Chief executive brings Dutch courage to drinks company
By Ian Fraser
Published: Sunday Herald
Date: April 17th, 2005
ROLAND van Bommel, the Dutchman who stepped in as chief executive of William Grant & Sons last November, flashes a wry smile when he describes what it was like in his previous job at the helm of global drinks distributors Maxxium.
In that role, van Bommel draws parallels between himself and the UN’s beleaguered secretary general: “I felt myself to be the Kofi Annan of the spirits industry.”
Founded in 2000, Maxxium Worldwide essentially amalgamated the global drinks distribution arms of Scotland’s Edrington Group, America’s Jim Beam Brands, France’s Remy Cointreau and Sweden’s Vin & Sprit.
“[Running Maxxium] you’re always in a no-win situation. You get things done, but there’s always some shareholder who is not satisfied, but is prepared to go along with things. So you end up stepping on toes.”
He adds the fact that the group’s four equal shareholders have different ownership structures – with one (Jim Beam Brands) being a division of a Fortune 500 firm and the others being either family or state-owned – only exacerbates the situation. “That does cause frictions because investing means different things to different shareholders. It was a very interesting five-year period.”
Indeed, van Bommel, who was educated at the same business school as Unilever chairman Antony Burgmans, is remarkably critical of his former employer. He accuses Maxxium of “slowing down consolidation” in the drinks sector. This is because each of its four shareholders have made such a long-term commitment to it.
“It prolongs independent companies’ opportunity to stay independent. That’s a negative in that it limits the opportunities for the players in the network to do deals. There’s a lack of flexibility. Also it’s not that easy to acquire a new brand and put it into the same network because everyone is covered. If Highland wanted to buy a vodka it would be very difficult because of course Absolut is now in Maxxium. It limits your freedom of manoeuvre and you need to be able to agree on a daily basis about the way forward.”
So he must have been delighted when offered an honourable exit route in the shape of the William Grant’s job. Headhunters Whitehead Mann had been on the case since the group’s first non-family chief executive, Frenchman Patrick Thomas, departed after reportedly falling out with the controlling family in April 2003.
This is van Bommel’s first interview since taking up his job with Scotland’s largest independent drinks group and we talk amid the plush surroundings of Prestonfield House Hotel.
Van Bommel says that he is well schooled in the niceties of managing global drinks brands within the context of a family-controlled company. On leaving Unilever in 1986, he joined the French drinks business Remy Cointreau, which is 60 per cent controlled by the Heriard-Dubreuil and Cointreau families.
His move to head up its sales and marketing arm in the Far East from a Tokyo base came at the worst of times. “I arrived just after the bubble burst in Tokyo, and the cognac market has been going South ever since,” he says. “It was basically restructuring time. Japan had been a very profitable market for Remy.”
“Brands like Remy VSOP had been selling for $100-$150 per bottle, mainly in the corporate entertainment market. But that market went down the drain. Now they drink local rice-based spirits and more beer. Asian markets tend to go national very, very quickly as soon as there is a change in their economic circumstances. Corporate entertainment goes down the tubes very quickly. Also, people feel this nationalism, which means they no longer wish to buy foreign products.”
Did he have any hesitation before taking up the offer of running another family-owned business? After all, if family members were to splinter into warring factions, he might have been required to rehearse the diplomatic skills he had to learn at Maxxium.
Van Bommel says: “There are bound to be occasional squabbles, but that doesn’t affect what consumers perceive in terms of brand values. Working for a family-owned company you are bound to go through occasional ups and downs, simply because there are disagreements between family members. But a key benefit is as a privately-owned company, you are able to take a longer-term view, for example of new product development or the opening up of new markets, than a company which must file quarterly returns to the stock market.”
He adds that the Grant and Gordon families – ranked the eighth richest in Scotland by The Sunday Times Rich List 2005, with assets of £480 million – have sensibly created a family council in a bid to insulate management from too much familial interference. The company also has several independent non-executive directors – including Gianluca Brozzetti, head of luxury retailer Aprey & Garrard and Javier Ferran, former chief executive of Bacardi. Charles Grant Gordon remains as chairman.
But no junior member of either family works for the business. Van Bommel says he does not rule this out “as long as they prove themselves outside the business first”.
His biggest challenge now is to sustain the success of the company’s leading products, which appear to have enjoyed a record year in 2004. These include Glenfiddich single malt; the world’s number four blended Scotch, Grant’s; The Balvenie; Hendrick’s gin; and a range of rums and vodkas acquired by his French-born predecessor, Thomas.
Glenfiddich, the world’s leading malt whisky brand, has benefited enormously from having “first mover advantage” in its sector. The brand effectively created single malt as a product category when the family-owned business decided to export it to England, and then further afield, back in 1963. “All the competitors in Scotland thought the family was mad and that it would never catch on, ” van Bommel recalls. “But the family was very tenacious, it was in keeping with the pioneering spirit that William Grant had from day one.”
Grant’s, the group’s blended product, sells one million cases in France alone, and 4.1m worldwide. However, van Bommel suggests the brand’s positioning might be reviewed.
It is currently promoted using the triangularity of its bottle and the quality of the spirit inside but, he says: “Branding and marketing is something we need to look at and improve.” He adds: “There are many, many brands over time that have been developed by family-owned companies that had the vision, the passion, the craziness to challenge conventional thinking and went out and did it.”
His challenge now is to ensure that spirit survives as William Grant & Sons continues to grow.
With Glenfiddich and Grant’s to “refresh”, with the fledgling Hendrick’s gin to grow, and the still low-profile portfolio of rums and vodkas that were acquired by Patrick Thomas to reshape, he has a strong palette with which to start.
MINI PROFILE
ROLAND van Bommel started his career with Unilever in the Netherlands, and then spent time with the Anglo-Dutch consumer goods conglomerate in Indonesia and Bangladesh. In 1986 he joined Remy Cointreau, latterly heading its Asian business, and from 1999 to 2004 he was chief executive of the drinks distribution joint venture, Maxxium. Van Bommel became chief executive of William Grant & Sons on November 1, 2004.
William Grant & Sons owns the world’s favourite single malt Scotch whisky, Glenfiddich, as well as The Balvenie single malt, and the world’s fourth-largest blend, Grant’s. It employs 750 people in Scotland, and has 60 sales staff in Richmond. In 2003, William Grant, which owns 30 per cent of Highland Distillers, made profits of £68.7 million on sales of £328.7m.
Copyright 2005 SMG Sunday Newspapers Ltd.
Short URL: https://www.ianfraser.org/?p=234
In June 2009, it was announced that Roland van Bommel was stepping down. He was replaced in August 2009 by former Bacardi group chief marketing officer Stella David. See article from The Herald http://www.heraldscotland.com/brand-guru-breaks-whisky-industry-s-glass-ceiling-1.913005