Just the Answer - Jeff Hopmayer

By | 5 December 2005

In this month's Just the Answer interview, Jeff Hopmayer, chief executive of spirits group Blavod Extreme Spirits, producers of the world's only black vodka, discusses the reasons behind Blavod's growth, possible future acquisitions and the company's recent tie-up with Japanese drinks group Suntory.

J-D: In August, you announced a premium spirits joint venture with Suntory in the US. What can Blavod bring to the venture?

Hopmayer: Definitely entrepreneurship. What happens at a lot of big companies is that they spend a lot of time in meetings, with focus groups and they lose some of their entrepreneurial flair. We are small and nimble and we create things; we make a decision and it's done.

J-D: A Tequila, El Diamante del Cielo, was the first product to be launched by the venture. Why move into Tequila?

Hopmayer: I was already working on a Tequila so that was an easy first step. Suntory was interested in Tequila as it's a phenomenally hot category. Just like in high-end vodkas, consumers are looking for a premium Tequila. And the reality of it is that we have a pretty hot Tequila. It's the highest-rated Tequila ever, we could put it up against any Tequila out there and it would win hands down.

J-D: How do you view Blavod's position in the wider wine and spirits industry?

Hopmayer: In the wine and spirits industry, there is room for new brands created by small, entrepreneurial companies. And not just with Blavod and Players Extreme because we have built a wider portfolio. Our table wine portfolio allows us to look to the long term. We're never going to out-Diageo Diageo but we can try to grow successfully.

J-D: You have been quoted saying that Blavod needs a major acquisition to maintain its market share in the US. What plans do you have on that front?

Hopmayer: I don't think we need it but we'd like one. We have looked at different acquisitions and we have made enquiries on certain brands. We would look at bringing in brands of 100-150,000 cases in the US. We'd certainly look at the bourbon category, the rum category… small, high-quality products not a commodity product.

J-D: Why have spirits producers been so successful at taking market share from brewers in the US?

Hopmayer: Among the brewers, I don't see the focus on high-quality, premium beers that would entice young people into the category. But, mainly, it's all about imagery. Mixed drinks are "cooler" to drink and they tend to make drinkers look as though they've spent more and that they're more sophisticated.

J-D: Would it be fair to say that image has been central to Blavod's success in the US?

Jeff Hopmayer

Hopmayer: Black is cool and hip and our black vodka has really caught on in the fashion industry and started to make a buzz for itself. We have the trademark on black vodka, so there cannot be any rival vodkas but Anheuser-Busch's Jekyll and Hyde is a black liqueur, so that shows we're on to something. With Players Extreme, we really make the most flavourful drinks - period. With vodkas like our cherry or caramel you can really make amazingly great-tasting cocktails. We are really heavy on the on-premise because that's really where we build our consumer base and we have our sales teams out there really selling the stuff.

J-D: You've steadily built a stable of Italian wines into the Blavod portfolio? What ambitions do you have in wine?

Hopmayer: We're focusing right now on Italian wine (but) we've recently just looked at our wine portfolio and reduced it by a couple of brands to give us greater focus. I want wines with a longer, deeper story than what I think, for instance, the Australian wine category can offer. There are a number of houses in France and Spain with deep traditional roots; we're not looking for a commodity wine, we are looking for high quality.

J-D: What about your prospects in the UK?

Hopmayer: In the UK, the focus is very much on the off-premise and there needs to be a shift towards the on-premise. Margins here are much tighter than they are in the US and in the on-premise here, Diageo has got a pretty big foothold. Still, the UK is going along at a great clip and it's done so without a huge marketing effort from us. Black vodka is a hard sell (in the UK) - you always get asked the same questions like "Does it stain my teeth? What makes it black?" - but once people learn how to use it, it's in. Although, I do see greater opportunities in the US; in the long-run, that will be a big, big market for us.

J-D: And where would you like to see the company within the next five years?

Hopmayer: We're looking at Russia, Australia and the Far East and we're hoping to move into those areas in the next year or so. If Suntory or others see what we're doing in the US or the UK and would like to take a certain brand, that would be great.

I want to see the portfolio grow to include a bourbon, gin and rum and I would love to see the portfolio pulling in over 1m cases on an annual basis. The first steps are already in place and there are others in the works - we'll push them out soon enough.

Sectors: Spirits

Companies: Suntory, Diageo, Anheuser

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