With more than 40 years’ experience, Cave Direct is the UK’s leading craft beer wholesaler. Having built up a solid portfolio, the company is determined to keep on growing. Newly appointed Managing Director Neil Kitching sat in on an exclusive interview with Inside Food & Drink, to explain more. Report by Imogen Ward.
With several new brewery partners added to the Cave Direct lineup, plus new and exciting flavours on the way, the company is set to experience an action-packed year.
“So far, 2024 has kept us busy, and we are expecting that to continue throughout the rest of the year,” said Managing Director Neil Kitching. “The industry is still experiencing the after-effects of Covid. It has been a turbulent ride, but we are back up at our pre-Covid turnover rates, and that is set to continue rising.”
Cave Direct was established in 1979 by Colin and Louise’s father, Brian Gilhespy, with both of them joining soon afterwards.
Since then, Cave Direct has developed a striking portfolio which features craft beers from a large array of breweries.
The big buyout
In September last year, with retirement on the mind, the owners of Cave Direct agreed to a management buyout.
“Louise and Colin decided on the MBO route as a way of ensuring that Cave Direct continues as an independent owner-operated business,” Mr Kitching explained. “Louise will remain a Director and Colin will be Chairman of the Board with myself as MD, plus Laurence Smale and Michael Rochester taking up Director roles.”
With the desire to secure the company’s future, holding the best interests of the business and its people in mind, the owners decided that a management buyout was the way to go. This not only secured the future of the business, but also allowed for the familial ethos of the company to continue, with Laurence Smale, (Ms Smale’s son), a prominent part of the team.
“They really wanted the business to stay the way it is for the next generation,”
Mr Kitching continued. “The structure of the business was also an important factor to consider, and this development was set to improve that going forward.”
Crafted collaborations
Cave Direct’s extensive portfolio is only possible thanks to the hard work and innovative nature of its brewery partners. Each one has worked hard to produce first class beers that prioritise quality ingredients and taste.
German-based brewery Paulaner – one of Cave Direct’s main partners – offers a wide selection through the wholesaler, including one non-alcoholic Weiss.
“The alcohol-free sector is quite big in Germany, accounting for about 7%-8% of the country’s overall turnover from the beer
industry,” Mr Kitching explained. “In comparison, it’s quite a new sector for us; but we work with a great selection of brewers who are experts in non-alcoholic brewing.”
Also on offer, for those looking for a 0% option, are several other top-quality options from the likes of DONZOKO, Tiny Rebel and LERVIG.
When looking for new products to add to its collection, Cave Direct first looks to its chain of valuable suppliers.
“The suppliers are the unique selling point of Cave Direct,” Mr Kitching commented. “We bring in beers that are unparalleled, from creative minds all over the world. This would not be possible without our suppliers. When looking for new additions, we turn to them first, because we know and trust the premium quality of their products.
“We are actually in the process of introducing some new products from LERVIG we have a good development programme with them, which is currently focused on
3.4% beers. This is a new category that has evolved from the UK tax regulations, with beers with an alcohol volume of 3.4 or less being taxed at half the rate of higher percentage beers.”
Cave Direct intends to further develop its ongoing supplier relationships as well. These people are an incredibly important element of the business, and their expertise is pivotal to providing Cave Direct’s customers with the very best selection of craft beers.
The perfect portfolio Cave Direct has developed an extensive portfolio of top-quality craft beer, which is divided into two ranges: exports and domestic. Within these categories, the company also offers several options that are sold exclusively through Cave Direct.
Just last year, the company added two new breweries to its exclusive range. Flötzinger, a 120-year-old, family-run brewery in Germany was of particular interest, thanks to the premium quality of its 5.5% lager.
The wholesaler has also seen an increasing demand for dry stout. In response to this, Cave Direct recently added Slow Life – a 4.5% nitro stout produced by award-winning Irish brewer Whiplash.
“There’s been a lot of interest for dry stout, and Whiplash are the perfect partner to meet that demand,” Mr Kitching explained. “The brewery has been operating for around six years now, and it produces a fantastic liquid.”
Whiplash launched with Cave Direct in October last year; two months after Flötzinger joined the wholesaler’s exclusives range. Both breweries have received positive praise from Cave Direct’s customers, and the company is looking forward to exploring future opportunities with both.
“The launch of Flötzinger and Whiplash has been very successful, and in February we made the decision to integrate them both into our core range,” said Mr Kitching. “The remainder of this year will be spent establishing support from our customers, before we look to introduce more products.”
What next?
Just like every other business, Cave Direct has felt the impact of inflation and increasing energy prices, with its cost of operations increasing by around 20% over the last few years. In an attempt to overcome these rising costs, the company
has been searching for ways to improve its efficiencies.
“We are trying to bring as much of our operation in-house as possible,” said Mr Kitching. “We now have our own fleet, that delivers to 90% of the UK, and we intend to pursue other improvements in the future.”
As it continues to grow, future development remains a large goal for Cave Direct. The buyout brings with it a new structure that will support future growth plans –including a desire to develop a portfolio of American breweries.
“We are really trying to develop the presence of American breweries in the UK,” Mr Kitching added, in conclusion. “We’ve been going out to talk to companies there: we even plan to attend a craft beer conference in Las Vegas.
“I think expanding into the American market will be a really exciting development for a lot of people. The key for us
is bringing over to America the freshest, most innovative beers by developing a good trade route that keeps the beer fresh, while minimising as much of the carbon footprint as possible.
“No matter what the future brings, we have an amazing group of people who will see us through and support our every success.” n
