Beam Suntory Chairman Denies Discord With Suntory Holdings As Integration ContinuesNovember 11, 2016
Speaking in New York yesterday, Beam Suntory chairman and CEO Matt Shattock said press reports of tension between the Beam and Suntory management teams over the summer were “overblown,” and predicted bright skies ahead for the company.
Addressing an audience at the Japan Society on Manhattan’s East Side, Shattock described the integration process as ongoing—more than two years after Suntory acquired the former Beam Inc. for $16 billion. The blockbuster deal created the world’s third-largest spirits company with a total case volume of 54.2 million cases, according to Impact Databank.
In response to a question from SND regarding the potential for collaborative products from Beam Suntory’s Japanese and American wings, Shattock said, “Even though we’ve been at it every day for two and a half years, we’re still only beginning to discover the power of the combination of these two businesses, and obviously areas such as product innovation would be one of those. As we go forward we should be looking at ways to bring our similarities and differences together, because I think it’s at that intersection where great innovation takes place.”
Whisk(e)y accounts for roughly half of Beam Suntory’s sales, and Shattock emphasized that the brown spirits category continues to be the primary focus for the group not only in the U.S. and Japan—where its distilleries are racing to keep pace with rising demand—but also in Scotland, where it owns the Laphroaig, Bowmore and Auchentoshan single malts, among others. And while Japanese whiskies surge in the U.S., Jim Beam Bourbon is on a tear in Japan. The brand will sell about half a million cases this year in the Japanese market, up from 30,000 cases before the creation of Beam Suntory. Shattock projected that Japan will be Jim Beam’s top export market by 2020.
Meanwhile, Shattock pushed back on a Financial Times report that made waves earlier this year. The article asserted that a culture clash—and the Beam team’s frustrated expectation of an IPO in the U.S.—was roiling the integration of Beam into the larger Suntory group, which has annual sales of $27 billion.
“I think that one press article was overblown and didn’t represent what has gone on. (The integration) has been an extraordinary success, exemplified by the results we deliver. We continue to outperform our competitors in the market,” Shattock observed. “Inevitably there are growing pains in any venture. But if you speak to the people on the ground, you’d find them very motivated, engaged and excited about being part of a bigger company. We’ve had a lot of opportunity to do some training and cross-fertilizing with people working on both sides of the Pacific and that will continue.”
Beam Suntory said last week that sales for the nine months through September grew by mid-single digits, led by strong performances by Jim Beam, Maker’s Mark and the group’s high-end Bourbon range, which includes Knob Creek, Booker’s, Baker’s, Basil Hayden’s and other brands. —Daniel Marsteller