Why we will always need spirits wholesalers

Nick Gillett, managing director at Mangrove Global, muses on Diageo’s recent decision to implement minimum order values and how it will affect wholesalers.

Diageo’s announcement that it’s set to stop working with wholesalers that don’t meet a minimum order value set tongues wagging across the spirits industry last month.

The company’s decision isn’t a question of right or wrong, and I imagine it’s symptomatic of the pressures our industry is under. The increasing cost of personnel, logistics, warehousing – something has to give if you want to work efficiently and avoid soaring consumer prices.

While it isn’t a move we’d make at Mangrove (we are a very different business, with a very different portfolio), Diageo is an incredibly successful distributor, and it’s got there by making bold moves.

But, to put it simply, this presents other distributors with an opportunity and a gap to fill – and it suits us because wholesalers, large and small, play a vital role in the success of our portfolio.

In 2021, the number of UK beverage wholesalers reached its highest number in well over a decade, jumping to 3,909 from 3,513 only the year prior. While the past few years have been tough on the whole industry, there are still vast numbers of wholesaling enterprises out there – the vast majority of which will no longer be able to meet Diageo’s minimum order values.

At Mangrove, we represent the best of independent spirits producers, who have created exceptional liquids and premium brands, all tied together with a compelling story behind each one. Many of our brands aren’t yet household names, but they have huge, loyal followings that have been built through intelligent brand-building activity, and wholesalers have been such an important part of that.

We need our portfolio stocked in venues and retailers both small and large. Yes, the nationals are incredibly important – but so are the independent venues and smaller outlets, where conversations happen. These are places where a bartender with a passion for spirits can recommend a mezcal to a Tequila lover, upsell a world whisky to a Scotch drinker, or maybe convince a regular to try a new category of spirit entirely.

We rely on that storytelling exercise to support our work. The liquids within our portfolio are fully appreciated when the drinker has an understanding of the brand behind it – and so we’ll always be delighted to work with wholesalers of all sizes.

Diageo is bursting with talented people. And this decision won’t have been made if it didn’t make commercial sense for the company. But, what I will say to any wholesaler left with a gap in their product range thanks to this latest development: come and talk to smaller distributors such as Mangrove. Our portfolio really is filled with the best tipples available in the UK. We know our spirits, and we’re a pretty good bunch to work with too.