Whereas Amber Beverage Group is powerful relating to vodka and Tequila, the corporate is raring to faucet into brown spirits, as chief advertising and marketing officer and managing director for the Americas Pepijn Janssens tells Melita Kiely.
*This function was initially printed within the April 2021 difficulty of The Spirits Enterprise
The color‐altering chemistry of pastis is one among Pepijn Janssens’ first recollections of alcohol, due to a youth spent holidaying in France. He recollects the hypnotic sight of including water and watching because the liquid remodeled from a darkish amber color to tackle a milky, cloudy look.
Born and raised in Belgium, Janssens initially pursued a profession in legislation, however a “panicked” first few days on the job set off the globe trotter in him. “Out of the blue”, Janssens obtained a name from a former landlord who supplied him an interview with an import‐and‐distribution firm in East Africa. “I flew to Tanzania, I had the interview and I took the job, and spent 5 years of my life in East Africa doing distribution for all the things from Philip Morris cigarettes to San Pellegrino water and in between that Diageo and quite a lot of alcohol manufacturers,” he recollects.
He says the expertise “utterly modified my life”, not least as a result of it was the place the place he met his spouse and had two kids. However the enterprise acumen wanted in that a part of the world was “utterly completely different. It’s been probably the most instructional expertise I’ve had.”
With two younger kids to take care of along with his spouse, Janssens and his household made the choice to relocate nearer to house, the place they might get pleasure from extra “stability, security, the place we don’t sleep with machete knives below our mattress and an digital gate round your home”.
In 2019, Janssens joined Amber Beverage Group, a subsidiary of Stolichnaya Vodka proprietor SPI Group, as chief marketing officer.
As of final Could, Janssens holds a couple of title after additionally being appointed managing director for the Americas. “I name it my day job and my night time job. The day job is my advertising and marketing job – and we now have a advertising and marketing crew and do advertising and marketing issues,” he explains.
“Then at round 4 or 5 within the afternoon, the US begins waking up and I transfer into my night job, which may go all the way in which to 11. It relies upon; the place there’s fireplace, I’m going.”
NEED TO RESTRUCTURE
Like many within the business, a lot of Janssens’ time was spent on a airplane earlier than the pandemic. However for the previous 12 months, Janssens has discovered himself grounded as a result of Covid‐19 disaster, and is now based mostly at house within the Netherlands. Additionally not distinctive to Amber Beverage Group has been the agency’s have to restructure sure components of the corporate on account of the Covid‐19 pandemic.
“Covid has impacted most firms in such a means that there was a primary response, which was making an attempt to determine methods to shield the underside line; how do you shield the challenge we’re in? Now, everyone type of is aware of what lockdown means, however the first time it occurred, you couldn’t describe it, you had no clue what that meant; you’ll have run to the hairdresser for those who knew again then,” he quips.
As the corporate wanted to restructure the worldwide crew, Janssens put himself ahead for the duty of working the Americas. “I had labored Latin America earlier than, however I’ve by no means achieved the US, and the US is what they name probably the most difficult but in addition the largest markets on the planet, and I actually wished to type of go on the market and get to understand it,” he explains.
The US part was in want of a rescue plan after “shedding cash 12 months on 12 months”. As somebody who admits he “likes turnarounds”, Janssens was instrumental in enhancing how Amber Beverage Group works within the area to show the States right into a worthwhile enterprise – which, fortunately, it’s now, he says.
“We had been our personal importer within the US and while you’re your personal importer you have to rent folks to exit and promote your product, which creates an overhead,” he explains.
“We’ve flipped to a mannequin the place we’ve discovered importers for all of the manufacturers, which suggests at this level there’s just one individual [from our team] within the US.
“That shift actually modified how the monetary enterprise mannequin appears. We’re rising volumes of each model nevertheless it’s not that that has truly modified it right into a worthwhile enterprise. It was rethinking the mannequin that we had that really made it worthwhile.”
When Janssens joined Amber Beverage Group, one of many manufacturers he was most excited to work on was Moskovskaya Vodka – “a diamond within the tough”, as he describes it.
“Moskovskaya has over 100 years of historical past and goes again all the way in which to the Russian Empire, there’s a lot there. However no person had actually labored on advertising and marketing the model; there was no person actually wanting on the model persona, what it’s about or what’s enticing about it. So, once I joined, I stated, are we allowed to do correct advertising and marketing and develop the model, and the reply was sure. So the ambition was there.”
First on the agenda was a redesign of the bottle to provide a “extra fashionable appear and feel”.
The brand new look was unveiled in August 2019 and backed by a worldwide marketing campaign. “We’ve created a few actually enjoyable campaigns, the place I really feel the model now’s thought-about ‘cool’,” Janssens provides. “It’s very rewarding as a result of the importers we work with have by no means obtained any type of advertising and marketing push from us earlier than.”
A TOUCH OF PINK
Subsequent up was the launch of Moskovskaya Pink, the model’s first line extension, made with raspberries, lime and a touch of juniper.
“We’ve by no means achieved flavours, we simply had one SKU, that’s it,” Janssens says of the vodka model. “Pink was very apparent for me as a result of we’re residing in an Instagram actuality proper now. For us to go within the pink vodka course was about flavour on one facet, which is regular for vodka, however, secondly, it was extra about being a web based model.
“We don’t have multi‐million‐euro budgets, therefore for us social media, as a means of promoting the model, is the place the place we should struggle the battle and create belongings, not POS [points of sale], however SKUs that slot in that vary.”
In January, Moskovskaya tapped into one other burgeoning pattern: hard seltzers.
The vary contains two flavours that are available in 250ml cans: Raspberry and Lime, and Ginger and Mint, each with an ABV of 4.5%.
Raspberry and Lime incorporates Moskovskaya Pink into the combo, whereas the ginger and mint flavour is made with Moskovskaya Osobaya Vodka.
“With exhausting seltzers, we stated we’ll do a line extension, primarily as a result of we as soon as once more wished to point out the model is prepared to maneuver, however secondly with lockdown, we see quite a lot of in‐house consumption, and it’s such a straightforward factor to play with on-line, in folks’s houses, in contrast with a one‐litre bottle of vodka,” Janssens explains. “Should you’re Stoli, you have to provide you with one other flavour. We’re doing issues for the primary time, so all the things we do will get consideration, and the importers that work with the model are grateful as a result of they haven’t had something earlier than.
THE RUSSIAN EMPIRE
Like Stoli, Moskovskaya may be traced again to the Russian Empire, and when the empire expanded, so did Moskovskaya, because it was distributed all through Europe.
“When the model got here into the palms of SPI, its European market was already constructed,” Janssens provides. “Moskovskaya already has a monitor report in markets like Italy, Spain and Portugal of fifty,000‐100,000 9‐litre instances.
That is the place the core is; the Baltics and European markets.” Since 2019, Janssens says Moskovskaya has “opened round 20 new markets, and within the ones the place we now have large quantity, which means we now have quite a lot of model loyalty, we’re simply in the beginning of promoting, so we will take the step up and develop the volumes in these markets”.
Sadly, Moskovskaya’s core markets in Europe – Italy, Spain, the UK and Portugal – have been “hit hardest” by the pandemic as a result of their on‐commerce focus. “There are markets which might be actually struggling on this Covid interval; it’s those the place retail shouldn’t be essentially an enormous a part of the full consumption and the on-trade is almost all, and once I say the bulk I imply 90% of consumption occurs within the on‐commerce.”
The model is offered within the US however has not but obtained the eye it must develop there, Janssens says, and this can take time.
It’s a danger to try to develop the model there earlier than it’s prepared, he provides, and believes efforts can be higher spent enhancing different markets first.
The vodka model is already nicely on its solution to changing into 1,000,000‐case‐vendor, and now shifts “near half‐a‐million 9‐litre instances” per 12 months.
“We wish to be 1,000,000‐case model, and we’re on monitor,” Janssens insists, and he hopes to attain this by 2025/2026. “There’s additionally the flipside with Covid,” he explains. “For instance, the Baltics, which could be very retaildriven, is doing means higher than regular.
Volumes fluctuate, the place they go down on one facet, they go up in one other a part of the world. It should require heavy investments to tackle the US, however I feel it’ll give us the muse to develop into one of many international vodka gamers.”
STRONG TEQUILA PORTFOLIO
Nonetheless, Amber Beverage Group isn’t just about vodka. Janssens believes the group’s Tequila portfolio is so sturdy it’ll ultimately take over the vodka facet of the enterprise – almost certainly coinciding with Moskovskaya’s one‐million‐case feat when it occurs.
Vodka and Tequila play very completely different roles throughout the Amber Beverage Group portfolio, nonetheless, as Janssens explains. Vodka is a “low‐margin, excessive‐quantity” enterprise mannequin, whereas Tequila is all about “much less quantity, however larger margins”. Among the many firm’s core Tequila manufacturers are Kah Tequila and Rooster Rojo Tequila.
Final September, the corporate acquired 220 hectares of agave fields within the Los Altos de Jalisco area of Mexico to assist its Tequila manufacturing. “We purchased a [Tequila] manufacturing unit, then we purchased the agave fields, which suggests at present we’re impacted by excessive agave costs, however we now have already arrange the answer of accelerating the margins within the enterprise that we’re in,” he says. “We’re constructing the enterprise within the US market, which is the important thing Tequila market – Mexico and the US, 95% of all Tequila is offered there, so that they’re two markets that we truly have to ace.”
Janssens is assured the group will have the ability to try this with the assistance of Bodegas La Negrita in Mexico, Amber Beverage Group’s new distribution partner within the area as of November 2020.
Riga Black Balsam is one other essential participant within the Amber Beverage Group steady.
Janssens describes it as a “funky model”, saying: “The loyalty in direction of this model from everyone who has been related to the Soviet Empire at one level or time is so insane.” Wherever he takes the model, from sure components of the US to Hong Kong, Janssens says it takes little greater than publicising the model’s availability on-line to be sought out by Latvian followers.
CASES START MOVING
“I’ll offer you an instance, I went to a commerce honest in Hong Kong,” he says. “Day two, a Latvian individual walks by way of the corridor, sees the bottle, asks for a shot, and we chat. The subsequent day, I’ve 50 Latvians or Russians passing by the sales space – in Hong Kong. The fourth and final day, I had 200 folks grouping collectively, and I realised at this level, this model is superb. As a result of wherever you go, the US, the Americas, it actually doesn’t matter, you don’t have to do something, you simply say it’s out there and instances begin shifting.”
The model shifts round 200,000 9‐litre instances, largely concentrated in locations like Russia, the Baltics and Ukraine. The problem is how do you’re taking that native publicity and replicate it globally.
“Covid has created a standstill for many individuals the place you re‐consider what you are promoting, and so we checked out making a 5‐12 months plan for each model,” he says. A part of Riga Black Balsam’s technique is creating an “accessible line extension that performs into the shot class”.
Stablemate Cross Keys Gin can be in line to have a packaging overhaul –“let’s name it model 2.0” – which Janssens hopes will assist set up the model within the UK. Each Riga Black Balsam’s new line and Cross Keys Gin’s new look are anticipated to be launched by the third quarter of this 12 months.
MERGERS AND ACQUISITIONS
Finally, as Janssens says, Amber Beverage Group aspires to construct a rounded vary of spirits, and as a 3rd duty with Amber Beverage Group, one which “doesn’t match on my enterprise card”, Janssens additionally sits on the corporate’s mergers and acquisitions crew. He says the corporate is consistently searching for potential acquisitions to develop its portfolio and switch the corporate right into a truly global competitor at all levels.
“We aren’t right here to play a vodka‐Tequila sport; the enterprise we’re in is to construct a balanced portfolio, and we now have quite a lot of gaps within the portfolio that aren’t lined,” he says. “We don’t have brown spirits, there’s no Scotch in there, no Bourbon. Vodka and Tequila‐smart, we’re good; all the things else is virtually absent, there are gaps – super gaps – that both should be solved by creating our personal manufacturers or by shopping for an current model or enterprise.
“Each pillar within the portfolio carries a wholesome quantity of weight, and so they complement one another. With vodka, we now have the largest pillar, and Tequila is developing, however we now have different pillars that we have to construct from scratch. So once we communicate once more in 4 or 5 years, who is aware of what else we’ll have to speak about.”