What does the GBH deal mean for Mangrove? Interview, Nick Gillett, MD, Mangrove
Yesterday, UK spirits distributor Mangrove announced that it had been acquired by Martinique-based conglomerate GBH. The deal, for an undisclosed sum, sees London-based Mangrove join Spiribam, which coordinates all of the spirits activities at GBH.
John Coe, majority shareholder and co-founder of Mangrove, will leave the business, while Nick Gillett, co-founder and current managing director, will remain at the helm.
Gillett will lead the distribution of all Spiribam's rum brands, including Rhum Clément and JM from Martinique; Bounty, Chairman's Reserve and Admiral Rodney produced in St Lucia; and Arcane and Beach House Spiced from Mauritius.
Here, he tells Drinks Retailing what the deal means for Mangrove and the trade.
Drinks Retailing: Will there be any redundancies?
Nick Gillett: No. Actually, the opposite is true. There is some integration, but we've got more jobs than we've got people - Mangrove is already recruiting. Once we bring the Spiribam brands across and integrate the team, we're still recruiting. We've got jobs across marketing, sales, and in our back office. It’s an expansion.
DR: What’s the idea behind the deal?
NG: The owners of Mangrove, so myself and John, we didn't need to sell, and we weren't looking to sell. We get a number of approaches from time to time, and I was having a conversation with GBH on a completely unrelated matter - and it came up in conversation.
We looked at it and ultimately, they could grow and expand the business faster than John and I could. It was partly an appetite for long-termism and reward, and partly because there's no redundancies. The fit was really, really good. It will allow our brand owners and our people to have opportunities on a global scale.
DR: What can retailers expect from this deal?
NG: We'll be able to bring the GBH-owned brands, which is St Lucia Distillers, primarily. We'll be able to add those to our brand portfolio and bring our expertise and our support to their brands. They've done a great job, but they're on their own a little bit at the moment. And so being in the portfolio with a larger number of people, bigger focus on marketing, we should be able to leverage those.
I think we've got a good understanding of what retailers are looking for. Mangrove has been investing in that area for some time. In practical terms, we'll have a few more people, but behind the scenes will probably be the biggest change. So, marketing and plans for these brands to partner up with retailers will be quite different to what you've seen before. There will be a big growth in that.
DR: How does the deal change where you fit into the UK spirits distributors landscape?
NG: It probably doesn't move us in terms of positions very much. I mean, it's going to add about 10% turnover to Mangrove as a business, it makes us 10% bigger. We will still be one of the bigger small guys. Unfortunately, we compete with the biggest global players - but we will have more scale, more resources to support those independent family-owned brands who want to be successful in the UK.
I think scale is becoming more important. People want fewer suppliers.
DR: GBH has got retail experience – is that something that will come across?
NG: The business has many different entities in different categories around the world. They run some franchises for grocery around the world. And they supply some of their brands to the grocers around different parts of the world. Not in the UK – I think the UK grocery scene seems a little different. More competitive and cutthroat.
Certainly, what we'll be doing over the next few months is looking at all of those sorts of things – looking at systems and processes. And we'll bring best practice here. So, if it works somewhere else, we'll have a look at it, see if it works here. But we don't need to bring anything across if that makes sense.
DR: Which spirits categories will be big for retailers this year?
NG: I do think rum is having its day. I know I’ve just completed a deal with a rum-owning company but if you had asked me last week, I would’ve said the same. And all things agave continue to grow. We’ve seen quite a lot of interest in the trade and at consumer level for flavoured Tequila.
In retail, I think there will be a big difference between the big grocers and independent retailers. The big grocers, I think, are focused more on partnerships with the biggest drinks companies in the world and I think that will potentially offer less interest for the consumer. Independent retailers are offering really interesting liquids.
I think cocktails at home will continue to be big, and so ingredients for cocktails, such as syrups and liqueurs, will become increasingly important and add move value to the shopping basket for retailers.