The just-drinks interview – Thys Loubser
Thys Loubser was previously a high flier in the chemical industry but when he was invited to become CEO of the South African wine group KWV he had no hesitation in taking the job. In this month's just-drinks interview, Olly Wehring spoke with Loubser about the opportunities and challenges facing KWV and the key changes he envisages for the company.
After around four months with his hand on the tiller at KWV, CEO Thys Loubser came to London earlier this year for his first taste of the International Wine & Spirit Fair. Despite previously working in the chemical industry, Loubser seems to have settled into his new role in the drinks industry quite comfortably. We settle down to chat, and it is clear straightaway that he is very happy to be here.
"I inherited a wonderful brand," he says. "KWV is a brand of brands. That's the biggest inheritance - the brand and the tradition that goes with it. The first time the headhunters contacted me and they mentioned CEO of KWV, I said yes, I'll definitely come. It's always first impressions that count. I think one can say that KWV has done great things over the years."
Loubser is also keen to credit the company's previous CEO, Willem Barnard, for his efforts. "My predecessor did a great job in getting us to become a public company and to make sure all the other things were set up," he notes. "Now's the time to take it further."
One of Loubser's first moves was to flatten KWV's management structure. He explains that he wanted to be closer to the action. "I felt that all the key players should report directly to me," he says. "I didn't want unnecessary companies within the group doing business with one another, wasting time and money. It's all about being customer-driven and consumer-orientated. Yes, there are a lot of people reporting into me, but I like it that way. I will empower them, so they know what they will be accountable for. I'm looking for continuous improvement and lean manufacturing."
Just prior to becoming CEO, the drinks company posted a disappointing set of figures for the second half of 2006, with profits almost halving. "I think it was quite a bit of rectifying in our off-shore companies that caused that," Loubser notes. "These were one-off costs in getting things ship-shape. We were looking to streamline the business more. Some aspects of the business weren't efficient."
Loubser points to KWV's sale of its UK subsidiary Edward Cavendish & Sons to Thierry's Wine Services last year as a step in the right direction. "Loss-making situations have now been turned into potentially profitable situations going forward." KWV's new chief draws a sporting analogy to KWV's future. "You could play for just the first half of the game and not for the whole world cup," he says. "We need to make sure we reward our shareholders. If we have a clear long-term plan and we inform them, then that will work well."
KWV has made no secret of its attempts to diversify its alcoholic drinks offerings in its home market. Loubser appears satisfied with the work so far, and hints at an addition to the portfolio in the coming months. "Through distribution agreements, we've started handling Rémy Martin in South Africa," he says. "There's another one coming soon, where we will handle distribution of a single malt Scotch whisky brand in South Africa." This will signify KWV's first entry into the Scotch market in the country, and Loubser is playing his cards close to his chest at this point. "We've also successfully concluded a deal with Bols, where we will make the brandy as well as distribute it in South Africa," he adds. "There's more work to come, but it's an important part of our business."
Turning to KWV's flagship wine brand, Roodeberg, Loubser believes the future for the brand is bright. "We do about 300,000 cases at the moment, and I think we have the potential to go close to a million, if we brand it correctly," he says. "The exciting markets right now are in Scandinavia - it's grown quite extensively over the last year. I think we have a great brand there that we can drive."
Yet South Africa has been accused of lacking identifiable wine brands in global markets. "If a country only has a couple of strong brands, then that works in the short term," Loubser concedes. "But then the consumer wants something more exciting. We can offer more interesting diversity from South Africa. It would have been nice to have a huge brand or two, but I'm not interested in big brands living on gondola ends. That's why we like Roodeberg - we get a very nice price point for that product. It's easy to sell lots of volume and cut your prices," Loubser warns.
Looking forward, Loubser is aiming to keep KWV shareholders onside, providing returns that keep them happy. "I would like to give shareholders a return that would make them conclude that they would keep their money with us," he says. "At the moment the wine industry is not rewarding their shareholders enough worldwide. But you can't just work for the short term, you have to play for the whole tournament. It might take a little time. If you communicate well with the shareholders, then they will understand."
As our time draws to a close, it remains clear that Loubser is relishing both his new position and the challenges ahead. "I couldn't have asked for a nicer job," he smiles. "All my friends now want wine and they want to know when I start drinking in the morning - which is as soon as the first Boeing flies over Cape Town, and they fly very early!"
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