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.
Fero's Olly Lawson sat down with guest speaker Robert Joseph — wine connoisseur, writer, consultant, and co-founder of the International Wine Challenge — alongside Mitch Fowler, Founder of Fero, to discuss the universal cash flow challenges and what happens when you take the usual constraints off the table, and the thinking behind why Fero was created in the first place.
The conversation was prompted by Robert's recent piece on his Wine Thinking Substack, “Shortage of Cash: the Wine Industry's Biggest Problem. And How to Solve It," which argues that cash — more than grapes, brands, or marketing — is the real constraint holding the drinks industry back, with the wine trade taking the strongest hit. Robert joined live from Bordeaux, where wildfires were an unavoidable backdrop to the discussion, a timely reminder of just how exposed producers are to forces entirely outside their control.
A few of the pressure points raised in tracing where cash actually gets stuck for producers:
- The data is bad. Even basic questions — how large is the US wine market, how much wine the UK produced last year — return wildly inconsistent answers depending on the source and methodology, making it hard for the trade to even see the problem clearly.
- Most producers are commoditised. Outside a small number of exceptions — Whispering Angel, Cloudy Bay — most wine businesses are simply "another Sancerre" or "another Chardonnay," without the brand power to set their own pricing. Price ends up dictated by neighbours, retailers, or monopolies rather than by the producer.
- Wine sits awkwardly between two worlds.One foot is in agriculture — unpredictable yields, unpredictable quality, production that can't easily flex up or down. The other is in FMCG, where retailers can switch suppliers overnight. Meanwhile the product itself — particularly red wine — can sit tied up in barrels for years before it generates any revenue at all: cash locked in stock.
- Land value used to paper over the cracks. Historically, rising land values gave producers an exit even when the wine itself wasn't profitable — "if all else fails, sell the farm." Robert pointed to Sauternes as the starkest cautionary tale: among the most expensive wines in the world to produce, among the hardest to sell, with land values now falling rather than rising.
- Spirits and beer have the advantage of speed. Brandy, cognac, and whisky take even longer to mature than red wine, but the margins on the other end are stronger. Beer, by contrast, can be made and sold almost immediately — a working capital advantage most wine producers simply don't have.
Mitch used this as the jumping-off point to explain Fero's own origins, drawing on his background in large-scale commodity markets rather than wine. His observation: mature commodity markets have solved for capital efficiency and route-to-market separately, letting each player in the chain focus on where they actually create value — something the drinks trade has struggled to do.
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.
