Suntory Global Spirits

Interview: Suntory Global Spirits on “leading the conversation” in premium drinks

Suntory Global Spirits Managing Director Global Travel Retail Ashish Gandham talks about innovation, consumer trends and the vital Americas market in this interview.

“We are investing in people and capability in travel retail and the brand strategy and innovation pipeline will reflect the focus on this channel.”

So says Ashish Gandham, Managing Director Global Travel Retail at premium spirits company Suntory Global Spirits, speaking to The Moodie Davitt Report at the recent IAADFS Summit of the Americas. [As reported, on 30 April Beam Suntory announced a rebranding to become Suntory Global Spirits. The move comes ten years on from the acquisition of Beam Inc by Suntory Holdings and includes the launch of a new website and visual identity.]

Gandham (speaking before the rebranding announcement was made) reinforces the message that Suntory Global Spirits has come a long way since the travel retail division was created in 2017, but that there is work to do to enhance its status in the channel.

“Even compared to three years ago retailers are recognising much more what we can do. Conversations that were only about Hibiki or Yamazaki are much more around Toki, around Maker’s Mark and our more balanced portfolio.

“Over time, retailers have seen the innovations that we have brought through, what we’ve done on Bowmore with the Aston Martin range, or on Japanese whisky. There is a talking point around Roku gin, a brand that is now increasingly well recognised.

“So the conversations with retailers are about how we can add value to their portfolios even outside Japanese whisky. For many the value-add is on American whiskey, on Maker’s Mark or Jim Beam, especially in the Americas or in cruise.”

The two pillars remain firmly Japanese whisky and bourbon, in each of which “Beam Suntory leads the global conversation” as Gandham phrases it.

“It’s our job to bring the right innovation, the right product, the right storytelling to travel retail in these categories.” A first step is the recent launch of The Kogei Collection, featuring travel retail-exclusive expressions of The Yamazaki and Hakushu whiskies (see panel). “You will see a lot more innovation on Japanese whisky including later this year,” says Gandham.

Ashish Gandham

A related development will be a selected roll-out of the House of Suntory shop-in-shop concept, which appeared first at Singapore Changi Airport in partnership with Lotte Duty Free this year.

“As House of Suntory is a priority we will look for shop-in-shops in the top travel locations. We have Singapore and want to create one in London and also in the Middle East and the Americas. How we execute will differ based on place – but they will make sense for the airport or operator in each location, and of course we need the full brand allocation for travel retail.”

The creation of channel exclusives and the focus on retail projects underline the rise of travel retail internally at Beam Suntory.

Gandham adds: “What is encouraging is that where there is limited allocation we now see travel retail receiving a lot more share than in the past, which tells you about the appetite and focus GTR is getting. And we are nowhere near our potential – within a US$5 billion business we are still under-indexed in this channel.”

Click to view this memorable short film from Singapore Changi Airport, where on 11 March The House of Suntory celebrated the opening of its first travel retail shop-in-shop

Americas focus

As our conversation takes place in Palm Beach, Florida (over a glass of the exquisite, smooth and soft new exclusives from The Yamazaki and Hakushu), we also focus on the trajectory of the business and brand priorities for the Americas market.

“At Beam Suntory we mirror our GTR strategy based on what is happening in domestic markets. In Mexico, Brazil and other markets we have the chance to leverage the power of domestic.

“Mexico is a big market for us. Tequila is a key category, one we have not expressed everywhere. Blended Scotch has ruled the market in Mexico but there is opportunity for Japanese blends such as Toki there.

“Airports of course are key, border stores are playing an increasing role for us and then cruise is a vital channel. Cruise plays a key role with a captive audience in the tourism industry and is a tremendous opportunity to showcase brands. We see many more brands activating across categories in cruise and the market is changing. If we can build occasions where people see and expect points of difference, experiences and shopping as exploration then it can be a great way to tell brand stories, show innovation and link it to domestic audiences.”

To boost its presence in the Americas, Suntory Global Spirits is investing in people too. Long-time Brown-Forman Director GTR Americas Montgomery Wilson recently joined the regional team, adding travel retail experience to the group.

“This investment is important,” says Gandham. “The Americas have not always been seen as important in the GTR world in certain companies but there is tremendous value there. US travellers lead the way worldwide today so why not focus on this region? We talk about emerging markets and usually that translates as Asia or Africa but what about Latin America? There is money there, there is exposure to brands and there are large populations that spend money when they travel.”

The latest Suntory Global Spirits portfolio

Lifting the experience

In our conversation, Gandham returns again and again to that theme of discovery and experience – highlighting how it can play a role in driving American whiskey too – both within the Americas and beyond.

“We are seeing that people want to have a slightly more elevated offering. That means premiumisation but not just with a narrow pricing lens. It is about drinking better, with small batch bourbon for example.

“Here Maker’s Mark is a big part of our strategy. And that is going to apply globally. So when we talk about bourbon and American whiskey Maker’s Mark is one brand that we really want to take to consumers across markets. We really have not done this to date.

“We have to be able to tell the Maker’s Mark story far more vividly. First, it’s a bourbon which is different because it uses only wheat instead of rye so it makes for a smoother taste profile and is far more accessible.

“Second, it is a craft bourbon and is handmade. So everything from the labelling to the wax, which is hand dipped, tells a craft story.

“It is also one of our B Corp certified brands, of which there are not too many in spirits. So it ticks that box around sustainability too.”

Long term, Suntory Global Spirits will place more emphasis around Toki as an accessible Japanese whisky, alongside master brand Hibiki among luxury blends plus its malts The Yamazaki and Hakushu.

“In some markets such as Latin America, there is opportunity in Japanese whisky but the story has been around scarcity until now,” says Gandham. “People say ‘I know of it but it’s not easy to find’ and we need to move towards ‘I have tried it and it is superb’. That is our job, to get sampling and storytelling, and Toki and Hibiki will lead this.

“We can tell these stories though a number of elements. The link to nature is one, with cues around water and stone. We talk about ease of drinking and liquid on lips is key. That can be complemented by video storytelling, with more sensorial wall bays. Worldwide we are making a big investment in brand ambassadors, with a platform that will connect them all to central online resources. This is a big commitment but allows us to offer several easy to communicate key points about the brands.

“Once you get people to try, then it is the most powerful way of telling the story and we haven’t done that enough. So we will bring a scaled sampling programme, a scaled education programme communicated through our store staff, with more store staff. And then wherever possible, we are going to be building shop-in-shops or elevated visibility touchpoints.”

Suntory Global Spirits recently introduced a travel retail-exclusive collection from The House of Suntory, The Kogei Collection. It features two expressions – Yamazaki Peated Malt Spanish Oak (pictured top) and Hakushu Peated Malt Spanish Oak (above).

Telling the story in Scotch

Beyond its Japanese and American whisk(e)y pillars, Scotch remains high on the growth agenda.

Gandham says: “Bowmore is one of our biggest priorities globally, because we want to create a luxury single malt. There is a long way to go. But the partnership that we are doing with Aston Martin, the innovation that we bring, whether it is the Frank Quitely series or others, all helps elevate the brand towards desirability.

“We need to continue to give reasons for consumers to tap into the Bowmore story and we have to keep it relevant for them.

“The starting point is a high-quality liquid, then there is the story of Bowmore and Islay, and Aston Martin, as two British brands coming together all helps keep it in the conversation.”

Laphroaig also enjoys a consistent, premium consumer following, notes Gandham, “but we want to make it more accessible at scale”. Beyond this the company will maintain a focus on Ardmore for the Indian consumer – “it’s the malt in the Teacher’s blend and is loved by Indians”. Auchentoshan is a single malt that Beam Suntory has “not talked about too much” but has potential in markets other than Asia, he adds.

The consumer journey

We also turn to the changing consumer landscape and dynamics influencing travel spend today, with a softening of spend evident across numerous markets and channels.

“We saw how in 2021, 2022 into 2023, any product that went on shelf was sold quickly, at the high-end especially. That has tapered off. Macroeconomic factors indicate that people are unwilling to spend the same amounts they were about a year back. And we are seeing that everywhere. It is a reality.

“We have seen a lot of players and a lot of brands doing deep discounting in certain locations. We had kept distribution somewhat restricted so now we are not into that discounting game as others are.

“But we need to ride this period out. Many people are defaulting to discounting to hit their numbers. Will innovation still be relevant? Absolutely, yes. That’s the only way you are going to keep the consumer coming back into the store. Sometimes the domestic pricing is so challenged that the shopper does not have a value reason to come into the store for the same brand. Hence innovation will remain the key.

This video outlines how Kogei or ‘traditional Japanese craftmanship’ is embedded in the latest Japanese whisky expressions

“What we cannot do, if we ever could, is put something on shelf and just expect it to sell. Now more than ever we are being asked for great story-telling, for the ‘why’. Now we are normalising we don’t have any shortcuts to sell.

“You still meet the high spenders and they are looking to buy still but they are being selective about what they buy, and which brand they buy into. If your brand is one they don’t trust and respect they will not invest or buy. If a brand holds its value and continues to give credible stories, then they will continue to seek it out.”

What are Gandham’s big asks of partners in the sector today to ensure not just visibility but also the opportunity to create great experiences?

He says: “We still need to know more about the consumer. In the Americas most items are still purchased by Americans in departures going abroad, so it’s a purchase for their trip or holiday. In Asia many people buy to consume back at home.

“So understanding the reasons for purchase, the occasions for which people buy, is key. It means the curation of what we are putting on the shelf needs to be different.

“What I would ask of partners is to really help us get under the skin of shoppers and shopper motivation so I can give them what is relevant rather than just selling my product.”

And a final word on his ambitions so that Suntory Global Spirits can punch at its weight in travel retail?

“From a strategic perspective, I want my brands across the major pillars to be absolutely well represented. That means Maker’s Mark, The House of Suntory, and on Scotch, depending on location it is Bowmore (mostly Asia) or Laphroaig. We need to show up well in the top 15 locations in travel retail with these brands.

“Beyond airports we also want to establish a growth model in cruise and increasingly borders. And I would be happy if we unlock much more of the potential in Latin America. There is a lot we can do.”

Building the travel retail range

Suntory Global Spirits has introduced a travel retail-exclusive collection from The House of Suntory, The Kogei Collection. It features two expressions – Yamazaki Peated Malt Spanish Oak and Hakushu Peated Malt Spanish Oak – with packaging art by Kyoto-based kimono house Chiso.

The range is rolling out in duty-free markets worldwide at a recommended retail price of US$205 for 700ml.

The 2024 Kogei Collection made its global debut on 1 April in the House of Suntory’s inaugural travel retail shop-in-shop boutique at Singapore Changi Terminal 3.

A high-profile outpost installation supporting the launch will go live at Dubai International at the end of May, followed by Singapore Changi and London Heathrow in July. Smaller-scale airport activations are also planned for Los Angeles, Shanghai, Hainan, Doha, Sydney, Paris and Delhi.

Suntory Global Spirits noted: “The word kogei can be translated as ‘traditional Japanese craftmanship’. This collection explores the traditional crafts of Japan through artisan partnerships, with the aim of encapsulating Japanese artistry – a dedication to process, beauty and creativity.”

The Kogei expressions – created in partnership with select Japanese artisans – present a fusion of peated malt and Spanish oak. The limited-edition collection will be refreshed every two years with revamped packaging designs.

Speaking to The Moodie Davitt Report about the expressions, Managing Director Global Travel Retail Ashish Gandham said: “We are excited. Outside Japan no other markets get a Japanese whisky exclusive – not even the US market. Global travel retail has the very first one.

“It shows how far we have come in the past few years, and even since the travel retail department was created in 2017.”

While the new expressions carry aged whisky, they don’t refer to this on the packaging.

“Shinji (Fukuyo, House of Suntory Fifth Generation Chief Blender) is clear that age is not the sole barometer of how good the whisky is. He wants it to be evaluated on taste, with the focus on craft rather than age alone,” says Gandham. “The added peat in the Yamazaki is an example of how he likes to keep experimenting. It offers a new experience.”

Around 3,000 cases of the Yamazaki are allocated with Hakushu at around 680 cases, each for distribution in the top 10-15 travel retail partner locations worldwide.

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Issue 334 | 12 May 2024