This interview was published for Global Drinks Intel subscribers in September. For details on how to join them, click here.
Earlier this month, Campari Group commenced preparations for the departure of CEO Bob Kunze-Concewitz – the latest company to bid farewell to its head this year, alongside Beam Suntory, Carlsberg, Diageo and Stoli Group. Global Drinks Intel editor Olly Wehring sat down with Kunze-Concewitz late last week.
Global Drinks Intel: You’re leaving, after all this time! Why?
Bob Kunze-Concewitz: There are two essential drivers. One is my strong belief that top managers should leave when they’re in their prime and not when they’re losing their edge. The company has never been in better shape; the brands are doing great, the portfolio has become fantastic, we’ve built route-to-market and we have a great team. If there’s a time to leave, this is the time.
The other thing is I’ll be 57 by the time I retire, and I’ll have been CEO for 17 years. The average longevity of a CEO is somewhere between three and five years! I’ve had all the satisfactions one can have, both professionally and financially. My wife and I told ourselves we probably have another good 15 to 20 years ahead of us, so let’s make the most of it. We might as well benefit from what we have now as opposed to delaying it by five years. It really saddened me what happened earlier this year to one of my dear peers.
GDI: Do you think there’s a correlation between [Diageo CEO] Ivan Menezes’ passing in June and the relatively high number of beverage alcohol CEOs stepping down this year?
BKC: I don’t know. I’d taken the decision to retire before Ivan passed away but clearly that reinforced my conviction that it’s the right thing to do.
GDI: The group’s share price took a tumble following the announcement. Is there any satisfaction to be taken from this?
BKC: Yes and no. A large part of my income is implied in Campari’s shares, so I’d rather see it move north than south! There’s also a sense of guilt – we’ve got a broad employee stock ownership plan, so I don’t feel good about making my colleagues 5% poorer.
The shares will recover over time. There’s continuity in strategy, in the management team, there’s a great successor and a long-term oriented majority shareholder. I have no qualms.
GDI: How do you compare the company you joined with the company you’ll be leaving [as CEO. Kunze-Concewitz will remain on Campari Group’s board of directors]?
BKC: The thing I’m most proud about is that even though we’ve tripled the size of the company in that time, we’ve managed to maintain and strengthen the entrepreneurial culture, the family feeling and the strong belief among all our ‘Camparistas’ that they can make a difference.
That’s the raw material with which we started and it’s great to see we still have that.
Beyond that, everything has changed. We had five in-market companies, but they were individual silos. The Campari brand had five different positionings across the world, and it wasn’t going anywhere. Skyy was growing with the [vodka category] dynamic, and that enabled us to finance a lot of things. Aperol was at its very beginnings in Italy. We didn’t have capabilities or sophistication in channel and customer marketing, in finance, in supply chain or in IT.
Today, we’re probably best-in-class organisationally, across all of our functions. We’ve got 23 in-market companies doing roughly 95% of our sales. The strategy’s still the same – half organic growth, half by acquisitions. Clearly, the return-on-investment on acquisitions today is a multiple of what it would have been, because we control the route-to-market and we have the capabilities to really drive the business forward.
GDI: Which inorganic transactions stands out?
BKC: I would have loved to claim that I did Aperol, but I arrived 18 months later! But, building the Aperol growth model and driving it internationally is one of my biggest satisfactions. The brand has grown almost 30-fold and wherever you go in the world, you see Aperol and it keeps on growing. It’s great to see that it’s still growing double digits in Italy, for example.
The second biggest satisfaction for me comes from the Campari brand. I was recruited as CMO to turn around Campari. Today, it’s twice as big as it was but most importantly, it’s a fresh, aspirational, premium brand.
In terms of our acquisitions, it has to be Wild Turkey. Buying Wild Turkey was about getting into the Bourbon category before it took off – at a [EBITDA] multiple of 12x, which was incredible. It was a great brand with great liquid, but very dusty and the pricing wasn’t all that great.
If you look at it now, what we did with repositioning it from a pricing standpoint via innovation, it’s a completely different brand. We’re a bit limited by the aged liquid that’s available, but hopefully, we’ll be able to have more space in the years to come. Wild Turkey is a brand that could do a lot more than it does.
Last but not least, there’s Espolon [tequila]. We actually bought the distillery so that we could guarantee a standard quality for the Cabo Wabo brand. The US marketing director at the time, Umberto Luchini, told me there was this little brand called Espolon. We looked at it and it was this typical, tourist-kitsch brand, with great liquid that was winning lots of medals, but the imagery, the storytelling and the packaging were absolutely terrible.
Credit has to go to Umberto, who did a phenomenal job recreating the brand out of nowhere. Espolon is now as big as brands that were bought for more than US$1bn from celebrities – and we built that organically.
GDI: I look back at your acquisition of Bulldog with fondness, having met the founder, Anshuman Vohra, only a few weeks prior to the transaction.
BKC: That was a good one. Unfortunately, the category has gone in the wrong direction. Gin has turned almost into wine. There’s such a proliferation of brands and SKUs that the consumer is totally confused.
GDI: Speculation has been rife of late that the group has been lining itself up for a sizable acquisition in the near future. Wouldn’t you like to be at the forefront of something really big?
BKC: What we’ve been doing is preparing the group not only from a financial structure perspective, but also from an organisational perspective. We’ve built a scalable model and capabilities. Now, we can really handle, absorb, integrate and then manage something transformational. I’d love to do that, but it takes two to tango.
Having said that, I still have six months left, so you never know.
GDI: How would you frame your legacy, both internally and externally?
BKC: I think the biggest legacy has been building a team of high-performance ‘Camparistas’ who are really passionate, dedicated to the business and have the strong entrepreneurial urge.
We’re also much more international – today, we’re a true multinational company. In our headquarters [in Milan], we have 33 nationalities. When I started, there were three – one Austrian, that’s me, two French and the rest were Italian, and they were mostly Milanese! Campari has definitely turned into an inclusive multinational company, and I think that’s the biggest legacy.
GDI: What do you plan to do once you step down? Will we see you with your own spirits brand?
BKC: No, I don’t think so. You and I could have lunch more often, though, because we’re moving to London! I have a few board positions with very interesting companies, so I might add to them. I’m also staying on Campari’s board, and that’s about it.
I’m toying with the idea of going back to school. I have a passion for history – particularly World War II – so I’m looking into what’s on offer.
This interview was published for Global Drinks Intel subscribers in September. For details on how to join them, click here.
