Kicking off our June Game Changers section is an insightful interview with Seymour Ferreira, Chairman and CEO of Amber Beverage Group, a part of the SPI Group. Amber Beverage Group unites 1500 employees in eight companies across the Baltics and Mexico, including the leading producer of alcoholic beverages in Latvia an authentic tequila producer in Tequila, Mexico and experienced distribution companies in Estonia, Latvia and Lithuania, a specialized retail chain of 70 shops operating in Latvia and Lithuania and a logistics service company. Here, Seymour tells Finance Monthly all about the company and what differentiates it from its competitors, his role within Amber Beverage and the impact that he’s had on its performance in the past four years.
You joined Amber Beverage Group in 2013 – what were your goals in driving change within the company?
I joined Amber Beverage, which was then called the Baltic Business Unit, to manage a series of independent companies. All of these companies were independently run by their own CEOs, who had their own perceptions on how their company should operate. Although some of our products were similar, the companies did not share any commonalities in terms of business. One of the first things that I did was to understand where we were and what we’re trying to achieve. Immediately, it became clear to me that these companies didn’t share the same vision for the future, or even common values. All the companies were completely different to one another, with different focus, different ambition levels and diverse understanding of performance and measures. Therefore, the first thing we did was connected to establishing a core vision and mission - our organization values. We also worked on spreading common financial and commercial goals, as well as a very clear and structured strategy, outlining how we wanted to operate and become a more profitable and efficient company – one that would be able to sustain growth over the medium and longer term.
How would you evaluate your role and its impact over the last four years?
Change is something that I am experienced in – it is something that I will ultimately bring into any organization that I’m involved with. When I joined Amber Beverage, it was quite apparent to me that the company needed change.
This took the form of legal and structural change from the BBU to Amber Beverage Group, a holding company, which legally brought together all of its business units. This meant that we could support our strategic goal of profitable growth with appropriate organizations, infrastructure, resource and a common language. There were some basic fundamentals that had to be established. One of the first things that we focused on was building a well-founded, international standard corporate structure. Additionally, we also wanted to make sure that we had the right infrastructure –IT systems, common processes and a way of evaluating our performance across the whole business, using revenue management principles as our foundation. This involved closely looking into our organization and its procedures and making sure that we had the right people in finance, IT, and HR, and then, centralizing as many common functions and processes as possible around a core upgrade ERP system.
The overall result of implementing new procedures and processes has made the company much cheaper to run, and has allowed our core businesses, of production and distribution, to focus their energies on running their operations, without worrying about the engine room as much. As a result, we have driven our profit up, while reducing our operating costs substantiality. This has also allowed us to be able to integrate new businesses and brands, which would have been nearly impossible when I first joined Amber Beverage. We have been able to buy the Moskovskaya Vodka brand, a tequila factory in Mexico, a wine company in Latvia, and a shareholding in a UK PLC, which will allow us to extend our footprint and over time, integrate that into our business too.
Overall, I’d say that thus far we have been able to successfully strengthen the core of the business and the company which in turn has allowed us to expand its presence outside of the Baltics.
What further goals are you currently working towards with the company and what is your vision for the future of Amber Beverage?
Broadly speaking, our mission for the future is to double our Ebitda, partly by focusing on making our operations in the Baltics more efficient. These countries’ declining population and rapidly changing tax and environmental situations mean that overall volumes within this market will get smaller in time. However, whilst we will continue to focus on being efficient in the region, we are also focusing on investing in our global portfolio to support our overall goal of driving international expansion. Our recently improved export team and our strategic marketing team are good illustrations of that. Of course, we will also continue to consider mergers and acquisitions in general.
What are some of the challenges that you are faced with as a CEO of Amber Beverage?
The main challenge that we are faced with is making sure that every company that is part of Amber Beverage continues to share the same vision. We are very focused on achieving our growth targets and consumer and client goals, which involves effective communication, regular reviews across all companies and across all markets. So my main day-to-day challenge is to constantly make sure that communication level is kept at the highest, and to be involved with our excellent teams in the details of our key projects and activities. All of this needs to be balanced with the needs of all different aspects of the organization - whether it will be our retail business, logistics business, production business, distribution, etc.
We are still trying to grow our top and bottom lines, in the rapidly changing environments in the Baltics, where recent changes to legislation and taxation are putting pressure on our production and distribution companies and which is something that we are continuously having to evolve around, without losing our core ambition to deliver excellence in everything we do. In America and Mexico, we have the challenge of increasing prices of raw materials and goods, whilst still meeting customer expectations. This means having to be ready to review, evaluate and change within our core strategy all of the time, having a team capable of this is part of any leadership challenge.
As I mentioned before, it is part of our mission to deliver excellence in whatever we do and that flows through the whole organization. As a CEO, you have to keep your eye on the numbers, you have to make sure that all those projects and plans are delivered against the time table, but you also have to make sure that your whole strategy is consistently being delivered.
Amber Beverage is the largest player in the alcohol industry in the Baltics – what differentiates the company from its competitors? What do you do to ensure that you are one step ahead of other beverage companies in the region?
Our strategy in the past 2-3 years has been very clear – our goal is to grow significantly, to be internationally recognized, but also to grow our base, our profitability, and our capabilities way beyond our local borders – the first thing that differentiates us from our competitors. The second is that in our production business, Latvijas Balzams, where we are proudly able to trace our expertise back to 1752 (the year when the Riga Black Balsam bitter was created) and have been manufacturing on the same sight at Caka Street for over 110 years. We have the highest standards of quality and production execution, illustrated perhaps more eloquently by the Stolichnaya Brand.
Thirdly, we take big leaps - we are the first Baltics Company to invest in Mexico - not only in the beverage industry, but also in any industry. It was a big, bold move, which perfectly highlights the kind of company that we are. What truly differentiates us from our competitors is the fact that we think very broadly, very internationally, and that we are constantly looking at how we can improve everything that we do. That means not only bringing new talents in, but building in-house talent through training and development. We have a substantial portfolio and we are able to manage it because we have exceptional people, exceptional processes and a really well-developed support structure. This combinations means that we can outperform, outpace and outcompete our competitors, in most cases. In Amber Beverage, there is a constant improvement – we never stay still.
The first Game Changer that Finance Monthly talked to this month is a CEO with a proven track record in FMCG businesses, former FTSE 100 Director and an international working experience. Stewart Hainsworth has been the Chief Executive Officer of the largest independent drinks company in the UK by volume, which manufactures and sells in 88 countries across the globe – Halewood Wines and Spirits, for nearly two years. In his interview with us, Stewart tells us more about the company that is famous for its Lambrini and Crabbie’s Ginger Beer brands and his vision for its future.
Could you tell Finance Monthly more about Halewood Wines and Spirits and its ethics?
Halewood Wines & Spirits is the UK’s largest independent alcoholic and non-alcoholic drinks manufacturer and distributor. The company’s goal is to create a unique portfolio of craft products with strong local provenance in the beer, wine and spirit categories whilst providing the trade and consumer a point of difference from mainstream brands.
Halewood is expanding and now employs over 1,000 people worldwide, more than 50% based in the North West including 325 employees at its Liverpool Gin Distillery Headquarters, a thirty-acre facility based in Huyton, Liverpool, capable of producing 20m cases. Halewood’s executive team also benefit from the company’s London office in Mayfair.
The business remains family-owned since its creation by local entrepreneur, John Halewood in 1978 and has retained an active role in community-related activity, sponsoring local and national sporting events and raising stars in boxing and motor racing.
Halewood is a medium-sized company and modest compared to its large international competitors but it continues to “fly the flag” for the UK drinks industry internationally, with operations in Romania, South Africa and China. The company exports in over 90 markets worldwide, including significant volumes in North America and Australia.
Halewood provides full manufacturing capability from distilling, bottling and distribution of craft brands at different price points including Liverpool Gin and Vodka, Whitley Neill Gin, Willow Mineral Water, Hyperion wine, Hawkshead Windermere Pale, Crabbie’s Alcoholic Ginger Beer, Lambrini and Red Square Vodka. Liverpool Gin Distillery works in conjunction with H&A Prestige (a Halewood subsidiary based in Chorley) that is a specialist bottling operation providing the industry a range of innovative bottling and packaging designs for both its alcoholic and non-alcoholic brands.
The UK domestic business accounts for 45% of profitability with a growing presence in the supermarkets, small shops and Horeca (Hotels, Restaurants and Catering). The company is focused on growing core brand exports, whilst driving sales for its Agency brands: Tequila Rose, Carlsberg, Lheraud and Tsingtao through its international operations.
Halewood demonstrates a genuine commitment to communities in its brand activities. 2016 was the third year of Crabbie’s sponsorship of the Grand National, and signifies Halewood’s continued association with Aintree, dating back to the 1990s. As well as providing an unrivalled platform to promote and sample Crabbie’s Alcoholic Ginger Beer, the sponsorship has allowed Halewood to support the prime event of the Liverpool sporting calendar.
Crabbie’s is supporting rugby at all levels of the game throughout the UK – from sponsorship of Scottish and Welsh Rugby Union, St Helen’s Rugby League, through to supporting local players and clubs at grassroots level. The company also supports local community activities including Liverpool Football Club Foundation, Glacial Art – a company taking part in the World Ice Art Championships in Alaska – and sponsorship of Declan Jones, a racing driver from Merseyside.
What have been Halewood’s major achievements in 2016?
2016 was a challenging and busy year of re-focusing and acquisitions and it’s paid off. Halewood reported strong financial results for 2016. The business returned to growth with a profit after tax of £1.7m compared to a loss of £9.5m in 2015.
The positive results follow a restructuring of the business, focus on core brands and rationalisation of non-performing brands in conjunction with a rapid inorganic growth strategy to improve the product portfolio. The introduction of a new highly-experienced spirits focused senior team helped develop the strategy to put premium craft products at the helm, alongside substantial investment in distilling, manufacturing, brand marketing and distribution.
The results of the new strategy are paying off. In 2016 the business launched a significant number of new brands, including Marylebone Gin and the J.J. Whitley range of gins and vodkas, which are inspired by the British countryside.
Development of new products also includes the expansion of the premium Whitley Neill range, with a Blood Orange Vodka “a quintessential Sicilian flavour”, Quince Gin, “the first in the UK” and Rhubarb and Ginger gin to build on gin’s huge popularity with consumers.
The success of these products has resulted in further investment in the Huyton facility, where the whole range of Whitley Neill will be produced and bottled in the near future.
Demonstrating continual improvement, existing brands including Red Square, Belgravia, Admiral Benbow and Jules Clairon have been revised too.
A number of Halewood brands won industry awards, including at The Grocer Drinks Awards, where Crabbie’s won the ginger beer of the year category alongside the Hot Brands award achieved in the USA. West Cork Distillery was voted best craft distillery in New York with its West Cork brand and Rum Sixty Six won a Gold award at the Spirits Business awards.
Could you tell us about any successful deals that Halewood has been involved in?
Halewood Wines & Spirits has made several major acquisitions in the recent past, including the purchase of a major stake in West Cork Distillers, to jointly develop and distribute its innovative Irish whiskey portfolio throughout domestic and international markets.
Halewood has purchased joint ownership of The Pogues Irish Whiskey, a joint venture with the iconic Celtic punk band and the business has also acquired Rum Sixty Six, a premium Bajan rum.
Most recently, Halewood made a significant investment in Hawkshead Brewery in the Lake District, as the business moves into the craft beer category for the first time and further strengthens its presence in the North West.
Another significant recent acquisition for Halewood is the super-premium organic craft spirit, Liverpool Gin. Liverpool Gin has been transformational for the business culture and direction in the business strategy. It has encouraged the whole workforce to engage with the brand and be proud of what they create.
Liverpool Gin has stayed true to its roots as an organic gin that is distilled and bottled in Liverpool driving significant investment in the Merseyside site, with new stills and specialised spirit bottling lines.
To capitalise on increasing consumer interest in “drinking less, but higher quality products”, Halewood has expanded the Liverpool Gin brand by launching the Liverpool Collection – a craft spirits range which includes Liverpool Gin Valencian Orange, Liverpool Rose Gin and Liverpool Vodka, as well as special editions of Liverpool Gin Distillers Cut, a 16-year-old Trinidadian rum and a 12-year-old whisky.
The launch of the Liverpool Collection has allowed Halewood to form a partnership with one of Liverpool’s most iconic names – Liverpool FC. The partnership with Liverpool FC creates a platform for Halewood to expand its presence and brand awareness within international markets, in association with one of the largest brands in world football.
Halewood’s latest strategic investment is in The City of London Distillery, the only gin distillery in London’s Square Mile. The deal will enable the micro-distillery to further capitalise on the gin renaissance by gaining new routes to market, as well as reinforcing Halewood’s firm focus on premium craft spirits.
The acquisitions have strengthened Halewood’s product portfolio in priority categories of craft beer, Irish whiskey, gin and vodka.
Looking into the rest of 2017 and beyond, what does the future hold for the company?
Halewood Wines & Spirits will remain focused on driving sales of core brands on a global basis, whilst further investing in craft products in new and existing facilities. The company wants to move closer to the consumer and develop new channels and routes to market. Engaging with the customer is important in the evolution of the company to identify new trends.
The company will continue to invest in liquid development, particularly through its Liverpool Gin Distillery, Hawkshead Brewery, Aber Falls Distillery and pending plans for a new John Crabbie’s Distillery in Scotland.
Halewood's export drive will be championed by notable brands including Whitley Neill Gin, The Pogues Irish Whiskey and Liverpool Vodka, with consumer marketing support through key export markets.
The Liverpool Collection is a key aspect of this activity, both in terms of increasing listings of the Liverpool Collection brands within the UK On Trade, but also seeking out opportunities to promote the city’s brand wherever possible.
Halewood will be weaving the brand story of Liverpool into its marketing campaigns – the launch of Liverpool Rum within the collection provides Halewood with a platform to tell the story of Liverpool, the docks and the city’s history with rum.
The partnership with Liverpool FC has only just commenced, so we are looking forward to deepening this relationship. Halewood’s sponsorship of the Liverpool FC Foundation will undoubtedly generate further opportunities for community engagement.
Halewood will continue to support local businesses and initiatives – as the headline sponsor of the British Style Collective, which takes place in Liverpool, and supporting the Liverpool Summer of Love event in its 50th anniversary this year.
Halewood also plans to be putting greater emphasis on the strong provenance of its North West based brands, such as Willow Water and Hawkshead Brewery, in order to strengthen their appeal and drive further growth.
The Aber Falls Distillery will start to come to fruition, and Halewood has plans to launch a visitor centre, tours and distilling classes to engage consumers.
Halewood expects to see consumer interest and growth in premium spirits to continue throughout 2017, so hopefully our spirit brands to remain relevant and popular.
Consumers have developed a keen interest in craft distilling, and Halewood will also be exploring opportunities to allow smaller businesses to access the market through our portfolio offering.
Last but not least, Halewood expects rum and Irish whiskey to grow in popularity this year, and the business is well-placed to take advantage of these trends, through the expansion of the Rum Sixty-Six range and further Irish whiskey distribution in collaboration with West Cork Distillers.
Email: stewart.hainsworth@halewood-int.com
Halewood Wines & Spirits
The Liverpool GinDistillery, Wilson Road, HuytonBusiness
Park,
Liverpool, L36 6AD, UK
0151 480 8800
Website: www.halewood-int.com
