Marie Brizard Wine & Spirits CEO, Jean-Noël Reynaud

Marie Brizard Wine & Spirits' CEO, Jean-Noël Reynaud

In 2013, Belvedere entered administration after falling into debt thanks to its purchase of the Marie Brizard liqueurs brand. Four years later, the French spirits company - renamed Marie Brizard Wine & Spirits - is debt free. What's more, its William Peel Scotch whisky has just become the top-selling spirits brand in France. Couple that with an entry into China and you have a company back on the up. just-drinks spoke to Marie Brizard's CEO since 2014, Jean-Noël Reynaud, about how he has turned the firm around by shunning premiumisation, as well as the benefits of Brexit. We also asked: Whatever happened to Bruce Willis?

just-drinks: It has been a remarkable comeback for Marie Brizard Wine & Spirits. The company cleared its debt in June five years ahead of schedule, and, excluding a rough Q4 in Poland, has regained balance in its financial results. How have you managed it?

MBWS CEO Jean-Noël Reynaud: The first building block was to convert EUR600m (US$640m) in debt. The second part was to position ourselves as a mainstream brand provider. This has led to the success of William Peel in France. (Last year, Peel was the top whisky brand in France in volume and value, and from November to February 2017 beat Pernod Ricard's Ricard pastis to be the leading spirits brand overall in the country.)

We have answered a very simple question: What does the consumer want? It's true in any FMCG product, including alcohol, that the consumer wants a good product at a good price.

What makes our business model so unique is that we have not embarked on premiumisation. This part of the market is already very crowded. All of my competitors are embarking on premiumisation but, at the end of the day, you need to have deep pockets to premiumise because you have to remain relevant to the consumer in terms of emotional benefits. That means lots of advertising.

Yes, some consumers want to buy a Hermes bag and a Christian Dior dress. But, most people are dressing up in Zara.

I like the Zara model, I dare to make the comparison that they have the same business model as ours, which is a value-for-money proposition. Have you ever seen Zara advertising? Never. And yet, it is very famous and is providing the consumer with innovation. It is the mainstream offer and it is making a lot of Euros.

j-d: Do you believe this mainstream positioning is sustainable? 

JNR: In France, the macroeconomics are not going in the right direction. There are 3.5m unemployed, GDP growth of less than 1% and the average salary in France is EUR1,800 a month. With all that in mind, do we believe people are going to drink a lot of premium Johnnie Walker Black Label or premium Scotch? The answer is no.

The average shopping basket for alcohol in France is EUR13, which - a-ha! - is the retail price of William Peel or Sobieski vodka.

j-d: So, is the premium path the wrong one to take?

JNR: I leave you to conclude on that! But, there are more reasons why 'mainstreamisation' is here to stay. One is that there are more legal constraints to advertising. The less you can advertise, the less emotional benefit in your communication, and the less you can make your brand a premium brand. Also, the structure of modern retail is not helping. Do you go and buy Chivas Regal at Lidl? I don't think so.

j-d: But, is it not true that premiumisation trends in Europe are in part down to declining consumption trends?

JNR: Yes, but you can drink less and better, but not necessarily at a more expensive price. There is a misconception that mainstream means low quality. It is quite the other way around. If you are selling low quality at a mainstream price, it is not working. 

j-d: Premiumisation is also about heritage, and provenance. Are you taking these cues into account with your brands?

JNR: Not necessarily. We want to make William Peel a non-pretentious brand. We want it to be easy to drink, to be accessible. There is a space for Zara and a space for Hermes. But, if you are Hermes you cannot be Zara, and the same is true the other way around.

j-d: Your mainstream strategy appears to be working in Europe, but you have just entered China with COFCO, one of China's largest food and beverage distributors. Will it work there?

JNR: This very DNA has been the foundation of our contract with COFCO. China was not on our radar screen, then last year, COFCO came to see us. Frankly speaking, we wouldn't have dared knock on their door.

j-d: COFCO came to you? That's quite unusual?

JNR: Yes, it is quite unusual. But we had a common vision of the Chinese market. Whereas China used to be a bipolar market - huge volumes and cheap local brands or low volume and very expensive foreign brands - the market is changing because of a growing middle class. This middle class is aspiring to buy imported, decently-priced products and brands.

Most of my competitors are a bit schizophrenic about China. They are looking at what they used to sell, premium Cognac and so on. But, you can't fool consumers anymore with this extravagant positioning. Yes, there will still be consumers willing to buy a EUR500 drink. But, people are shopping in Lidl, Morrisons, etc. This also applies to China.

j-d: Did you believe a few years ago that you wouldn't have been able to get into China?

JNR: Absolutely. I thought we were too late. But, the change of the paradigm in China makes the fact that we were late not a competitive disadvantage. We don't have the problem that as we are so big in premium products we don't want to convert into a mainstream offer. I don't lose anything, I'm just creating new business for me.

j-d: What material difference - if any - will Brexit have on your business?

JNR: A positive one, which is that the pound is devaluing so Scotch is cheaper. It's music to my ears. Devalue another 40% and I'll be happy.

j-d: Now you are debt-free, do you have any M&A plans?

JNR: We are lacking a rum in our portfolio. And rum is the third-largest segment of the French market after whisky and pastis. So, either organically with a green-field operation or through acquisition we will be looking to have a rum in our portfolio.

j-d: Do you have your eye on any particular one?

JNR: There are different options. It must be a rum that fits in our business model.

j-d: Bruce Willis was previously a stakeholder in Belvedere and used to appear in the company's advertising. Is he still around?

JNR: He's not part of Marie Brizard anymore. We stopped using him in our communications in 2014. We owed him some money as part of the receivership process, so everything was settled when we came out of receivership in 2016. He's not part of the equity anymore.

j-d: Have you been in touch?

JNR: I know his lawyer, but not him!