just the Answer - Quintessential Brands' international brands & marketing director Mike Salmon
Quintessential Brands may not be a name familiar to many. But the burgeoning spirits group, owner of G&J Greenall and backed by former Gruppo Campari CEO Enzo Visone, has ambitious global plans. Last week, just-drinks met Quintessential's international brands & marketing director, Mike Salmon, to discuss those plans and where the company is looking to capitalise.
just-drinks: How did Quintessential Brands come about?
Mike Salmon: Quintessential Brands was set-up two years ago by the two founding partners Enzo Visone and Warren Scott (an investment banker).
j-d: What's the thinking behind the company?
MS: "The (spirits) industry appears to be dominated by a few groups. But if you look at their combined volumes, they only account for about 30% of the world's alcohol consumption. There are a lot of businesses out there still privately-owned, very domestic, who are simply below the radar. We believe there's an opportunity to build the next group, based on partnerships, like Greenalls in the UK (acquired by Quintessential in 2011).
Mike Salmon - Quintessential Brands' international brands & marketing director
"Over the last 18 months, we've established a number of other partnerships. We're also in conversation with brand-owning manufacturing companies to acquire and/or set up JVs, which can sometimes be a step on the road to an acquisition. The idea is to keep the model as flexible as possible. But, we're looking for businesses with a combination of brand, manufacturing and distribution assets."
j-d: Why the two-year delay in setting up the company and then the official announcement earlier this month?
MS: "The most important thing was to get the first acquisitions across the line and make them work. We wanted to be able to demonstrate that it wasn't just a one-trick pony, not just one acquisition. We were waiting for the next story and a few stories have all come at once.
"We have three exciting announcements: Toussaint Coffee Liqueur, which we acquired in December and is now ready for re-launch; Opihr Oriental Spiced Gin, which is launching now, and our UK distribution partnership with Marblehead. This demonstrates how Quintessential will develop: Through acquisition, partnership and organic growth. "
j-d: Are you happy to be a producer, marketer and distributor?
MS: "Absolutely. There often seems to be a lot of tension between being a large-scale manufacturer and a contract bottling business and being a brand-building business. But, we've kind of embraced that model and with Greenalls we're proving how it can work."
j-d: How did you get involved with Quintessential and what will your role entail?
MS: "I've been in the drinks industry since 1981 and known Enzo for a long time. We both realised we were looking for the same kind of opportunities. And, all my background is in international brand building.
"The world may appear to be dominated by a few multi-national groups, but we plan to explode that myth and demonstrate in every market there are still a number of powerful local players. And, with powerful local brands, there are nearly always powerful local distribution strands.
"During my days at Cutty Sark we remained independent and (at the time) resisted the temptation to join Maxxium, despite quite a lot of pressure. This was in the belief that hungry local distributors are normally a better partner than international groups with their own agenda."
j-d: Are you looking at categories, or geographical regions for opportunities?
MS: "We are looking at both. We have areas where we need to be able to compete and we have category gaps that we need to fill. One of the unique elements of this management team is having Enzo, who completed 14 acquisitions (with Campari), combined with Warren Scott's lifelong experience in deal making. That means we're very aware of the fundamental fact of M&A life, which is that you can only play what's out there.
"What we are capable of doing is spotting and reacting to opportunities very quickly, we are very flexible. That puts us in a position of significant strength."
j-d: Are you looking at China?
MS: "China is certainly on our agenda, but it's really early days. Ideally we'd like to take our brands to Chinese companies and then invite them to use our distribution network."
j-d: Are there any other regions you are excited about?
MS: "We are particularly excited about Spain and the US. They both present enormous opportunities with gin. We are aware we have a very significant opportunity to make rapid progress in both of those markets. The other thing is there are a number of opportunities that are opening up within the European Community. We are actively engaged in discussions there."
j-d: Your most recent experience personally is with Scotch. Is that an indication where Quintessential might venture next?
MS: "I spent 15 years focussing on Scotch (at Cutty Sark) and no portfolio is complete without a Scotch, so that's one category we're actively looking for opportunities to partners or take a stake. Whisk(e)y in general is an area that we are very interested in: Irish, Scotch and Bourbon are firmly on our list of target categories."
j-d: Would you look at beer?
MS: "I don't think we'd look for a mainstream beer presence, but there are some fantastic boutique beer brands that would sit comfortably in a portfolio like ours."
j-d: How is your funding working? How much financial firepower do you have?
MS: "Initially, the funding has come from the two founding partners, with some bank backing. But, as you can imagine, over Enzo's time in making acquisitions and Warren's time in banking, the two of them are extremely well-connected with private wealth and with institutional investors.
"We've set our sights at a mid-tier position, globally, as a spirits group. But, we don't feel our ambitions will be limited by our ability to find funds. Bringing home the deal is the challenge, not funding it.
j-d: What are your medium to long-term targets?
MS: "Rather than concrete numbers, we have set our sights on having a broadly-based portfolio of world class brands. That means we have to fill those big category gaps. We have to have a true international distribution platform, which means we have to fill the distribution gaps within three to five years and have to be mid-tier within three to five years.
"Whether that means a EUR300m, EUR400m or EUR500m turnover business, we don't want to set ourselves that kind of target. The big step changes will come through acquisitions and that will depend on what comes our way and what we get across the line."
j-d: What is the company's misson statement?
MS: "Brands have been built not by the multi-national groups, but by the perspiration and inspiration of individual private brand owners, then multi-national groups have snaffled them up.
"We want to dispel the myth that the industry continues to be dominated by multi-national groups. If there's any mantra, we have to be flexible, fast and courageous and the three of us revel in that. We are looking for partners and staff who embrace that culture.
"Individuals are the lifeblood of this industry. There was a risk the groups were stifling it, but I think there's now a second wave of entrepreneurialism flowing through the industry and we want to be part of that."
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