We welcome Graham Sumeray, Chief Executive of Fine + Rare, to our regular series of interviews with leading figures in the business community.
Hello Graham, tell us about Fine & Rare and your role as Chief Executive
Fine + Rare is a broker of fine wines. We use a high tech platform that enables customers to search a vast database of around 50,000 different wines. This is a level of choice way beyond our competitors and something of a dream for wine lovers. We have a dedicated team of 30 account managers, including a small team in Hong Kong, who advise and guide our customers on their wine choices.
The business was founded in 1994 by Mark Bedini and Bud Cuchet. They have developed a unique business model, quite different from the rest of the industry in so far as we are not stockholders. Through the technology tool they developed, we bring wines together from a huge variety of sources from an extremely fragmented industry and it is this model that enables us to offer a massive range of wines (more than ten times as large as our nearest competitor) and to be completely impartial in the advice we give customers. By the time Mark and Bud brought me in as CEO last year (initially as COO), the business was turning over £60m. Their aim was for me to grow the business to triple its size over the next five years. The growth strategy I developed was challenging due to the complexity of the business model.
To implement this strategy, I have recruited an outstanding senior management team, including a Chief Technical Officer, Head of Fine Wine, Head of Marketing and a Supply Chain Director. The goal is long term growth, but I have been spending much of my time consolidating the business, including expanding our warehouse space, improving recruitment, training and our marketing. Businesses that experience rapid growth in a short period of time often, in my experience, need a short period of consolidation before they can grow rapidly again.
How has the economic recession impacted your business?
Our customers are high net worth individuals who regard fine wine as a ‘passion’ investment. They love to collect and drink wine and are willing to spend to acquire often quite scarce wines. We still face unique challenges: this year, for example, saw a particularly poor en Primeur campaign. This is when leading chateaux allow investors to buy wine when it is still in the barrel and reserve a volume of the vintage prior to bottling. While 2009/10 produced great vintages, 2011 was average and yet many of the chateaux tried to put their prices up, so this year has been disappointing. We have managed to offset some of this difficulty by diversifying into different markets, especially Burgundy, Rhone, Italy, Champagne and some New World wines.
What challenges are you facing over the next 12 months?
Most of the challenges we face are internal. We have a number of bottlenecks such as a technology platform which is difficult to enhance and this is restricting our potential growth. That’s why we need to overhaul it to provide a level of functionality similar to amazon or eBay – this will include auctions, peer to peer reviews, dealing between our customers and a number of unique initiatives which will be drip fed over the next few months.
Do you think that the government should intervene more?
As our business is so global in scope, we are not heavily influenced by the UK Government. Over 60% of our sales are international and we won a Queen’s Award for International Trade in 2011. We are much more affected by global wealth trends, so we have felt the impact of the struggling international stock markets.
Do you have any Non-Executive Directorships or consultancy / advisory roles? If so, what have you learned from the experience?
I am a governor at a local school, where I help to provide commercial thinking to the school’s development. Fine + Rare has two Non-Execs on board whose advice and guidance is invaluable. One has oversight of our technology development and the other is expert at helping us improve our sales effectiveness; they are both customers, so they share our passion and knowledge of the wine market.
Do you have any advice that you’d pass on to a newly appointed company director?
I have three pieces of advice. First, you need to win over your peers and staff: do this by being authentic and approachable and let your results speak for themselves. If you have a good working relationship with your colleagues it makes it far easier to develop your business.
Secondly, ensure that you get the best possible people on board. Never compromise when it comes to staff. If you have to make changes to the payroll, do it early.
Finally, ensure that you have a compelling strategic vision. People in your business must understand your vision and get behind it. Always value the input of your peers when creating strategy.
What do you like to do outside of work?
I have three children, which takes up a lot of my time. My eldest is 18 and currently planning for her gap year, which is a bit scary. As a foodie, I love good food, often at home, and good wine. When I am not doing family-related things, I like to play golf.
Who is your hero/personal inspiration?
I have great respect for Chris Gent, former CEO of Vodafone and Chair of GlaxoSmithKline. How he managed to expand Vodafone from a small company into a multinational giant is an inspiration. Unlike many brash and extrovert company directors, he is a quiet and softly spoken individual with huge talent.
What is on your I-Pod and what are you reading right now?
I have just finished reading The Hundred Year Old Man who Climbed out of the Window and Disappeared by Jonas Jonasson, which I found very funny. I have a fairly eclectic music taste that depends on my moods. I am a fan of acoustic guitarists, such as Newton Faulkner, as well as African musicians, such as Baaba Maal.
What has been your experience of working with Moon Consulting?
Moon Consulting seem to do really well at raising their profile and adding value to businesses. For a small company, they seem to punch above their weight.