Beam Suntory CEO Albert Baladi recently spoke at the 44th Annual Impact Marketing Seminar. He outlined how Beam Suntory is becoming a purpose-driven spirits company that is Growing for Good, and how inspiring it is to be part of an industry that shares so many common values and a commitment to doing the right thing. Listen to the speech recording or view the transcript.
Hello. It’s an honor to be here today for the 44th anniversary of Impact.
A lot has changed since the first Impact Seminar.
The way we communicate has changed.
The way we buy things has changed.
The way we drive has changed!
So much has changed.
But one thing hasn’t changed… Marvin!
What’s clear is that consumers’ expectations of companies and brands have dramatically changed from what they were 44 years ago, or even 4 years ago. And now business is changing in response!
Put simply, consumers want companies to “Do Good.”
According to a recent survey, “73% of respondents agree that a company can take actions that both, increase profits AND improve conditions in the communities where they operate.” A 9-point increase from two years ago!
Earlier this year, Larry Fink turned BlackRock’s investment strategy on its head.
He declared, “We believe that sustainability should be our new standard for investing… Ultimately, purpose is the engine of long-term profitability.”
So, against this backdrop, you’ll hear from me, and then Claudia Schubert from Diageo, about how our companies are navigating this landscape.
We are fortunate to be part of an industry where so many players, across every tier, are doing so much good already… and where we can collectively do even more!
At Beam Suntory, our vision is Growing for Good.
This vision is firmly rooted in our belief that growth should be inclusive… meaning that we can grow as a profitable business AND do good for the world!
This vision was inspired by our parent company, whose mission is to “Create Harmony with People & Nature.”
This authentic core belief – and how Suntory lives it – is one of the reasons Suntory is among the most admired companies in Japan.
So, I will unpack what Growing for Good means at Beam Suntory, underpinned by our three critical strategies: Premiumization… Scale… Purpose.
Let me first speak about growing…
I will start with a story of a young wine wholesaler, Shinjiro Torii, who had a big dream: to create the first Japanese whisky.
Shinjiro pursued his dream against the advice of his family and friends. In 1923, he built Japan’s first whisky distillery, Yamazaki, and 6 years later, launched Suntory whisky. The brand was not a success!
However, Shinjiro was determined. He spent several years refining his product to suit the Japanese palate.
Finally, in 1937, 14 years after he started the distillery, Shinjiro launched Kakubin Suntory Whisky.
The brand took off… and the rest is history!
Shinjiro coined this attitude Yatte Minahare, which in Japanese means ‘Dream Big – Go After It! Yatte Minahare has become a core value for us.
We’re applying this attitude to capitalize on our growth opportunities, reflected in our 2030 goals:
Above all, we aim to build premium brands of scale that consumers love!
Brands that consumers love because they’re timeless, aspirational and relevant. Brands that will command a premium!
We are privileged to have brands steeped in history, that measure their heritage in centuries.
These brands have endured and sustained because their DNA – their timeless elements – have remained clear and consistent.
The very essence of our brands begins with the blessings of nature, which through the beautiful craft of our teams is transformed into unique liquids.
We know there is magic when we blend quality at every touchpoint, with storytelling. We call this Monozokuri, which means quality, and Monogatari, which means storytelling.
So, we make it a priority to deliver quality that represents the style, taste and sensory aspects that our founders created. We also make it a priority to tell the history and living stories of these brands!
This means recognizing the roles of not just of our master distillers, but our founding families. Which is why “Legacy” is another one of our core values.
We are privileged to have founding family members working alongside us. They embody who we are, and ensure we capture the pioneering spirit and legacy of our founders.
Our founding family members are an integral part of our family. Nurturing and sustaining these relationships give us clarity, guides our direction, and strengthens the backbone of our company.
And the same holds true for many of our friends and partners in the distributor tier.
One of the admirable traits of this industry, is that we ALL “stand on the shoulders of giants!”
The importance of Legacy has informed the evolution of our global Operating Model.
We have recently created seven brand houses that are anchored in our distilleries and brand homes. The houses will drive the premiumization strategies and management of our brands, from seed to sip.
The commercial regions will be the link to our customers, and will ensure executional excellence in the markets.
We know this model has worked well for other companies, and we’re excited about the premiumization journey we’re on.
Now as we grow, we’re also committed to doing good.
And doing good starts with people and building a more Diverse and Inclusive workforce.
I spoke at the outset about some of the things that have changed in the past 44 years. Well, this is an area where our company has not changed fast enough.
We know that companies that tap into the diversity of their people and create an inclusive environment, are the most innovative and the best performing.
It’s the right thing to do – and part of the legacy I wish to leave at Beam Suntory.
That’s why I’ve taken the CEO Action Pledge and publicly shared our company-wide targets:
It’s a long road ahead to achieve these goals, but we’re determined to be progressive in this space.
For example, last year, among many other initiatives, we introduced more flexible workplace policies. We also expanded our parental leave benefits to 26 weeks of paid leave globally.
Our people are also passionate about giving back to society and protecting nature. This is another core value for us.
Our social responsibility platform is built on 3 pillars:
With respect to the environment, we’re making progress on our sustainability targets by:
Water is the lifeblood of our products, so we take watershed conservation very seriously.
We have watershed protection activities in Kentucky, St. Croix, India, Mexico, and Spain… With more to come this year to Scotland, Canada and Ireland.
We have also established two Natural Water Sanctuaries in Kentucky that were inspired by Suntory’s actions in Japan. We have one at Maker’s Mark, and the other on the grounds adjacent to the James B. Beam distillery.
Take a look… [video plays]
We’re also expanding how we give back to our communities. Last year, we launched Together for Good, our first annual global day of service, which involved teams from 55 markets – many supporting local water-related initiatives.
Of course, we’re not the only company doing this. Pernod Ricard’s annual Day of Service drew 19,000 employees last year. Very inspiring!
Another way we give back to our communities is by helping to sustain the future of our industry.
So, we partnered with the University of Kentucky. Together, we established the James B. Beam Institute for Kentucky Spirits to develop the next generation of distillers and specialists.
We’re also helping develop pathways for certification in mixology and bar management, in partnership with City Colleges of Chicago.
Just the other week, we saw a commitment from Bacardi to the Chaplin School of Hospitality and Tourism at Florida University.
So as you see, the countless ways our industry gives back are incredible. This includes the wonderful philanthropic work of Marvin and the Shanken Family Foundation.
One of the amazing things about our industry is how we come together when times get tough!
We saw it in the outpouring of industry support when one of our Jim Beam warehouses was destroyed by lightning last year.
And we saw it when our Cruzan distillery was brought to its knees by Hurricane Maria in 2017. One of the first calls we got in the aftermath was from Diageo. They invited us to join them in an emergency shipment of badly needed generators to St. Croix.
Once the situation was stabilized, our small but determined brand team committed to transforming Cruzan into a purpose-driven brand.
They developed The Island Spirit Fund, so that for every case of Cruzan sold, a portion of the proceeds goes to aid disaster relief in the U.S.
Take a look… [video plays]
Cruzan is not a top priority brand, nor the largest, but our distributors didn’t think twice about generously matching our contributions.
With so many of our partners in the room, I’d like to say a huge thank you and give you a huge round of applause!
Another important way our industry comes together is in promoting responsible consumption and reducing alcohol-related harm.
We are united with our industry peers across spirits, beer and wine. Together, we take meaningful actions and raise standards that we hope others will follow.
This is even more important as some opponents of our industry claim that ‘there is no safe level of consumption.
The good news is, we’re seeing significant progress across key measures:
I recently became the Chair of the CEO Group of IARD, the International Alliance for Responsible Drinking.
In late January, we announced a set of actions to intensify the fight against underage drinking. This includes a voluntary commitment to place age restriction symbols, or equivalent words, on our packaging.
We’re also partnering with the leading digital platforms to eliminate online exposure of our messages to minors.
We’re doing important collective work in our industry across numerous markets.
In the US, we partner with Responsibility.org to jointly fund programs, like:
We are also proud to partner with our distributors in this space.
An example is our partnership with Major Brands on their ‘Safe Home After Every Occasion’ program, providing safe rides during key holidays.
Even though key measures are moving in the right direction, we recognize there’s more to do.
We recognize it will require a whole-of-society approach. That means, we ALL have a role to play!
Together, we can positively influence behaviors, be part of the solution, and earn the trust of an even broader set of stakeholders. And in doing so, preserve our ability to self-regulate and co-regulate.
Thank you for the opportunity to share how we are Growing for Good at Beam Suntory.
While the world will continue to change at rapid pace, Growing for Good will remain our mission well into the future!
It is indeed inspiring to be part of an industry that shares so many common values and a commitment to doing the right thing.
We are so much more powerful when we work together… And this IS the true meaning of IMPACT!