Paul Esposito, CEO of Independent Liquor Group (ILG), spoke to National Liquor News at the group’s 2022 Family Reunion about the growth of the co-operative, freight challenges and e-commerce.
“We’ve been able to maintain momentum in all the metrics – revenue growth, volume growth, membership growth – we’re in double digits in all those areas” Esposito said.
This statement comes off the back of a report in which the CEO detailed a pre-tax profit of $2.2m, plus a membership increase of 131.
“I think the message of ILG is getting out there, and people are understanding what the co-operative is about,” Esposito continued.
“The fact is that people are squeezed on the cost of business, people are looking for efficiencies, and now – they’re looking at ILG and thinking: ‘ILG can make a difference.’
“We expect this momentum to continue. In Sydney we have introduced an afternoon shift, purely because of the volume growth – for the last quarter, we’re looking at nearly 40 per cent growth.”
One of the business squeezes Esposito mentioned when addressing members at the conference was the increasing cost of freight. National Liquor News enquired if there was much to be done on this front, or whether it was a matter of absorbing costs in the short-term.
“We’ve got to roll with the punches. The unfortunate part is increases – decreases in excise freight. Companies are quick to introduce fuel levies, but they’re not quick to remove them when the freight prices come down,” Esposito explained.
“Our job is to make sure that our members get products in the most cost-effective way. At the moment ILG can afford to absorb the freight costs.”
As well as absorbing costs, Esposito has been working to identify new areas of opportunity for members. E-commerce is one such channel that the CEO believes has great potential.
“We’ve jumped on theses platforms – we quickly embraced platforms like DoorDash and UberEats and encouraged our members to join. In some instances, it represents up to 15 per cent of [a member’s] total business, and it’s all incremental,” Esposito said.
In addition to these existing apps, Esposito indicated that ILG was working on its own platform, which would be available to members shortly.
Similarly, ILG has partnered with app-based wholesaler Kaddy for both the supply side of the co-operative, and for business purchases from beyond its membership.
“We’re starting to see more traffic go through Liquorstop Warehouse via the Kaddy platform, and we’re encouraging some of our suppliers to engage with the Kaddy platform as well. It gives all on-premise customers better prices,” Esposito said.
“Along with Liquorstop warehouse, ILG has developed our own platform as well, which is called the Liquor Co-op warehouse, which is a B2B platform, that will also support restaurants, bars and other on-premise venues with better buying opportunities,” Esposito told National Liquor News.
In his report and address, Esposito explained that ILG had taken these steps in introducing B2B platforms, to reduce the incidence of independent liquor retailers purchasing from national chains and third-party operators.
“What we’re trying to do is just remove the leakage, and keep the volume within the cooperative,” Esposito continued.
Finally, Esposito commented on the election of the board of directors of ILG, the first competitive election under his tenure.
“Governance was different in the past – it was more the board inviting members instead of members voluntarily applying,” he said.
“As we’re a co-operative, it’s a democratic vote and the vote was close today, it was a handful of votes that determined who was on the board.
“It was sad today to lose Doug Dalley, as he was a good director and a strong voice for clubs and regional Queensland. However, I think Tracy [Hatch, new ILG Board Member] will be a welcome addition, and she’ll add value, especially for regional Queensland.”