By Ian Fraser
Published: Sunday Herald
Date: 17 April 2005
WILLIAM Grant & Sons, Scotland’s largest independent distiller, is keen to buy some of the unwanted drinks brands if the £7.25 billion takeover of Allied Domecq goes ahead. It is expected that the joint bid team of Pernod Ricard and Fortune brands will want to divest brands that do not fit in with the product portfolio of either company.
Roland van Bommel, chief executive of William Grant & Sons, told the Sunday Herald: “If this deal completes, then it is fair to say that Pernod Ricard and Fortune Brands will only be wanting to retain a minority of Allied’s collection of 150 to 200 brands. The two bidders will split the biggest brands between them. But there’s going to be a second round to this, with a large number of additional brands being sold to other parties. We’ll be watching with interest to see what becomes available.”
Van Bommel would not single out brands. But he said he thought it unlikely that a counter bidder would emerge to trump the joint Pernod Ricard and Fortune Brands bid for Allied. “I don’t think the appetite for anyone else to come in is very large. The complexity and size of the deal is going to hold people back.”
Analysts have speculated that Bermuda-based Bacardi, US-based Brown-Forman (the maker of Jack Daniel’s Whiskey), US-based Constellation Brands and France-based LVMH may come in with a counterbid.
Last week Constellation’s chief executive Robert Sands said: “We’re viewing the opportunities Allied presents. If we get involved, it would have to be with other people. Our top priority for the last three years has been the premium and mid-premium spirits area.”
Van Bommel, who became Grant’s chief executive last November, has a brief to build on the strong market positions held by the company’s existing brands. He intends to review their marketing and advertising approaches.
The company’s brands include the world’s fourth biggest-selling Scotch whisky, Grant’s, and Glenfiddich, the world’s best-selling malt, as well as The Balvenie and a range of rums and vodkas. It also has a 30 per cent stake in Highland Distillers. He added that the family-owned company is on a “slow burn” to build Hendrick’s, a super premium gin, into a serious brand. Hendrick’s was launched in the US in 2001, where it has proved popular in high-profile bars in New York and other major cities.
In the UK, the Scottish distilled gin was launched in 2003 and is targeting similar venues in London, Edinburgh and Glasgow. The gin is already being sold in around 200 style bars and restaurants across the UK, with a view to being listed in around 1000. In the Scottish off-trade the gin is sold only by Peckham’s although down south it is also available in Waitrose.
Hendrick’s, distilled in Girvan, Ayrshire, has an unusual flavour, with subtle hints of coriander, juniper, citrus peel and rose petals. It has an ABV (alcohol by volume) of 44.1 per cent and is packaged in archaic, cylindrical bottles. The company believes that it has a real contender in the super-premium gin category, where the biggest player is Bacardi’s Bombay Sapphire.
Van Bommel said: “We believe in it. We’re now in year five and we’re selling 25,000 cases. It’s small but it’s growing rapidly. We have high hopes for Hendrick’s and we’re very pleased with the progress. But we’re not saying it has to hit a certain level of sales. It’s a very, very slow burn but we are absolutely determined to make it a success.”
Van Bommel said William Grant & Son’s family-owned status enables it to play a long game with new products without the need to justify its strategy to stock market investors on a quarterly basis.
This news piece accompanied a profile of Roland van Bommel published in the same issue of the Sunday Herald (‘Chief executive brings Dutch courage to drinks company‘)