Bordeaux Index: Gary Boom
Claret with clarity: how a seasoned City slicker transformed the wine industry
Few people are lucky enough to combine their business with their pleasure; fewer still are lucky enough to make profits from their passion. So Gary Boom, of Bordeaux Index, is part of an elite band.
Boom has built Bordeaux Index, the wine trading business he founded in 1997, into a £150m-turnover company with customers in over 120 countries. His company has grown into a fully-fledged wine merchant, and has used financial instruments such as a two-way price index to bring order to the often chaotic wine market.
Wine collecting had been Boom’s principal hobby for years before he launched Bordeaux Index, but the enjoyment it gave him was often diminished by the “shoddy service” he received from existing wine companies.
He says that the distribution service was often extremely poor, with couriers simply dropping the cases of wine he’d purchased round the back of the house, and the industry was blighted by vagueness and disorganisation.
Falling back on his financial background, Boom began to conceive a new venture. He explains:
“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.
“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, Boom and his business partner founded Bordeaux Index with an initial investment of £500,000, removing 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. With no permanent furniture in their office, the six original staff had to sit on wooden boxes as they did business on mobile phones. Furthermore, the task of establishing the brand was an onerous one as an early stage proposition, “your competition absolutely trashes you,” says Boom, “you get bad references from competitors, and you’re facing a wall of prejudice from start to finish.”
To boost his company’s profile and create a loyal core of customers, Boom put a premium on personal, direct communication. “Right from the start, we tried to meet face-to-face, because they [potential suppliers] 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 the initial teething problems, business steadily began to pick up; rather than chasing suppliers, Boom 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. We also took the decision to rebrand the company, and promote an unstuffy, modern approach to selling wine.”
Customer-focused development has yielded a string of accolades. Boom 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.
Boom’s staff roster grew from the initial core of six to more than 50, and he upscaled his company’s premises in accordance with the expansion. Bordeaux Index now proudly occupies a five-storey building – a fitting centrepiece for its international operation.
A crucial step in the development process was the opening of a Hong Kong office in 2008 – just as the wine market was taking China by storm. Boom says this strategic move helped the company thrive during the recession, because, “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.
Boom 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.”