Last week we launched the first session in our new monthly webinar series, where we set out to explore how those structural challenges manifest differently depending on where you sit in the supply chain and unpack where the real gaps exist beyond the bottle.

The subsequent discussion between Fowler and Joseph revealed key challenges that wine businesses face currently with lessons learned both from examples within wine and how other industries have tackled these issues. 

Watch the full webinar

Key topics covered include:   

• Does the agricultural nature of wine create a structural, not cyclical issue?
• Is appellation- and varietal-based pricing just a capital argument in disguise? 
• Why is cash flow such a  problem now? Hint: Did land value used to paper over the cracks? 
• Can private equity help? And what to watch out for.
• How to get cash today? Spirits and beer have the advantage of speed. The real fix is generating cash today, not waiting for the vintage to sell.

Thank you to Robert Joseph and Mitch Fowler for a candid, wide-ranging conversation, and to everyone who joined live and sent through questions. This was the first in our new monthly webinar series on the business of running drinks companies — more to come soon.

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About this session

The webinar covers the different types of practical strategies that are options for building cash flow resilience.

Fowler argued that bringing a disciplined, question-everything mindset to the value chain – the kind more associated with optimisation-focused capital than with traditional ownership – can unlock decisions producers rarely feel able to make while cash-constrained: which activities are actually earning their keep, which routes to market are worth paying for and which aren't.

Several concrete strategies came up for building cash flow resilience at the producer level.

Chapters:

• 0:00 — Introduction: why cash is the topic nobody in the trade can avoid
• 2:43 — Operating profit vs return on capital — why wine looks profitable and isn't
• 4:12 — One foot in agriculture, one foot in FMCG: the structural bind
• 7:42 — Mitch Fowler on coming from commodity markets, and the two constraints eating the industry's resources
• 15:20 — Down the chain: retail concentration, private label, and the squeeze passing upstream
• 20:38 — The generational problem, and how private equity looks at a wine business
• 28:06 — Q&A: what's actually working — cash generation, breweries and wine clubs
• 30:22 — Q&A: rethinking representation and the sales agent model
• 40:51 — Q&A: high-growth brands and English sparkling — two opposite cash problems
• 49:49 — Closing: Darwin in real time

Mentioned in the session:

• Robert's Substack Article - "Shortage of Cash: the Wine Industry's Biggest Problem. And How to Solve it."
• WineGB Data & Reports - Cited on the missing English wine sales figures behind Robert's argument that the category has a structural problem.
• The Sushi Comparable Story - Norway's campaign to sell raw salmon to Japan — an example of a fragmented industry building demand together instead of fighting each other for it.
• Robert on LinkedIn‍
• More about Robert on his website

Robert closed with a stark, clear-eyed framing: what the wine industry is going through right now is Darwinian. He future prediction is to expect fewer producers, though not necessarily fewer brands, over the coming years. The open question, in his words, is whether the industry that emerges on the other side is leaner, fitter and genuinely more profitable to run. Or is it simply a smaller version of today's same structural problems.

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