A Word with Wilmore - Beam Inc EMEA president Albert Baladi - Part II
Here's the final instalment of our two-part interview with Beam's president of EMEA, Albert Baladi
Earlier this week, we ran the first part of an exclusive interview with Beam Inc's EMEA president, Albert Baladi. In the second and final part here, Baladi discusses new products - including US sensation Skinnygirl - M&A speculation and his idea of a good weekend.
Throughout our time together, one of the words Baladi returns to the most is the word 'innovation', and there's plenty of that currently coming from Beam.
In its first-half results this year, Beam noted that a third of the net sales rise - 8% on a comparable basis - came from product innovations. Helping drive this are two variants of its flagship Bourbon Jim Beam – Honey and the black cherry-flavoured Red Stag.
Beam Inc's EMEA president, Albert Baladi
Baladi is clearly proud of Red Stag, pointing out that in less than 12 months, it has been launched in 16 countries. Meanwhile, Jim Beam Honey, launched in April this year, is proving to be “even more successful” than Red Stag a year ago on a like-for-like basis, he says. Baladi also has high hopes for Pinnacle Vodka, which Beam acquired in April, but suggests "there's a lot of work to be done". There's also talk of a 'Winter Punch' version of Jim Beam being launched in Germany, a low abv RTD that people can heat during the winter, based on Glühwein.
But, does Baladi ever worry these offshoots can sully, or undermine, the core product?
“We are very conscious that the core has to grow,” he says. “We follow the mantra of borrow/build. Innovation has to build back to the mother brand, but similarly it (the variant) has to be more profitable than the core brand, that's the the bottom line.” Ultimately, Baladi says, “as long as we are careful and conscious, I think innovation can be critical (for success)”.
Part of the Jim Beam brand extensions are aimed at attracting more women to the category. Baladi claims Honey and Red Stag are “bringing double the rate of females into the category”. But, it is another Beam brand, targeted unequivocally at women, that is making the biggest splash.
Originally launched by US chef, author and TV personality, Bethenny Frankel, and drinks industry veteran David Kanbar in 2009, the then range of Skinnygirl's RTD cocktails was snapped up by Beam in March last year.
Since then, the portfolio has been rapidly extended to include four flavoured vodka variants, and three wines – California white, red and rosé, boasting 100 calories for each. The red wine marketing spiel includes the line: “We’ve got all of the good parts of a break-up (chocolate, berries, caramel and crème brulee) with none of the bad (puffy eyes and extra calories)”.
You get the idea.
The brand has been a huge hit in the US, with Beam reporting 81% sales year-on-year sales growth in the first six months of this year.
Skinnygirl has recently been launched beyond the US, in Canada and Australia. But, the brand extensions remain exclusively in the US. So, the obvious question: any plans to launch elsewhere? Baladi goes into extra-guarded mode: “We are very cognisant of the potential this brand can have,” he says. “We will bring it, in due time, to other markets, when we are ready.”
While we're tackling delicate subjects, I raise the topic that gets all business hacks salivating and execs frowning: M&A.
At the time of its birth last October, Beam Inc instantly became the subject of speculation that it was a buy-out target, in a consolidation-thirsty industry. And, as recently as August, analysts were still suggesting the group remains a “logical acquisition target”.
Baladi admits: “When we went public, there were a few journalists who said we would not celebrate our first-year anniversary, but here we are.” He adds, with a smile: “Rumours are part of life in the spirits industry. People are free to speculate.”
As our time draws to a close, we turn to wider subjects, like the shift towards lower-abv drinks in response to increasingly health-conscious consumers. As a pure-play spirits company (aside from the Skinnygirl wines), Beam must be conscious of how to handle this trend. Baladi is quick to point out that Jim Beam Honey's abv is 35%, 5% lower than the original – and that that was a “very conscious” decision. He also points to a 30% abv variant of DYC, a Spanish whiskey, that is “doing very well”. As to the future, Baladi says: “There's a space for products that are more drinkable and have less of a kick.”
As the coffee runs dry and thoughts turn to the day ahead, I just have time to get a glimpse of Baladi away from the Beam coalface. His idea of a good weekend in his current home city of Madrid? “I'm a swimmer and and so is one of my (two) daughters, so we like to go swimming. I like to go biking in the morning too.”
And, after all this virtuous activity, how about a drink? just-drinks is buying. “I would love to have a Jim Beam lemon-lime,” says Baladi, with loyalty, and, as ever, one eye on the future.
For part one of this interview, click here.
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