Fraser Thornton, European managing director for Distell, talks to Felicity Murray about the South African producer's ambitious plans for expansion and brand promotion in the UK and European markets
Fraser Thornton Distell
As South Africa’s leading producer of wines, spirits and ciders how do you plan to increase your market share in the UK and Europe?
The UK and Europe are important markets for us within our international business and so we need to develop an infrastructure capable of supporting our growth aspirations. Our first step is to bring our customer service and logistics hub for these key markets into the region, this work is ongoing and will significantly enhance our response times and ability to meet overall customer needs. In the UK market we have gone one step further and are building our own commercial structure so we can better engage with our key customers directly and understand how we can add value to their business. Finally we have strengthened our regional marketing team, both in number and capability, to improve our ability to understand consumer needs and to execute our marketing programmes.
All our brands across the portfolio are rooted in authenticity and heritage so we have no shortage of brand stories to tell. Further, by highlighting the quality credentials of our portfolio, we believe we have the right brands to appeal to the European and UK consumer base by offering them clear and well differentiated choices within their price brackets across categories.
What have been the most significant changes for Distell during the past five years?
I can really only talk about changes from the European perspective. Within that context I would say the evolution of the group from a fairly centralised organisation to a much more decentralised, market and customer facing business has been the most significant. That change is quite profound and puts a huge degree of trust in our market facing teams to understand customer and consumer needs. Allied to this we are increasing our marketing investments on a reduced portfolio of brands thereby increasing our focus on key brands and markets.
We relocated our European commercial office to Richmond one year ago and, at that time, we had around eight full time employees in the office. We have more than doubled that number over the last 12 months and also built a UK commercial team so we have overseen a great deal of change from a people perspective. Ultimately getting the right people on board is the most significant investment a business can make when you want to grow a business and we need to work hard to ensure we have a team of creative and passionate advocates for our portfolio of wonderful brands.
Looking ahead, what will be the biggest challenges?
In the longer term our biggest challenge will probably be how we help to drive the premiumisation of South African wine category. All too often a South African wine that is one of the cheapest on the retailer’s shelf across Europe. Not only does this have a major impact on how consumers perceive the category as a whole but it has a detrimental effect on the whole supply chain and this is unsustainable. South Africa is a producer of fantastic quality wines at all price points and we have the range and depth in our wine portfolio to build value for the trade and consumers.
In the short term our key challenge is keeping our focus on the right group of brands which can really make a difference and in working hard to build trust from our committed customer base and distribution partners that we can execute our brand plans. We are very fortunate, particularly in UK where we have relatively low market share in each of our focus categories of Scotch Whisky, South African wine, Cream Liqueur and Cider so growth is certainly achievable. We need our brand growth to translate into value growth for everyone and that will be a key focus for us.
How important is CSR? Do you have any on-going projects in this area?
In recent years, we have worked hard to look after the workers and farmers that support our drinks industry. Distell will continue to work tirelessly to engage and support the farmers who supply us. They are an invaluable part of our community.
The strong moral code that underpins all we do has seen us supporting our local communities around the world as well as the emergence of some really significant initiatives. The Amarula Trust’s conservation work to protect the African elephant and bring to an end the global trade in ivory is notable. We also work with the Quebeka charity supporting
the # Do Your Part campaign. This works by raising money to build bikes at the Nederburg winery thereby supporting local people increasing their mobility by cycling, whether it be to work, school or market. We are always looking to see how we can best support our communities.
Which brands do you see as key to growth in these markets? Is the focus on the on-trade or off-trade? How will you target these areas?
We’ve created dedicated teams to look after retail, wholesale, on-trade and premium sales. They are all important to delivering long term growth and success for Distell but clearly some brands will be more key to certain sectors than others.
I would like to see Nederburg making inroads into our stated ambition of improving the consumer perception of the quality of South African wines, while our Pongracz sparkling wine, made to the highest Cap Classique standards, is a fantastic opportunity to offer consumers an impressive alternative to ever popular, but variable in quality proseccos that currently proliferate the UK market. I think Alto is an interesting brand for UK drinkers as well - Australia has done well out of highlighting its heritage credentials and Alto is well set up to do the same, being the oldest red wine estate in South Africa
Savanna Cider, South Africa’s favourite cider brand, is already performing well in the UK - with its premium look and feel, it’s a natural choice for more aspirational cider drinkers who also seem to be enjoying our serve recommendation of adding a wedge of lemon, tapping into the current trend for personalisation. We see Savanna as a brand ripe for further expansion in this market
Authenticity – really important to today’s consumer - is a key driver in our Amarula messaging. Amaruka is unique it that it is the only cream liqueur in the world to use real Marula fruit as its base spirit. As part of our commitment to ‘giving back’, The Amarula Trust is also dedicated to a cause that is readily embraced and understood by consumers – the preservation of the African elephant and the ending of the international ivory trade.
Whisky is a key part of our offering and we are unique in having the world’s only whisky made from 100% South African maize in Bain’s Cape Mountain Whisky, perfect for both the on-trade and specialist whisky retailers. Our Black Bottle blended Scotch whisky is a blend of Islay, Highland and Speyside malts and grain whisky, creating a distinctively full, rich and slightly smoky serve which makes it an excellent cocktail ingredient. Cocktails are a real driver of consumer experimentation and Black Bottle is a great way to introduce them to whisky based cocktails like Old Fashioneds and Manhattens.
What are your plans for the individual brands?
We will continue to support the Nederburg brand across all major channels highlighting the great product quality and our position as South Africas most awarded wine brand. Our ongoing sponsorship deal with Team Dimension Data combined with the link to the quebeka charity will be at the heart of our activities
Bains is a genuinely exciting opportunity in the fast growing world whiskies market. We will focus on getting consumers to trial this exciting and versatile Single Grain whisky through tastings, where possible led by our Master Distiller Andy Watts
Amarula is a brand with a rich vein of brand stories and heritage. We firmly believe that our liquid on lips strategy will continue the growth of this iconic brand. In addition we will continue to highlight across all channels the strong conservation message led by the work of the Amarula Trust and our links with Wildlife Direct in protecting the African elephant
We have recently invested in a new exciting outdoor advertising campaign fo Savanna across Scotland along with shirt sponsorship of Saracens rugby as well as a raft of other initiatives. We will continue with this to build our unapologetic positioning
Black Bottle has shown strong signs of growth in both on and off trade. We are working hard to build our presence in the premium on trade with strong portfolio based activity, and in the off trade we are focusing on adding value activity
Alto is a key brand as part of our activity to help build the premium image of South African wine. We are using PR, tastings and our new premium sales team to help Alto grow
The sparkling category has grown massively over the last few years and interest is growing massively on Pongracz. We are using sampling and events to help drive this.
Are there any plans for new product launches?
Innovation is a key driver to help grow all of our brands. We have a dedicated New Product Development team who constantly review the latest consumer trends and have introduced things such as our new hop cider, Savanna Cross, a range of limited edition premium Single Malts and we have many other exciting plans so watch this space.
4 December 2017