Maxxium Philippines: In high spirits

Joey Mendoza is literally in high spirits these days. After all, he calls the shots for a company exclusively marketing a formidable lineup of imported liquor products — brands that include Fundador, Absolut, Remy Martin, Jim Beam, The Famous Grouse and Macallan, among others.

As president and general manager of Maxxium Philippines, Mendoza was responsible for catapulting the company into Maxxium Worldwide’s largest profit and volume contributor in Southeast Asia. From a mere five percent of total turnover, the Philippine unit now accounts for more than 40 percent, just over a year since formally establishing local operations in September 2005.

He credits this achievement to the dynamism of the Philippine market which, he admits, is likewise posing a challenge to Maxxium’s operations. Considering that the company sells imported premium liquor products, its market is somewhat limited by age, gender, economic status, as well as the changing standards of wine drinkers – infuenced by Fil-Ams and balikbayans – whose preferred cocktail concoctions continue to evolve.

"You have to cope up with it," he points out, adding that the extra burden of a new set of excise taxes on "sin products" (alcohol and cigarettes) taking effect this year could further affect sales.

The Netherlands-based Maxxium actually started business in the Philippines in 2002 but merely as a representative office of the Singapore unit. Mendoza, then the country manager, helped set up the business and turned it into a profit-machine in 12 months. This eventually earned him a plane ticket to Vietnam in 2003 to oversee operations in the wider Indochina market, consisting of Thailand, Cambodia, Laos, Myanmar and Vietnam.

Mendoza says Indochina, Maxxium’s second largest profit source in Southeast Asia, is also a dynamic market for their products. As a former French colony, Vietnam has developed a sophisticated taste for liquor, with prospects of higher consumption due to its growing tourist population. Thailand, a bigger tourist draw with over 13 million arrivals yearly, on the other hand, is seen to pose a greater challenge since a change in government took place last year.

Backed by the military, Thailand’s new administration has imposed stricter rules on the liquor industry such as an increase in the legal age for drinking, an advertising squeeze and a clampdown on bar merchandising.

"We are in the process of interpreting what the law means," Mendoza says.

With the re-emergence of the Philippines as a major market — largely due to the addition of the Fundador brand in Maxxium’s portfolio — Mendoza, a business economics graduate from the University of the Philippines, was recalled back in 2005. Since then, he has guided Philippine operations — along with that of Thailand — to new performance records.

The Philippine subsidiary presently handles the sales, local marketing and distribution of 12 of the world’s leading premium wines and spirits brands — a potent mix of brandy, whisky, vodka, cognac, bourbon, rum and tequila.

As diverse as its product list is the price range of the liquor brands. At the low end is Tres Cepas brandy, at a suggested retail price of P250 per bottle, while its high end counterpart is the rare 100-year old Remy Martin — Louis XIII Black Pearl Edition cognac label, costing an astounding 6,000 euros or approximately P380,000.

Not surprisingly, brandy makes up the largest segment in Maxxium’s business, pushed significantly by the popularity of the mid-range priced Fundador which, unknown to many, has proven to be a success story for Filipinos, who helped land it in the elite list of the world’s 100 most powerful brands joining the likes of Coca-Cola, Toyota, Nokia, Microsoft and GE, to name a few.

In 2005, Allied Domecq’s flagship brandy brand was acquired by Beam Global Spirits & Wine, a co-shareholder in Maxxium Worldwide, greatly strengthening Maxxium’s hold of the markets in Canada, Germany, Spain and the Philippines.

Aside from the Jim Beam group, Maxxium Worldwide’s other co-shareholders are the Edrington Group, Rémy Cointreau and the V&S Group, combining their global distribution resources to make Maxxium the biggest of its kind in the world.

The Edrington Group produces Scotland’s best selling Scotch whiskies including The Famous Grouse and Macallan Single Highland Malt. The V&S Group, a Swedish-owned corporation with extensive international operations, has its biggest brand in Absolut vodka, the third largest premium spirit brand in the world.

France’s Rémy Cointreau Group also ranks among the leading players in the worldwide spirits industry with a portfolio of unique and international brands that consist of Rémy Martin cognac, Cointreau liqueur, Mount Gay rums as well as Piper-Heidsieck champagne. The Chicago-based Beam Global Spirits & Wine, meanwhile, owns and produces leading global brands such as Jim Beam bourbon, Canadian Club, Sauza Tequila, Maker’s Mark, Small Batch Bourbons and a strong portfolio of premium Californian wines as well as leading local spirits brands such as Larios gin and Whisky DYC.