Fighting spirit: Interview with Halewood Wines & Spirits CEO Stewart Hainsworth
If Stewart Hainsworth needed a reminder of the size of the task ahead of him when he took the reins at Halewood Wines & Spirits last year, he was handed a pretty big one in his first month when the Liverpool City Region drinks firm posted an operating loss of £8.4 million. After 16 months at the helm, Move Commercial finds out how this internationally mobile CEO has set about turning things around.
Interview by Lawrence Saunders
Best known for producing the popular sparkling perry drink Lambrini, Halewood Wines & Spirits – the parent company of Halewood International – was formed in 1978 by John Halewood and is the UK’s largest independent drinks manufacturer and distributor. It has operations in five countries across the globe, employing over 1,000 people.
However when Stewart Hainsworth was drafted in as group CEO of the Huyton-based company in June 2015, which counts Crabbies and Red Square Vodka amongst its top brands, turnover was down 14% on the year – marking a tough period following the passing of John Halewood in 2011.
Hainsworth’s impressive CV includes stints at two of Europe’s largest tobacco firms alongside three and half years as chair of Russia’s principal vodka producer, meaning his appointment wasn’t exactly what you’d call risky.
For Hainsworth, who splits his time between the Knowsley base and London, the initial few months in the hot seat were spent trying to figure out what was going wrong with the company before highlighting what was going right and maximising those revenue streams.
“The basic idea was to look at spirits because they have a longer life cycle as a product,” he explains.
“For example Smirnoff has been in the market for over 50 years whereas RTD (Ready To Drink) products like alcopops are more like fashion – they come in and then they go out again in two to three years.
“I wanted to focus on more of a longevity strategy in terms of spirits which would also generate higher margins and better cash flow in the future.”
After formulating a strategy, the next step was to implement it and Hainsworth’s contacts in the industry were to prove vital in this process.
“We brought in a team of managers which could execute a spirits strategy,” he says.
“My finance director is ex-Russian Standard, as is my managing director in the UK, plus we also had contacts between us in Whyte and Mackay, Grants and Rémy Martin.”
With his team now in place, Hainsworth set about transforming the company’s sales approach which was very much volume focused and geared towards supermarkets and wholesalers.
Whilst acknowledging that these channels were and continue to be important to the business model, Hainsworth believes Halewood was overlooking the ‘on-trade’ practice of selling to hotels, restaurants and bars to its detriment.
“Halewood was ignoring that trade to some extent,” he says. “We started to invest in creating new jobs to get people out into the market with our product and showing them what we can do.
“The grocers and wholesalers are important but we’re growing a premium spirits portfolio. The on-trade is the most important factor to push the business forward.
“Of all the acquisitions we’ve done, by far the most successful is the Liverpool brand. It was a very big investment but it’s generating a huge amount of global interest.”
“It gets interaction with the consumer. You speak with the bartender, they test your liquids and if you’re lucky enough that they like your liquids then they will, in effect, promote your product to new consumers.
“That’s a really important strategy for Halewood and something that we haven’t done to any real extent in the past.”
A prime example of this new strategy involved the firm’s biggest selling vodka brand, Red Square earlier this year.
The brand had been included in a tender with a major grocer and in order to stay listed it would cost Halewood £250,000 – accounting for 35% of the Red Square UK sales volume.
Believing the vodka to be at least the equal of the market leader in terms of quality, Halewood declined the listing and instead invested in Red Square through the on-trade, creating 20 new sales positions.
The decision proved a shrewd one for Hainsworth and Halewood, with Red Square enjoying growth each quarter since and it has recently outperformed the overall vodka category by more than 14%.
This renewed focus on spirits has also led the company to acquire a number of liquor brands, both internationally and here in the Liverpool City Region, including Liverpool Gin and The Pogues Irish Whiskey, but it’s the local brand which has stood out.
“Of all the acquisitions we’ve done, by far the most successful is the Liverpool brand,” he says.
“It was a very big investment but it’s absolutely flying and generating a huge amount of global interest.”
In May 2016, Halewood bought out the two owners of Liverpool Gin who were manufacturing the drink from small premises in the city centre with no ability to expand the operation.
Halewood has since invested heavily in equipment for the brand including a new copper still, which allows the quality of the product to be controlled with greater precision.
Despite the change in ownership, Hainsworth is keen to stress the gin is still made to the original organic recipe and is immensely proud of the brand’s name and local heritage.
The Liverpool brand has been expanded this year to include Liverpool Vodka and, most recently, Liverpool Rum, and Hainsworth sees no reason why Liverpool can’t follow the success of other spirit brands which carry city names including London Dry gin.
“People around the world know of Liverpool for a few reasons – either because of the port, because of The Beatles or because of the football.
“We would like to be the fourth thing – they know it because of the gin. That’s our aspiration.
“We’re investing heavily in distilleries here in Liverpool on the Huyton site and also in North Wales because we want to do more craft distilling as a business.
“It’s an exciting opportunity for the whole company because it’s taking it into a whole new area where it has never been before.”