De Kuyper CEO outlines ‘strategic roadmap’
De Kuyper CEO Mark de Witte is set to unleash a new dawn for the historic company as he seeks to “own the cocktail” with his strategic vision.
*This feature was initially published in the November 2015 issue of The Spirits Business magazine
It’s been a period of significant change for De Kuyper Royal Distillers. The family-owned Dutch liqueurs firm, with a history stretching back to 1695, has undergone a rebrand and unveiled a new distillery in the last 24 months alone, plus it recently, launched the Rutte white spirits brand.
Then, in July 2015, the pace of change quickened even further, when ex-Bacardi DACH & Nordics chief executive Mark de Witte took up the role of CEO.
The contrast between the two businesses is sharp, and the move from the world’s largest family-owned company to a smaller entity could have been a bumpy one. But it’s a change de Witte appears to be relishing.
Fresh off a plane from Bar Convent Berlin (he rates the bar scene in the city as fast catching up with that of London and New York), de Witte is animated, clearly passionate about the drinks trade and energised, despite the rigour of an undoubtedly hectic few days in his former stomping ground.
“It was fantastic,” he evaluates, clearly excited about his time at the event. “A lot of trends are really starting at BCB [in Berlin]. I do think there is a broader trend for real authenticity, craftsmanship… and the more classical cocktails are coming back.”
It’s this eagerness for the industry that shines through when we talk, and surely also smoothed the transition from Bacardi to De Kuyper. Both are family-owned, but, as de Witte notes, the difference in scale means that the familial values in the latter really come across strongly.
“In the case of De Kuyper family values are very, very clear – it’s ingrained in the company. The board is chaired by a non-family member – the family is in that respect at arm’s length and really trust the non- family management to run the business.”
But two family members do have a hands-on presence: Marc De Kuyper runs the US affiliate, while Remy De Kuyper heads up production.
After those crucial first 100 days “in office”, any new leader will be keen to set out their priorities. And de Witte’s primary approach clearly reflected those family values.
“I’ve had breakfast and lunch sessions with all employees. Literally all of them,” he explains. “To understand what gets them out of bed, to understand what they like about the company what they don’t like about the company, their own role.”
It’s a surprising strategy in the fast-paced business world. Yet de Witte explains meeting as many employees as possible has been an essential early doors strategy throughout his career. It was only after hearing from those “on the ground” that he started to evaluate the state of the business with the executive team.
De Witte is frank: discussions have already seen processes “restructured” and new ways of working rolled out. The bigger picture, however, is the development of “a new strategic roadmap for the next five to 10 years”. While plans were still to be fully finalised, he was surprisingly open about his vision for the de Kuyper’s future.
“We want to be a premium liqueur and premium spirits company, the cocktail leader in the on- and off-trade, and we want to own the cocktail,” he states, a phrase he often repeats.
The strategy has two arms: liqueurs will retain their “very important” positioning and will be strengthened, and the firm will venture further into the premium base spirit territory than before.
“You need premium base spirits to be able to deliver all the ingredients to own the cocktail. From a portfolio perspective [that’s] where we want to be.”
The focus on spirits is possible thanks to a major investment in the company’s Schiedam headquarters. In November 2013, three new pot stills were added to production, giving De Kuyper the ability to expand its spirits offer in-house.
Speaking at the launch event at the time, Albert de Heer, De Kuyper’s marketing director, said the new equipment would enable the company to “play around” with new liqueur flavours, in addition to base spirits.
De Witte echoes that ambition: “We definitely want to own our own production – our own distilleries are part of the artisanal and real craft angle we want to play in.
“A precondition is that the quality of the product should be really outstanding. The second one is clearly the right route to market and a relevant and differentiated positioning of your brands, and that’s where we do think we can and will improve a lot in the future.”
For de Witte, defining a brand’s values is essential, including its role for the bartender. “In the end there’s a lot of competition, a lot of competitors. But the difference should be where we add value, and what gives us the right to be in the bar. Why should people work with our brands? We need to add value – only when we add more value to our customers and consumers than our competitors [do] we have a reason for being and the right to win.”
While he mentions an ambition to play in the “at-home” cocktail space, he is adamant the on-trade will remain a key focus due to its value as a brand-building channel.
“The two big continents we play in are clearly the US and Europe. No one has a crystal ball to see what will happen in five or 10 years’ time. But at the moment, both economies are pretty healthy apart from Eastern Europe. When the economy is healthy, [there’s] more money to go out to the on-trade – in that respect, the on-trade is fairly well positioned for us.”
One of the biggest challenges for de Witte will be streamlining operations. He admits that perhaps the product offer has become a little cluttered (“We now have a range of 43 liqueurs – I dare say there’s easily 200 we could produce, but… do you really need 43?”) and that the process of shedding dead wood needs to begin.
“Focus means also letting go of a couple of things. We are now engaged in a lot of small initiatives which distract and don’t really strategically add to the future,” he explains. Route to market is another area in need of a refresh, he adds.
“The 80/20 rule applies and it means we will be focusing more on key countries, be more selective in what countries to play in, and then eventually do it better.”
In addition to Europe and the US, de Witte has identified Australia, Korea, Japan and “potentially” China as locations to focus on – an enormous challenge given the size of the territory and vast differences in drinking culture.
“China is so big, you know. We talk about countries but what we actually mean most often is cities. In my learnings and experience, it is important to focus first on a couple of cities and scale up when you really understand how it works.
“Often, we tend to simplify the differences that continents and countries have between [drinking] cultures. Yeah, it’s true, but within that there are a lot of differences, even between the UK and Germany, or the Netherlands and Belgium.”
It’s not just drinking cultures that carry so much variance. Carefully selecting the right route to market by country is also critical, de Witte reckons.
“We are an exporting company with subsidiaries only in the Netherlands, our home base, and in the US. So in other markets we are dependent on the right partners and it’s key for us to really have the right partners and to be selective.”
That said, it’s clear that loyalty is hugely important to both De Kuyper and de Witte. While the company is going through a significant period of change, he stresses it would take a lot before the firm would part ways with a key distributor.
“The approach is always to see whether or not we can improve with what we have; that counts for employees, that counts for business relations. When that’s not possible, or your partner is reluctant or not capable to change and improve, then you have to take next chapter. But loyalty first.”
It’s a recipe which has served the company well. The Spirits Business’ Brand Champions 2015 data revealed that De Kuyper was the only liqueur brand to post growth in 2014 – surely an achievement in a market dominated by global uncertainty, changing consumption patterns and pesky exchange rate volatility.
De Witte credits De Kuyper’s innovation programme for its success, alongside the company’s flexibility and ability to react quickly to new trends, thanks to its in-house R&D and production capabilities. But how does a CEO with a busy schedule manage to keep close to market developments?
“It’s very important clearly to have the right organisation and market insight data, but also to have a very close network with the top bartenders – that’s one of the areas I do think we’re good in.” He sees amassing feet on the ground in key markets as a vital next step.
The art of juggling
The conversation shifts again to priorities – because, in de Witte’s words, “you can’t do it all, the world is too big”. There’s juggling to be done.
“I started the conversation by saying that our vision is to own the cocktail and to be an image leader on our range of liqueurs. At the same time we want to expand our premium spirits portfolio and it can be done by own brand extensions, like we are doing now with Rutte, and by acquisitions.”
His ambitions for the base spirit side of the business are such that he is aiming to shift the category split from 90% liqueurs/10% spirits, as it was a couple of years ago, to a 50/50 split, while growing the value of liqueurs.
De Witte admits it is a “pretty ambitious growth plan”, but he is clear the opportunities to build and acquire start now.
“We’re absolutely keen. Clearly in Rutte we have a great gin and genever brand. In that respect it is pretty unique. Since 1872 we’ve been famous for genever and later for gin; there are not many companies that have both and can claim to be specialist in premium juniper-based spirits. For acquisitions and own-brand developments, we are interested also in vodka, rum, and Bourbon.
“We’re very open. The good thing is we are a financially healthy company so when the right opportunity comes along, and depending on the size, we can and will [acquire].”
I remark that it must be an exciting time for de Witte personally and he enthusiastically agrees. There is a job to be done, but he clearly revels in the potential of the company and has the remit from the De Kuyper family to spearhead dynamic change and growth.
Getting Rutte “on the road” is an immediate challenge, but he also cites preparing the company for its expected growth and “transformation” as key. He’s already eyeing the off-trade and the at-home cocktail consumption market.
With different drinking occasions in the spotlight, along with a laser focus on key cities and clearly a sizeable appetite for acquisitions, the vision to own the cocktail suddenly seems achievable – and we wait with anticipation to see where de Witte takes his next steps.