong. Although tax is payable if the               “We only just started with futures
     wine is eventually delivered, the savings      this year but the market is already
     are still substantial and customers can        popular,” Ms Tse adds. “For wine
     alternatively store their vintages in          enthusiasts, it’s an interesting form
     European cellars.                              of investment. For me, it’s a bit like being
        They can also trade the futures cer-        a stockbroker!”

     with their money. The interesting thing        wine guru Robert Parker and Wine               function for the completely lost and con-
     about letting customers sit around and         Spectator magazine, two of the best-           fused. No idea what you want, except
     reflect is that they spend more. And if        known arbiters of fine wine.                   that it should go with your Thai salad or
     they don’t buy today, they will come back         In another industry breakthrough,           English roast beef?
     and buy tomorrow. People who are com-          Watson’s Wine Cellar is taking wine               Simply select your cuisine type on the
     fortable with a brand usually buy the          retailing hi-tech with interactive “Wine       kiosk’s touch-screen, click on a sub-sec-
     more expensive line of products.”              Kiosks”, which are easy-to-use computer        tion of dishes within it, and the comput-
                                                    screens linked to a data bank. Every bot-      er delivers a list of suitable wines, com-
     From Label to Table                            tle has a barcode, which the computer          plete with a “dollar-rating” from “$”
     So where does all this leave the customer      identifies to screen a host of information     to “$$$$$”.
     who only wants a suitable bottle to go         about the particular vintage. They offer          From the data bank, it emerges that
     with his dinner but doesn’t have a clue        an individual food-matching tip.               German Rieslings and Semillons can com-
     where to start looking?                           “As far as I’m aware, nobody else in the    plement a traditional Cantonese menu.
       Alongside the grape variety and price,       world does this,” says Liversedge. “It         For an Indian curry, try Beaujolais,
     Watson’s Wine Cellar also labels every         takes a great deal of effort to keep the       Burgundy or Cote du Rhone, especially
     bottle with essential food-matching tips       system updated, but it’s worth it if you       Pinot Noirs.
     and, if available, the vintage’s official      want to give the best service.”                   “The pairings are constantly being
     tasting “score”, marked up to 100, by             Most revolutionary of all, however, is a    increased,” says Liversedge.

30    SPHERE
                                               QUEST FOR THE BEST

          uality, value-for-money wine         “Everyone in the world wants these     “The idea is to source Fine Wines
          is the benchmark for selecting     including our Hong Kong customers,”    at different price points that are more
          around 2,000 vintages for sale     says Liversedge.                       accessible to the market, if we can
at Watson’s Wine Cellar outlets.               But Watson’s Wine Cellar also        get in there before experts like Robert
   “We won’t list a wine unless we feel it   tours the lesser-known c hateaux       Parker, all the more satisfying for us
is excellent for the price,” says General    from the sub-regions of Bordeaux, in   and the customer, because it means
Manager Paul Liversedge.                     search of outstanding value.           that value is better.”
   Selecting from the                                                                                         Beyond        the
vast amount on offer                                                                                       famous Bordeaux
around the world is                                                                                        and Burgundy vin-
an art form by itself                                                                                      tages, Watson’s
– and every single                                                                                         Wine         Cellar
vintage is tasted                                                                                          sources        from
before going on sale.                                                                                      across the globe,
   For premier crux                                                                                        including Australia,
Bordeaux classics,                                                                                         New       Zealand,
fine wine buyer                                                                                            South America,
Jeanette Paterson                                                                                          South Africa, the
attends exclusive                                                                                          US and across
tastings at all major                                                                                      Europe.
c hateaux       twice                                                                                         Along with New
a year for a fore-                                                                                         World         buyer
taste of forthcoming                                                                                       Candice Chan,
wines from the                                                                                             Liversedge also
barrel.                                                                                                    attends numerous
   A watchful eye                                                                                          international trade
must be kept on                                                                                            shows. “They are
vintages that are                                                                                          all in one place, so
highly rated by top                                                                                        it’s a convenient
wine        journalist                                                                                     way to taste a lot
Robert Parker.                                                                                             of wine,” he says.

                                                                                                                      SPHERE      31
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                                                    A PASSION FOR WINE

         t’s very rare for a company to                                                       and who are especially enthusiastic

     I   encourage its staff to “drink on the
         job”, but that’s exactly what Watson’s
     Wine Cellar does.
                                                                                              may subsequently be offered
                                                                                              advanced-level training, although this
                                                                                              HK$70,000 qualification is “not being
        Hong Kong’s leading wine retailer has                                                 offered yet”.
     embarked on a programme to tutor all                                                       To facilitate the programme, Watson’s
     staff up to international standards                                                      Wine Cellar successfully applied
     in wine.                                                                                 to become an official Approved
        “It’s part of our mission to create the                                               Programme Provider for the WSET,
     best wine shopping experience in Asia,                                                   which is approved by the British govern-
     says Ross Edward Marks, Manager                                                          ment as a national awarding body of
     for New Business at Watson’s                                                             vocational qualifications.
     Wine Cellars.                                                                              Marks himself is an Approved Tutor
        Marks is highly rated worldwide as a                                                  for the programme.
     top sommelier and he regularly oversees                                                    Ultimately, Watson’s Wine Cellar
     tastings with staff to keep them abreast                                                 hopes to offer WSET tutoring to inter-
     of new offerings in the stores.                                                          ested customers as well.
        What’s more, around 50 staff are                                                        “The idea is to offer mini-courses on
     undergoing comprehensive training in                                                     Bordeaux wine, for example,” says Paul
     conjunction with the London-based                                                        Liversedge, General Manager, Watson’s
     WSET (Wine & Spirit Education Trust).          Training will bring staff up to inter-    Wine Cellar HK. “We want to make
        “Our goal is to have sales staff deeply   mediate level wine knowledge, and           people aware that we’re not just a big
     informed about our entire product            those demonstrating an ability              company selling wine, but contributing
     range,” says Marks.                          to handle university-style learning         to local wine culture.”

        Better still is the advantage Wine                                               Hutchison Whampoa conglomerate, the
                                                     Despite its relatively junior standing
     Kiosks present to wine retailing in a                                               company can expand with relative ease.
                                                  in wine retailing (the first store opened
     multi-cultural and multi-lingual society     less than a decade ago) Watson’s Wine    Apart from controlling more than
     like Hong Kong. The write-ups are also       Cellar sees expansion potential in both1,100 retail outlets across Asia already,
     in Chinese and Korean, with more lan-        Asia and Europe.                       ASW operates some 2,600 health
     guages on the way, including Japanese.          A Hong Kong retailer making waves   & beauty stores in 18 countries across
                                                  in the bastion of “Old World” wine may the UK and Europe.
     On the Grapevine                             sound unimaginable, but Nothhaft         “We are probably one of the most
     Looking into the future, Christian           believes this vision is realistic.     competent retailers in the world, and
     Nothhaft doesn’t see any                                                                        in Asia we are one of the few
     reason why the kiosks                                                                           companies with a balance of
     can’t stand as miniature               Taking wine retailing hi-tech with                       business in Europe as well,”
     wine outlets in their                                                                           says Nothhaft. “So we
     own right.
                                                     interactive kiosks                              should be able to find a for-
        “Why not?” he asks.                                                                          mula to expand wine retail-
     “I could imagine the day when every         “Firstly, given the huge consumption ing. We have the expertise to do it.”
     office or housing block has a wine kiosk, of wine in Europe, with customers will-     Proposals for expansion are already
     like they have soft drink dispensers. Or ing to pay relatively high prices for good on the drawing board.
     you could choose a wine, pay for it and quality, there is a fairly low penetration    “It’s an unbelievable opportunity,”
     have it delivered to your home later. of specialist wine stores,” he notes. Nothhaft adds. “Most other wine com-
     They have dispensers for everything in “Most Europeans buy their wines in panies are relatively small, often with
     Japan already, so why not wine?”          supermarkets.”                            problems of cash-flow and being
        Watson’s Wine Cellar sees a local        The most significant passport squeezed by supermarkets and whole-
     market saturation point at about to Europe, though, is the ASW salers. We just don’t have the same
     15 stores, a target it will reach within group itself.                              problems. We have all the backing and
     the next year.                              As part of the cash-rich global resources we need to expand.”

32    SPHERE

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