S14 E03: Jonas Tåhlin, President of Spirits Brands at Moët Hennessy

[music] You're listening to the luxury item, the podcast on the business of luxury and the people and companies that are shaping the future of the luxury industry. Here's your host, Scott Kerr. After years of growth after the pandemic, the spirit sector is facing a softening demand as cost of living pressures mount in major consumption markets. Many consumers are opting to moderate their alcohol consumption to account for the squeeze on disposable incomes, as well as shifts in lifestyle choices. One of the major wine and spirits giants tackling these challenges is Moethenesie, the wine and spirits division of LVMH. Moethenesie is the largest luxury wines and spirits company in the world, representing a broad range of world-renowned wines and spirits brands that have become synonymous with the most prestigious origins and terwars. My guest on the luxury item is Jonas Talon, president of spirits brands at Moethenesie. He oversees the global spirits business of seven of the LVMH groups 75 May Sones, including Belvedere Vodka, Glenn Morangie and Artbegg single malt whiskeys, Emanente Cuban rum, Volcundi Metiera tequila, Woodenville American whisky, and most recently spearheaded the joint venture with Beyoncé Noles Carter to launch Sir Davis American whisky. Jonas started his career in consumer goods with 10 years at PNG and then moved to the world of wine and spirits in 2006 by joining Absolute Vodka, where he progressed to become VP of sales, global CMO, and then CEO of Absolute Elix. He moved to LVMH in 2020 to lead the global spirits business. Welcome to the luxury item, Jonas. Thank you very much. Thank you for coming on the show. So you oversee the global spirits of seven of Moethenesie's May Sones that span across the whisky, tequila, vodka, and rum segments, all have been facing challenges in their own ways. If you step back to late 2023, the spirits industry had a much sunnier outlook on how 2024 might pan out with the worst of inflation and its impact on consumer spending expected to be in the past. So we're going forward to the present and a mixture of political and economic uncertainty and continued pressure on consumer spending, continues to weigh on the spirits business big and small. Consumer attitudes also suggest a cultural shift towards less drinking. How would you characterize the spirits market and the consumer right now? Yeah, well, first of all, I think the headline thought is, you know, the world is rarely quite as bad as people say or quite as good as people say either. So of course 2024 has been a challenging year. There's no doubt. But we've had challenging years before, you know, for those who've been in this industry for a while, we might remember what it was like around the year 2000 or the year 2008 with the financial crisis. And I think the fact that we haven't had a downturn like this in what, you know, 15, 15 years or more is, is unusual if anything. But yeah, 2024 was tough and probably tougher than, than most of us thought. I think the simple truth and fact of the matter is that people have had less disposable income than we thought they were going to. It's inflation, it's interest rates, it's mortgages, it's energy prices rising. And so what's left at the end, you know, once you've paid the bills is not as much as it used to be, especially not as much as people had during the extreme years of the pandemic, 21, 22 and 23. So yeah, it's been, it's been tough. But again, you know, we've seen that before and we're certainly confident that that things will get better. And I think already we're starting to see some positive signs of growth, you know, the US has been doing recently, well, in the past couple of months and, and so yeah, it's a downturn, but we still remain optimistic. Are you seeing occasions for consumption also evolving? We are, we, we have and we are. And although I would say that they've been going on for a while, we do see that the, you know, the traditional nightclub occasion has been going down for quite a long time. You know, it seems consumers are enjoying spending their nights and having their cocktails at home to a higher extent. Maybe the nightclubs, we've certainly seen that. On the other hand, we've seen a continuous upturn in what we call vibe dining or high energy dining or even lunch, where people will, will enjoy a high energy environment, you know, and, and, and that could be on the beach or somewhere else. So that's something that's certainly increasing. I would say cocktailing, it's been, been growing for a very long time. And, and I think it's still growing. And within that, we certainly see ready to drink cocktails are, are certainly having their moment right now. Elvim H and Moat Hennessey's response to headwinds have traditionally been strategic and forward looking, to strengthen the brand through continued investment and brand positioning and marketing efforts to maintain desirability of its brands or inventory management and market diversification. How are you attacking the situation? First of all, I think it's important to remember that we are fortunate in that we have an ownership of Elvim H and Moat Hennessey, which is a very long term in its nature. We're not looking to necessarily have a fantastic next quarter. I think we're looking to have a fantastic next decade or several decades. And we keep that long term view and everything we do. And within that, how we build the brands over time is simple in theory, more difficult in practice, but we speak about brand desirability. That is the reason we're here is to build the desirability of our brands. In many cases, they are hundreds of years old and most of us only have a chance to work on them for a few years, but we all try to leave them more desirable than how we found them. And that's a combination of focus on their quality. We try to really pay attention to how we make our products extreme quality with the belief that quality will always win over time. Creativity in the way we bring them across to consumers and creativity, I think, is we like to view that as a mix of art and science, not too much science and not too much art, but really finding the right balance between the two. We think culture is incredibly important. We try to place our brands in culture, making them culturally relevant to really understand the grounds where it's going on. And then I would also mention innovation as being continuously really important across all of our categories. We always try to innovate. And I think if we do those things well, we build our brand desirability. And if we were building our brand desirability, we're going to get through good times and bad times. Well, I can't talk about the market without talking about China. And given weakness in China, the US is set to be the focus of attention for many luxury brands, especially in your parent company. Are you sharpening your focus in the US market too? We are, but I will still say the US has been and will continue to be our number one market. It's it's the biggest market. It's the most valuable market, but even beyond that, it's also in our industry. It is also the trend setting market in the sense of things that happen in America. They tend to spread in the world of wines and spirits to the rest of the world. That's not the case in every category. We can think of several others automotive being one, perhaps where that's not the case. But in the world of wine and spirits, that's always been the case. And I think it's going to continue to be the case. So yes, it is and will remain our number one priority. And we are definitely focused on the US focused on the US this year as well, and perhaps even more than before. We were expanding our portfolio, our luxury offering. I hope we can talk about them more a bit later on, but I'll mention things like Belvedere 10. I'll mention, you know, Sir Davis, our American whiskey, our higher expressions of Glenn Morangy, the 1825 year olds. You know, these are our launches that are very much focused on the US. We keep engaging more and more with the high net worth individuals. So many successful Americans that are accumulating wealth that have the ability to enjoy our products. We're engaging with them on one on one relationships. We're providing experiences, a lot of folks on experiential. We are increasing our marketing investments. And the other thing I would say, which is very relevant to the spirit portfolio is we have stood up for the first time a dedicated sales team, which is just focused on whiskey in America specifically, which, which very very excited about for 2025. I want to dive into some of the brands in your portfolio. You mentioned a few. So let's start with the Scotch whiskey brands, Glenn Morangy and ArtBag. Both brands date back to the 1800s with ArtBag having a bit of a tumultuous history. ArtBag was on on the break of the extinction, but was saved by Glenn Morangy's distillery in 1997 to revitalize it back to its high. LVM has required glimmer angi along with ArtBag distillery in 2004, adding whiskey brands to its portfolio, which at the time already included Hennessy Conjag. What opportunity did LVMH see in these two niche Scotch whiskey brands that may be right for the portfolio? Well, first of all, I'm not sure I would characterize Glenn Morangy as niche. I think it's definitely something that can have a very broad appeal. ArtBag with its very peaty smoky natures is perhaps a little bit more more pointed in its appeal. Look, overall, I think whiskey and especially single malt is such a beautiful fit for LVMH and from what Hennessy we pride ourselves on things like you know terroir craftsmanship aging blending. All of those things are obviously what whiskey and single malt is all about. So when you think of luxury spirits, it's difficult to think of anything that's a better fit than then single malt whiskey. and Glenn Moore. is I think it is the preeminent highland single molt. So unique in its style with our tall stills which create this incredibly elegant flavor. The work that Dr. Bill has done in terms of pioneering, I would say finishing in whiskey, the very unique water source that we have. It's just such a beautifully elegant whiskey, which I think is a very nice juxtaposition against some of the sort of heavier, sherry-forward whiskeys that you can find in space, either elsewhere. It's shocking to think today that Artbegg, when we acquired it 20 years ago, was almost a gift with purchase. It was, as you say, very close to extinction, a very, very small blend, a small single molt located on this beautiful island of Eilah and having had this real roller coaster of a history. But I think we can and do feel very proud of how Artbegg has developed since then. It's become a real cult brand with an incredible following with fan base that are organizing their lives around Artbegg, organized in the Artbegg committee, by the way, whose job it is to make sure that the Artbegg distillery never is mothballed again. What is your name in that group again? I forget the. It's the Artbegg committee. The committee, right, right. It's a couple of 100,000 members now and they are so passionate about the brand. It's one of those few brands in the world where the brand really plays a big role in people's lives. You know, you can think of maybe a handful of others that they're Harley-Davidson might be another one, but we're so proud of it and it's doing so well. There's an Artbegg day, isn't there? There is an Artbegg day every single year and if you haven't been to Eilah to enjoy it, it's a fantastic festive day just before summer and we typically release a specific version of Artbegg in celebration of the Artbegg day. Now I see you have a new face for Glenmarangie, the legendary actor Harrison Ford. He stars in a new global campaign for Glenmarangie that's highlighted by a series of episodic films directed by filmmaker Joel Edgerton. I saw the first episode and it was very well done. Of course Ford brings along his trademark gruff yet sneakily pleasant, cramuginally, sense of humor to the ad as you would expect. Could you talk about the once upon a time in Scotland campaign and what the brand was hoping to achieve with the narrative? Yes, for sure. Well, first of all, we're very, very happy about it. We're very proud of it and it's been incredibly well received. I'm glad to hear that you liked it as well. Scott, if we take a step back, I think we have to somehow confess that sometimes single malts can be a little boring. We can sometimes take ourselves very, very seriously and we should, but at the same time, we also need to have a little bit of fun. And single malts did not have a very good year in 2024, even compared to some other spirits categories. I think American whiskey, especially in America, has been a bit more energetic and has enjoyed a little bit more momentum, perhaps. And I think against that context, we wanted to put single malt back into people's lives in a relevant way to make them smile and to remember this incredibly beautiful category. Therefore, once upon a time in Scotland, yes, it's about Glen Mourinji, but it's really also a love letter written to Scotland seen through the eyes of Harrison Ford, whom we chose because much like Glen Mourinji, he is an icon. And at the same time, he's an icon, he's in his 80s now, but he's also more relevant than ever. He's got his series 1923, he's got another series shrinking, he's part of the Marvel project where he's the Red Hulk in their most recent film. So even though he's getting on an age, a little bit like the single malt and like Glen Mourinji, he still remains young and relevant. And that's why I think it makes him such a beautiful choice for this. And as I said, he's telling the story of Glen Mourinji through his own eyes, through his own personality, we get to see Harrison Ford the way he really is. So it was genuine, it's authentic. Much of it was not scripted, it was Harrison. He wanted to act against not other actors, but against the good people that make Glen Mourinji day in and day out. So if you watch the next episodes that will come up, you'll see that he's actually starring the people who are making Glen Mourinji every day. It's beautiful, it's unpretentious, it's endearing and hopefully it will help bring a little bit more energy back to Scotland and single malt and of course to Glen Mourinji. Yeah, a great job. And one of the more interesting Scotch whiskey marketing efforts I've seen was from ArtBag a couple of years ago, it tossed away the standard Scotch whiskey marketing playbook and let its geek flag fly, if you will. It created this 40-page graphics sci-fi novel, Planet ArtBag, a comic book featuring three stories centered around ArtBag's most popular Scotch offerings. Why a graphic novel to tell the ArtBag story? Well, I think ArtBag is, it's such an incredible brand. It's incredibly serious in how it's making its whiskey. There's so much craftsmanship and care taken into the process of creating a bowl of ArtBag. But at the same time as a brand, it's very light-hearted, it's unpretentious, it doesn't take itself too seriously. And ArtBagians, the people that like ArtBag, they're a little bit like that as well. Many of them and many of us, we think of ourselves as proudly weird. And in that context, graphic novel, it fits that beautifully. It's a big growing subculture of people who enjoy having fun that don't take themselves too seriously, that don't take life too seriously. But that whole art form of graphic novels is certainly a place where we have people of incredible skill, just like the people that made ArtBag. So we thought it was a beautiful combination. We started out doing it when we launched We Beasty, our youngest expression a while back, and people really loved it. We called it a monster of a dram, and we showed these monsters in cartoonish format. And people loved it. And so we decided to stick with it, and it's been really, really well received. And last summer, Moad Hennessy joined forces with Beyoncé, Nol's Carter to create a new American-made whiskey brand, Sir Davis, named after Beyoncé's moonshine, her paternal great-grandfather, LVMH already had a 50% stake in Jay-Z's campaign. So you were kind of keeping it in the family. How did that whole project come about? Another project that we're incredibly excited about, I'm very proud of. Well, as a starting point, Mrs. Nol's Carter is a genuine lover of whiskey. She's loved whiskey her entire life. It's what she has often likes, you know, it's what she drinks when she's had an opportunity to choose Japanese whiskey, singamalt whiskey. And so she's always had this love of whiskey. And then she also discovered a couple of years ago, like you said, that her great-grandfather was a moonshiner and a whiskey maker during prohibition, where he used to make delicious whiskeys and hide them in the knots of cedar trees for friends and others to find. And when Mrs. Nol's Carter Beyoncé, when she found this out, she felt like, all right, I have to continue with legacy. And that's really what she's doing. She's not looking to make a quick buck here. She really wants to create together with LVMH, a whiskey to stand the test of time, something that she can pass down to her family. And so she approached us several years ago. And since then, we've been working on the project together in a true sense of partnership. We involved Dr. Bill Lamston early on to help on the creation of the liquid. She explained what her ideal whiskey would be. And Dr. Bill went about trying to design that. And I think came to a really, really interesting place, finding a mash bill, which the world really hadn't seen before. It's certainly not at any scale, which is really a marriage between the single malt way of creating a mash bill, which is malt and barley. And then the other half being rye, which is what her great grandfather would have used pre prohibition and during prohibition. So it's a very unique mash bill finished in Pedro Jimenez, Sherry Cask. And it just, it tastes like nothing else. And it's a beautiful, beautiful whiskey. And the ambition that she has as the co-founder and, you know, and together with us is to create something that's going to stand the test of time. And that's hopefully is going to change the way people are drinking whiskey. Because what she feels is that there are a lot of people that would enjoy whiskey, but they're not drinking it today, because it's often considered to be like a middle-aged, maybe white man's drink. And it should be enjoyed by many more, certainly by her fans and by whiskey lovers today, but also by people who haven't tried it. And that's that's the ambition that we have. So let's talk about your star master distiller, Dr. Bill Lubston, which you've dropped his name a couple of times. And so far. And I'm sure you'll drop it again. I've seen him characterize as the mad scientist of Scotch whiskey. Could you talk about him and what he has meant to the success of your whiskey brands? Dr. Bill is a wonderful personality. He's also incredibly talented at making whiskey. And we're fortunate to have him. If you think about, you know, our Glenn Moore 18s or maybe even the 25s now is he distilled those and he put them into casks and now they're ready to drink. I think it'll be very difficult to find anyone in the Scotch whiskey industry, a master distiller who's been around in the distillery for so long that he can probably say that I made this when you're opening a bottle of something that's 20 years or older. So we're certainly very happy to have him and and and we're very very proud of him. He brings a lot of innovation. He's super innovative and I think that's what's exciting about Dr. Bill. He doesn't rest on his laurels. He tries to break rules. I think sometimes he has a tendency to make the Scottish whiskey association, the SWA a little upset because he's he's certainly no stranger towards bending the rules and try new things within reason. He is a stickler for quality. He's obsessed by quality but I think maybe maybe most importantly he's so passionate about whiskey. So and I think this goes beyond Glen Mourinji. If you hear him speak, he spreads his love of whiskey to audiences around the world and he speaks highly not just of Glen Mourinji but also of of our competitors and I think that's wonderful. And so we you can think of him almost as as a creative director for one of our fashion brands. I think that's probably the closest thing you can get to to to his role. And I think what's wonderful lately is is that you know being able to take his talents and apply those other things we just talked about Sir Davis. You know that's a great example of how we've been able to use his talents and something which is not Glen Mourinji or Ardbeck. I want to shift over to the tequila category. If you look at the tequila sector the past four years have been an unexpected golden age for tequila in which sales have gone through the roof. The premiumization of the category has significantly increased consumer interest in the spirit. However the thirst for agave spirits appears to be slowing particularly in the premium ultra premium price range as consumers have been gravitating towards less expensive bottles. Moan Hennessy made his first foray into tequila category I think in 2017 with the launch of its ultra premium line Vlokhan Demetiera. It's been growing brand ever since. How has the brand been holding up as the demand for tequila slows? Volkan has been performing adnably well especially last year was was a very very positive year strong growth in America. But again I think what we didn't know when we launched Volkan back in 2017 or when it was thought of in terms of its creation back in 2015 was what would happen to tequila. The number of brands that would enter the number of brands owned by celebrities that would enter it's been it's been really something to watch and obviously this is part of the reason why tequila has had this explosive growth which by the way was was was bound to slow down at some point or another. We are in this you know again I've said it a few times we're playing the long game. The first thing that we did here was was to build the best tequila in Mexico that we could find at the foot of the volcano which is named tequila which is why the drink is named tequila to begin with. It's very unusual in that it's one norm it's it's it's only producing Volkan in the vast majority of other cases obviously the tequila tends to produce tequila for many many brands but ours produces Volkan and and Volkan only. We use no additives whatsoever so it's one norm no additives and we don't cut any corners it's it's not a very high margin business for us I'll I'll be open to say that it's not it's not something that is immediately profitable but that's not what we're trying to do we are trying to create an exceptional tequila that will be around for for a long time and so the focus that we have is on snow build it's on quality but also innovation I'll mention the Blanco Tahona that we launched recently it's in my mind is the most delicious Blanco that I've ever had and and a lot of people seem to feel the same way so we're excited about the future of Volkan. So with the new administration threatened tariffs on imports from Mexico may actually become policy what effect will that have on your tequila business and how are you preparing for that possibility? We're we're actually in and wouldn't want to comment on tariffs or or anything that has to do with politics re keeping our heads down and and Volkan is is a brand that we're trying to build for the long term so not really too worried about you know current politics or or or tariffs in this moment we're we're just focusing on building the brand of the brand is our ability. Late last year LVMH Inc. a mega 10-year sponsorship with Formula One Racing that will kick off this year as part of the deal LVMH brands will provide hospitality bespoke activations and content tied to Formula One including Louis Vuitton which has been designing the custom trunk for the F1 trophy for the past four years. Tech Hoyer which was the official timekeeper from 1992 to 2003 at one point and Moe at Hanesy. How will your spirit brands be integrated into the F1 partnership? It's very exciting clearly it's so exciting because Formula One has seen such tremendous growth in in popularity in recent years and I think it's only set to continue. I'll start off by saying that the main star of the show as far as Moe at Hanesy is concerned is Moet and Shandle our champagne. It's going to take center stage in our portfolio in Formula One but that being said we're clearly also incorporating and activating our other brand sales mentioned specifically Belvedere which is doing a lot around Formula One. It's going to be especially visible in after parties and in events surrounding Formula One you'll see it being the headline product in the after-particip in the inaugural 2021 Grand Prix in Melbourne coming up in a couple of weeks and it's just a good fit for us. It's about luxury, it's about success, it's about excitement, it's about high energy. So clearly this Formula One partnership is going to be very exciting and beneficial to the full Moet Hanesy portfolio. Well speaking of Belvedere vodka it's also in your orbit. It's latest campaign marks the launch of Belvedere 10 an ultra premium line extension for the brand. Three-minute short film directed by Oscar winning filmmaker Take a Wattiti and he stars in it too alongside rapper future. It's definitely targeting the millennial middle upper and upper income tier. People are still drinking lots of vodka but perhaps it's not being talked about as much as it once was. A lot of other categories are getting attention. The data shows that ultra premium vodka is forecast to grow signaling the top end of the category remains attractive. What is the Belvedere brand doing to interweave itself into the lives of consumers? Well first of all I think you're making a great point in that. Takeela people tend to talk about Takeela a lot and they have for many many years. Vodka remains you know king. It is still an incredibly vibrant and exciting category and whereas in the US from memory I think Takeela has has outgrown vodka at least on the premium and luxury side in value. Obviously in rest of the world Takeela is still relatively small in most places. So vodka is exciting. It remains exciting. I'm seeing it more and more also in trendy places. I think I wouldn't be surprised if vodka has a little bit of a comeback. What it has as an advantage is its extreme versatility whereas not everyone might enjoy the taste of the flavor of Takeela. You know vodka is incredibly versatile. So we're excited about it. We're very excited about Belvedere. It's doing very very well. It was one of our fastest growing brands in recent years. So we're very proud of it. I'll start off I think the campaign that came before the one that you were talking about with future for Belvedere 10 was the campaign we created for Daniel Craig. With Daniel Craig for Belvedere proper and that was an incredibly successful campaign which has really helped propel Belvedere in terms of growth, in terms of brand desirability, in terms of excitement. Following that the launch of Belvedere 10 has been very very exciting because it's the first real serious major attempt at creating a a luxury vodka, a real luxury vodka business in the same way that we have seen high end tequila. Belvedere 10 is off to a great start. We're very proud about the campaign that we did together with future, the iconic American rap star which was directed by Tyka Wattidia C.C. And we're now seeing Belvedere 10 in more and more places and it is performing very well indeed. I will also mention of course the fact that Belvedere pure, Belvedere proper is becoming organic around the world and it's the first organic vodka of size. One of the first organic vodka that has that sort of size that Belvedere enjoys and that's another very very exciting thing. So very exciting marketing, innovation through Belvedere 10, through organic on Belvedere pure. We have a lot of belief for continued success with Belvedere in vodka which I think is still a really important category and a category for the future. We're also seeing rising demand for non-alcoholic alternatives as younger generations move away from conventional products. Moan Hennessy announced in October of last year that it had taken in a minority. already investment in French bloom, which is a premium alcohol-free sparkling wine. It's LVMH's first investment in non-alcoholic drinks. Do you see more non-alcoholic investments like that in your portfolio? Well, first of all, I think it's terrific that there is a non-alcoholic option in our portfolio because it's clear that you have several consumers and occasions where that is a great fit. We're very excited about it and very proud to welcome it into the LVMH family. As for the future, I'm not sure if we're going to be expanding that or not. It's certainly not something that would happen in the short term. We're very, very proud and excited about the portfolio that we have right now and that's going to be our focus for the future. Yeah, so speaking of the future, what does the Spirit's roadmap look like for a moat fantasy in the coming years? Do you see building on your current portfolio through acquisitions? Are there any new categories you want to explore? I will say that it's an incredibly exciting time for us in moat fantasy because traditionally moat fantasy is most famous for French grapes, for cognac, for champagne. And obviously we have a formidable cognac in Hennessy and an awe-inspiring champagne portfolio. And next to that, we're now building spirits as a third pillar next to those two beautiful French great businesses that we have. So we're very serious about it and we are very intent on building this third pillar for moat Tennessee. Organic growth is, there's so much organic growth to be had. We've talked about Belvedere, we've talked about Glenmorenji, we've talked about Artbegg, we have other beautiful brands. We have Woodenville, the American Whiskey, we just launched Sir Davis. So this is the number one focus. But of course, if another interesting brand comes up, we will definitely have a look at it to expand the portfolio further. It's not something that happens very often. We are very, very picky about the brands that we acquire and we don't acquire nearly as many brands as our competitors do. Certainly if the right brand wants to come up, it's something that we would look at. Well Jonas, my final question is the luxury item question, which I ask oh my guess. So if you was stranded on a deserted island and you could only have one single luxury item with you, what would that luxury item be? It can't be any form of air or water transportation to get you off that island or anything that requires mobile service so you can call somebody to pick you up off that island. It's just you on this lonely island. But with that one single luxury item you would like to have with you. Yeah, I thought about that. It's definitely going to have to be the Louis Vuitton Nomad Leather Hammock. It has to do. It is comfortable. It's comfortable. It's comfortable. It's beautiful. As you can imagine, made in leather using the skill and expertise, the way only Louis Vuitton can do it. So it's beautiful. It's beautifully made and importantly, it will elevate me from the bugs that will undoubtedly be found on the ground on this deserted island and make me very comfortable. Ideally, I know you're only giving me one, but if I can be in that hammock with a small glass and glamour in G 18-year-old, then life would be perfect. I knew you had to get an aunt something on brand there. We'll let that slide for this episode. Jonas Tellen, president and CEO of the Spirits Division of Moe at Hennessy. Thank you so much for joining me on the luxury item. Thank you, Scott. It was my pleasure. I'm your host, Scott Kerr. Until next time.