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Speaking in New York yesterday, Beam Suntory chairman and CEO Matt Shattock said press reports of tension between the Beam and Suntory management teams over the summer were “overblown,” and predicted bright skies ahead for the company.
Addressing an audience at the Japan Society on Manhattan’s East Side, Shattock described the integration process as ongoing—more than two years after Suntory acquired the former Beam Inc. for $16 billion. The blockbuster deal created the world’s third-largest spirits company with a total case volume of 54.2 million cases, according to Impact Databank.
In response to a question from SND regarding the potential for collaborative products from Beam Suntory’s Japanese and American wings, Shattock said, “Even though we’ve been at it every day for two and a half years, we’re still only beginning to discover the power of the combination of these two businesses, and obviously areas such as product innovation would be one of those. As we go forward we should be looking at ways to bring our similarities and differences together, because I think it’s at that intersection where great innovation takes place.”
Whisk(e)y accounts for roughly half of Beam Suntory’s sales, and Shattock emphasized that the brown spirits category continues to be the primary focus for the group not only in the U.S. and Japan—where its distilleries are racing to keep pace with rising demand—but also in Scotland, where it owns the Laphroaig, Bowmore and Auchentoshan single malts, among others. And while Japanese whiskies surge in the U.S., Jim Beam Bourbon is on a tear in Japan. The brand will sell about half a million cases this year in the Japanese market, up from 30,000 cases before the creation of Beam Suntory. Shattock projected that Japan will be Jim Beam’s top export market by 2020.
Meanwhile, Shattock pushed back on a Financial Times report that made waves earlier this year. The article asserted that a culture clash—and the Beam team’s frustrated expectaton of an IPO in the U.S.—was roiling the integration of Beam into the larger Suntory group, which has annual sales of $27 billion.
“I think that one press article was overblown and didn’t represent what has gone on. (The integration) has been an extraordinary success, exemplified by the results we deliver. We continue to outperform our competitors in the market,” Shattock observed. “Inevitably there are growing pains in any venture. But if you speak to the people on the ground, you’d find them very motivated, engaged and excited about being part of a bigger company. We’ve had a lot of opportunity to do some training and cross-fertilizing with people working on both sides of the Pacific and that will continue.”
Beam Suntory said last week that sales for the nine months through September grew by mid-single digits, led by strong performances by Jim Beam, Maker’s Mark and the group’s high-end Bourbon range, which includes Knob Creek, Booker’s, Baker’s, Basil Hayden’s and other brands.
•Diageo’s Ketel One is introducing an on-pack virtual reality kit this holiday season. Compatible with iOS and Android devices, VR goggles will be packaged with 1.75-liters of Ketel One for about $33 at retail accounts nationwide. Content includes 360-degree views of the Nolet distillery in Schiedam, Holland, as well as a menu of cocktails narrated by mixologist Dale DeGroff, among other features. Ketel One was down 1.7% in the U.S. last year to 2 million cases, according to Impact Databank.
•Argentina’s Rutini Wines is rolling out a Trumpeter Rosé inspired by the Provence rosé style. Made with 100% Malbec, Trumpeter Rosé grapes are hand-harvested in the middle of the night and fermented for 14 days in stainless steel conical tanks, with the wine aged on the lees for 10 days. Trumpeter Rosé is retailing around the $12.99 mark in New York, Florida, Pennsylvania and California, with expansion to more markets to follow.
•Constellation Brands has entered a comprehensive arena sponsorship with Brooklyn, New York’s Barclays Center for its Corona Extra, Modelo Especial and Ballast Point brands. The pact will feature three individually branded bars at the arena, with Corona Extra and Ballast Point positioned as the official imported and craft beer sponsors of Barclays Center, respectively, and Modelo Especial as the official imported beer sponsor of the NBA’s Brooklyn Nets. Constellation acquired San Diego-based Ballast Point for about $1 billion a year ago. In other Constellation news, the company’s Casa Noble Tequila has unveiled a new limited edition extra añejo, Alta Belleza, marking the first annual entry in the brand’s new Colección del Fundador (Founder’s Collection). Casa Noble Alta Belleza, aged five years in French oak and finished for six months in Robert Mondavi Cabernet Sauvignon barrels, is limited to 563 bottles, retailing at $1,200 each.
•Phillips Distilling is extending its Revel Stoke whisky brand with a new Root Beer flavor. Designed to compete with hard sodas and traditional whisky cocktails, Revel Stoke Root Beer is launching nationwide, retailing at $14 a 750-ml. and $16 a 1-liter. Revel Stoke, which grew 17% to 35,000 cases last year, according to Impact Databank, saw dollar sales more than double in Nielsen channels in the 12 weeks through October 15.
•Jean-Henri Schÿler, owner of Bordeaux négociant Maison Schröder & Schÿler and third-growth Château Kirwan in Margaux, passed away Oct. 31, three days after celebrating his 85th birthday. Wine Spectator takes a look at Schÿler’s life and career.
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