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Interview, Part 1: Jean-Jacques Dubau, Managing Director For North America, Gruppo Campari

April 27, 2015

Jean-Jacques Dubau took the reins as Gruppo Campari’s managing director for North America early last year, having previously helmed the group’s domestic Italian business. Since the departure of former Campari America CEO Roy Danis last fall, Dubau has been filling that role as well (an internal candidate, as yet unnamed, will replace Danis on June 1). Among Campari’s key brands, Skyy slipped 1.6% to 2.8 million cases in the U.S. last year, Wild Turkey was flat at 590,000 cases and Campari bitter rose 11% to 83,000 cases, according to Impact Databank. SND senior editor Daniel Marsteller recently met with Dubau to discuss Campari’s current U.S. profile, and the road ahead.

SND: From a big picture standpoint, how has Campari America’s portfolio been performing recently?

Dubau: In 2014, we grew in line with expectations, approximately 1%. But if you look at the history of the company over the last 10 years we almost doubled our revenues. Considering the 2008 crisis and its aftermath, that’s not a bad ride. We’re focused on growing our high-margin products like Aperol, Campari and Russell’s Reserve. This, together with the very good performance of Espolon Tequila (up 12% to 110,000 cases) and Appleton rum (+5% to 205,000 cases), has made up for a difficult vodka market and some flattish shipments on Wild Turkey, whose depletions remain ahead of the market.

SND: What trends are driving the spirits market this year?

Dubau: Bourbon remains the sweetheart of the industry, so we’ll continue to rely on Wild Turkey—including some upcoming innovation—and Russell’s Reserve. We’ll be tweaking the Russell’s Reserve bottle to give a clearer reference to the Russell family. Many people think vodka will continue to be a challenge, but we see growth possibilities. We just launched Skyy Barcraft—in Margarita Lime, White Sangria and Watermelon Fresca flavors—which addresses consumers’ desire to make good, simple cocktails at home. You just add soda to the product (which is 60-proof), and you have a great cocktail. We think that kind of innovation can still bring growth in vodka. Also underestimated is the good performance of fruit- and spice-flavored vodkas. The crash in flavors lately is mostly due to confectionary flavors. We didn’t pursue that category, and we’re now outperforming in flavored vodka. We just launched two new Skyy Infusions, Pacific Blueberry and Texas Grapefruit, and we’re seeing a very good response. There is also potential for growth in Canadian whisky—we launched Forty Creek last year and we’re now accelerating it into more markets. We don’t know that Canadian whisky will be the next Bourbon in terms of growth, but it’s a 15-million-case category, and there’s plenty of interest there. (Forty Creek depleted 63,000 cases in the U.S. last year.)

SND: Where do you see opportunities to accelerate Campari’s U.S. progress?

Dubau: One key objective is to improve our on-premise penetration. We can build on our Italian portfolio—including Campari, Aperol, Cynar, Averna, Braulio and Frangelico—which is resonating with bartenders. With Skyy, we now have the packaging and communication right to grow on-premise. Wild Turkey is also having more success in that channel recently, and we’ll push Russell’s Reserve there too. On the flavor side, Wild Turkey American Honey is premium-priced, positioned a bit higher than Fireball, so even though we’re still growing at high single digits, that area represents a challenge. The good news is the strong initial performance of American Honey Sting, which is flavored with ghost pepper. We launched it as a limited offering last year, and it will now be an ongoing product. We also expect Appleton and Espolon to be big for us. Espolon was reinforced last year with an Añejo, and Appleton will receive new packs this year. We also think White Overproof rum from Wray & Nephew is a product that bartenders will fall in love with. It’s 122 proof, and in its home market of Jamaica it’s really woven into the fabric of the country. We see it catching on here as well.

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