Beam Suntory CEO rides whiskey boom at home, abroad
Chicago — “The great American export story that is bourbon” is how Matt Shattock, the soft-spoken native Brit at the helm of Beam Suntory, begins to describe his company’s growing presence in the Land of the Rising Sun.
This year, Chicago-based Beam Suntory — a private subsidiary of the Japanese firm Suntory Holdings — expects to sell more than 8 million bottles of its flagship Jim Beam bourbon in Japan, up from just 300,000 bottles in 2012, prior to Suntory’s $16 billion acquisition of Beam in 2014.
By 2020, when the Tokyo Olympics commence, Japan likely will have surpassed Australia as the largest export market for the global spirits company.
“That’s just an extraordinary acceleration,” said Shattock, 55, CEO of Beam and a father of three.
Business is good at home, too, as evidenced by Jim Beam’s double-digit year-over-year volume sales growth in the U.S.
And since striking a corporate sponsorship deal earlier this year with the Chicago Cubs, Jim Beam sales in Illinois are growing at twice the rate of the rest of the country, Shattock said.
“(We) attribute that difference significantly to our partnership with the Cubs,” Shattock said.
A former tank commander in the British army, Shattock has led Beam through significant change since joining the company in 2009, including the Suntory merger and, more recently, moving Beam’s headquarters last year from suburban Chicago to the city.
Though whiskey-focused, Beam Suntory’s portfolio also includes brands such as Effen vodka and Hornitos tequila, among other spirits.
Q: What were your initial thoughts and impressions when this Japanese firm came forward to buy Beam, an iconic American brand?
A: We’d had the opportunity to get to know Suntory through a distribution arrangement. Over the previous few years, we’d managed to consolidate our brands into the Suntory organization, which was our distributor in Japan. So it gave us a chance to get to know them. ...
And while on the surface, the cultural differences between a Japanese and an American company are quite large, this business had a very common foundation. Both companies have multigenerational living family legacies.
Q: What were the initial challenges in bringing together these two cultures?
A: Inevitably, fundamental things like communication and ways of working and the different reporting regimens of the business had to be brought together. But actually, we had a real coming together, a real coalition of the willing.
Our people were very excited that we’d been purchased by a company that wanted to keep us for the long term and invest in the long-term growth of the business, which they’ve certainly done.
Q: What’s spurring the growth in Japan?
A: One of the innovations that the Japanese have pursued with their own Japanese whisky is to position whiskey as a refreshment alternative. The form of the drink is a highball, which is mixed with club soda and a lot of ice and a dash of lemon. ... They’ve adopted that as one of the platforms for growth of Jim Beam.
We’ve begun to explore that as a strategy in other markets — not just in Asia, but in other parts of the world.
Q: How much of Beam’s overall growth is a result of booming whiskey sales in the U.S. as opposed to growth in Japan and other export markets?
A: We are growing in the home market, which is by far the biggest market in the world. We’re growing very significantly here. That’s a result of a number of drivers. The first, I think, is authenticity. Today’s consumer is very interested in the heritage, the craftsmanship, the story behind the brand.
And I think another thing that’s been driving growth both in the U.S. and globally is the versatility of bourbon. It’s a slightly sweeter whiskey than say, Scotch, so it’s very accessible to be drunk neat but it’s also very well mixed, so it’s been at the heart of a lot of the renaissance of the cocktail culture. That allows it to adapt to different tastes around the world.
So, for example, the highball in Japan is one way of drinking it, whereas you might be drinking an Old-Fashioned in a bar in Chicago.
Q: How long do you expect the explosive growth in bourbon and whiskey to continue?
A: Spirits continues to take share of overall alcohol, for, I think, seven years in a row now. And within that, the trend toward brown spirits seems pretty well set because of the reasons I’ve said — the authenticity, the innovation, the versatility.
I think as long as we continue to invest in our brands, invest in quality, invest in innovation — and tell those stories — we’ll see growth continue for some time.
Q: Is it fair to say that the company’s investment is more on marketing what’s already in the portfolio, as opposed to growing through acquisition?
A: Absolutely. Our first priority is growing the business we have today. And with the combination of Beam and Suntory, an example would be Japanese whisky. Brands such as Yamazaki, Hakushu, Hibiki are now very highly regarded brands around the world.
Q: In terms of the runway for growth for Japanese whisky in the U.S., relative to a premium spirit like a Basil Hayden, what do you see as the potential?
A: They have similar potential. The only restraint on (Japanese whisky) at the moment is supply. We are investing significantly to drive supply into the future. I think the consumer demand will be very vibrant.
Q: Do you see that limited supply as a lever to create the demand?
A: We wouldn’t do it intentionally but certainly scarcity can sometimes enhance demand. And it is very sought after, indeed.
Q: What’s your go-to drink?
A: Jim Beam or Jim Beam Black. I drink it long, with some ginger ale. It’s a really wonderful, refreshing drink.
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