Almost everyone has, at some stage, dreamt of combining their hobby with their job, but only a handful ever realise the dream. Few possess the funds, the contacts, and the nerve to build a business around their interest, and fewer still harbour a hobby which can become a viable commercial venture.
Gary Boom, of Bordeaux Index, is one of the blessed few who have been able to channel their passion into profits. Fourteen years after establishing his own business, this seasoned wine collector now heads a company which buys and sells wine around the world, and turns over up to £150m a year.
Gary says he got the idea for Bordeaux Index when he was working in the City, and collecting wine for pleasure. The “shoddy service” he was getting from existing wine companies gave him the conviction that he could create a long-term wine trading business, buying up large amounts from suppliers and selling it on to collectors at a fair and reasonable price.
He elaborates: “When I worked for InterCapital, I was spending quite a lot of money on wine, but I was distinctly unimpressed with the companies around at the time. I would be buying Petrus at £5,000 a case, I would ask for it to be delivered and they would just drop it round the back of a house – appalling!
“I thought wine was one of the last great commodities, but it was very badly served by the companies that ran it. The wine market is a big commodity market and, in City terms, it reminded me of an unregulated market.”
Gary turned his observations into a template for his new business, and in early 1997 Bordeaux Index began trading. He explains the vision for the company:
“By providing transparency to the market, I could start commoditising it. We’ve always publicised our wine prices, shown exactly what quantities are for sale, listed the prices we buy at and the prices we sell it. Clarity is the key.”
Having made “a fair amount of money,” in the City, Gary and his business partner founded Bordeaux Index with an initial investment of £500,000, obviating the need for external funding. The start-up fund was spent on office space, and buying an initial base of stock from European suppliers.
The early stages were not without challenges. The company’s first premises, a rented office in St. John Street, North London, had no permanent furniture; the six original staff had to sit on wooden boxes as they did business on mobile phones.
Furthermore, the company had to overcome all the common problems of a fledgling business, as Gary describes:
“It takes 10 years to build any business - you’re starting with a lack of capital, lack of retained customers, problems getting decent suppliers, and you’ve not always got the best staff for the job.
“Your competition absolutely trashes you, you get bad references from competitors, and you’re facing a wall of prejudice from start to finish. But everything is measurable in small steps, and we just had to concentrate on providing a better standard of product.”
When meeting suppliers and customers, Gary has always placed real value in personal contact. “Right from the start, we tried to meet face-to-face, because they had a choice of where to sell their product and we wanted them to choose us.
“Personal relationships with our customers and suppliers are key – we hold many events through the year for them, such as tasting events, and dinners at Michelin star restaurants, as a way of engaging them with the product and educating customers about the product we all love.”
After deciding that advertising was a waste of time, Gary decided to target word of mouth instead. But business soon began to pick up; rather than chasing suppliers, Gary found they were coming to him.
Gary’s account of the expansion is simple: “We hired good employees, purchased the best stock on the market, and invested in our IT infrastructure to keep pace. As the wine market grew, we grew with it and influenced it.
“Rather than concentrate on 20 or so wines, we diversified, and tried to drop the price per bottle. We now sell as low as £20-30 per bottle, so we target a much wider market. And we’ve been able to expand by opening an office in Hong Kong in 2008 - just as the wine market was taking China by storm.
Gary also took the decision to re-brand the company to “promote an unstuffy, modern approach to selling wine.”
Customer-focused development has yielded a string of accolades. Gary was included in a list of the wine industry’s most influential figures in the 2008 issue of Decanter, and his company has claimed a handful of awards at the International Wine Challenge, including the ‘Bordeaux Specialist’ award in 2008 and 2010.
Nowadays the company has between 15 and 20,000 customers in over 120 countries, spending an average of £150 per bottle. From the initial core of six people, Gary’s staff roster grew to over 50, and today’s premises are more lavish than the original rented space. The company now proudly occupies a five-storey building – a fitting centrepiece for its international operation.
Bordeaux Index’s global reach has enabled it to survive, even thrive during the recession; Gary says that, “while the UK was in a mess, China was desperate to buy because the economy was growing at 8-10%. We actually made more money in the recession than we had before!”
The next step, Gary says, is the imminent launch of the First Growth Wine Fund – an investment fund, run by Bordeaux Index, targeting wealthy wine lovers willing to make a minimum investment of £100,000.
Bullishly, Gary claims the company could turn over between £150 and £175m this year. “Our business is continuing to grow at an exponential rate, and the premises we have now could accommodate 20-30 more people, so there’s plenty of scope for expansion.
“Wine is becoming fashionable among a wider audience, and it’s becoming a lot more ingrained in our culture. So it’s a great time to be in the wine business.”