SB meets… David Wilson, Beam Suntory GTR
David Wilson, managing director of Beam Suntory Global Travel Retail, on the business’s progress three years after its formation.
How would you describe the last 12 months for Beam Suntory GTR?
We have had a very good last 12 months – very encouraging across all the brands and the categories that we work in. In particular, we are seeing some really nice growth come through in premium Bourbon. Last year we re-launched the whole Jim Beam range with new packaging and that’s been really well received. We have increased focus on premium SKUs and we are performing ahead of the category on Bourbon. If you look at our malts business, we are performing well and have just re-launched Bowmore as an age statement, which is doing really well for us. So I’m delighted with that. I guess the bit we are still working through is Cognac, which is still a challenging category for us and obviously the Courvoisier brand is causing that, so we are working with our retail partners and thinking about how we can re-energise the category.
What’s making Cognac a challenging category right now?
Well I think certainly it’s still feeling the affects of the loss of the Russian traveller and the impact of the Chinese traveller. I think we are seeing more second and third tier Chinese consumers who are travelling and they are probably more attracted to the top end of the category and more super-premium purchases in Cognac. Our strength has been more in VS and VSOP. But I think on the positive side we are starting to see Russian consumers coming back, which is very positive. And this year we are starting to see a growth coming back into Cognac.
We are also really excited about our Japanese whiskies and our products from Japan. Last year we launched The Chita single grain whisky, which has done very, very well, and we have just launched Roku gin. So all in all a good year – we are seeing growth in the right areas and it’s green shoots as we can see markets taking off again. We are still thinking of the right propositions for a changing consumer in the channel, but we are understanding those consumers better.
Are there categories or brands that perhaps weren’t a focus for you before that you hope to re-energise in the next year?
To be honest I think our learning has been that we are a portfolio business. We have a fantastic portfolio of brands with whiskies from five regions of the world. So I think the biggest lesson for us is to be focused. What we have done in the last 10-18 months is really pinpoint which brands we should focus on and give them real focus. Secondly, I think we understand that the growth engine is premium in the categories that we play in. And I think with focus and discipline in getting it right with the right range in the right place at the right price, clear messaging to consumers and clear premiumisation is our approach. It’s definitely strengthened the proposition we take to our consumers.
Will you be taking focus away from any brands in GTR?
If you look at Jim Beam, we had a very lateral range and now we have a very focused range. So I think we disciplined ourselves to rationalise some of our ranges. And I think Bowmore has become our lead single malt, because it has the benefit of age and the benefit of growth potential.
Can you see a gap in Beam Suntory’s GTR portfolio?
If you’d asked me the question six months ago, I would have said gin, and I am absolutely excited to have a really strong premium gin play. It was definitely a gap in our portfolio and we had the support of Beam Suntory and Suntory as a parent company in terms of not only providing us with an amazing Japanese gin, but also to purchase the Sipsmith brand, which is such a cool brand and I think it fits beautifully in the Beam Suntory portfolio. You talk about Sipsmith in the same breath as Hibiki, as Bowmore, as Maker’s Mark. We now have a beautiful portfolio of premium and artisanal brands. It was definitely a gap we filled faster than we thought we would have done.
How big will Sipsmith become in travel retail?
Sipsmith is a beautiful brand and I think what its team and founders have done really well is grow it slowly and really build the brand equity in a very focused way. It is a very strong brand in the UK, but with that it’s got a renowned reputation globally with bartenders and mixologists. And I think that in acquiring the brand we have the opportunity to start, with the right retail partners ,to roll that out. But we will take our time, because we are building the brand for the long term and we want to build it in the right way, in the right places.
Are there any markets in particular you plan to roll the brand out to?
Sipsmith is still in fairly small distribution, so we have a nice roadmap, which is to take it to some key sites in Europe and then to some key sites in Asia. It will follow in the US in due course.
Are we going to see more Scotch whisky age-statements in your portfolio in the future?
I wish I knew the answer. I am in two minds. I have worked in single malt Scotch whisky for 22 years now and I completely appreciate that age statements are a very strong signpost for consumers. However, I think it depends on the maturity of the market, and if you’re looking at Europe, I think that the European consumer is interested in different cask types and regions and aspects that affect the whisky – it doesn’t have to be age driven. Whereas in Asia, age is more of a signpost. We came out of age because our inventories couldn’t support it, and we have been able to go back into age because our inventories can now support it. It will remain a mixed offering and I do think that single malt whisky will probably consolidate a little bit more going forward as other categories become stronger. I think we are going to see a growing strength in Bourbon and I think that will demand a little bit space. I also think super-premium gin is going to demand more attention.
Beam Suntory GTR was formed three years ago – how has the business developed?
It’s been really exciting since day one because we literally had a blank sheet of paper to set up a GTR business, which is really special. Historically travel retail wasn’t set up as a global business. In Asia and America it was managed through domestic teams and in Europe it was managed through the Maxxium travel retail joint venture. But the channel requires focus and expertise, both in terms of how we work with our partners and also how we manage our portfolios and pricing strategies. It’s been a really exciting journey and so much has happened over the last three years. We have now got a very strong infrastructure – we’ve got our head office in Madrid, our European office in London, our Asia Pacific office in Singapore and our Americas office in Miami. We have doubled our sales teams within travel retail, and not just doubled the number of people, but the capability and expertise. And our brands have grown strongly. So I think we’ve seen the growth of a really strong business platform, strong talent, and working with great partners, and it’s so important to have done that during what has been quite a difficult chapter, because we can come at these challenges together.