Ian Ford is all fired up. In 2014, he sold Summergate to Woolworths, reportedly for $25m. After two years working as chief executive officer to hand over the ground-breaking Chinese drinks distribution business he co-founded in 1999, he is now finally ready to deliver his follow-up act.
A self-described “dyed in the cloth entrepreneur” complete with American optimism and 23 years’ worth of familiarity with Chinese culture, not to mention fluent Mandarin Chinese, Ford decided to share his experience with businesses embarking on their own Asian adventures. “The typical advice you get in Asia is smoke and mirrors: anecdotes, storytelling, unproven claims about your connections or being the biggest player,” he says. “I wanted to clear the air.”
A new venture
Ford’s first post-Summergate venture was the founding of angel investor Lightkeeper Studio, ocused on helping China-based beverage start-ups like the smash hit Gre3n coconut water. This year, he has also teamed up with two other Asian veterans, Polly Aylwin-Foster, the former commercial director of Pont des Arts Wine, and Francesca Martin, an independent beverage consultant. The trio have opened a new consultancy: Nimbility. Their idea is that the best way to help producers grow their business in Asia is by offering a combination of data analysis and market expertise to create a robust brand building and distribution strategy.
From the producer side at least, there is clearly both a need and interest. One catalyst for this interest has been the so-called Treasury model, the direct distribution strategy adopted in China by Treasury Wine Estates, now being rolled out in the US. But as tempting as the idea of bypassing importers may be, this exact model probably isn’t achievable for most brands. Robert Foye, COO of Treasury Wine Estates, which began working with Summergate in 2016, says that “if smaller or mid-sized brands don’t have the understanding of the Chinese market on the ground, they definitely need help from companies like Nimbility”.
Ford explains that five to eight years ago, clients often expected wine importers to be “brand management companies”; however, Chinese importers are typically wine specialists with distribution networks in major cities that also work with distributors elsewhere. Like many distribution businesses, they are more inclined to open accounts and grow sales rather than think strategically about growing brands. Ford is convinced that not only is the time ripe for these functions to be split out from distribution but also that importers would gladly give up some of their margin to have the work taken off their plate.
Nimbility’s offer is threefold: regional market intelligence and insight – the big ideas that are Ford’s expertise; market access, Aylwin-Foster’s area; and brand building, Martin’s specialty, though all three will be actively involved with every client. The business model isn’t new – import consultants have long been active in Asia – but most have been individual actors like Martin, serving as an outsourced regional brand manager. “I’ve done it as one person,” Martin says. “It’s exhausting. Brands spend so much money on your travel and in the end I don’t know how effective you can really be.”
Data analysis is the most novel aspect of the business and the most challenging. “There’s a lot more detailed customs data than what’s usually published,” says Ford, “but it’s very raw and requires a team of people who have been deep under the skin of the market to crunch it.” In addition, Nimbility will monitor producers’ individual data, which is not yet standard practice in China, where there is limited traceability through the supply chain. The eventual plan is to have teams perform market visits with mystery shoppers across retail and food and beverage outlets to deliver comprehensive, individualised insights that few medium-sized wine companies could hope to generate alone.
One difficulty is that because Nimbility won’t be replacing traditional importers and distributors, it needs to work smoothly with them. However, the rapidly evolving landscape has left several distributors wary of potential existential threats. Although Summergate made a point of sharing data with its suppliers, many other importers are unwilling to share what they consider proprietary information. This means it could be a tough sell for Nimbility’s proposal to help clients’ importers monitor depletions and manage customer lists in exchange for some of the marketing budget that used to be built into the wine’s price structure.
However, Ford has been pleasantly surprised that his pitch – “If you get better at this, it’s a big chip in the game to help you get better brands” – has brought several of his former competitors around. Martin adds: “Importers like having a third party telling producers they need to invest more cash specifically in marketing and moderating their growth expectations.” Rodrigo Jackson of Concha y Toro, a long-time Summergate partner, agrees that the sometimes opposing agendas of producer and distributor could be resolved by somebody with Ford’s “good obsession with not losing an eye on the medium and long-term”.
Deep market roots
Now that Ford is out of the China importing game, his reputation opens rather than shuts doors, as does his near-native language ability. “Travelling with him we constantly have issues with Didi [the Chinese Uber equivalent] drivers who refuse to believe he’s their passenger,” Martin says. “They’ll have chatted with him on the phone and expect him to be Chinese.” Beyond language, “Ian understands what to do at various points in a negotiation: when to pick up the phone, when to meet face to face,” says Aylwin-Foster.
Ford would be the first to admit that trying to advise on culturally appropriate branding as a non-native would be foolish without local support. “Naming, for example, is very culturally specific,” he says. “You have to watch out for cultural references, double meanings etcetera, but even once you’ve covered those you’ll talk to somebody in the actual market and they’ll complain that it sounds like a detergent brand they know.” He says naming exercises often result in default names that mean something like ‘noble’ or ‘royal’, even if they’re not right for the particular brand. Ford sees himself as somebody whose history with naming – who can claim successes such as Casillero del Diablo’s Chinese name – lets him “be the guardrail”.
The more challenging phase will be building the business in the rest of Asia. “We understand our limitations,” says Aylwin-Foster. “In insular markets like Japan, or those where we’re not experts, we’re outsourcing to locals we know very well.” Although Ford hasn’t worked in distribution outside Greater China, he has built a strong Asian network, particularly among mutual importers of Summergate’s brands.
Still, it’s clearly China that has Ford most excited: “China is going to be generating business models, platforms, apps that are going to go way beyond anything else in the rest of the world.” He cautions that some commentators have gotten over-excited about new business models in China, particularly ecommerce, where the big sites claim to have high sales that are not always backed up by import statistics. Nevertheless, he concedes that ecommerce’s effect on pricing and visibility is enormous. “Look at the impact Chinese ecommerce has had on the deteriorating price positioning of major commercial brands.” In five years, he foresees a “sea change” in the market, with JD.com, Alibaba and the currently less active Tencent rapidly consolidating China’s bricks and mortar retail market; he’s advising larger clients to “plant a flag” with each.
In discussing Nimbility’s growth, Ford is more measured. Traditional importer concerns like a geographically diverse portfolio aren’t as pressing for the new partners: “We’re not a distributor with a customer base that will only give us a fixed number of listings,” he says. But they’re adamant about limiting the client list to businesses that share their vision. “We’re not looking for clients who just want to sell a few containers somewhere in China,” he says. New clients are expected to commit to three years to give time for a strategy to be developed, executed and evaluated. Ultimately, he is following the advice Concha y Toro’s Jackson remembers Ford hammering home in nearly every meeting: “This isn’t checkers, this is chess.”
Sarah Heller MW