THE INDIES CORNER: Rise of the ‘Hybrid’ Wine Shops

By Angela Johnson

Despite the first wine-shop-come-wine-bars opening in London nearly 15 years ago with establishments such as Vagabonds, it’s taken the industry another decade to see a significant boom. Decanter introduced the 'Hybrid' category to its annual awards in 2022, highlighting an evolving landscape for Independent Wine Merchants.

However, the concept of combining wine retail and social spaces has been deeply rooted in European culture for centuries. In Paris, the ‘caves à manger’, and Italy's 'Enotecas' have long graced the city streets, offering sociable atmospheres alongside a curated wine selection for both takeaway and on-site enjoyment. Now in the UK, as an increasing number of Independent retailers embrace this 'Hybrid' model in various forms, it's an opportune moment to explore the driving forces behind the shift.

Navigating the increasingly blurred boundaries between on-trade and off-trade establishments poses a perplexing question: when does a wine shop become a wine bar (or even evolve into a fully-fledged restaurant)? I spoke with some Independent wine retailers that have adopted the Hybrid model in different ways, to find out about their experiences and how both retail and drink-in play out in the overall impact on their business.

Auriol Wines recently made this strategic shift. John Carlisle took over the shop in 1992 and, until last year, had always operated solely as a wine shop. Last March, responding to the challenges of a declining retail landscape in the village of Hook, he decided it was time for a ‘transformation’. He sought to capitalize on the thriving 'café culture' that had significantly boosted footfall in the area. Rather than blending tables into the store layout, he opted for a distinct split between the bar area and the retail space, aiming to maintain the integrity of both aspects of the business. By relocating the wine bottles to the rear of the store, he ensures that the inviting ambience of the bar is prominently visible from the storefront windows.

It's evident from talking to John that he recognizes the core of his business now lies predominantly in this on-trade area. However, he candidly admits that it hasn't quite turned out to be the 'golden egg' he initially envisioned. While selling wine in the bar yields healthier margins, surpassing the usual 40% mark, it also comes with its fair share of overheads—such as refurbishment, rewiring, increased energy consumption, and staffing.

Yet, John emphasizes that the most significant aspect of adaptation has been the investment of time. "We used to close the shop at 6pm, but now I rarely get to bed before midnight" he reflects. As the owner, maintaining a visible presence is paramount. While hiring more staff could alleviate some of the workload, John highlights the importance of personal commitment in selecting wines that set his establishment apart from the neighbouring bars and pubs.

John did his research before embarking on the new venture, he had been warned by other Independents that it might not affect retail sales in the way that he might imagine. Indeed, the idea that someone might take home a bottle afterwards or order a case once they’d tried a wine on the list was the desired outcome of having a few glasses at the bar. However, he says this is rarely the scenario. Retail sales are still in decline but at least the bar gives him a space to continue the conversation about wine and open bottles that may otherwise sit on the shelves. Being flexible with his wine list means he can move through slower-moving lines or lines of his own interest. “In a purely retail setting, you’d need to offer a discount on them, but with the bar, it’s the opposite, I can actually make more on the margin”.

He’s one of few shops I’ve seen to adopt a ‘wine tasting flight' menu but he tells me that this is one of the most popular choices. “We hosted flight tastings for customers over Zoom during covid and the response we got was great. Being able to open up a Wiessburgunder is something that not only makes a better profit on a 125ml sample in a flight, but it also allows us to show more interesting wines at the same time”. John also has a quirky way of breaking down the barriers with the accessibility of these wines, allowing customers to choose their level of price and interest from ‘economy’ to ‘business class’ flights – a concept that customers feel comfortable ordering… although he hasn’t quite got round to cracking out the pilot outfit for service yet.

While initially envisioned as a wine shop transitioning into a wine bar, John admits he underestimated the importance of the culinary aspect. "Value is still crucial to people when going out now" he observes. While it appears people may not be dining out as frequently, they still seek the social experience of enjoying a drink, complemented by something to eat. John emphasized the significance of offering food alongside their wine selection. Currently operating within a compact 2m by 2m space, they're limited to preparing cheese and charcuterie plates. "We don't want to be the prelude before dinner elsewhere. We want our customers to linger, perhaps for another glass or even the entire evening", John explains. To keep things fresh, they frequently host pop-up food nights and rotating the selection of local cheeses monthly ensures returning customers always find something new.

John knows the challenge of attracting patrons on quieter nights, noting the necessity for creative thinking to enhance midweek appeal. From jazz night to book clubs and incoming art classes, John is adapting to the way people want to spend their time when drinking wine. Reflecting on the past year, John expresses no regrets, emphasizing the versatility of the space. "If I had a pound for every time someone said, “The Village needed it”, I'd be a rich man" he quips, highlighting the significant impact this transformation of the shop has had on the local community as well as the future of Auriol Wines.

In comparison, Symposium Wines, established by Henry and Rob in 2011, was an early adopter of the Hybrid model. Their journey began during their second year studying Wine Business at Plumpton College, where originally they had envisioned a standalone wine shop in the nearby town of Lewes. However, market research at the time and their business studies hinted at the benefits of incorporating a bar component into their venture. Henry states “The main reason was that we could see the high street set-up starting to fade as the digital economy grew. We knew shops needed to make themselves more of a ‘destination’”. This blend not only marked a first for Lewes but also provided a venue for tasting events, something which was a pivotal aspect of their vision.

Henry reflects on the evolution of their business, noting that whilst for them retail still dominates the overall sales, the wine bar segment has surged in the past six months. Post-Covid challenges led to a temporary closure of the wine bar for two years, but an influx of newcomers to the area, especially from London, has since revitalized the bar side of things. “It has taken a while to work out customer routines post-pandemic and for customers to settle back into a ‘going out’ rhythm, but we are seeing better consistency now and Friday/Saturday wine bar nights are especially busy”.

Henry tells me his ‘house wines’ are key for the bar sales, changing up the offering weekly to entice customers to explore wines. “We rotate them every 3-4 weeks. It helps us reduce stocks of slow-selling wines, or more importantly, to push new wines we love”, like the Tenuta Serranova Appasimento which they put on as their ‘Top Red’ house wine. “It’s become one of our best sellers on retail too”. Henry adds that they are ‘deliberately vague’ with explanations on their list/menu, saying ‘Top Red’ or ‘Italian Red’ on the wine list forces the customer to engage with us. “It allows us to enthuse about a wine when describing it to them”.  In addition, they capitalise on the BYOB of local restaurants by offering pairing suggestions for bottle takeaways. It means although they might not be able to provide food beyond cheese and charcuterie, they also get the benefit of a retail sale for those drinking in before dinner elsewhere.

Symposium has periodically reassessed its business model in response to changing market dynamics. The pandemic prompted a revaluation, leading to a more balanced work-life approach. After years of intense 65-hour weeks, it allowed them to take a step back in what works for them and the town. Despite challenges like expensive music licenses, insurance and long hours, Henry remains optimistic for both aspects and it shows what they have experienced in the last 13 years has honed their ability to seamlessly integrate bar and retail operations to work for the business, but more importantly, for them.

The momentum of the 'Hybrid' wine shop trend shows no indication of slowing down. Yet, in an ever more ambitious and growing sector, the primary challenge may lie in carving out a distinctive niche to maintain profitability as well as competitiveness. Creativity in optimizing drinking-in spaces could prove pivotal for these establishments, alongside striking the right balance of shop vs. bar tailored to the area and customer preferences.

But, with an emphasis on showcasing lesser-known wines, offering corkage at competitive rates, and flexibility with the space, it seems few places can match the knowledge and value proposition that a Hybrid can.