Clear designs
Steven Bullock: Poland is an interesting market in the context of Moët Hennessey. We have a diverse portfolio - mostly champagnes, world-leading brands, market-leading brands. But, why Poland? Poland represents an interesting opportunity in terms of spirits. If you look at Asia, it is a spirits market; Australia, more of a wine and champagne market; the States and the rest of Europe, generally speaking, also champagne and wine markets.
However, the further we move east in Europe, culturally speaking, the more it becomes a spirits market. Consequently, we have Belvedere vodka, which we classify as a luxury vodka. You can go into any retail outlet and you will see a plethora of vodka. From a statistical point, the vodka market here in Poland is 35 million cases [annually], which translates to a bottle per person per month. When you take that into context, that's a lot of vodka. Therefore we have the opportunity to take our luxury brand-building experience and relate that to luxury spirits. Based on the economic fortune and economic rise of Poland, we certainly see that our targeted approach to grow Belvedere into a strong luxury brand will work.
What motivated your company to finally enter the Polish market?
The motivation behind our entry was to take advantage of the economic opportunities that have been seen and that are being experienced in Central and Eastern Europe, particularly being led by Poland. We can certainly see that in the economy, the strong złoty, the value of the Czech crown. Clearly, this part of Europe is economically robust.
Hennessey Polandset up business here on April 1 of this year; previously the brands were being distributed by another distributor. The decision was made to invest in local expertise and to do the job ourselves. A fully fledged sales, marketing and distribution network has commenced as of three or four months ago.
The luxury vodka market in Polandrepresents just five percent of total vodka sales. How hard was it for Hennessey to break into the market when there is such a wide variety of less expensive vodkas?
It was a challenge without a doubt, but that's what Moët Hennessey has managed to do very well in terms of our marketing strategies. We don't want to target the entire market. We are after less than five percent of the market. How do we encourage a consumer to pay four times the amount of a regular, everyday vodka? Poland is vodka saturated. [Therefore] we give the Polish people a good reason why they should be purchasing Belvedere vodka and not be shopping purely on price.
The main obstacle for the food industry as a whole is price growth. How is Hennessey dealing with this issue?
Through our value price strategy we are trying to offset the price. Of course, over time, price increases are necessary; however, we expect prices to remain stable when it comes to our vodka.
Are your Polish vodkas sold primarily as export brands?
Absolutely, Belvedere is a global brand and there are a couple of key markets in the world, with the US being clearly one, as well as the UK and Australia, where there is a strong vodka culture and a strong cocktail culture.
What percentage is exported?
Sales here in Polandare small compared to the total export sales, considering that the US is a very large market per capita. However, we intend to change that. The potential here in Poland to grow a homegrown brand is very strong.
With the strong złoty, are exports less profitable?
Ultimately, each business unit around the world is measured in local currencies. At the moment, the appreciating of the złoty is benefiting us, which is very positive.
Luckily, Moët Hennessey has a very broad distribution network around the world. What does that mean when we have interesting economic times like now? Our risk is minimized. [Results] have shown a six-percent organic growth globally. So while there are challenges in the US and Japanese markets, that is offset by strong growth in Asia, China, Russiaand in Central and Eastern Europe.
