Andre deAlmeida joined Loch Lomond Group in July this year

Andre deAlmeida joined Loch Lomond Group in July this year

Andre de Almeida had been William Grant & Sons' director for European Travel Retail for four years when he decided earlier this year to take up the role of Global Travel Retail head at Scotch whisky specialists Loch Lomond Group. That was in July, and now the Brazilian-born de Almeida, who moved to Scotland when he was 15, faces one of the biggest challenges of his career - establishing Loch Lomond as a player in the GTR channel. When just-drinks spoke to de Almeida in Cannes earlier this year, the 40-year-old was just six weeks into his new job. But, a whirlwind start helped Loch Lomond bring a full GTR range to the French coast, including a couple of exclusives from the group's Glen Scotia single malt distillery. In a wide-ranging interview, de Almeida spoke about his move to Loch Lomond, how to lever blended Scotch up the value chain and the dangers of money laundering in Travel Retail.

just-drinks: Was it an easy decision to join Loch Lomond?

Andre de Almeida, Loch Lomond Group GTR head: It wasn't easy, because I had friends at William Grant. I'd been there for four years and loved the brands, but ultimately you have to do what's right for yourself from a working perspective.

I'm not moving outside of Scotland. That freedom to work - that's what I love about working for a company this size. On the flip side, you don't have the overheads, you don't have the number of people, you don't have the money, so you have to think differently.

j-d: You moved from a company that is family-owned to a private equity-owned one (Loch Lomond was previously controlled by the Bulloch family, who sold to Exponent two years ago for a reported multi-million pound fee). Is there a difference?

AdA: Not really. I got on very well with the family members at Grant's. But, the reality is that private-equity is not involved in the day-to-day business. Of course, they are interested in their investment but on an operational side, in the day-to-day, it's run by the CEO (Colin Matthews) and the wider team.

j-d: Six weeks is an incredibly short time to have pulled this GTR range together. How did you do it?

AdA: The liquid was already there, as was the capability. I already had something to work with. By tapping into different people within the business - the master blender, the master distiller - I was able to move extremely quickly.

j-d: How did you feel when first presented with that task?

AdA: I wouldn't have taken the job otherwise. That freedom is one of the appeals. If I'm concentrating more and more on the internal tasks and not engaging with the consumer and customer, then frankly I'll be looking for something else.

j-d: As well as the Glen Scotia distillery, you also have the Loch Lomond distillery, which produces blended Scotch. (The company also owns Inchmurrin, which produces the High Commissioner blend, as well as stock from Littlemill, which burnt down in 2004.) Loch Lomond distillery is known in whisky circles for the four different types of still it uses.   

AdA: When I started at Loch Lomond, I was approached by real whisky geeks who wanted to see inside the distillery. A lot of bloggers have taken pictures from outside but that's the closest they could get. For your average Joe, our message will be about provenance. All the whiskies going into that blend come from one location. No other blended whisky can claim that in Scotland.

j-d: The blended category is a tough place to be at the moment.

AdA: Blends in general is a very competitive category and so is heavily promoted. You see what Diageo does with Johnnie Walker, for example. It's almost always on promotion in certain places, which is not great from the perspective of building value. Yes, it shifts a lot of volumes, but it's not great from a value perspective.

Clearly, what a lot of people have tried to do is move those blended consumers into premium and single malts. But, in our case, it's about trying to reflect what the distillery is about and coming in with a little bit of a different message, because we can.

j-d: But, aren't blends in decline?

AdA: What I'm hoping for is value growth as people move from standard blends to deluxe or from deluxe into single malts. There's still huge potential in places like South America, which is primarily a blends market. If you could get a small percentage of that business moving into single malts, then all of a sudden there is a huge amount of value growth for all of the players involved.

j-d: Travel Retail is also a difficult trading environment right now. What's your take on it? Are retailers squeezing too much out of suppliers?

AdA: Sure, that is one of the risks. I've written about it on my blog (Inside the Cask) before, and I think that is the biggest risk to the channel. If those stakeholders get too squeezed down the line - and if this trend continues - it would not be sustainable and would ultimately get to the situation where some brand owners would exit the channel.

The end is nigh for Global Travel Retail - Click here for a just-drinks comment

j-d: Do you believe it will continue?

AdA: I hope not, because, unless there's change, companies like ours won't be able to enter into the channel. Commercially, Travel Retail is the most challenging channel because customer margin expectation is so high, and it's so high because a big chunk goes to the landlords. That's not sustainable.

With some retailers, there is almost a Tesco-isation of the Travel Retail market, where they are more focused on pure rotation and lower-end promotion. Brand owners are in the channel because it gives them access to an international consumer base, it helps them to increase awareness with those consumers and allows them to bring brands to life. The more like Tesco you become, the less you can do that. And, the more pressure on commercials, the less money you have to work on activations, which is what you want to do.

j-d: Is the grey market becoming an increasing problem in GTR?

AdA: It's something that's always been there. It's something that we're not ever going to be able to fully control because of the extent you're unable to control the supply chain all the way down. My view is that you have to try to control it as much as you can because, otherwise, it gets very difficult to manage the commercials down the line.

Global Travel Retail - The Grey Market - What is it and why is it causing concern? - Click here for a just-drinks focus