Lucas Bols prepares for new premium era
As Lucas Bols celebrates its 450-year anniversary, its financial officer is preparing to take a step up. Incoming CEO Frank Cocx revealed his plans for the future.
After 20 years leading Lucas Bols, CEO Huub van Doorne will pass the baton on to chief financial officer Cocx in October. The leadership transition will be smooth; the pair have worked together closely since Cocx joined the Dutch spirits company.
“I started five years ago. Because we were listed on the stock exchange, we always had a small management team, which really was Huub and I,” Cocx says of the company’s headquarters in Amsterdam.
When Cocx assumes the role of CEO, he says he will switch it up from the two-man team. “There’s a lot of pressure and a lot of non-business focus that comes from being a listed company. Huub and I tried to take that away from the business teams here.
“I think that worked well. However, now we’re no longer listed, I want to professionalise with a broader management team. It’s going to be myself and brands and business development, sales and distributor management, supply chain, and IT.”
Strengthening the company’s route to market will also be a major focus. “Last year, we sold to 114 markets, and 111 of those were dependent on third-party distributors.”
Trading up to premium
At the heart of Lucas Bols’ operation are its liqueurs and its involvement in the cocktail and bartending scene.
Cocx explains the company is playing across different price tiers to ensure positioning on both the back bar – where more premium, specialist bottles tend to live – as well as on the ‘speed rail’, which is usually directly in front of the bartender and reserved for frequently used spirits.
To build its back-bar presence, the company has relaunched Bols Blue 1575 in a revamped, more premium form, with a new distinct bottle design, labelling and focus.
“It’s at a totally different price point to the old version,” says Cocx. “It’s a unique bottle that comes only with this drink. We’re not going to make a new range with the same bottle for other products.”
The goal is for Bols Blue 1575 to become the category leader in blue liqueurs, as other brands have done with their signature flavours.
“In the top 10 liqueurs, there’s always one brand that claims each flavour: triple sec for Cointreau, passionfruit for Passoã, St-Germain is elderflower. You’ll find a hero brand for all of them, but not for blue. That’s why we jumped in.
“There are maybe one or two other liqueurs where, in the next few years, there’s room for similar innovation.”
Additionally, the company has also bolstered its ready-to-drink (RTD) range with Passoã. The firm created an RTD with the passionfruit liqueur and orange juice a few years ago (it’s the second best-selling RTD cocktail in the Netherlands), but last month it introduced two new variants: Passionfruit Martini and Pink Lemonade Spritz. The range is intended to “target the direct-to-consumer or at-home markets”, adds Cocx.
Taking Tequila global
Lucas Bols’ ambitions stretch beyond liqueurs, however. Acquiring Partida from Edrington was one of Cocx’s early moves on joining Lucas Bols.
He believes the brand stands out in a crowded category owing to its Roble Fino line, which is finished in ex-Sherry casks from The Macallan. “It’s the only Tequila in the world – at least it was when we bought it – aged in single malt. It’s a beautiful Tequila and I’m a big single malt fan. It appeals to both categories and what’s trending.
“We used to have a 35% stake in Edrington [Macallan’s parent company], so we still have some casks. We work with Edrington a lot, so we’re able to get a new supply coming. ”
While Cocx admits Lucas Bols may have arrived “a year or two late” for the US Tequila boom, he sees major opportunities elsewhere.
He says: “We didn’t really know at the time but, in 2021, Tequila was almost hitting its peak in the US. It had been around for ages and already made that transition from ‘cheap mixer’ to premium.
“While the strategy is to further grow it in the US – which, fortunately, is working – I’m also exporting it to other countries where they’re still really just starting with super-premium Tequila.”
He lists Lucas Bols’ home base of the Netherlands as one such example, but also China: “As we speak, Partida is being imported into China; given that Cognac is declining quite a bit there, it’s quite a gap. People still have money – a small group of people, of course, but they still have money. I wouldn’t be surprised if Tequila could fill that gap.”
In terms of percentage growth, China will be one of the company’s biggest focuses, especially for the cocktail side of the business. “There’s a growing community that has been studying abroad in London and in the States. They’ve taken that cocktail culture back to Shanghai and other cities in China.”
Can’t ignore low and no
Cocx is also keeping close tabs on the low-and-no movement. The firm acquired non-alcoholic spirits producer Fluère at the beginning of 2023.
“It’s got a 24-month shelf life, and does very well in taste. It’s pure and it’s premium,” he says of the brand.
On low and no, he says “the jury is still out” and the category is a “work in progress”, but Lucas Bols is factoring it into its cocktail work. “We’re not trying to get this [Fluère] out there just to drink it in an easy-mix. It’s an on-trade-focused approach. You can sell it in the off-trade, but we overspent quite a lot, specifically in the US, to get this on menus with our recipes.
“Our mission is to create cultural experiences around the globe for everyone. There are so many people who don’t drink alcohol – temporarily, for religious reasons, pregnancy, so many reasons. It [fits] with our mission to be involved in this space.”
Addressing how trade disputes with the US may impact the business, Cox says: “We’ll be hit, but not as much in comparison to some other companies.
“We produce most of our products in the US, such as Bols liqueurs, which are volume-wise 70% of the business. In terms of growth and margin, it’s a bit less because there are a lot of imported brands such as Tequila Partida (from Mexico) and Galliano (from Europe) – they’re higher margin products.
“It is what it is. I think it’s a new reality – specifically the uncertainty around it. Not so much the numbers, but the uncertainty. We’ll deal with it. We’ve been around for 450 years, and we’ll find a way.”
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