Big interview: Chris Mason - The master builder

After the buyout of C&C Group’s spirit business, First Drinks boss Chris Mason is sharpening his axe for some giant slaying. Alex Beckett reports

Chris Mason leans forward and slips into a faux Russian accent as he describes his encounter with billionaire vodka baron Roustam Tariko. They first met in 2007 when Mason was trying to plug a gaping hole in his spirits portfolio. The First Drinks boss came away with Russian Standard; Tariko with a distribution deal worth £29.8m [Nielsen] a year in sales.

Now Mason’s using our interview, conducted in a swish Mayfair whisky bar, to perfect another accent… Irish.

Last week, he added the first whiskey Tullamore Dew to First Drinks’ portfolio, cementing the £256m May acquisition of C&C Group’s Irish spirits and liqueurs business and accelerating expansion at what is already the fastest-growing drinks distributor in the UK.

“People ask what is the criteria for bringing in a new brand? I reply ‘I don’t have the accent from that country yet’. It drives my HR director nuts but the Irish brands are very welcome,” he says.

Purely by chance, sitting on the mirrored shelving behind Mason’s massive shoulders are some of the spirits in his expanding portfolio they look like the ranks of the England first XV with their proud manager in the centre.

And Mason has overseen some star performances of late from his 29-strong squad. The team starring First Drinks-owned brands Grant’s, Sailor Jerry, Hendrick’s, Glenfiddich, Three Barrels and a host of stellar names to which the company owns the UK rights have consistently taken sales figures over the try line.

Total off-trade sales value is up 41% to £243m. Glenfiddich alone has jumped 41.9% to £22.6m [Nielsen 52w/e 12 June 2010] while its blended whisky stablemate Grant’s has climbed an even more impressive 61.9% to £78.9m. In white spirits, Russian Standard is up 54.3% to £29.8m, while Hendrick’s gin and Sailor Jerry have received a timely boost over the past 12 months with 43.3% and 347% sales growth to £2.2m and £4.5m respectively.

Other brands distributed by First Drinks include such icons as Rémy Cointreau’s Rémy Martin, Cointreau and Charles Heidsieck and Piper Heidsieck Champagne brands and Ilva Saronno’s Tia Maria and Disaronno.

“I hate the word distributor,” grumbles Mason. “It sounds like you only have warehouses and wheels and lorries. We are brand builders.”

And First Drinks’ success in building these brands, says Mason, has led him to be optimistic about future increases in investment in marketing and innovation from the brand owners.

Mason’s next challenge is to carve out a market not only for Tullamore Dew whiskey, but Carolans cream liqueur and Irish Mist whiskey liquor, all of them added to the drinks cupboard with the C&C deal. Tullamore, of course, is the biggest of the three and strategically the most important to Mason, but currently has a UK sales value of just £230k, way below the First Drinks premier league, begging the question: how fast can Mason whip his new signing into shape?

A clue comes in his observation on the spirits category as a whole. “Historically, the spirits industry has been a bit pompous in terms of the language it uses,” he says. “Language experts might understand words such as filtration and fancy production methods but real language is: ‘this tastes like honey’ and ‘this mixes well with Tesco own-label ginger ale’.”

He believes whisky and the culture that surrounds it need a kick up the backside. “It has been the epitome of tradition and heritage but whisky doesn’t have to be too precious. Why shouldn’t people drink a bottle of fine single malt and stick cola in it? There shouldn’t be such rules.”

Spirits or “liquors”, as Mason likes to call them are the company’s biggest asset and Irish whiskey has been one of the few bottles missing from the portfolio since its inception in 1996, when the distributor formerly known as Teltscher Brothers was renamed First Drinks. A year earlier Bacardi Martini had sold a 50% share in the business to William Grant, who finally bought out the business from Bacardi in 2006.

“At that stage, we were half the size we are now,” says Mason.

And he now plans to set Tullamore at Jameson’s throat in the UK market. But the bigger appeal, he says, is increasing the 600,000 cases it sells a year across eastern Europe, Scandinavia and the US.

“On the global stage we believe there are a lot of legs to Irish whiskey. I’m confident Diageo wouldn’t have bought Bushmills (in 2005) unless it knew there was potential in the market. Our marketing team will now have the forward plan for the brand and will be deciding whether it is capable of being a Monkey Shoulder, targeting younger guys who probably drink Bourbon but don’t feel fulfilled by Scotch.”

Crucially, Tullamore will also give First Drinks critical mass in the Irish whiskey category and reinforce its category management role among the multiples. Over the past three years, the company has joined Diageo as a key category adviser to the big retailers and, at the beginning of the year, it overhauled the single malt fixture of 180 Asda stores to make them more accessible for shoppers.

“Diageo has a fantastic portfolio but we operate across a number of drinks sectors that allows us to act as a trusted adviser to the trade. The retailers found it was helpful to have another operation to sense-check category reviews,” says Mason. “I know this sounds holier-than-thou, but we are really objective.”

The problems facing single malt, he says, are indicative of those dogging the spirits category as a whole. And there’s a veiled warning to the multiples not to go too far in driving volume through price.

“There is sales growth in spirits but it’s artificial and down to inflation, duty increases in March and VAT that went back to 17.5%. Promotional activity is still very aggressive. It’s challenging supporting those deep-cut promos. And that’s an area that, if it contradicts our value-growing strategy, we’d be very cautious about.”

The past three years have seen First Drinks embark on an ambitious sales journey; Mason will shortly be leading his 129-strong workforce on another from the old head office at Southampton docks to a bigger, hi-tech site in Hook, 30 minutes from William Grant’s UK headquarters in Richmond where chairman Charles Grant and the rest of the clan “stump up the money” for new brands.

There are still some holes in First Drinks’ portfolio and more work to do, says Mason. He suggests there could be space for the Brazilian spirit cachaça in the squad, with the 2014 World Cup and 2016 Olympics in Rio de Janeiro providing a golden opportunity, and says he is tempted to roll out the Three Barrels brand into the rapidly expanding premixer category.

Highest on Mason’s to-do list going forward are three of First Drinks’ own brands. Hendrick’s will continue to forge ahead in the gin category while Mason has earmarked Sailor Jerry the main constituent of Sail Away, a potent cocktail using Crabbie’s Alcoholic Ginger Beer dreamed up by the man himself for big things. And then, of course, there’s Tullamore Dew.

But there are other reasons to be keeping a close eye on First Drinks. “Put an outside bet on Russian Standard doing bigger things in the next few years. And there is a baby Bourbon brand I’ve got my eye on,” chuckles Mason. His accent could be taking on a touch of the Deep South in the not-so-distant future.
 

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