IN THE SAME WAY THAT STICKY TAPE IS SELLOTAPE AND VACUUM CLEANERS ARE HOOVERS, IN THE PHILIPPINES, BRANDY IS EMPERADOR. It too has notable pulling power. In fact, according to the company’s data, Emperador has magnetised 97% of the Philippine brandy market, repelling competitors with 33m 9-litre annual case sales.
Emperador has not only won the brandy battle, it seems it is winning the spirits war, too. It claims to have a 50% share of the total market (73% in Manila) and is approaching a monopoly-dominance of a country of 100 million people.
“We launched the brandy in 1990 when the landscape was just gin and rum,” says Emperador Distillers president, Winston Co. “We promoted brandy as a young, aspirational product. Brandy may be for older drinkers in other parts of the world but here it’s young and vibrant.”
When Gran Matador was launched against Emperador some 10 years ago, undercutting it on price, a “category fight” ensued. Though it was close at times, Emperador reports Ginebra San Miguel’s Gran Matador is now holding just a 2% share.
Emperador’s more recent growth might go down in history as the most incredible proliferation of a spirit brand anywhere. In 2009 it sold 6.3m cases, in 2010 it was at 9.6m, in 2011 it managed to double output to 20.1m cases and in 2012 it piled on another 50% to 31m cases. The past two years have seen more sober performances, with 6% growth in 2013 and flat growth last year due to a brief bump in the economy. But that didn’t stop it gaining market share.
As consumers, Filipinos are a capricious bunch – and the population mobilises together and quickly. So, is Co concerned that Emperador could one day be usurped? No, in short. “We developed this category 25 years ago – this was not an overnight thing. Consumers choose Emperador because it is an upgrade on the market, so the probability of them going back is quite low.”
In lieu of a meaningful competitor, there is at least one barrier to sales – the market ceiling. There are only so many people in the Philippines. But Co disagrees. He isn’t looking at the remaining 3% of brandy but the 50% chunk of total spirits that is unconquered. “We are a proxy to the Philippine economy – we mirror its performance. There has been an increase in personal wealth and GDP is expected to grow 7% in the next couple of years. There is a migration towards quality so we expect our volumes to grow.”
Emperador Light has been the driving force of the spike in growth. Launched in 2010 the 27.5% abv sweeter brandy is made from a proportion of Spanish brandy and neutral spirit from sugar cane. But as the Filipinos’ tastes develop, will Emperador Distillers’ offering? “We are premiumising Emperador and adding to the selection,” says Co, but accepts this will meet competition in the form of international brands.
Spearheading the premium drive is Emperador Deluxe, a 30% abv grape brandy, produced and bottled in Spain. Grupo Emperador Spain opened in 2013 and the company now holds bottling and manufacturing facilities and more than 1,200ha of Spanish vineyard, which it plans to double within two years. A joint venture with González Byass has also been entered into in Jerez.
We are used to western companies buying up developing countries’ big brands to aid distribution. With Emperador’s purchase of Whyte & Mackay, the shoe is on the other foot. “Emperador can potentially sell its products in 100 countries where Whyte & Mackay products are available.”
Except for some fledgling sales in the likes of Asia and Africa, for the moment Emperador is a domestic brand – but expect this to change. “We should be able to take Emperador international within three to five years,” says Co. “The strategy is to build Emperador as a strong global liquor brand.”
The wider world could prove to offer fertile feeding grounds. Suddenly South Korea’s soju, Jinro – the world’s biggest-selling spirit brand – doesn’t seem so untouchable. But Emperador Distillers’ ambition does stop short of 66.5m cases. “Reaching Jinro is not our ambition,” says Co. But, in other aspects, Emperador Distillers’ ambition should not be underestimated.
The Brandy Report comes in 12 parts. Folllow the links here Category introduction by Hamish Smith (1/12), Brandy in the Philipinnes by Hamish Smith (2/12), Cognac by Nicholas Faith (3/12), Premium brandies by Richard Woodard (4/12), Armagnac by Ian Buxton (5/12), French brandy by Hamish Smith (6/12), Spanish brandies by Dominic Roskrow (7/8)