Interview: Ray Noble, SouthTrade International

THE SAZERAC ACQUISITION WAS A HUGE TURNING POINT FOR SOUTHTRADE

SouthTrade International, the Australian home of big brands like Buffalo Trace, Green Fairy and Fever-Tree has experienced several large changes over the last couple of years. In 2016, the business changed hands from local Woolworths-owned company, Pinnacle Drinks, to American company Sazerac. Subsequently, leadership at SouthTrade changed hands from the original and iconic founders, Tony Stubley and Dave Higgins, to ex-Bacardi-Martini Australia Marketing Director, Ray Noble, as Managing Director. Then, a year later, Bacardi Limited announced that it had purchased Patron globally; this is a brand that has been with SouthTrade for many years and will officially switch businesses on 31 July. Despite all this, SouthTrade seems to have continued to move forward with a high head and unwavering passion, driven by Noble. Contrary to what some may think, its team, brands and sales have all grown. We decided it was time to sit down with Noble to find out what’s been going on for the business and more importantly, what’s next.

Drinks Trade: There has been a lot of change at SouthTrade over the last couple of years. Let’s go back a bit to when Sazerac acquired SouthTrade at the end of 2016. What was the feeling like inside the business during that period?

Ray Noble: The Sazerac acquisition was a huge turning point for SouthTrade because they brought in the Southern Comfort brand (Editor’s note: Sazerac owns Southern Comfort globally). That meant the business doubled overnight in terms of revenue and the sales force. At the same time, a new leadership team came in – myself, the Finance Director, Head of National Accounts and the Marketing Director. A lot of change can bring about a lot of uncertainty, so it was important to me that the team understood that this was positive news - we were growing as a business.

DT: Were there any challenges that came with integrating the two businesses?

RN: Up until this point, we had been an on-premise focused business. Now, we had to start thinking about how we could capitalise on the great work we had done in the on-premise in retail. To do that, we had to bring in a key accounts team with the extra capabilities we needed. But overall, people have embraced it. In fact, we recently did a cultural survey and scored among the top 10% of companies that have taken the same survey. There is an amazing passion in the team and my job is to make sure that we don’t lose that as we put in place the processes necessary to get to the next level.

DT: How about when Pinnacle Drinks withdrew from the business, was that relationship affected in any way?

RN: We still have a fantastic relationship with the whole Woolworths Liquor Group. We now talk more directly with the buyers, whereas before we were doing everything via Pinnacle. So, we’re running more like a normal business, but the relationship is still very strong.

DT: It sounds like it’s a real growth period for SouthTrade, despite recent changes.

RN: We’re growing in high doubledigits and we still see so much more opportunity. The trade has embraced us with open arms, particularly now that we’re a Sazerac run business. We’ve re-engaged with key retailers and we’re locking in promotional programs. That’s a new discipline for us as most of our brands didn’t run that way previously, but now with Southern Comfort, for example, that’s a brand that needs an ongoing promotional program. Fireball is moving into that arena as well as it starts to gain scale with us focusing on retail and the on-premise. Fever-Tree is going from strength to strength since we’ve taken it into retail and a similar story exists with Master of Mixes, which has also been helped by the whole cocktail boom. Dan Murphy’s actually sold more Master of Mixes than any other mixer over Christmas.

DT: You have a lot of experience in the alcohol industry. What’s your vision for SouthTrade?

RN: We’re calling SouthTrade Australia’s most influential spirits specialist. We have decided to really excel in the spirits side of things and solutions that sell spirits, such as cocktails or mixers. We also want to get to a decent scale. Sazerac is committed for the long-term and the business has allowed us to invest ahead of the curve in terms of people and foundations. For me currently, it’s about making sure SouthTrade remains as a niche, on-trade specialist that focuses on quirky brands, while also being able to maximise return once we get brands like Southern Comfort and Fireball to hit scale. We also want to be a key player but without all of the layers and hurdles the bigger guys have. We want to remain agile and be able to make new partnerships or decisions happen fast, and Sazerac is quite well-known for that.

DT: Bacardi Limited acquired Patron globally last year, but SouthTrade is still distributing the brand. When are you expecting distribution to switch locally?

RN: The Patron distribution will switch to Bacardi on 31 July. My view is how you exit things is just as important as how you enter things, so we’ve made a commitment to continue to build the brand until the change. We have exciting replacements ready with Corazon Tequila (from 1 August) and the hugely exciting Mr Black Cold Brew Coffee Liqueur (available now). drinks trade|27

Patron is a substantive and quite an emotive loss because the brand is loved here, but these things happen and we wish Bacardi all the best in continuing its growth journey.

DT: What excites you the most about bringing the Mr Black brand on board?

RN: We believe that the strength of local craft spirits is important and that’s now a strong platform for us with Starward Whisky, Adelaide Hills Distillery, Mr Black and there’s one more to come. Then we’ll have a complete portfolio of Australian craft spirits that we can really get behind. So that was one of our main motivators. The other main motivator was Australia’s love of coffee and with the Espresso Martini being the number one cocktail, we thought these guys were the perfect fit for us to be able to help continue to drive that journey forward. The other reality was that with Patron leaving the portfolio, and with over 75% of our Patron business being driven by XO Café, it was important to us that we found a replacement for that - a good, high quality, wellrespected liquid, and we found that in Mr Black, hence the partnership was formed.

DT: Corazon Tequila is a Sazerac owned brand. What do you think its potential is here and has it been available in Australia before?

RN: No, it’s only really been available in the US and Sazerac is just starting to get behind it there now. So, it’s exciting times for this one. Because it’s a Sazerac brand, they’ll help us invest in it and build it for the future. Combined with our good relationships here and our understanding of tequila, we think it will see success. The thing I like about it too is that there’s not only a good story behind the brand with it being a family estate, single estate and made 100% on the estate, but Sazerac does some interesting things with their Expression series, which sees the tequila aged in world-class barrels such as Buffalo Trace, Sazerac Rye, George Stagg and Pappy Van Winkle that give it a unique flavour. They’re very limited, but they’re very popular, and we’ll be bringing those out to show how Corazon is testing the boundaries and trying new things.

DT: SouthTrade has also begun importing and distributing Japanese whiskies Kurayoshi and Tottori and Indian whiskies Paul John and Rampur. Are you excited about building the portfolio beyond the existing bourbons and whiskies?

RN: We have the most amazing bourbon portfolio, home to the most awarded distillery in the world, Buffalo Trace, so we have the bourbons down pat. But we thought - how do we go about expanding our whisky portfolio so we can become more of a whisky specialist. We will also have a new Scotch whisky partner soon, but I can’t reveal anymore than that just yet. There is a beautiful range of known whiskies out there, but we wanted to try emerging and different whiskies as well. Japanese whisky was an obvious one, so we found a partner there, and then we found these Indian ones. We tasted the liquid, read up on them and realised how drinks trade|29

unique they were. You wouldn’t normally think of India as where quality whisky comes from - even though it’s the biggest market for whisky - but we think there’s an interesting story to be told there and that’s what we’re going to do.

DT: Let’s talk about the new Southern Comfort Black. Drinks Trade actually compared the Original recipe from a few years back to the current Original and then Black. We noticed a real flavour difference – the more recent two aren’t as sweet and the bourbon flavour is much stronger. Can you talk through the rationale behind changing the recipes?

RN: Southern Comfort is such a unique brand, there’s nothing else like it, but my personal view is that it has probably been the ugly sister to Jack Daniel’s when owned by BrownForman and even though a few things have been tried to change that, none of them quite got there. So, I was excited when Sazerac purchased this brand; I was the Brand Manager on Southern Comfort back in the day at Swift & Moore, so it’s close to my heart. As everyone knows, Sazerac was born in New Orleans, as was Southern Comfort, so the business has made a commitment to taking it back to its roots with the Spirit of New Orleans campaign; new packaging that looks a bit more authentic; and the liquid – they’ve put the whisky back in, while maintaining the unique flavour profile the brand is known for. Then with Black, we now have more of a premium offering and it’s a really important player for us in terms of the male consumer – it’s more whisky led, not as sweet and slightly higher in alcohol, so it appeals to the male palate.

DT: Before we wrap this up, do you have any thoughts on the next big trends for spirits?

RN: I think spirits is the most exciting category, but maybe I’m biased because I work in it (laughs). I think premium and craft aren’t going anywhere. I also think that doing good for the community is the new cool, so we need to start thinking about how we tell the stories of brands that are doing the right thing, not just being mass produced. Tito’s Vodka, for example, has a fantastic story around the amount of money it gives to charity. Then in terms of cocktails, I think we’ll see mixologists continue to be more creative than ever before, and then more accessibility for consumers to make cocktails at home. We see that through what we’re selling with the Master of Mixes and Finest Call Premium Cocktail Mixes.