Posts Tagged ‘Beam Suntory’

21st Annual Whisky Advocate Award: Distiller of the Year

Wednesday, December 17th, 2014

Beam Suntory

Who knows whether Shinjiro Torii, when he opened his Torii Shoten store in 1899 in Osaka, envisaged his family firm becoming the world’s third-largest drinks group? Or that, in pioneering whisky distilling in Japan and creating a style that was recognizably Japanese and not a scotch copy, he would excite the world’s palates; that the values he laid out would have lasted for over a century.

A few years ago I met with his grandson, Shingo Torii, Suntory’s vice-president and master blender. Then, among other things, we discussed the philosophy which, he felt, helped define Suntory. “It has been about creating and developing a positive tradition, and it is this tradition, or what you could even call ‘inheritance,’ which should be understood by everyone within the company. It is important that it is handed down.”

As other drinks firms increasingly seem attracted to short-term fixes, these embedded values have given a consistency to the firm’s long-term vision for whisky. Neither does “consistency” mean “conservative.” You don’t spend $16 billion buying a competitor if you are that. After all, one of Shinjiro Torii’s first principles was “Yatte Minahare!” [Go For It!]

Suntory has always been based around innovation. This is the firm that transformed the stagnant domestic Japanese whisky through the HiBall revolution, while its research into whisky production at Yamazaki leaves other distillers scratching their heads in disbelief.

I remember asking Torii-san whether a family company was in a better position to take this approach. “I see family management as simply a form of style, he replied. “However, it is also true that this style has enabled Suntory to pursue its dream for a significant period of time and makes the moral values which lie at the heart of the business a top priority in the firm’s values.”

Seen in that light, the acquisition of Beam is the most visible manifestation of a very long-term strategy. What has resulted is the creation of the only firm that plays in ASH - for mediaevery one of the world’s key whisk(e)y styles. Beam’s stake in bourbon, yes, but also blended scotch and single malt whisky, particularly peated. Beam Suntory is the biggest single player in Japanese whisky, but also owns Canadian Club and the world’s rye whisky specialist, Alberta Distillers; and then there’s Cooley, from Ireland. It is an astounding—and deep—portfolio.

It will be interesting to see how these Suntory principles are absorbed within American business culture and how the new management handles this range. “We have a deep conviction for making product,” said Torii-san. “In addition, [it is about] having a long-term plan, in terms of half a century or even a century, and being able to maintain a sense of humility.”

Humility is not a word you hear in whisky often—it is one which should be heard more often in business—but if these Suntory values are maintained, then a measured, long-term approach to building these brands can only benefit the category and consumers. Beam Suntory should not merely be a bourbon firm with some interesting stuff in its second tier.

It took $16 billion to break the duopoly of Diageo and Pernod-Ricard, but there’s a new kid in town, a new seat at the table. Who else could be our Distiller of the Year? Whisky’s pieces have been fundamentally rearranged. Things will never be the same. —Dave Broom

That’s our final Whisky Advocate Award announcement for 2014. We’ll see you in the comments section!

Whiskey Shortages? Not at Beam (Suntory)

Friday, June 6th, 2014

Author - Fred MinnickWhy did the world suddenly start to care about the whiskey shortages?

On May 8, Buffalo Trace sent a media-wide press release that detailed looming bourbon shortages. From there, serious journalists covered these tragic circumstances and whiskey shortage stories became a trendy subject on slow news days. So, if you’ve been wondering where all these stories came from, now you know.

With that said, the shortage is real, to some extent. The industry is feeling heavy demand with no end in sight.

But the world’s largest bourbon maker, Jim Beam, has been relatively quiet in these doom-and-gloom whiskey stories. There’s good reason. Suntory purchased the company in January, and it’s been quietly adding to its Kentucky distilleries, had the acquisition pass through regulatory bodies, and developed a new Beam-Suntory logo that offers a subtle contrast in American creativity and Japanese efficiency.

BeamSuntoryLogoJust how is Beam doing in this whiskey shortage? According to Clarkson Hine, Beam-Suntory’s senior vice president of corporate communications and public affairs, Beam was ready for the demand.

“We have been investing substantially over the past several years to increase our bourbon capacity, including the recently announced third still at Maker’s Mark and construction of new rackhouses,” Hine says. “Given the laydown decisions made years ago, we currently have supplies across our bourbon brands to support consistent healthy growth.”

But not all bourbons are created equal. According to Beam’s financial 2013 results, Maker’s Mark grew 17% and Knob Creek 14%, while Jim Beam paced at 4% growth and Basil Hayden’s threw a party with 29% growth.

Hine says Australia’s market softness impacted Jim Beam’s growth rate and the company’s marketing strategy for Basil Hayden’s led to consumers discovering the 80-proof whiskey for the first time.

BH750_06“We made a strategic decision last year to boost investment behind Basil Hayden’s, particularly in the on-premise and in social media,” Hine says. “We believe the brand has the potential to be the next break-out star from the Small Batch Collection, building on the ongoing success of Knob Creek.”

Basil Hayden’s is certainly poised to capture the beginner’s market. People tend to find this lower-proof bourbon to be subtle and with a couple ice cubes, it offers the newbie little to no bite. In social media, the bourbon appears in photos set in places of relaxation, from a park bench to a bathtub, appealing to one’s inner tranquility, a refreshing attempt at presenting to new consumers.

Meanwhile, Beam-Suntory finds its new company in change. Starting July 1, Hine says, the company begins to transition distribution for the legacy Suntory brands into the old Beam routes to market in the U.S. and Germany.

“We expect that management of Suntory’s international spirits business outside of Japan will integrate into Beam Suntory in stages by the fourth quarter, with the Japan business to merge into Beam Suntory by the end of 2014,” Hine says. “Given the size and importance of the Japan business, Japan will become Beam Suntory’s fourth operating region.”

As for the American whiskey, well, Beam Suntory seems to be business as usual. Expect to see two new editions in the Jim Beam Signature Craft Harvest Bourbon collection this fall; one will add brown rice to the mashbill in place of rye, the other will replace rye with red winter wheat. Meanwhile, the trucks keep moving in and out of the Clermont and Boston, Kentucky, facilities with tankers of whiskey and barrels to stack. Beam seems to be perfectly under control.

The reason I tell you this: the next time you hear your buddy talk about the whiskey shortage, you can tell them to calm down. If Jim Beam—excuse me, if Beam Suntory runs out of whiskey, then it’s time to panic.