With seemingly little or no fanfare, Japanese multinational Suntory Beverage & Food became one of the largest makers of distilled beverages in the world when it acquired Beam Inc in 2014. The Beam acquisition also made the Beam Suntory portfolio unique in having spirits distilleries hailing from three different continents through its Irish, Scotch, Bourbon & Japanese whiskies.
The Tokyo-based company was established in Osaka in 1899 and has become one of the oldest companies in the distribution of alcoholic drinks in Japan. Today its 300 companies around the globe employ over 40,000 people. Last year it made €19 billion or ¥2.295bn.
It also makes Japanese whisky.
Lucozade Ribena Suntory Ireland was formed as part of Suntory Beverage & Food Europe, the European business unit of Suntory Holdings in 2014 and in 2019 became the official distributor (through Beam Suntory Ireland) of Beam Suntory’s spirits portfolio.
The company also owns the Lucozade brand through Lucozade Ribena Suntory Ireland and so this made LRSI the first company in the world to bring the two businesses – soft drinks & spirits – together under the ‘One Suntory’ banner.
LRSI is now responsible for Beam Suntory’s premium spirits collection which includes brands such as Jim Beam, Maker’s Mark, Courvoisier, Kilbeggan, Teacher’s, Roku Japanese Gin and Sipsmith.
This had formerly been distributed by Barry & Fitzwilliam, still a huge and valued customer of LRSI, with a huge distribution network across the country, points out Mark Aherne, Lucozade Ribena Suntory Ireland’s General Manager here.
Mark has worked with LRSI for over six years now having started as Sales Director with the company. Previously, he worked as Head of Sales for GlaxoSmithKline, Lucozade’s previous parent.
A key part of Mark’s role is to ensure that at the forefront of all LRSI’s employees’ actions is the Suntory group’s ‘Growing for Good’ vision which is about being a company that always benefits its community.
“Given the current Covid-19 pandemic” he explains, “I’m particularly conscious of our employees’ and our supplier partnerships’ health & wellbeing while they work so hard to continue to supply our drinks to our consumers.”
Lucozade – part of LRSI’s heart
Together, Lucozade Sport, Lucozade Energy and Ribena beat the heart of LRSI’s business.
Lucozade Energy and Lucozade Sport continue to drive sales success and have added €4m to the market over the past year, he says.
Due to the current Covid situation LRSI has had to be flexible and adapt its plans but it continues to invest in insight-driven product launches and innovative marketing campaigns.
LRSI operates in both the grocery trade and the on-trade across the island of Ireland. As both sectors ‘return to normal’ post-Covid-19, “Our diverse portfolio enables us to tailor our offerings to adapt to the changing consumer habits we’ve seen develop in recent months,” says Mark, “Our Lucozade Energy pub bottle is a particular favourite in the on-trade channel with the increase in consumers looking for a refreshing non-alcoholic drink to be enjoyed even in the daytime or whilst watching sporting events. Now that we’ve a full range of both alcohol and non-alcohol drinks to offer, we’ve even more reason to be a key partner in both trading arenas.”
Pub bottle – approaching 50 years old
With an on-trade distribution history dating back some 40 to 50 years and nearly total distribution across the on-trade, 2019 saw the Lucozade Pub Size product experience 6% growth in value, claims Mark, “As consumer demands change, Lucozade has benefited from this growing demand for Low Alcohol/No Alcohol drinks in pubs and bars across Ireland.”
With or without the effects of Covid-19 where does Mark see future growth for the company coming from today?
“For our Beam Suntory team and within the alcohol sector whiskey and gin are growing year-on-year,” he says, “The growth is currently coming from premium Irish whiskeys, premium Bourbons and premium gins.”
Mark goes on to explain that LRSI’s total RoI soft drinks market is in growth with its own Drink Now share up 6.8% in value set against the general Drink Now market which shows value growth of just 0.4%.
“The Energy sector is the fastest-growing, up 13.6% in value, so our Lucozade Energy & Zero brands remain key,” he says, “Lucozade Energy will be on TV throughout the year supported by ‘Paid To Promote’ advertising, Digital and in-store activation.”
LRSI has some “very exciting” developments and marketing announcements coming down the line and looks forward to revealing all to its trade partners in the coming months.
For example, Limited Editions are lined-up in Irish and Scotch whiskeys as well as Japanese gins and vodkas to enhance LRSI’s offering to gin and whiskey bars.
But there remain challenges.
Recycling the challenge
In 2019 Suntory set out its vision and made a clear commitment to a sustainable future. It aims to become the first global drinks company to use 100% sustainable plastic bottles, using fully recycled or plant-based materials across its entire portfolio by 2030.
Sustainability and recycling will continue to play a vital role at LRSI.
“Our ambitious plan for the future of our bottles is critical for our business,” believes Mark, “We firmly believe that plastic isn’t the issue, but plastic waste is. When managed properly, plastic is more durable and less carbon-intensive than glass and aluminium. What we need to do is to remind people of its value, encourage recycling efforts, improve infrastructure and – with an increased amount of rPET in our fully sustainable bottles – reduce greenhouse gas emissions.”
As the on-trade starts to open-up again, Mark wants to ensure that LRSI has the necessary range to offer.
“We want to ensure that we understand our listing and that we do some work around driving promotions and advertising to ensure that we’re front of mind in the on-trade,” he explains.
Barman’s recommendation “no more”
He makes an interesting point for suppliers going to the on-trade in this time of Covid: “The nominated Brand Ambassador used to be the barman but this has now become the floor staff as one doesn’t necessarily have access to the barman any more – you just can’t get access to the bar!
“Especially for food-led pubs at the moment, that interaction piece up at the bar has changed.
“We’re trying to re-think this in light of the present situation because I think the sales model has changed overnight.
“Customers cannot prevail upon the maitre d’ or equivalent to be given product advice so there’s a need for an intermediary to train floor staff in being ambassadors for brands within that outlet.”
Growing Beam Suntory’s on-trade relationship
Beam Suntory’s on-trade relationships are vital for growing its premium spirits portfolio in particular.
“To connect with both our consumers and customers amidst the on-trade being closed due to Covid-19, we tapped into new digital experiences and ways to experience our spirits such as online whiskey tastings and cocktail masterclasses.”
Throughout the pandemic LRSI has been working to scope out potential outcomes with its colleagues in the UK as well as internationally.
“We’ll take all necessary steps to minimise any potential impacts on Irish consumers across 2020 and 2021,” promises Mark, “What’s clear is that this will take collaboration throughout the supply chain and it will be hard work for all of us but we’re resilient and this will be a reminder of what an important role FMCG companies – from manufacturers through to retailers and their employees – play in people’s lives.”
Unlike some exclusively on-trade suppliers, LRSI appears to have got off lightly.
“Our LRSI portfolio is quite heavily focused on retail, which means we haven’t seen the effects some other suppliers may have experienced during this period” says Mark, “so we were less exposed to the licensed trade because of our diverse portfolio which saw an upsurge in grocery and a closing down of sales to the licensed trade. If we’d been purely licensed trade we’d have been down about 90% but as it was, we saw a 50% decline and a slight change in mix.”
Still lots of room for growth then.