Bars and restaurants have been closed almost everywhere in Germany since last Christmas.
Trendy districts seem deserted even in the early evening hours because of the exit bans.
In the pandemic, Bacardi Germany boss Nicolas Rampf has a lot to do with keeping his customers among the restaurateurs and bartenders happy, supporting them with business knowledge or even keeping them from bankruptcy.
A bizarre legal dispute in the founding family of his company comes at an inopportune time.
Manager Rampf proudly tells in an interview with WELT that the Bacardi employees address themselves as “Primos”, which translates as “cousin”.
It should stand for the fact that each of them is a member of a large family.
But for a few months there has been a dispute in part of the family clan.
Family members Monika Bacardi and Maria Luisa Bacardi, the widow and daughter of a great-grandson of the company founder Facundo Bacardi, are taking action against a family foundation in Liechtenstein.
According to the “Liechtensteiner Volksblatt” newspaper, they have asked the country and its competent authorities to take action in the conflict.
It is about different views on dividend payments, arguments in court and with the means of injunctions.
We are talking about claims for damages in the billions.
Retail sales increased
Germany boss Rampf does not comment on the details. "The incident does not concern us in our day-to-day work," he says. The family company has existed for almost 160 years and will still be there in 160 years, says the manager. The Spaniard Facundo Bacardi founded it in Santiago de Cuba, Cuba, in 1862 by buying a rum distillery. The black bat as a brand logo was considered a lucky charm at the time and has survived to this day. After the overthrow in Cuba by Fidel Castro and the expropriation of Bacardi, the country fled. Today the family holding is based in Bermuda. Around 400 family members are now shareholders.
“We don't have any shareholders that we have to favor,” says Rampf, who came to Bacardi from L'Oréal ten years ago. Once a year he receives “a handwritten thank you letter from a high-ranking family member”. In the company itself there are family representatives on the board, the supervisory body. Only a few of them work operationally in the company. Chairman is Facundo Bacardi, a descendant of the founder of the same name. The turnover of what it claims to be the world's largest family-owned spirits manufacturer is estimated at around five billion euros. In addition to the well-known rum, the around 200 brands include Martini, Gray Goose Vodka, Bombay Sapphire Gin, Dewar's Whiskey and Cazadores Tequila.
During the pandemic, Manager Rampf, who is responsible for Bacardi in Germany, Austria and Switzerland, succeeds in increasing sales for at least part of the business.
What is meant is the retail trade, with which the manufacturer makes around 80 percent of sales.
According to the boss, stocks were temporarily increased by a third in order to be able to deliver.
The other 20 percent is accounted for by the catering trade.
“The catering business is currently almost zero,” says Rampf.
The spirits manufacturer has around 6,000 customers in Germany.
At the beginning of the lockdown period, Bacardi supported the restaurateurs through an aid fund.
Alcohol-free mixed drinks are trendy
Now the 39-year-old country manager is counting on openings soon. “I am assuming that the entire catering area will be allowed to reopen in June. For outdoor catering, we are already anticipating this in the course of May, ”says Rampf. It is a mystery to him why hairdressers are allowed to open and restaurateurs are not. "I find it presumptuous that one does not trust the operators of restaurants and bars with a safe solution for opening," says Rampf. A customer login via smartphone, registration via a QR code and cashless payment offer sufficient opportunities for a safe visit to the restaurant.
There is also uncertainty throughout the industry. "The various phases of the lockdown and the roadmap for the return to the new normal will challenge the spirits industry in 2021 and 2022," says Angelika Wiesgen-Pick, Managing Director of the Federal Association of the German Spirits Industry. This is particularly true due to the losses in the catering, duty-free, event and tourism sectors. These areas account for around 20 percent of the total spirits trade. "According to current estimates, it will no longer be possible to compensate for this in sales and turnover in 2021 either," says Wiesgen-Pick.
Striking trends in the spirits market currently relate to non-alcoholic cocktails and mixed drinks in cans.
Bacardi wants to be part of it with the allegedly “first genuinely alcohol-free aperitif”.
As with beer without alcohol, Rampf is also hoping for long-term success with the offerings for spirits.
"I expect sales potential of 150 million euros in the next five years for this segment," says Rampf.
In his view, the drivers of demand are the millennials, those born between the early 1980s and the late 1990s who choose to eat healthily.
A third of the turnover goes into advertising
New developments could come to Bacardi from another side as well, because restrictions in advertising are being discussed in politics. The Commission of the European Union is considering restricting alcohol advertising and introducing warning notices based on the model of tobacco cigarettes. "We are optimistic that there will be no reason for such changes," says Rampf. According to him, the industry should control itself and promote “sustainable consumption”. Money is available for such education: Bacardi spends every third euro in sales on TV advertising, outdoor advertising or activities on social media.
For his country area, Rampf cites a turnover of 122 million euros in the 2020/2021 financial year that ended at the end of March. According to the statement, this corresponds to growth of a good two percent. Still, the year of the pandemic left its mark on business. "We did not achieve our goals in terms of profitability," says Rampf. The native of Flensburg does not give any numbers, the result was still positive, he says. E-commerce via online shops and marketplaces like Amazon is still a niche in the spirits business. At Bacardi, online sales are now expected to increase to 20 percent of sales over the next four years.
The consumer behavior of customers, however, hardly changes.
The value of 5.3 liters of alcohol that every German drinks in a year has remained at this level for a decade.
At the same time, industry sales are rising slightly because customers are choosing more expensive products.
Bacardi himself wants to "grow sustainably over value" according to his own statements.
What is meant is: The manufacturer does not want to drive spirits sales through price and at the same time gain market share.
According to data from the market research company Nielsen, Bacardi grew by twelve percent in 2020, measured in terms of sales based on retail prices.
In contrast, the entire industry in the beverage sector saw an increase of nine percent.
Germany is the largest market for spirits in the EU
120 employees work for Bacardi in Germany. So far, there has been no downsizing in the pandemic. Three years ago the only plant in Germany in Buxtehude was closed and bottling was relocated to Italy. The most important market in Europe with a total of around 2,600 employees at Bacardi is France, followed by Benelux and the Scandinavian countries Denmark, Sweden and Norway. Germany is in fourth place.
Germany is also the largest market for spirits in the European Union. The ranking of the most popular spirits in Germany reads like a look into traditional bar cabinets. As in the previous year, so-called clear spirits with around 38 percent, liqueurs with 36 percent and whiskeys with nine percent ranked in the first three places in terms of market share. This relates to the sales volume. According to data from market research “Information Resources”, last year's winners include vodka, special liqueurs such as eggnog or semi-bitter liqueurs, gin / genever, rum, ouzo, fruit brandy and amaretto. Incidentally, a third of the annual turnover for most spirits manufacturers comes from the Christmas season.
Similar to coffee with the coffee tax, there is a special tax to the state in the price in this country. The sales prices include a spirits tax of around 13 euros per liter of pure alcohol. For a liquor bottle with 0.7 liters and 37 percent by volume, this tax corresponds to 3.42 euros.