FRIDAY INTERVIEW: Anna Malmhake, chair and CEO of Irish Distillers
A LITTLE over three months since taking over as chairman and chief executive of Irish Distillers Pernod Ricard and Anna Malmhake is still getting to grips with how we use the English language.
“What is a dollop?” asks the Swede innocently of a colleague after I had requested a cup of tea with a generous helping of milk.
"It's more than a drop," came the reply, as if from a sketch in Fawlty Towers. "Oh, OK. I will have a drop," a bemused Malmhake replies.
“This is a new word for me,” she says with a smile in her fourth-floor corner office on Simmonscourt Road, which overlooks the RDS showgrounds.
“People will say something to me and I will stare at them blankly because I just don’t know. But I guess that’s what you expect of a foreigner.”
In the end, we were given a jug of milk to share with a large pot of tea.
We’re meeting at the same time that Minister for Public Expenditure and Reform Brendan Howlin is delivering the budget speech part one. Michael Noonan’s the following day was of more relevance to Malmhake (its pronounced Malm-hock-yeah) with the rise in VAT to 23 per cent effecting the price of booze in pubs and the off trade.
Malmhake was remarkably calm about the tax rise, especially as alcohol sales have been in reverse here throughout the recession with the pub trade devastated.
“Of course it’s not the greatest news,” she said. “In any business you just have to adapt to the environment. In whatever climate you’re operating in, it’s about having the products that people want and enjoy, and find worth the price, higher VAT or not higher VAT.”
Malmhake is also unfazed at the prospect of a likely uptick in cross-border shopping following the tax rises.
“I come from Sweden and that’s probably the area of the world with the most cross-border trading,” she says. “People drive all the way down to Germany to buy alcohol. It’s incredible. They take minivans to Germany for the only purpose of buying alcohol and then they go back.”
“It might happen [here]. But the budget is very new now and there’s no scenario of exactly what we think will happen. Political decisions are political decisions and you continue to do your business.”
Fortunately for Malmhake, Irish Distillers’ difficulties in its home market are far outweighed by the success of its brands overseas, notably Jameson. The brand is flying, particularly in the United States, where it last year achieved double-digit sales growth in each of the 50 states. By contrast, sales in Ireland rose by 4 per cent.
The US now accounts for more than 1 million cases of the whiskey annually. Irish whiskey has become sexy in the US.
This success has spilled over into the current year. In the first quarter, the volume of Jameson sales rose by 23 per cent. In value terms, the increase was 29 per cent. Irish Distillers shifted 3.4 million cases of Jameson in the year to the end of June 2011 and is targeting 9 million by 2020. It’s a bold strategy.
To keep pace with demand, it has unveiled plans for a €100 million expansion of its distillery in Midleton, Co Cork and a similar investment in extra warehousing. The new distillery will generate 60 new jobs when complete and 250 during construction.
“This is about meeting demand,” Malmhake explains. “When you are in the whiskey industry you can’t just think one year ahead. There are no short cuts .
Malmhake is also keen to stress that Jameson is more than a one-trick pony. “It’s not just in the US we’re growing,” she says, noting that Jameson is sold in 120 different countries. “It’s growing in Russia, it’s growing in South Africa, in Mexico. The brand can go almost anywhere right now.”
The strategy is simple. Target a city for growth, focus on the hip pubs and nightspots, and lovebomb bartenders to act as its frontline sales force. If you get the mix right, the brand can go viral in a country. The US has proven this.
“Sao Paolo [in Brazil], for example. It generally kicks off with the trendiest bartenders adopting the brand and goes on from there.”
Some bartenders become especially intoxicated by the brand, according to Malmhake. “They even go so far that they tattoo the crest on the bottle or the motto, or the bottle on their bodies. Especially females.”
Bizarre. It’s a trend that has yet to catch on with Irish bar staff.
Malmhake’s long-term goal is to make Jameson one of the top 10 spirits brands in the world. It is currently number 29. “In the past few years it’s been climbing that list with two or three jumps each year so it’s not as ‘out there’ as it might sound. Personally, I think it is very realistic.”
It’s not all about Jameson for Malmhake. The Irish Distillers portfolio also includes Paddy, Powers, Green Spot and Redbreast whiskies; Huzzar vodka; and Cork Dry Gin, for which the Swede has a particular soft spot.
“I think it is a little bit of a hidden gem. We have to think how we handle that one. I think it’s worth some attention. It’s a lovely product. I like gin.”
She believes the other whiskies are a “potential goldmine in the portfolio”.
“I have seen the look on people’s faces when they try Redbreast for the first time. In Stockholm, whenever we put Redbreast out, it disappears by the day after.”
This is a long-term project, she adds. “It’s not that Paddy or Powers will be everywhere tomorrow.”
She also wants to play her part in growing the Irish whiskey category, which at 5.5 million cases a year continues to operate in the shadow of the Scottish equivalent, which shifts about 80 million cases annually.
“That annoys me because Irish whiskey is so much better,” Malmhake says.
Malmhake is a career marketeer and has worked for some of the world’s biggest consumer brands.
She started in 1991 with Proctor Gamble, doing consumer research and market analysis. After five years there, she joined Coca-Cola in Stockholm.
“It’s another brand with a strong heritage that manages to remain cool 150 years after the launch.
“I’m still a very loyal Coca-Cola drinker. I think that Diet Coke is very appropriate for breakfast,” she says giggling.
In 2001, she joined Motorola to work on marketing its mobile handsets. This involved stints in London and Chicago before Malmhake returned to Sweden in 2003 to become chief executive of a local consultancy called Temo.
Her job was to whip it back into shape so that the owners could sell it on. This took just three years after which Malmhake had a short stint with Coca-Cola’s Swedish bottling arm. After about a year in that role, Malmhake got a tap on the shoulder from Swedish vodka maker Absolut, which was then state-owned.
“Absolut was about the only brand I would move for,” she explains.
Its subsequent sale to Pernod Ricard opened up a whole new dimension to her career and she was in Paris earlier this year when the call came to succeed Alex Ricard as head of the Irish business.
Malmhake also sits on the executive board of Pernod Ricard, a clear signal of Irish Distillers’ importance to the French drinks giant and the potential that exists for Malmhake’s career.
“When I got the offer to take on this job I was overjoyed and when I talked to friends all over the world they were saying that’s the absolutely most cool job they could think of.”
On coming to Ireland, Malmhake was surprised to find that there wasn’t quite the same buzz here around Jameson and Irish Distillers as there is abroad. She finds us almost blasé about the success of the brands.
“When I talk to people in Ireland I don’t get the same reaction ... people are unaware of the brand and how incredibly cool it is in certain parts of the world. Perhaps it’s because it’s something they’ve seen for a long time.
“It reminds me a little bit of the situation of Absolut in Sweden. They were completely unaware of the success and the iconic status of the brand.”
Absolut and Jameson share many characteristics. Both are enjoying strong double-digit growth and are being heavily backed in marketing terms by Pernod Ricard.
Does she feel the pressure of having to maintain Jameson’s strong growth projectory? “It’s a little bit scary, of course it is. That is okay.”
In the context of international transfers, she describes her move to Ireland as a “breeze”.
“I even have HM,” she jokes. “It’s a gorgeous place to live.”
Her 18-year-old twin sons are in their final year at school and are considering applying to universities in Dublin.
“We’re working on understanding how they might apply. A lot of people are mentioning Trinity.”
Her secret “passion” is console gaming and she often plays online with her sons. Car races and strategy games are her favourites.
Which console does she have?
She pauses before bursting into laughter. “I have all of them. I have so many computers networked that even my sons say I have gone overboard.”
Malmhake is friendly and fun which are useful characteristics for the head of an international spirits company. She usually hits about half a dozen pubs or clubs each week to test the market and try out venues.
“I’m a ridiculously lucky person because I have a business reason to go to look at these places.”
Malmhake is at the start of what she hopes will be a long journey with Irish Distillers.
“I would be very happy to have this job until I retire because there are so many things going on. You see the expansion and what’s happening to the brands. I just consider myself to be very lucky to be in this situation.”
It’s a good answer but you can’t help feeling that the Swede hasn’t arrived at her final destination.
On Jameson
[It] was roughly four years ago ... I had been fond of certain whiskies in the past and then I tried Jameson and it was impossible not to fall in love with the product
First alcoholic drink
A sweet liqueur that my mother offered me when I was 19. It didn’t impress me very much. I think the first drink that I enjoyed was white wine
How she drinks Jameson
This might be a Swedish habit but I like it neat. I like it on the rocks too but my absolute favourite way of mixing it is with ginger beer
A typical Jameson drinker
They tend to be 25 to 35. They tend to work in creative fields or work in hi-tech. They are very modern. They are into bicycles and cinema but not blockbusters
Marketing success secret
It was at P&G that I learnt one thing: if the product is not good, there is no amount of marketing that will ever make it good
Vodka or whiskey?
Oh, I am a whiskey drinker and I drink vodka too from time to time
ON THE RECORD
Age: 45, on December 21st
Family:Twin sons, aged 18
Lives:Ballsbridge. Also has home in Stockholm
Hobbies:"I like to read a lot"
S omething we might expect:"I am still in the learning phase with Irish expressions"
Something that might surprise: She "loves" playing computer games
