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Interview, Part 1: Patrick Piana, President & CEO, Stoli Group USA

May 5, 2017

Drinks industry veteran Patrick Piana was named president and CEO of Stoli Group USA in mid-2015. Over the past two years, Stoli Group USA has expanded its headcount by roughly 50% to more than 100 employees, and added Diageo and Moët Hennessy veteran Brian Cox as CMO, among other key hires. The company’s namesake brand has carved out solid growth within a challenging imported vodka category in the U.S. recently, increasing 3% to 1.7 million cases last year, according to Impact Databank. In recent weeks, Stoli also introduced a new flavor range, Crushed, featuring real fruit juice. SND recently met with Piana to see what’s next on the agenda.

SND: The U.S. imported vodka category has been flat to down over the past four years, but Stoli ($20 a 750-ml.) grew by about 13% over the same period. What’s been the key to that performance?

Piana: Stoli Group USA started operating in early 2014 to try and turn around the Stoli brand in the U.S. From 2009 to 2013 our profile had fallen. We felt that it was time to create a company to not only take care of Stoli, but also start establishing a small portfolio of proven brands. (Former Stoli Group USA chief executive) John Esposito began that effort, and did an amazing job. I was then asked to follow in his footsteps and continue the second phase of the evolution of the company. We had organic depletions growth of 5% in 2015, and rose another 3% in 2016, which is pretty good for a mature brand. We’ve been able to keep our price positioning solid. In 2015, we grew without innovation, and in 2016 we launched Stoli Gluten Free, which has had promising early results.

SND: What marketing avenues are you pursuing on the core brand?

Piana: We’ve gone back into TV advertising this spring for the first time in eight years with a two-month campaign conveying the quality of Stoli vodka: “Uncompromising Quality Since 1938.” We’ve been consistent with our quality messaging over the past two years and it has shown results for us. We’ve also been able to reach our consumer bases directly at large-scale events such as Full Moon Fest in New York and the Art Basel concert series in Miami. And in cocktail programming, we increased volume growth of Stoli Ginger Beer by 20% last year by focusing on the Moscow Mule, which remains popular on-premise.

SND: What’s the rationale behind Stoli’s new Crushed flavors, Ruby Red Grapefruit and Pineapple (60 proof/$17 a 750-ml.)?

Piana: We were able to maintain slight growth on our existing flavors last year, even in a difficult market, but I think the simplicity of the Crushed flavors is what will draw a lot of consumers in the off-premise market. You can just add club soda to create a cocktail. Early feedback from distributors has been very positive. In the future we’ll add new expressions to keep consumers engaged. We’re playing our role as a thought leader in the market to raise the bar for the vodka category.

SND: What’s the update on Stoli Elit?

Piana: Elit is one of the few true luxury vodkas on the market. It retails at $50-$60 a bottle, and sells for as much as $600 in nightclubs. In 2014, Elit grew about 15%. In 2015 it accelerated to 30%, and last year depletions were up about 40% to 24,000 cases. Depletions are expected to rise to 40,000-50,000 cases in the coming years. The patience the group exhibited early on in brand-building and consistently executing our luxury strategy towards the consumer and trade partners over time is paying dividends today.

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