(Bloomberg) -- The UK’s oldest fine wine and spirits merchant, Berry Bros. & Rudd, celebrated its 325th birthday last year, and announces today that it’s taking on a major new challenge: holding online auctions.
In an exclusive interview with Bloomberg, Geordie Willis, director of new ventures at the venerable central London retailer, reveals that the inaugural global sale for Berry Bros. & Rudd Auctions will launch later this month, bringing yet another auction choice to the world’s thirsty collectors.
“It will feature 500 lots of classics from Bordeaux, Burgundy and Champagne, and well-known names not just from the Old World,” Willis says. He declined to provide details of individual lots but promises “there will be wines dating back to the 1950s, and I hope some surprises.” Rare spirits will be included, too.
Entering the auction business has been on the management team’s mind for some time, Willis says, the latest innovation for the company whose historic, eye-catching headquarters at No. 3 St. James’s Street exudes Old World charm and could easily be a set in a Harry Potter movie. While several retailers in the US such as Zachys and Acker host auctions, Berry Bros. says it’s the first major merchant to do so in the UK.
“In a way the expansion feels quite natural,” says Willis, a member of the eighth generation of the Berry family, who masterminded the project and likes to describe the company “as a 325-year-old startup.” It was the first wine merchant to host a website back in 1994 and decades ago began orchestrating sumptuous wine dinners in its cellar at No. 3 St. James’s Street, where Louis Napoleon Bonaparte (Napoleon III) held secret meetings to plot his return to power.
Certainly, it has in place key auction essentials and behind-the-scenes logistics.
For example, for buyers and consigners, it will build on an existing client base in more than 100 countries as well as on its experience and success with Berry Bros. & Rudd’s fine wine exchange BBX, an online marketplace launched in 2010 for customers to buy and sell bottles from each other.
In addition, the company’s private client and cellar service division has long advised on how to collect and invest in wine, and when and where to sell it. And although it has long offered storage for clients’ bottles, in 2022 Berry Bros. opened a state-of-the-art warehouse in Hampshire’s Andover Business Park with a capacity for 14 million bottles, one of the largest fine wine storage facilities for private clients in Europe. The site is also carbon neutral, generating its own energy supply through solar panels and harvesting rainwater. Willis calls it “a massive advantage.”
“We see what’s in our warehouse, we see the demand,” says Willis. “The online auctions will complement BBX, whose platform works best for selling a small number of cases. It’s more complicated if you have a big cellar.”
Since 2011, Berry Bros. has even had an in-house authentication expert on hand, Philip Moulin, who oversees a specialist team to verify the provenance of bottles sold on BBX. They’ll also apply their skills to the new auction business, a necessity in a dark side era of frauds and fakes.
There’s also its existing global reach, with outposts in Asia—Hong Kong, Singapore and Tokyo—where Willis, as well as other auction houses, sees a huge audience. The company’s long-held relationships with the most important wineries offer potential future partnerships for direct-from-the-cellar sale exclusives.
It’s all part of remaining relevant in a changing market and expanding and innovating without destroying your brand image. That’s a difficult balancing act in today’s business world, and Berry Bros.’ auctions will obviously cater to the kind of clients the company specializes in.
The company has been especially adept at moving with the times in the past few years, even acquiring Hambledon Vineyard, England’s oldest commercial vineyard, in a partnership with Symington Family Estates of port fame last year.
It responded to the surge in luxury spirits sales—Berry Bros. reported 42% year-on-year revenue growth in the category this spring—by opening a dedicated standalone shop in April with about 1,000 spirits products. The next month it offered sake en primeur for the second year; sales were up nearly 1,000% in the year to March 2024.
But what about the state of the auction market it’s entering? It’s a mixed bag and a buyers’ market, according to Nick Pegna, worldwide head of wine for Sotheby’s, which reported a record $159 million in auction sales for 2023. He points out that current global uncertainty and declining wine prices generally are affecting auctions. Lower, more conservative estimates are the name of the game.
To obtain the best cellars to offer, competition is already fierce among well-established names—Sotheby’s, Christie’s, Bonhams, Zachys, Acker and Hart Davis Hart—and newer niche companies like Baghera. All conduct live and online sales, while Willis says Berry Bros.’ auctions will be online only for now.
Arguably it’s a good time for online auctions. During the pandemic, auction houses were forced to pivot quickly to online, and this attracted a new cohort of younger collectors. Now about two-thirds of Sotheby’s auctions are online-only, for example, and a recent one in Hong Kong brought in $6 million.
Berry Bros. & Rudd’s added incentive is a highly competitive buyer’s premium at 20%, while the average for other houses is about 25%.
And the historic company is banking on the legacy of trust built into its brand, its expertise and level of attention to detail, and its role as a custodian of wine for its global customers. “We believe there’s an opportunity,” says Willis.
©2024 Bloomberg L.P.
