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Matt Shattock on the ‘east-meets-west phenomenon’ of Beam Suntory

When Suntory Holdings bought Beam Inc there were reports of a clash of cultures. But, as Beam Suntory chairman and CEO Matt Shattock tells The Spirits Business, healthy difference, not dissidence, has created a global powerhouse.

*This feature was originally published in the February 2018 issue of The Spirits Business

It’s been four years since one of the drinks industry’s most expensive acquisitions took place. At the start of 2014, Japanese drinks group Suntory Holdings augmented its international ambitions with the purchase of US producer Beam Inc for US$16 billion, creating the world’s third-­largest alcoholic drinks company: Beam Suntory. The global spirits operations of both parties were brought together under the new umbrella, which is headquartered in Chicago, Illinois.

The deal grabbed headlines not only for its transformative impact on the international spirits landscape, but because of the supposed boardroom dramas that ensued. Hubris from both sides was reported, and speculation mounted over whether the businesses, both with a proud sense of heritage, could realistically coalesce. Have relations really been that strained?

That’s certainly not the impression Matt Shattock, chairman and CEO of Beam Suntory, offers. “It’s been a very exciting chapter for everybody involved, and I think it’s only strengthened our business,” he says of the takeover. According to Shattock, the businesses have become bound by “commercial synergies” that have allowed Jim Beam to grow its sales in Japan from 320,000 bottles before the merger to a predicted 8m bottles this year. And the benefits have been reciprocal: “We have seen tremendous growth, and taken some of Suntory’s brands – its Japanese whiskies and some of its malt Scotch whiskies like Bowmore and Auchentoshan – around the world,” says Shattock.

American whiskey is a priority


But he isn’t afraid to admit that Beam Suntory comprises two distinct business personalities. “We have been successful in establishing a culture that’s built, it would seem on the surface, on very different backgrounds – different languages, different heritages, different business plans – but we were bound together through having common multigenerational family heritage, as members of the founding families still work with the businesses.

“There’s a real, sort of, east­-meets-west phenomenon, where we’ve got on the one hand quality and continuous improvement, and on the other hand a performance culture and a real spirit of entrepreneurialism and innovation. It’s a combination of these things over the past four years that’s really enabled us to build on our core strengths and take the business collectively to new heights.”

Shattock is in the perfect position to offer insight on the transformation of the company, having joined Beam Global Spirits & Wine, then part of Fortune Brands, as president and CEO in 2009, following six years at Cadbury and 16 at Unilever. Before this, he was a tank troop commander in the British Army. Shattock became CEO of Beam Inc in 2011 and was named chairman and CEO of the newly formed Beam Suntory in 2014.

“Suntory took an unprecedented move of asking us to combine and lead the business for the global Beam Suntory enterprise from our offices in Chicago, and I was fortunate enough to be asked to lead that business as chairman and CEO,” he says. “I also had the great privilege of joining the Suntory board of directors. It was a wonderful learning experience to be part of that leadership team and understand how a Japanese company operates.”

While there is, as Shattock puts it, a firm “synergy” between the Japanese and US arms of Beam Suntory, does he believe they are now completely combined, or do fissures remain? “I would say we are now fully integrated in the sense that we are now one Beam Suntory family,” he answers. “We have talent moving around the world and are fully integrating the way that we run the business.”

In 2016, Takeshi Niinami, CEO and president of parent group Suntory Holdings, told SB that Beam Suntory was not then a fully incorporated enterprise since its US and Japanese teams had not created products in collaboration with each other. “We have to materialise the integration by launching products as a result of the integration,” he said. “[We] are manufacturers, so we need brand new products to appeal to the global market, that’s for sure. That’s the concerted effort I share with Matt Shattock.”

Japanese gin Roku

Sure enough, these efforts came to fruition with the launch of Roku, a Japanese gin, last year. Roku – meaning ‘six’ in Japanese – contains six Japanese botanicals, including sakura flower, sakura leaf, yuzu peel, sencha tea, gyokuro tea and sansho pepper, along with eight other botanicals traditionally used in gin. The product is made at Beam Suntory’s Osaka-­based distillery, and has received a significant global push.

“This is a good example of where there’s been a direct collaboration in coming together and creating opportunities that just didn’t exist in either company before,” Shattock says of Roku. “I still think we have got an awful lot to learn from each other, and that’s exciting because we can continuously spawn new opportunities for our business.”


Beam Suntory may further explore new product development in Japanese white spirits, says Shattock, but it has certainly not neglected its key whisky contingent. In 2015, the group released Hibiki Japanese Harmony, a blend of 12 malt and grain whiskies. One year later, Beam Suntory unveiled Toki, also a combination of malt and grain from the Yamazaki, Hakushu and Chita distilleries; and The Chita, a single grain. The whiskies, all bottled without an age statement, had the dual function of bringing newness to the category, while also allowing the group’s inventory of maturing Japanese malts to continue to grow.

Suntory Holdings has invested a significant sum in adding more pot stills to its Yamazaki and Hakushu distilleries and in expanding its Ohmi ageing cellar – one publication reported that as much as ¥20bn (US$176 million) has been spent. And while the firm’s main competitor in the category – Nikka – is scaling back its international distribution because of supply constraints, Beam Suntory is able to continue with its global strategy.

“There’s always a balancing act between the heartland market where brands have been built and the global market,” says Shattock. “The great thing with Suntory is that it takes a global long-­term perspective, and therefore the ability to dedicate finite resources to those global priority markets and think about the long term is very much the core philosophy of the business.” Indeed, such a strategy will be critical as Japan’s population continues to decline.

Bourbon will also benefit from a huge capital investment drive from Suntory – just last month, the group confirmed it will spend ¥100bn (US$917m) on increasing its American whiskey production over the next five years. “You have to be far­sighted in this business because it takes between four and 10 years for whisk(e)y to mature,” says Shattock. “A number of years ago we decided strategically to invest, as we really believe in the long-­term global growth potential of American whiskey, and particularly our Bourbon brands.

One of the company’s whiskey maturation warehouses

He continues: “We have plenty of capacity and we are fulfilling that opportunity in the Jim Beam brand – which will probably have its highest growth in 30 years this year – and Maker’s Mark. Because of those investments, 2018 will be an important year. We will begin in earnest to build Maker’s Mark globally and in our key markets around the world because of that capacity expansion. That will be a very big focal point for us globally.”

Shattock even says Beam Suntory is aiming to position Maker’s Mark as the “world’s first global craft whiskey”. “Going forward there will be a lot of opportunities, but certainly so for our heartland brands Jim Beam and Maker’s Mark,” he adds. “They will be the big global focus for us.”


Beam Suntory’s strategy may be heavily focused on Bourbon, but it is also seeking to expand into areas that the company has historically had a minor presence in. At the end of 2016, it purchased a controlling stake in pioneering London craft distiller Sipsmith, thus giving a significant boost to its gin portfolio, which already included Spanish brand Larios. The later addition of Roku prompted the firm to claim it now has a “very distinctive and competitive gin portfolio”.

Shattock says the “exciting” acquisition of Sipsmith is part of Beam Suntory’s “increasing focus on premium brands”. While the group is focused on developing its core portfolio, it will “always be open” to making more acquisitions. In particular, Shattock claims, Beam Suntory is attracted to brands that have “passionate founders” who want to “stay part of their family”.

He notes: “We still have a number of members of the founding families of Maker’s Mark, Jim Beam, obviously Suntory, and Cruzan still working in our business. They can come and join us and we can help them fulfil their long­-term ambition, and build brands of great quality and craftsmanship. They seem to be a good cultural fit with our company.”

Shattock: Jim Beam ‘will probably have its highest growth in 30 years this year’

In addition to craft spirits, another key trend that is taking the US by storm is cannabis-­based drinks. One analyst recently told The Spirits Business that he believes the emerging category is set to become the “biggest disruptor that ever was” in the US market, and called the ‘craft’ drive a mere “playground in comparison”. In October, US competitor Constellation Brands bought a minority stake worth US$191m in Canadian cannabis producer Canopy Growth Corporation with the intention of creating cannabis beverage innovations. As more US states legalise the drug, is Beam Suntory interested in dipping its toe into the weed water?

“We are keeping a close eye on it,” Shattock says. “To date, we haven’t seen a material impact on our business, and we don’t see a big impact in terms of substitutions.” His main concern is that as the cannabis industry evolves, it “becomes regulated and operates to the same standards as our industry does”.

In terms of future strategy, Beam Suntory has a “clear market segmentation of the US and Japan as our two biggest markets”. Shattock expands: “We also have some other big developed markets, such as western Europe, which has seen growth performance in the likes of Germany, Spain and the UK. And then the third leg of the stool is our emerging markets, and again we have had good success in markets ranging from China, where we set up a new route to market, to Russia, where we have seen tremendous growth. We see those markets as being a platform for the long-­term growth of the company.”

To many, Beam Suntory may appear to be a company comprised by disparate elements. They may have questioned whether both sides could ever work together in harmony. But it seems the company is united in its bold global ambitions.

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