Impact Seminar: Suntory’s Niinami On The Beam Integration; Jackson Family’s Tigner On CaliforniaMarch 16, 2017
In a much anticipated speech at this year’s Impact Seminar, Suntory Holdings Ltd. president and CEO Takeshi Niinami spoke on “Suntory’s Vision For The Future.” Niinami noted that in 2009, Suntory began making a major push with strategic acquisitions in Europe and Asia Pacific. But the biggest move by far was the $16 billion acquisition of Beam Inc.—today’s Beam Suntory—in 2014.
“During the integration, there were fundamental differences to overcome as East met West, such as the Japanese comfort with ambiguity versus the U.S. preference for clarity,” Niinami said. “It was a long journey, but I’m happy to say that we’re well beyond” any potential problems, he added. Niinami credited Beam Suntory CEO Matt Shattock for his role in “blending our differences together.”
“Through ongoing communication and lots of traveling between Kentucky and Yamazaki, we’ve been able to accept, and even leverage, our varying approaches for the better,” added Niinami. Suntory shared the Japanese business philosophy of kaizen—continuous improvement on working practices, no matter how high the status quo. “In turn,” he said, “Beam’s thinking has inspired a more creative mindset in Suntory’s traditional whisky-making.”
A creative mindset was on full display as Jackson Family Wines CEO Rick Tigner addressed the topic, “California’s Booming Premium Wine Market,” and took the Seminar audience through the company’s past and current strategies.
Tigner recalled founder Jess Jackson’s vision for California wine more than a quarter-century ago. “What Jess was discussing back in 1991 was premiumization within,” Tigner said. “He was actually talking about building a Russian River Pinot Noir. I told him I didn’t think anyone knew where the Russian River was. So we’ve certainly come a long way in 25 years. But we still have a long, long way to go.”
Discussing premiumization in the current marketplace, Tigner said the Jackson Family Wines philosophy is all about premiumization through constant upscaling of the mix—a strategy that has proved remarkably successful.
“Distributors and retailers don’t want to take price increases,” Tigner said. “So companies growing their portfolio and their average revenue per case are doing it through mix. We’re selling more Hartford Court, Verite, La Jolla, Cardinale and so on. Our average FOB has gone from $124 last year to $128, and only a dollar of that average was moved on price increases. The other three came from mix.”
Observing that Jackson Family is “not the same company we were five years ago, 10 years ago, or 25 years ago,” Tigner said Kendall-Jackson is now the lowest-priced item in its portfolio. But he proudly noted that Kendall-Jackson Vintner’s Reserve Chardonnay does 2.4 million cases annually and recently got a 91 rating from Wine Spectator. —David FlemingSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.