Jason Langmead tells Tan Parsons about business on the island of Guernsey.
In the hyper-competitive island economy of Guernsey, wholesalers need to be ahead of the curve to survive. With a population of 66,500 spread over 78km2, the Channel island has a limited market to aim at, and Jason Langmead, MD of VWT, has five or six immediate rivals to contend with.
He says: “It’s cut-throat. It’s not like in the UK where you can go north or east and spread your wings. Here on an island, we’re stuck with what we’ve got.”
But for all that, business is growing and VWT is seeking extra staff and new premises as it embraces the opportunities of foodservice and alcohol. After starting life as the smallest wholesaler on the island, the business has grown over the years to become Guernsey’s market leading supplier of confectionery, soft drinks, crisps and snacks, which account for 75% of VWT’s turnover.
Tactics on Guernsey can be ruthless. VWT is selling Cadbury Creme Eggs for £14.99 a case, a price competitors have undercut by 5p. Langmead spends time talking to customers to show them the value he offers across the board.
“I don’t trade like that – I want a fair price on everything,” he says. “I went through some invoices with customers. We went through 20 lines and when they saw what they were saving they were back on board. It’s a case of pointing out that they might have saved 5p on their Creme Eggs, but they’ve just paid £1.50 more for a case of Coke cans. It’s all about trust. I want clarity in the VWT business, so that our customers are comfortable that they’re going to get the best price on the island.”
Among VWT’s 200 regular customers are convenience stores, supermarkets, cafés, restaurants, pubs, beach kiosks, schools, office canteens, and sports and social clubs – essentially anybody and everybody in the trade. Today, Langmead is focusing on new product lines as the market shifts and traditional revenue streams dry up.
“Business in the schools was huge for us, but thanks to that nice guy Jamie Oliver, that’s evaporated,” he says. Guernsey’s schools no longer always welcome flavoured water and chocolate is “pretty much a no-no”.
“Where’s confectionery going to be in five years’ time? It’s a declining market and so that’s why we’ve branched out into alcohol.”
In 2009, VWT successfully applied for a liquor licence, and in 2012 joined the Society of Vintners (SoV), meaning it can now supply great wines to which no other wholesaler on Guernsey has access.
“Joining the SoV was one of the best things we’ve ever done. I like to support suppliers that support me, so 75% of the wines we stock are SoV. They have their own brand names which are becoming big across the country.”
Another growth area is foodservice – and this is where being a member of buying group Confex comes into its own. Previously, VWT had dabbled with the catering market, selling tinned coffee and teabags to offices. But it was at the Confex trade show in 2013 that Langmead got the idea to look seriously at catering, starting with cooking oil.
“We took a punt and bought five pallets and now we’re ordering full trucks of cooking oil,” he says. “I’m looking for high volume foodservice lines – we’re now doing chopped tomatoes, baked beans and mushy peas. We’d never done tuna before, but that’s huge for me now. I can’t believe how much tuna we sell to sandwich bars.”
Disposable coffee cups and lids might sound an unlikely growth area, but VWT is using these lines to gain traction with coffee bars and restaurants as more and more offer takeaway coffees. The group is now looking at disposable food cartons and sandwich boxes – but it’s important not to overcomplicate things.
“What we don’t like to do is confuse the issue and bring in six different types of sandwich boxes,” he says. “I don’t want to sell one or two cases. I’m looking for volume.”
VWT is expecting to hit a turnover of £4m this year, and with a staff of just nine, including Langmead, there is a need to recruit extra team members and find bigger premises. The business has also teamed up with Jersey wholesaler Carob Enterprises to make inroads on the other island.
The goal is to maintain sustainable growth, focusing on the wine category, nurturing the business on Guernsey while pushing into Jersey through Carob.
In the meantime, the Co‑op has decided to pull its warehousing operation out of Guernsey, opening up opportunities for VWT with a small range of products the Co-op is unable to source.
Getting stock to the island is a challenge. For bottled water, freight costs are almost as much as the price of the product, and you can typically wait five or six working days for a delivery after placing an order. Weather conditions can delay shipments by a further three or four days, so in the winter, VWT has to consider keeping an increased stockholding of certain products.
Langmead says that as a business, you are only as good as your partners – including your shipping company and your suppliers. VWT is the Channel Islands agent for Saka Water from Navson and is seeing huge growth in the brand.
“They understand what we need and what our customers are looking for so they promote regularly,” he says.
The basis for a good relationship is regular communication and getting to understand what works for both parties, says Langmead. VWT has a retail club and the best suppliers work to provide deals on the right products.
“A good relationship is about replying to emails, simple things like that. But also they identify what works for us rather than coming over with a bunch of third-tier products.
“It’s not about knocking money off. It’s about working out what works for us and driving sales.”