PREMIUM PLAY BUSINESS REVIEW 2014 PREMIUM PLAY The launch of The Macallan M, the pinnacle of the whisky-maker’s art, has been a truly international success. e April Finkelstein of Edrington Americas, Jennifer Wu, Edrington Taiwan and Jaume Ferras of The Macallan EDRINGTON BUSINESS REVIEW 01 CONTENTS PAGE 02 PAGE 08 PAGE 12 LAND OF OPPORTUNITY GREAT PEOPLE BUILD GATEWAY TO ASIA LEADING BRANDS Paul Ross talks market share Singapore is the door to the and shoe leather as Edrington New horizons call for new dynamic and growing markets sets its sights on the world’s perspectives. Veronika Gunn- of South East Asia, says Geoff leading premium spirits market. Boesch explains how Edrington Kirk, and Edrington’s experience is placing leadership skills at is the key. the heart of its growth strategy. PAGE 18 PAGE 24 PAGE 28 INTEGRA: REWIRING THE EVOLUTION OF THE GIVING MORE EDRINGTON PREMIUM CONSUMER Tellis Baroutsis describes how As the Company integrates the Philip Mackie and Lerato Edrington’s ethos of charitable networks that run Edrington’s Ramollo discuss the giving motivates his team and international business, Enrique converging interests of a why he’s determined to hold Mendez knows that this technology global generation and the true to the principles of the project is really all about people. changing face of ‘status’. Robertson sisters. Contributors: Editorial: Ronald Main and John Hatfield. Photography: Salem Krieger, Chris Lomas and Shannon Tofts. Design: Smith Brands. Print: J. Thomson Colour Printers. q The Macallan M is the world’s most precious whisky, a collaboration between The Macallan, Lalique and Fabien Baron. EDRINGTON BUSINESS REVIEW 02/03 t Located close to the iconic Flatiron building, Edrington Americas’ 5th Avenue headquarters was built in 1888, the same year that the Brugal family began distilling their famous Dominican rum. ACK in the 1960s the headquarters, the business has of consolidation in the US as there is USA was gripped with opened new regional offices in in the UK.” talk about the British Chicago, Miami, Dallas and Orange All this intense evangelical work Invasion. In those days it County. Bwas beat groups such as began when Edrington announced last the Beatles and Rolling Paul himself ran up 75,000 miles year that it was to part company with Stones who crossed the Atlantic with between January and April this year longstanding partner Rémy Cointreau the aim of ‘breaking America’. while, over the same period, he and USA and create Edrington Americas. his colleagues have delivered the The two companies continue to work Half a century later another Edrington message to more than together in several other markets, so invasion with a similar aim is 10,000 people at marketing seminars. why the change? underway as Edrington pursues its ambitious strategy of doubling US Paul is unequivocal: “The next step sales in just five years. Paul Ross, is to increase focus on the brands and President and CEO of Edrington rebalance the business to focus on key Americas, is excited and confident “We have a start-up cities right across the US. This is the about the challenge: mentality and a very world’s biggest market for premium spirits and the potential for growth is “We believe our brands are capable entrepreneurial team” phenomenal if you have the right of enormous growth. To achieve that growth we have learned that the key is brands and the right business to get as close to the consumer as structure. This is the time for us to build that business.” possible and that is exactly what we A dedicated team of Edrington road are doing.” warriors, including managers and “The people we are talking to, from The numbers involved in Paul’s brand ambassadors, has been major distributors to key accounts, are game plan look more like the statistics spreading the message to every state astonished about Edrington – our associated with a presidential in the union. status, our history, our difference.” campaign. In the last year staff levels “It’s all about the shoe leather,” he “People simply didn’t realise we had have quadrupled to 120 as the quips. “The US isn’t really one market. all these fantastic brands under the Company gears up for growth. As well At the end of the day it’s 50 different one umbrella. We’ve shone a as expanding the New York states and there is not the same level floodlight on the brands in our LAND OF OPPORTUNITY Head office Regional offices portfolio. We injected enthusiasm Paul and the team have been focused on New York Chicago Edrington Americas Central and Canada and belief in that growth potential building strong relationships. headquarters and division throughout our distributor network.” northeast division “Distributors are coming with us Orange County, Although the distributors are fired on the journey because they believe California West division up by all six brands in the portfolio, in the Company. What excited them focus is on The Macallan and Brugal, was the determination of Edrington Dallas South division which are targeted at the booming and its commitment. Our market premium spirits sector. The figures Miami share in other territories is Latin America and are compelling in Paul’s view: substantial. The distributors bought Travel Retail division “At the moment 40% of the world’s into the view that we can do in the premium spirit consumption is in the States what we currently do in other US. The potential for brands like ours markets such as Europe and Asia.” is enormous.” “They understood that there was a “We have a start-up mentality real business opportunity with huge and a very entrepreneurial team,” growth. They have sales guys who says Paul. work on 100% commission, no retainer FACT! “We talked to the team by webcast and they were getting very excited. on launch day. The message was that The belief is there. We’re obliged to we had run to the starting line just to work hard. We can’t underestimate the get into the race. But we got to the power of our brands.” starting line in great shape. We patted Like all good campaign managers, ourselves on the back for an hour and Paul has a very clear strategy for then rolled up our sleeves for the raising the profile and the sales of his hard work ahead.” portfolio: Getting the big distributors onside “The US market is is all about and fired up is essential if Paul and individual cities. In Florida for his team are to deliver on that example it’s Tampa, Miami, 40% OF THE demanding five-year plan. In the US, Jacksonville and Fort Lauderdale. In WORLD’S PREMIUM alcohol is still distributed in the Texas, we want to focus on Houston, SPIRIT CONSUMPTION three-tier system that was put in IS IN THE US. Dallas and Austin.” place when President Franklin D Roosevelt repealed Prohibition in A promotional event, Raise the 1933. Macallan in New York’s historical Under this system the three tiers are meatpacking district highlights the producers, distributors (wholesalers) power of this approach: “10 years ago and retailers. Generally producers (like we would have just been the country Edrington) can only sell their products club drink. But the place was packed to distributors who then sell them to and 40% of the guests were women. Every culture was represented there PAUL RACKED UP retailers (bars and off-sales). At that 75,000 MILES IN point, retailers are permitted to sell to from Hispanic and Asian to African- 4 MONTHS TO DELIVER the consumers for consumption. American.” THE EDRINGTON MESSAGE TO 10,000 There are six very powerful Brugal is the other half of CUSTOMERS ACROSS distributors in the States who each cover Edrington’s prime time double act in THE US. a number of states. If they get behind the premium category, especially on your product, you’re well on the way. the east coast: EDRINGTON BUSINESS REVIEW 04/05 e As HR manager of Edrington Americas, Nadege Dethy managed a programme to quadruple its headcount in less than a year. “Rum is the last category to “We patted ourselves they have lived up to the Edrington ethos of Great People, Leading premiumise in the USA,” says Paul. on the back for an hour “We have a great chance here. Ten Brands, Giving More. million cases of rival brands sell for and then rolled up our “None of the team has ever worked $10 - $15 a bottle. Brugal starts at $20 sleeves for the hard work” as hard as they have in the last year a bottle. We are in the vanguard of the and they deserve a huge amount of premium rum trend.” credit for getting us here in such a “The time is right to focus on Brugal short time. and while we don’t have a crystal ball “But we all know there’s still a job to – we believe we’ve got the right do. The foundations are laid but now message at the right time to the build there is the rest of the house to put up.” the brand.” “These are the so-called Prohibition In the 1960s British bands did, Timing is vitally important and the brands – brands that meant something indeed, break through into America. underlying drink market trends seem in the 1950 and 1960s. That helps us,” There is reason to be confident that to be moving very strongly in Paul confirms. Edrington’s brands will conquer the Edrington’s favour. There is a real States too. retro movement in the States and Paul’s team, comprising 20 keen interest in rediscovering nationalities, is as diverse as the USA authentic older brands from the past.