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As pure as nature intended - Pierhead Purchasing Ltd - The Interview

Specialist beer importers Pierhead Purchasing have become known in the trade as "The Imported Beer People." With an impressive portfolio, listing well over 80 beers from all over the world, Pierhead is a leading supplier of highly distinctive, brewed-at-source beers. With trends towards matching beer and food continuing, consumers are learning to experiment with beers that complement certain flavours, and Pierhead is able to offer beers to accompany cuisine from the world over. The global product range also allows Pierhead to cater for the ethnic market, giving On and Off trade retailers a distinctive product range consumers will notice and appreciate. Pierhead's beer brands are available at very competitive prices and delivered through a nationwide delivery service including Northern Ireland and the Channel Islands, as well as exported to other EU countries. The Pierhead portfolio also includes wines, spirits, liqueurs, cocktails and slammers. Michael Cook, Pierhead's Director of imported beers, spoke to The Grocery Trader.

The Grocery Trader - When was Pierhead Purchasing founded and who by?
Pierhead was founded by Rick Hercules in 1976, and developed from a general wholesaler into a specialist drinks company. The company takes its name from Pierhead House, the old bargemen's house by the Regents Canal Dock in East London, where our first offices were.

GT - Whereabouts are you now?
We're in Belvedere, Kent, five miles east of Greenwich, giving us access to the M25 and M2.

GT - How many staff do you employ?
Pierhead employs 36 people, including sales and warehouse staff.

GT - What factors have been driving imported beers' popularity in recent years?
Consumers have grown increasingly disillusioned with bland mainstream brands, which are often brewed under licence outside their country of origin. UK drinkers are now more adventurous and discerning in their beer selections. They appreciate speciality imported beers, because they offer a unique drinking experience.

GT - How many beer brands do you import into the UK, and from which countries?
We sell 80 bottled beers representing 30 countries from across the globe. Our portfolio covers everything from lagers and fruit beers to ales, dark beers and stouts. We also distribute one-off products including Desperado, the Tequila beer, and Chili Beer, a fiery lager from the Arizona desert, with a Serrano chilli pepper in the neck of the bottle.

GT - Which countries' beers are the top sellers here?
Australia has been developing a very strong following over the last few years. Coopers is one of our bestsellers and is listed in several multiples including Tesco, Sainsburys, Waitrose and Oddbins, Threshers, Booths and selected Majestic Wine Warehouses.
European brands are also proving popular. Independent breweries on the continent have a remarkable heritage and deliver really distinctive brews. We import several beers from the Brasserie Duyck, including Jenlain Six, a lager-style blonde ale. The Duyck family has been brewing in the bi¸re de garde style for five generations.

GT - Do you supply the whole UK? How does the UK sales operation work?
We deliver throughout the UK and Ireland, with daily delivery within the M25. We have a large Customs bonded warehouse in Belvedere with a high bay, configurated racking system and a wine and champagne tunnel. This ensures our products stay in first class condition by keeping them at a constant temperature. Our UK sales team services multiples, independents and our on-trade customers.

GT - How big a proportion of your turnover now is the Beer Division?
Beer now represents 65-70%, up from 30% in 2004. It remains the fastest growing area of our business.

GT - What value share of your UK beer sales goes through grocery outlets?
The off-trade represents around 60% of our beer sales, divided equally between grocery and off-licence.

GT - What benefits do imported bottled beers offer grocery outlets?
In addition to offering excellent margins, the market for premium speciality imported beers is enjoying impressive growth. The current grocery trend towards ethnic food and drink means there is no better time for retailers to stock authentic brewed-at-source beers. These products offer excellent on-shelf standout and with growing interest in beer and food matching, they are well suited to link-save and cross category point of sale.

GT - Who are your present imported beer customers in the retail sector?
Tesco, Sainsburys, Waitrose, Oddbins, Threshers, Majestic and Booths, as well as smaller chains like Peckham's and Laithwaites. Our other retail customers include independent C-stores and off-licences. We also supply Bookers, the UK's largest cash & carry group.

GT - What case sizes do you offer? How important are larger sized bottles?
The majority of our brands are available in cases of twelve or twenty-four bottles. Larger sized bottles are a growing trend in the off-trade because they offer a higher return for the same shelf space. We have just taken on a trio of German beers from the Weltenburger Kloster Monastery brewery, in impressive 500ml bottles.

GT - How important to the consumer's purchasing decision is the provenance and heritage of an imported brand, as opposed to its taste and quality? What about retail price?
The story behind each brand is extremely important. Independent family breweries with a long history have particular appeal, partly because of their heritage but also because they offer more adventurous styles and flavours. In fact, heritage and quality usually go hand-in-hand. We currently import Moosehead, a multi award-winning lager from Canada. It's been brewed by the same family since 1867 and they use the same local ingredients to maintain its distinctive character and crisp flavour.
These products offer something "extra", both in quality and character. Consumers appreciate this and will pay a premium for authenticity, flavour and style.

GT - Who do you see as your key consumers?
Speciality beers have wider appeal than ever before. Their variety means they satisfy a range of drinking occasions, from dinner parties and themed events to a relaxed big night in. In the on-trade, our brands are particularly popular with young professionals (male and female) in style bars, thanks to their elegant presentation, premium quality and cosmopolitan appeal. The off-trade market is also being driven by a new generation of discerning beer drinker.

GT - When did you join Pierhead? What is your background?
I joined Pierhead in 2002, but have been in the drinks trade since 1961. Among other things, I brought Kronenbourg into the UK and became MD of its UK operation for 10 years (1967-1976).

GT - Michael, we last spoke three years ago. What's happened since then in your business?
The beer division has grown significantly since we started out. Our portfolio has doubled to well over 80 brands, which is very pleasing. In the grocery trade, many of the core brands we started out with have added UK multiple listings and become firm favourites with consumers. The success of Coopers Sparkling Ale and Original Pale Ale has been particularly impressive.

GT - What is the difference between Pierhead's imported beers and 'mainstream' beer brands? Can beers brewed here under licence ever match up?
Our brands offer variety, character and distinctive flavours. Bland mainstream brands do not. Consumers now have higher expectations when it comes to their overall drinking experience and are prepared to pay a premium for speciality beers that satisfy this.
Water plays a pivotal role in the brewing process; therefore beers brewed under licence overseas will lose some of their character. Alhambra Reserva retains its authentic taste because it still uses water from the Sierra Nevada Mountains.

GT - What is the typical differential in RSP and margin between your beers and domestic beer brands?
This varies between brands and also between different styles of beer. Imported lagers are slightly less expensive and provide some of the best margins. Overall, the strength of the pound against the Dollar and Euro gives us a price advantage.

GT - Which of your beers would you recommend for the summer barbeque season?
It has to be authentic Australian ales from the Coopers brewery and Boag's Premium lager from Tasmania. The malty flavours of Coopers Sparkling and Original Pale Ale make them the ideal accompaniment for flame-grilled meats. Boag's is a crisp, refreshing lager, perfect for summer drinking. Their Australian heritage also makes them ideal for link-save promotions with barbeque products, helping consumers to recreate an authentic Aussie Barbie.

GT - How do you go about sourcing new beers to take on? How do you decide whether a brand will be suitable for you to handle?
Proven success on home turf is obviously an important factor for us. Last year we took on Anchor Smooth, a Singaporean lager with a large share of the market in South East Asia. Anchor comes in a stylish bottle and makes the perfect match for South East Asian cuisine.
Premium quality, genuine brewing heritage and stylish bottling are all essential. Most of our brands come from independent breweries, which means we can build strong relationships with them. Understanding each other's requirements makes it far easier to support brands effectively.

GT - Do you run client brands' advertising and other consumer activity for them? How do you publicise these products to the UK audience?
Yes. We outsource our PR and marketing to an outside agency, who take various promotional routes, including media relations, advertising, sponsorships and reader offers. We have just launched a Coopers website for UK consumers (www.coopers.uk.net), which will include the Coopers story, product profiles, UK availability information and news updates. We also take our brands to a wide range of consumer events, including Taste of London and Toast, the Australasian food & drink festival, both happening in Regent's Park this summer.

GT - There seems to be a current trend for imported 'abbey beers'? Are these authentic beers brewed in abbeys, like the Trappist beers?
Abbey beers are certainly growing in popularity. In reality, only a handful of breweries are still based in monasteries. Some excellent beers have been licensed to commercial breweries, with their character intact, but some brands just take on names to suggest a connection.
We have recently begun handling three of the best abbey beers from the world's oldest monastery brewery. The Weltenburger Kloster has been making beer on the River Danube in Bavaria since 1050 AD. The range includes a German Hell lager, a dark beer and a doppelbock. Asam Bock is matured for 10 weeks and is rich in chocolaty and dried fruit flavours.

GT - How is foreign travel impacting on the UK imported beer market in the UK?
The accessibility of foreign travel means Brits are far more familiar with imported beers than ever before, whether they have sampled Mythos in Athens or Cristal in Cuba. When they return here they want to relive that experience as authentically as possible.

GT - Polish food is a big grocery trend at the moment. Any plans to introduce Polish beers?
We have just launched Brok Sambor and Brok Strong, two full-bodied premium lagers from Koszalin, northern Poland. Brok have enjoyed great success in Poland and are considered some of Eastern Europe's finest beers. They have been brewed since 1874 and retain their Baltic brewing heritage by using exclusive local ingredients and traditional brewing techniques for an aromatic hoppy flavour. With the Polish community here continuing to grow and with so much interest in Eastern European cuisine, we are confident Brok will be very popular with Polish and British drinkers alike.

GT - You currently import Quilmes from Argentina. Are South American brands a growth area?
Yes, South American lagers are performing very well. We currently import brewed-at-source lagers from Argentina, Brazil, Mexico and Cuba. We have already had considerable success with Quilmes, Argentina's biggest brand. It now benefits from an ultra-stylish association with the UK polo club scene and is very popular in London's style bars. We are planning further launches from South America this summer.

GT - How important is the beer and food movement - ie discerning consumers drinking quality bottled beer with meals instead of wine - in the off-trade?
Beer and food matching has become increasingly sophisticated in the on-trade, with more chefs writing beer lists to complement their food offer. In the off-trade, consumers are coming round to the idea but there are still opportunities for retailers to make this more accessible. While link-saves and cross category POS have been used successfully with seasonal products like strawberries and cream, this has yet to carry through to the beer category. Pierhead is running a PR and marketing campaign across a number of our brands, to educate consumers about the distinctive tastes and flavours premium beers can deliver.

GT - What sort of impact do cultural and sporting events have on sales?
Imported beers make excellent add-on brands during special events. Euro 2008 will give retailers the ideal vehicle to offer a range of beers from the competing nations. We can supply authentic brands from pretty much every competing nation, from Gold Bohemia (Czech Republic) to Crocodile (Sweden). Our brands also sponsor on-target cultural events throughout the year, helping to raise their profile as the authentic taste of that country or region. We are delighted Moosehead is sponsoring the Canada Day celebrations in Trafalgar Square this year (29th June).

GT - Finally, what does the future hold for Pierhead?
The beer division's rapid growth over the last four years has been very encouraging, and our brands have enjoyed real success. We will continue to expand our portfolio to meet new trends, and are always looking to secure further listings in grocery outlets. We always aim to work closely with retailers to ensure they have the best selection of beers to satisfy their customers.

Pierhead Purchasing Ltd
Tel: 020 8320 4467
www.pierheadwines.co.uk
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