With a growth of 8% to 10% each year, Poland is one of the fastest-growing wine markets in Europe and beyond. In recent years, however, that growth has mainly been achieved by supermarkets and hard discounters which, according to latest KPMG data, currently control 35% and 46% of the market, respectively.
With wine above 30 PLN ($7.50) representing just 10% of the global volume, and independent retailers being squeezed out of the lower price brackets, it would seem that smaller businesses are destined to stagnate. Yet the contrary is true. The number of wine importers continues to grow and is now estimated at over 800.
Grassroots movements
Niche importers have continuously operated on the Polish market since a free economy was reestablished in 1989. Over the years, they have greatly contributed to the large diversity of the wine offer, often originating from the owner’s personal import from European wine countries. Rubikon was an ambitious catalogue of Italian and French wines sold only at the eponymous restaurant in Warsaw. Bogdan Fałowski of Kawa-Wino-Czekolada used to bring boutique Italian producers’ wines in his own car and hand-sell them to Warsaw’s and Kraków ’s cognoscenti. Others chose to source their wine from German wholesalers, such as 101win.pl, one the first Polish companies to list top-notch Rieslings and Burgundies, sourced from Berlin’s Wein & Glas. But they were exactly that: hand-sellers, that, in Poland’s narrow market for fine wine and relatively high overheads, had no room to grow and eventually failed.
The success stories of the Polish wine market, such as Mielżyński, Winkolekcja, DELiWINA, and Vini e Affini, to cite but a few, were all professional operations with long-term strategies and distribution networks to match. For years, it was believed niche importers couldn’t grow sustainably.
The last few years have proved the contrary is true. Micro-importers have been given a new lease of life, and some have grown impressively. One example is Vive le Vin, owned by former sommelier Artur Zarzycki. After working at London’s Maze and Warsaw’s Amber Room, he took the plunge and started importing boutique wines from New Zealand and Chile in 2012. Poland is hardly enthusiastic about upper-bracket wines from the New World, but Zarzycki persevered, offering household names such as Greywacke, Spy Valley, Emiliana, Charles Smith, and Jamsheed.
Another sommelier-run import company is Winemates. Łukasz Hryniewski, Łukasz Czajkowski and Marcin Soćko were all sales managers at Mielżyński, Poland’s top independent wine depot. They left the company at various times and, in 2013, decided to combine their passion with business. They also saw a lucrative niche in top-end restaurants where sommeliers increasingly look for boutique labels and bin ends. Twelve bottles of an older Barolo or Amarone vintage might not be a viable import for a larger distributor, but such wines have become a signature speciality of Winemates.
Defining the niche
So what really represents a viable niche in a market like Poland? It might be the wines of a single country or region. A single source of imports makes for an easier start. Poland has seen countless small companies offering wines from Slovenia, Croatia, Greece, Cyprus, Moravia, Moselle, Sicily, Alsace or even single appellations such as Grignan-les-Adhémar.
Specialisation appears to be a recurrent theme amongst successful micro-importers. It creates a competitive advantage on a crowded marketplace, argues Paweł Woźniak, owner of Krakó Slow Wines, who started importing wines from Georgia in 2009. He formerly worked as a sales director for CEDC, a major distributor, but, as a philosophy graduate, he was looking for more distinctive, ‘authentic’ wines. His operation picked up steam in 2013 with the arrival of partner Janusz Jarosz, and wines from Hungary, Romania (completely unknown on the Polish market), and Armenia were soon added to the portfolio. A wine bar and shop, Lipowa 6F, was also opened in one of Kraków ’s touristy areas, which Woźniak says, “has given us distribution independence and helped the promotion of our wines.”
Another natural wine specialist is Winotake, founded by Japanese national Hirotake Ikeda and Dorota Stec in 2012. Although several other natural and biodynamic importers existed already —Naturaliści and AlterWina — Ikeda and Stec saw untapped potential in Wrocław, a large city in Western Poland, and decided to have a go. Their portfolio includes some of the most extreme styles on the market, including Italian natural wine icons Stanko Radikon and Angiolino Maule. “We can’t compete with conventional wines on price, but we can give our customers a different kind of drinking pleasure,” says Ikeda.
A bumpy road
Problems appear further down the road. Import a few boxes of wine in your own car and they’ll always find buyers, be it among friends or family. Import a few pallets and you need to build a proper distribution. In the Polish wine business, this passage separates the men from the boys. “We were surprised by how little wine the average Pole drinks,” says Ikeda. “It was risky business, so investing our private money looked scary at first,” adds Łukasz Hryniewski of Winemates.
Unsurprisingly, investment and overheads are the major obstacles to small independents entering the market. Hryniewski also cites “ruthless bureaucracy” as a serious hindrance, including the notorious Polish excise stickers (banderole) that need to be put on bottle necks by hand before entering the country. Top-end producers from France, for example, often refuse to comply; Hryniewski says Italians are more understanding, as “they have a similar bureaucracy”. Ikeda also cites stickers as the number one obstacle at the start of his business.
Achieving net profits and satisfactory cash flow is a long process. Tellingly, the three Winemates still keep their day jobs as sommeliers in various Warsaw restaurants. The initial plan was to go full-time within three years, but that hasn’t yet happened.
Artur Zarzycki took the plunge, but until recently his company Vive le Vin remained a true one-man operation, dealing personally with red tape, deliveries, accounting, and marketing. “Managing my budget and stocks was the biggest challenge at the beginning,” he said. “It sometimes takes five months between my order and the wines being delivered to Poland. Projecting sales so much time in advance is a challenge.”
A little help from your friends
One clear trend emerges from these stories: the real market potential lies with the on-trade. Retail sales are and will remain under pressure from supermarkets — some of which, such as Lidl, have already ventured into over-$22.00 fine wine territory. According to KPMG data, the on-trade represents merely 4% of wine sales by volume in Poland, but is one of the fastest-growing channels. Tapping that potential is one way how independents can duck the supermarket fireball. “The on-trade is the only way to go for premium wines,” Hryniewski says.
This has as much to do with higher average spending on wine in restaurants as it does with communication. Indeed, the sommelier often becomes the micro-importer’s best ally, compensating for a lack of organised distribution. Retail customers are often reluctant to try unusual things, argues Woźniak, especially in Warsaw, the country’s most competitive city, which accounts for more than 50% of the market.
“We find Kraków a lot easier, perhaps because of the city’s long tradition of cultural exchange with Eastern and Southern Europe.” Again, it is culture that helps business. But things change when an enthusiastic wine communicator, such as a sommelier, enters into the process. “Pairings with food change the perception of wines I import exponentially. This is where I, and the customer, really become excited,” adds Zarzycki.
The second-year syndrome
Books have the second-book syndrome, and football managers the third-season syndrome. Is there an equivalent in the wine business? Small importers often stumble in their second year, having burned out their initial investment and with the portfolio of private and on-trade clients growing slower than expected. This can be particularly punishing if relations with impatient suppliers deteriorate.
Yet economics is not the only aspect of small imports. Personal engagement and work ethic are also an important source of growth. Asked how he sees his company developing, Hirotake Ikeda insists on honesty: “We will continue to pursue honest wines based on honest work and business.”
Paweł Woźniak of Krakó Slow Wines echoes this approach: he believes his relentless quest for “true wines” will find sympathetic customers. It is a matter of aesthetics over Excel.
Passion drives many businesses, including large-scale wine imports. But there’s an air of romanticism when Hryniewski and Czajkowski declare, “We believe we can really diversify Poland’s wine business.”
Artur Zarzycki of Vive le Vin also believes he’s on a mission to educate consumers: “The New World [wines] are being redefined, with more freshness and drinkability and a true creative passion from small producers.”
“We strive to reach drinkers who understand the true beauty of wine,” adds Ikeda. Could this be the micro-importer’s competitive advantage over the formulaic large company sales manager? Even if it’s an illusion, it works.
