Interview with David Elghanayan, Co-Founder & Director of Vanquish WineFebruary 29th, 2012 | Posted by in Taking the stuffiness out the fine wine market
I suppose our first question would be, you had a public school education in the UK at St Paul’s, and then went to university at Georgetown in the States, how would you compare the two education systems?
Both were amazing experiences for me. St Paul’s was an incredibly competitive environment in every aspect of school life, from rugby to academics and prepared me well for Georgetown where, I was surrounded by some of the brightest International Relations professors whose goal was to bring the best out of all their students. I consider myself very lucky to have had the opportunity of the combined academic and life experiences that both institutions had to offer.
You openly acknowledge that you didn’t know enough about the property world and grew your family business before selling out of it in search of more hands on experience. What was it like to go from running your own business to working for a boutique property house?
I think that I realised that I actually knew a lot more than I thought and had far more hands on experience than most of my peers of the same age. It was also a challenging transition to move from a position I found myself thrust into due to family circumstances where I had to learn on the fly to working for an aggressive boutique firm in which I was in a room every day with some of the smartest people in UK property. The learning curve was extremely steep but the rewards in terms of the knowledge, deal experience, contacts and business acumen gained, was immense.
Tell us how you met your business partner Jimmy Metta, and what you were both doing at the time? How do you complement each other today?
Our families have been close for many years and Jimmy’s older brother is one of my best friends. Jimmy had this great embryonic trading business with a partner who decided to leave the company to work abroad. I had just exited from the UK property business and we got talking. We both saw this niche in the supply of Champagne to London clubs and both had the common view that it was possible to commoditise certain products and dominate the UK supply of them. The synergies between our skillsets were apparent and so Vanquish Wine was born.
The two of you started in a tiny office in Gloucester Road and started selling to London’s premier venues. Was the ‘club’ scene an untapped market, and how did you get in with the owners? Explain to our readers what you mean by ” you are your customer’s customer”.
At the time it seemed the world was on fire and money was never ending. Clubs have obviously been around for many years but no one had anticipated the level of spending and exuberance that was going on between 2005-2008. I think it caught most of the traditional wholesalers off guard. Many were slow to adapt to the changes that were taking place – namely that in the top venues, three or four products were responsible for 70% of their revenue and the largest contributor to their bottom line. These products were limited in supply (like most commodities) and often on allocation and that’s what we invested in, becoming focused specialists in a world of generalists. The first time we met a venue as Vanquish, we had a very short list of 2 products! – but these were the products they needed and couldn’t get enough of from their existing suppliers. We always had a huge advantage over our competitors at the time as we would go to all of these venues as paying clients (our customers’ customer). Therefore we understood what people wanted, how they wanted it, what they were willing to pay and the mentality of the paying customer.
When you started focusing on what customers in clubs were drinking, particularly for table service, you chose Cristal to be your flagship product. Is it true that at one stage you were the largest stockist of Cristal in the country, and if so, how did this come about?
Yes and probably in Europe. Cristal was on a very limited allocation from the brand owner and often tied into their other products. At the time a venues weekly requirement for Cristal was probably a multiple of their monthly allocation. There was a huge demand-supply gap. We approached all of our wine suppliers and basically bought their entire stock of Cristal in all formats, we did the same with local wine merchants and shops across Europe. We have always been very good payers in a world where many people broker – therefore we were offered the allocation first enabling us to build up such a dominant market position.
You work closely now with a lot of brand owners, did that happen overnight, or did you have to push your way into their good graces?
No, that was a long process and we had to cultivate those valuable relationships over a few years. Today we are in the top three vendors nationwide for the brand owners whose products we supply.
Tell our readers about your Fine Wine Department; a little bit of the makeup up of the team and how you diversified into fine wine to begin with?
Vanquish was born when Jimmy was asked to dispose of a large cellar owned by his uncle. It was through this process and a passion for wine that sparked the idea that there could be a business in this. Through the sale of these wines, Jimmy cultivated the contacts to trade champagne – that being said he always had an eye for fine wine, albeit the business at that time was demand driven (we are looking for…, can you find me…). As our on-trade business matured, it was evident that the same people drinking Champagne in the clubs also wanted fine wine on their tables at home and so a natural push was made to build the fine wine team. Richard Brierley was our first hire as the Head of fine wine and came from being a VP and Head of North American Wine Sales at Christie’s in New York and worked as a specialist and auctioneer at Sotheby’s before that. Jimmy and I have always understood that our strengths lie in understanding the business of wine and spirits, however, we knew that we needed to hire someone like Richard with a deep knowledge of fine wine from both a practical and academic perspective. The team was then further built up with top London wine traders with proven track records and the cultural and linguistic ability to trade all over the world. Between the Vanquish members we natively communicate in English, Arabic, French, Italian, Cantonese, Russian, Portuguese, Spanish and Farsi. Today we invest in and trade some of the finest wines in the world, offer comprehensive Managed Personal Wine Portfolios to private clients and offer a variety of products to institutional investors.
So let’s talk about the pink elephant in the room. This is your first official interview since your auction with Spectrum Auctions. Spectrum approached you a little while ago with the idea of running a ‘different’ auction in London. You agreed that there was a gap in the market; how did you intend to be different?
Together we wanted to provide a professional fine wine auction, with incredible stock that would appeal to the trade, private clients, professional investors and collectors alike. We have been to many wine auctions in which the bidders are comprised of four people in an empty room and a few anonymous parties on the phone and online. We wanted the auction to be representative of the calibre, glamour and excitement found at modern art auctions. Therefore everything we did was to be of a higher standard than anything done previously in the UK – from the quality of the catalogue and the sheer number of high res images within, to the venue being the beautiful ball room of the Mandarin Oriental hotel in London. We had a catered cocktail hour before the auction with champagne provided by Moet Hennessey and wines by Chateau Palmer. It was essential to Vanquish that our inaugural wine auction should be just as elegant, glamourous and fine as the wines being sold.
In Don Cornwell’s blog (Wine Berserkers), he accused you and Spectrum of sourcing wines from Rudy Kurniawan. In the past Rudy Kurniawan has been a consigor at other auctions and has had wines pulled from them, simply over doubts of their provenance. When Don Cornwell accused you and Spectrum of having fakes wines at the auction, did he contact you first to alert of you of his concerns?
He never contacted Vanquish and to the best of my knowledge never viewed a single bottle of wine which were in situ in California for a couple months prior to the auction.
For the record was Rudy Kurniawan a consignor?
Spectrum has already publicly stated the he was not.
What was your reaction to these accusations, and what did you do as a result of them?
We continued showing and reviewing the wines up until the day before the auction with external professionals and buyers. Three people authenticated the wines for auction, one on behalf of each Spectrum and Vanquish and a third party consultant. Between these professionals they must have 80 years of real hands on experience considering, evaluating and opining on fine wines. Add to that the list of professional investors, buyers, collectors and representatives who intricately inspected the wines and we were confident that we had a great auction ahead of us.
You invited the Domaines and their agent Corney & Barrow to inspect the wine and they declined. If you were so confident of their authenticity, why did you pull the wines from the auction at the 11th hour?
As with all auctions, our wines had been available for any interested party to inspect for at least two months, both in the UK and California – many professional buyers did come and conduct their own due diligence as we have always encouraged. High resolution imagery was available for all the lots by request and the catalogue, that contained more close up shots and images than I have seen in most auction catalogues, was both available in hard copy and on line. When Corney & Barrow called us to express their concerns, we invited them and the domaine to inspect, they declined. Ultimately out of an abundance of caution, we decided to pull some lots for further investigation. We have further invited Corney and Barrow and the domain to participate in this process with us. Domaine de Vogüé called us on the day of the auction and asked to pull 8 lots as they had some concerns, out of immense respect for the domaine we agreed and they have graciously accepted to review the withdrawn wines and help us in the authentication process.
Did you find it strange that many people within the industry took Don Cornwell’s accusation as gospel? And did his accusations hold water, or were there any discrepancies in anything he said?
Absolutely, especially the fact that not a single person asked if he had viewed the wines (he did not) or requested high resolution imagery (he did not). For someone so passionate about the auction, why didn’t he view the wines, they were all available in California for two months?
As I mentioned, we had some of the world’s most recognised experts evaluating the wines, some on behalf of the auction and some on behalf of clients, we had open discussions and debates with all of them yet that was completely ignored. He pointed out obvious inconsistencies in bottles and labels that exist due to the inconsistent and varied nature of labelling, bottling, distribution etc of decades past, which are familiar to any experienced wine professional. Even stranger was the fact that he had several blatant discrepancies, one of which was pointed out by a fellow blogger, yet his word was still gospel. For example: he pointed to a missing accent on Lot 11 on the green writing- when reviewing the picture even on the catalogue – it clearly has an accent. Lot No 118, a case of purported 66 DRC Romanée Conti was previously pulled out of a Heritage sale – these were different bottle numbers and the case did not correspond to the one mentioned at Heritage.
The night was reported to be a success, how so?
Feedback from all those who attended has been extremely complementary and positive. We had several hundred attendees and the auction was standing room only. 84% of the lots were sold (realising over £1.34m) and the diversity of the client base was incredible: we had both private clients in attendance and the trade on the phone from as far away as Brazil, USA, China, Japan, Mexico, Singapore, Lebanon and Europe. We also had an incredible number of first time registrants who ended up buying lots too.
What’s the future for Vanquish Wine and would you ever run another auction in London?
Its business as usual for Vanquish as our business continues to go from strength to strength. We are fortunate to have an amazing client and supplier base and despite general European economic uncertainty, we are trying to hire talented new professionals for the various divisions. We have a few exciting ventures in the pipeline and we are always open to the thought of future auctions in the UK.
You moved away from selling mostly to clubs to now the top 150 Premier Venues in London. Who’s your next target audience you’re going after or is that a secret?
We are close to launching an incredible B to C online platform, but that’s all I can say about that for now.
What’s your personal favourite drink after a long day at work?
Casa Dragones Tequila on the rocks with some fresh lime.
12×75.com would like to thank David for taking the time to meet with us and interview. We are particularly flattered, given that this is Vanquish’s first OFFICIAL interview since the auction with Spectrum. We wish them continued success and look forward to reporting their growth in the future – The Editor
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