Shaper: Martin Watts

Show aired on 17th September 2016

Transcript

Elliot Moss
Gregory Porter with Don’t Lose Your Steam – a brilliant way to start the programme here on Jazz FM. Good morning it’s me, Elliot Moss and this is Jazz Shapers. Thank you very much for joining me. Jazz Shapers is the place where you can hear the very best of the people who are shaping the world of jazz, blues and soul and we put them alongside their equivalents in the world of business and we call those people Business Shapers. I am very pleased to say that my Business Shaper today is Martin Watts; he is the co-founder of a business called Cellar Trends and they are an independent wine and spirits distributor. The brands behind them you will know very well, they have included Apparel, Jagermeister, they do include Sambuca, it’s going to be a bit of a treat hearing about how Martin’s business has developed. In addition to hearing from Martin shortly you will be hearing from our programme partners at Mishcon de Reya some words of advice for your business and on top of that of course we have got some fantastic music from the shapers of jazz, blues and soul including Avishai Cohen, Kandace Springs, Ibrahim Malouf and this from the one and only Chet Baker.

That was Chet Baker with The More I See You and we promised you some Shapers and that’s one of them. That was originally recorded in 1958 for those of you that would like to know. Martin Watts is my Business Shaper here on Jazz Shapers and as I said, he is the co-founder and now he is called the director – I love these titles you can make up whatever you like when it’s your company – director of Cellar Trends and Cellar Trends as I said are an independent distributor of wines and spirits and I mentioned a few of the famous spirits, one of which I have had a relationship in the past called Jagermeister but we won’t go there right now. Martin, thank you very much for joining me. Your business is fifteen years or sixteen years old now but tell me how it evolved, that you were a corporate man before, you worked in massive companies, Beecham I think it was called Beecham then and I read a bit about that business going up against Proctor and Gamble and other great beer moths of the FMCG world. Tell me how you evolved into thinking ‘you know what, I am going to do this myself’. How did that happen?

Martin Watts
I think it was all about being able to see an opportunity at the time and opportunities evolve, they flow. The whole of the drinks industry which I spent ten years in already had changed dramatically with distributors being absorbed by the major large companies in the business leaving a gap in the market place. We identified that gap. We worked with one particular company initially, Luxardo Sambuca who were looking for a distributor and as soon as we set up people started coming to us. Business came to us rather than us going to it which was very exciting. We grew dramatically in those early days.

Elliot Moss
Now that explanation makes perfect sense, strategic business man in front of me here has grown a business; you now employ about eighty people, turnover north of thirty five million pounds. The emotion behind that though I imagine at the time, people will say to me well yes there was the gap but what about the feeling of being your own boss having been inside a pretty big corporate place before. Was there any sense of trepidation?

Martin Watts
Yes and no. I think the… my corporate experience was really built as an expert manager in the days when mobile phones and emails didn’t exist and I was sent out into parts of the world where communication wasn’t very easy and where you had to make decisions on the hoof and go back to the office and justify them and say ‘yeah I have taken that decision because I thought that was the right thing to do’. Basically hire me or fire me. And I think that ability to make decisions without necessarily going through the corporate network was significant even though you knew you had the corporate network backing you up with the powerful brands which they had.

Elliot Moss
Stay with me to find out how the story evolves with Martin Watts my Business Shaper and co-founder of Cellar Trends. Making decisions on the hoof. Sounds like a very good place to begin if you are going to be an entrepreneur. Time for some more music, one of my favourites from the last few years, Ibrahim Malouf and Essentials.

A big one there from Ibrahim Malouf, it’s called Essentials in case you didn’t know. Martin Watts is my Business Shaper and we have been talking about making decisions on the hoof and how that helped him decide to set up a business or identify an opportunity that’s the strategic part but the sense that he could do it because he had been doing it for years in terms of making decisions without necessarily all that structure as you said around you. So you make that decision Martin and it sounds like very quickly things were successful. Did you ever think it wouldn’t be successful?

Martin Watts
Certainly at one stage we had.. I’m not a finance man but we’d underestimated as the business grew the amount of cash we needed. The more the business grew the more stock we had to have, the more stock needed to be financed. At that stage we struggled a bit for whether we would survive because we just simply didn’t have enough cash in the business.

Elliot Moss
How did you resolve that?

Martin Watts
With a very friendly bank manager.

Elliot Moss
Many people talk to me about this as well, the nature of the relationship with money and you obviously had your friendly bank manager. Let’s pretend now for a moment you are setting this business up today.

Martin Watts
I’d still go and look at invoice financing as a way, as a tool of financing the business. If you know you can sell invoice financing can give you the cash flow you need. Yes it comes with handcuffs tied to it and certainly for a significant period of time the bank had more of a share of my house than I would really want them to have but yeah, if you’ve got a proposition and you are convinced that you can sell then the banks will come with you.

Elliot Moss
Now a lot of what you have done with distribution is kind of, I think of it as the plumbing of the industry because suddenly people are drinking Jagermeister but it wasn’t suddenly. Suddenly people are drinking Sambuca. How did you, you obviously have got a great feel for the business but how did you know what to do with those brands because they weren’t famous fifteen years ago.

Martin Watts
I think the skill is following the consumer. We are consumer marketeers. The whole of our team build brands. We don’t just import and put them on the back of a lorry, we build brands. We are marketing people and it is finding the right method of talking to the right consumer in the right place. So without big budgets we weren’t able to go and spend money on massive TV, radio campaigns but the secret of it is putting liquid on lips and in a manner and style in which people can remember and recall when they go home or when they go into the drink location next time out. So experiential marketing is a key tool. We were probably the first… well we were the first drinks company to have our own in-house promotion experiential marketing team you know, taking Luxardo Sambuca to the streets. Luxardo Sambuca was previously a digestive product, drunk in Italian restaurants. We took it into the main bars as a shot drink and we were the first people to do that and we have revolutionised the Sambuca market.

Elliot Moss
And boy do most of us know some evenings where we have indeed enjoyed a little bit too much Sambuca. Not that I recommend that obviously. Latest travel coming up in a couple of minutes, before that some words of wisdom from our programme partners at Mishcon de Reya for your business and after that much more from Martin Watts, my Business Shaper.

You are listening to Jazz Shapers here on Jazz FM with me, Elliot Moss; every Saturday morning I meet and talk and hopefully illicit great insight from the people that I speak to and they are my Business Shapers and if you have missed any in the last few years and we have been going a few years now, go into iTunes and you can find some there or British Airways if you are flying on BA in the near future, then please do tune in to some of the great interviews that we have done here on Jazz Shapers. Martin Watts is my Business Shaper today; he is the director of Cellar Trends and also the co-founder. A business that has helped bring the delights of Sambuca to a new audience, the delights of Jegarmeister to a new audience and still helping us drink lovely wine, the Faustino Rioja’s just to mention one currently. When you built that business Martin right back in the beginning, I imagine that the team you assembled, the initial team was critical to your success. How did you go about finding the right people?

Martin Watts
Again I think we were fortunate. As I said previously, the industry had gone through a spell of consolidation and therefore there were a number of good quality sales people and marketing people who were out of work looking for jobs. And those sales people tended to be older rather than younger because the natural tendency would be to get rid of your older staff if you were downsizing because they are the more expensive ones to downsize with; it’s a bit ageist but you know, that was a fact of life. And those older staff were having more difficulty finding other employment so when we came along and said to people with drinks experience we’d like you to work with us, you know they fell into our arms because that was the right thing to do and we were able to simply hand them a set of car keys and a product brochure and say ‘go out and do it’ because they knew what to do. When we started there were only seven of us in the business. Of those seven only one has very recently resigned, well retired and we were known in the business as the Magnificent Seven, for obvious reasons but we built a bit of a legend around that.

Elliot Moss
But the, you strike me as incredibly calm and yet you are in quite an excitable business. How would your team describe your management style? Would they say ‘oh Martin unrufflable’.

Martin Watts
No. Too much optimism I think they’d describe me as having.

Elliot Moss
Really?

Martin Watts
Yeah I am an optimist by nature. I can think of reasons, all the reasons to do things rather than the reasons for not doing them. But I think you need a balance of realism and optimism in any business and I am probably at one end of the spectrum.

Elliot Moss
Stay with me for more from Martin, my Business Shaper who is definitely at the end of the optimistic spectrum and it is a nice place to be. Time for some more music, this is Kandace Springs with Thought It Would Be Easier.

That was Kandace Springs with Thought It Would Be Easier. Martin Watts is my Business Shaper today, director of Cellar Trends and they are the independent wine and spirits business and he has built this business up into now a thirty six million pound turnover business with about eighty people minimum. That’s a lot of people. I mentioned team before and building it and as you get bigger how do you continue to instil the Magnificent Seven’s way of doing business? The culture that you wanted to create? What’s the secret to that?

Martin Watts
I think you treat people like you want to be treated yourself is a starting point. We also try and… when we started I was late fifties and I thought well I’ve got maybe ten years working life left I want to have some fun. There was no point in not enjoying it. But when you sit and think about it, even if you are starting a business relatively young, you still want to enjoy it. It’s a big proportion of your day. So you want people to enjoy what they are doing and we try and instil a sense of enjoyment. The drinks business, we don’t just sell alcohol, we sell a whole entertainment package around the drink. Drink isn’t just the end result, it’s having a good night out and being able to go home and say I enjoyed that night in which the brands of drink we sell are part and parcel of that.

Elliot Moss
You mention the late fifties thing when you started and there are many people that start in their first business, you know they are aged twelve and they have an idea, fifteen, sixteen, seventeen, many people who have worked in corporate life for two or three years. Could you have started without all the experience you had, for you?

Martin Watts
I would doubt it. Not for me personally in doing what I am doing. The marketing disciplines which I learnt as a graduate trainee were the foundations of what I do today and I think everybody is different, every generation is different but for me personally I don’t think I could have done that.

Elliot Moss
And no ideas, you don’t look like you are going to retire Martin?

Martin Watts
No. I get a kick, a buzz, a burst from adrenaline when one of the team does something great and you know, that keeps you going and if you don’t enjoy it at the end of the day, then yeah you might retire.

Elliot Moss
Final chat coming up with Martin plus we will be playing a track from the Israeli bassist, Avishai Cohen, that’s after the latest traffic and travel.

That was Avishai Cohen with Lost Tribe. Just for a few more minutes Martin Watts is my Business Shaper and we have been talking about all sorts of things. Starting a bit later than many entrepreneurs do but actually for you Martin as you said, you couldn’t have done it the other way. It strikes me also that your desire to set the business up was more about the cold light of day and the opportunity than it was about some raving ambition to be the man.

Martin Watts
Absolutely.

Elliot Moss
The ambition now that you have again when you talk, you talk very humbly about well I get excited when there is a team member that does something brilliant and we celebrate it and so on. Where will it go? You said you are not retiring any time soon. You don’t look like you are going to be doing that. What is your ambition for the next five years? How will the shape of this business emerge?

Martin Watts
I think the industry has been characterised by major companies wanting to do their own thing at the moment and setting up their own companies. A number of brands which we have been associated with, Jagermeister, Campari, Remy, they have all recently done that. To us those businesses are too small to be a sensible economic size and I think there will be a fall-out over the next four or five years with brands coming back to distributors and there will always be medium sized brands who can’t afford to do their own thing so I think there is a lot of potential both in beers, wines and spirits and in cocktail ingredients like the finest core cocktail range we have got. So I can see that evolving. I’ve got family in the business and I suppose an ambition I have is to be able to retire at some stage and knowing that they’ve got an economically sound business to run.

Elliot Moss
The cocktail thing just intrigues me because obviously you have over the years spotted trends or even created trends. I never know where they come from like most people probably listening will go, well how did it become the Negroni in certain parts of town, in London became big or wherever it is in the world, in Miami or wherever it might be. Are you to blame for this? I mean are you responsible or are you merely as you said at the beginning, in a good way I mean to blame, are you following the consumer and picking up what looks interesting and then exploding it out? What… how does it work?

Martin Watts
I think that’s a very good description. I think you do follow trends in cocktails. There is a strong trend at the moment and Negroni with Campari in it is a traditional drink which is very popular right now. Old fashioned with bourbon, Rebel Yell, bourbon for instance in it is another standby but there is also lots and lots of creative and inventive bartenders who are out there trying to create their own little cocktail drink and we help stimulate that. We have got guys working for us who focus on the brands of alcohol we serve but in a way which uses the cocktail mixes and which make things different and yes you are always going to get the standbys on your drinks menu, you know, we will push Pina Coladas because we have got Coco Real, one of the top coconut ingredients so they are standbys but you are also going to get the sort of the herbal ones, etcetera, etcetera.

Elliot Moss
Just before we go because we are going to run out of time pretty quickly and I am going to ask about your very interesting song choice, the money. We haven’t really talked about the money. You built this business, it’s gone up in line with you know, brands that need you, it’s gone down when the brands decide to take in house and all that. Does the money drive you personally at all?

Martin Watts
Yes I think it does. I was educated and brought up in an environment in the Beecham Group where bottom line mattered and yeah bottom line does drive us. When we establish priorities in the business, we are looking at things which are going to generate cash. So yeah it does create some of the back bone of the company.

Elliot Moss
But you personally?

Martin Matts
No not particularly.

Elliot Moss
Didn’t think it did. I mean that’s why it is interesting you just… he doesn’t look very materialistic in a nice calm, kind of humble way which I mentioned a couple of those adjectives before. It’s been a real pleasure talking to you and I have really enjoyed it Martin. Just before I let you go, what’s your song choice and why have you chosen it?

Martin Watts
Within a jazz environment it’s an interesting choice I think. I’d like to hear Leontyne Price sing Summertime. Leontyne Price is one of the world’s great soprano opera singers. My wife is an opera singer. She got me in to see a dress rehearsal in Covent Garden when Leontyne Price was singing Leonora in Il Trovatore and the dress rehearsal there was lots of things going on, people hoovering the stalls and banging nails in the scenery and all of a sudden Leontyne Price started to sing and the whole theatre went quiet and at the end they all applauded and it was so moving because you had people who listen to great singers day in, day out, saying that was super and the choice of music, Summertime is a bit more jazzy than Il Trovatore but Gershwin is a good jazz standby.

Elliot Moss
Well here it is just for you. Thank you very much indeed.

That was summertime from Leontyne Price, a very special version there chosen by my Business Shaper, Martin Watts. Talked about learning how to run a business himself by making decisions on the hoof as he moved around the world in the first part of his career before he created his own business. Following the consumer he said, what great and simple advice if you are going to run a successful business whatever it is that you do. You have got to know what they want and an optimist, really important and really important I think for any entrepreneur to be an optimist at heart and I think that is something that Martin embraced and indeed is. Great stuff. Do join me again, same time, same place for another edition of Jazz Shapers – that’s next Saturday, 9.00am sharp here on Jazz FM but in the meantime there is plenty more, stay with us because coming up next it’s Nigel Williams.

Martin Watts is co-founder of Cellar Trends, an independent wine and spirits distributor. Founded in In 1999, with David Marriott (previously a supplier to Findlater) Cellar Trends is an independent distributor of wines & spirits (and associated products). The company initially employed seven people, including the two owners.

The wines and spirits market experienced a period of consolidation during the 1990s, as independent distributors were swallowed by big brand owners seeking economies of scale. It left a gap in the market for a distributor to work with and for mid-sized brand owners who could not get focus within the portfolios of the big brand owners.

Martin and David initially secured brands including Luxardo and Faustino, before adding Jägermeister to the portfolio, taking this very small German speciality drink from nowhere to being the second largest spirit brand in the UK On Trade, only being outsold by Jack Daniels. The pair eventually set up a standalone company for Jägermeister and handed it over to Jägermeister company control.

Other brands launched or marketed by Cellar Trends include: Grey Goose vodka; Patron tequila; Campari; and Aperol. They created the Japanese whisky market for Suntory and re-launched Morrison Bowmore’s malt whisky range.

Current brands include Angostura Bitters; Luxardo Maraschino cherries; Re’al Cream of Coconut and Thomas Henry mixers. They are working with George Clooney and his friends on building the Casamigoe Tequila and have a rum portfolio that is the envy of most distributors: Angostura from Trinidad; Pusser’s; Botran and Bumbu. They work closely with Gonzalez Byass from Spain on their spirit range – The London Number 1 Gin, Soberano brandy and Nomad whisky, born in Scotland and raised in Jerez; and with Douglas Laing on their range of exceptional regional blended malt whiskies. They are heavily investing in Licor 43 – a golden liqueur from Spain, along with the very rapidly growing Luc Belaire sparkling rose from Provence; and Armand de Brignac prestige champagne – recently voted the best Blanc de Noir champagne on the market.

By 2013 the company had a turnover of over £100 million and a staff number of 140.

Listen live at 9am Saturday.

Follow Martin on Twitter @cellartrends.

“Business came to us rather than us going to it which was very exciting. We grew dramatically in those early days”

“Certainly for a significant period of time the bank had more of a share of my house than I would really want them to have”

“I think the skill is following the consumer. We are consumer marketers. The whole of our team build brands”

“We have revolutionised the Sambuca market”

“The secret of it is putting liquid on lips and in a manner and style which people can remember and recall when they go home”

“We were known in the business as the Magnificent Seven, for obvious reasons, but we built a bit of a legend around that”

“I can think of reasons, all the reasons, to do things rather than the reasons for not doing them. But I think you need a balance of realism and optimism in any business and I am probably at one end of the spectrum”

“I get a kick, a buzz, a burst from adrenaline when one of the team does something great and you know, that keeps you going”