During his recent visit to Nigeria, Benjamin Smith, Hennessy Business Development Manager for Africa & Middle East, spoke with Tayo Fagbule (Editorial Board Chairman) & Michael Ani (Analyst) of BusinessDay, about how Hennessy is experienced in Nigeria, one of its fastest growing and it’s second-largest market in Africa. Benjamin Smith has over 15 years’ experience in premium spirits, with the past 10 years within Moët Hennessy (LVMH). Excerpts;
What’s it like to be an Aussie based in France overseeing a premium spirit for Middle East and Africa?
It’s an opportunity I had in my sight for my years. I worked for Hennessy for 12 years in Australia before they offered me this incredible, exciting role. It involved moving to Paris; I split my time between Paris and Cognac which is great since you get the best of both worlds: the incredible city of Paris but then you get to spend time in Cognac which is a beautiful small French town totally devoted to cognac;it’s all about cognac in Cognac. You get an amazing opportunity to spend a lot time at our home in Cognac.
The best part of the role for me is to be able to travel to Africa frequently to work closely with the team. Africa is the fastest growing market in the world for Hennessy and to work in a market that is so dynamic, for a brand I love, is a dream and I’m blessed.
How steep has this learning curve been?
If you have a passion, it’s one of those things you can’t know it all; new products, new trends that’s why I love this industry, there’s always something new to learn. There is a never a dull moment.
I’m here now in Nigeria working for a brand I love; I wouldn’t have it any other way,hosting events and taking people through the experience. I’m very fortunate to be in this position.
In the premium spirits market the new-world is differentiated from the old-world. You’re from the new-world (Australia) selling a brand from the old-world (France) in Africa, the fastest-growing market for Hennessy. How is that panning out?
In terms of an old brand playing in a new market, it seems to be working well. Hennessy is an old brand established in 1759, it’s been around for over 250 years. But we’re not new to Africa. It’s important to understand that we tracked the 1st shipment to Africa back to 1866. So it’s not a brand that just popped up in the last 20 or 30 years; we’ve been around for a very, very long time. And the beautiful thing about Hennessy, from the beginning, is that it’s not a one-size-fits-all approach. We make the same cognac, it’s the only thing we do but we’re not prescriptive about the way different countries consume it. We’re not prescriptive about the way different countries activate, bring the brand alive in their market. That has been the success of Hennessy.
In Africa we’re not trying to do same thing as in China, it’s a completely approach. It’s bespoke. What we do in Africa for Hennessy is for Africa. Advertising campaign is specifically for Africa. The way Hennessy is consumed, for instance in Nigeria it’s consumed in nightclubs. You have to embrace what’s happening locally to be a successful brand. And it seems to be working and we don’t want to change it.
You talked about rolling out different strategies for different countries. What kind of strategy are you using to market your brand in a country like Nigeria where almost everyone believes that all wine is red?
To be successful you need to appeal to all your consumers. In Africa we see there are many different consumers of Hennessy. There is a wide demographic: men, women, all of different ages. We have a portfolio of products as well, VS, VSOP, XO and rare cognac collection.
The strategy to engage is to ensure you’re speaking in the right way to your consumers. Education is part of it. In Nigeria we’re seeing consumers who want to learn more about how we create cognac. At Hennessy we take education seriously; it’s a big part of my role. My favourite part is to get to speak to and train our internal staff, trade partners and consumers about how we turn grapes into cognac.
They need to understand why cognac is different from whiskey. The younger generation of consumers is thirsty for knowledge. They want to understand more about what they are drinking. And that’s the key to get them at the luxury end of the market; they have to be passionate about what’s in the glass; the process of how we create cognac using since traditional methods since we were established 250 years ago. That’s part of the strategy. You need to inspire people about what’s in the glass.
For other consumers how it’s made isn’t that important. It’s about establishing a connection with the brand, making a lifestyle of Hennessy. I think that’s what we’ve done really well in Africa; Hennessy isn’t just a drink, it’s a lifestyle. For consumers that aren’t that interested about how it’s made, it’s all about creating incredible experiences for them and doing whatever it takes to strengthen that connection with the brand. This is working in Africa where you can feel a passion for Hennessy. That’s why I enjoy this part of my job which involves overseeing Africa. We share a passion for Hennessy. It’s a fantastic opportunity.
Could you give us a crash course about premium spirits and the Hennessy brand?
My pleasure. To understand Hennessy you have to understand Cognac which is a region in France. It’s the largest white wine-growing region in the world, double the size of Champagne. You need a lot of grapes because you lose a lot in the distilling and maturing process.
Richard Hennessy, our founder, an Irish entrepreneur,established the business. Since the beginning we’ve been looking beyond the horizon, setting the pace for the cognac category. We invented the classifications you know today: VS, VSOP, and XO. Hennessy, as the industry leader, sets those classifications which are all about quality control. One classification isn’t better than the other but it’s important for consumers to understand each classification hasa certain style. At Hennessy we understood early on that cognac is so versatile that you need these classifications for consumers to understand.
We’re also the pioneer of taking cognac around the world. In particular, Richard’s son, James Hennessy, had that spirit of conquest; he wanted to explore new territories. As I said, we tracked our first shipment of barrels to Africa to 1866; South Africa and Zanzibar (1898) were the earliest shipments. Our first shipment to Nigeria was in 1920. Our 100th anniversary comes up next year.
Premium spirits is a booming category. Spirits priced above $20 are premium. Hennessy is the number one international premium spirit brand; a recent achievement which we’re thrilled about. It’s a dynamic category. You have consumers looking to trade up to luxury spirits. Globally, people are drinking less but better – that plays to us. If consumers are going to spend that extra money they want the stories, they want the connection. Of course, the product has to deliver. The premium spirit is where you want to be playing. In the last 20 years the segment has grown by 69 percent.
Looking at your market in Africa can you give us an overview the share of Nigeria?
You can’t be everywhere in Africa; we’d like to be but there is a limited amount of stock allocations so we have to be focused about where we activate in Africa. We have the big two: South Africa and Nigeria are our biggest markets. Nigeria, our second-largest in Africa, is growing at an incredible rate. Then we have our boost markets: East Africa and few others where we see huge potential.
The strategy is to have the best people on the ground – it’s all about the people. If you have a great brand but the wrong people you’re not going to be successful. And we want to be in the best venues.
That’s our strategy: the best people working for the brand in the best venues, because that’s where you create those experiences, being in the top venues is what drives the connection with our consumers.It’s where everybody is looking.
Do you see the rising music industry driving the growth consumption for Hennessy in Nigeria?
Nigeria, without a doubt, is one of our fastest growing markets globally. And that success can be attributed to some of the top Afrobeats artistes’ passion for Hennessy. I was lucky to attend our last Hennessy Artistry event in Lagos and it was incredible to see these Nigerian superstars with bottles in hand.This has a huge knock on effect. It helps establish those connections; it makes consumers want to be associated. They want that lifestyle as well. It’s hard to say whatthis has contributed to sales but it’s important. A big star’s connection with brand is huge for us.
Does this explain why Nigerian artistes are featured in your adverts?
At the moment we have “All I need” which is our ad campaign. Again, it is an Africa-specific ad campaign that was launched two years ago. It’s a big step forward – in the previous campaigns you had a lot of colour, more energy – it speaks to what Hennessy is to Africa today. To be honest, I think it is one of the most exciting things we’ve done at Hennessy. We’re proud of it. That campaign features eight carefully selected vanguards from all across Africa; the Nigerian artiste is Kaffy, megastar dancer. Her values match perfectly with Hennessy.
Hennessy is in a niche market. What’s driving the growth in consumption – is it price or volume?
It’s always a value game at Hennessy. We don’t have an endless supply to flood the market with stock. For a product that is aspirational, it’s always a value game. What’s driving the growth is different in did areas. We are certainly seeing more females gravitating towards the brand which is exciting to see.
It’s hard to pigeonhole your stereotypical consumer because you appeal to so many people. The younger generation are looking to establish the lifestyle the artistes I mentioned are helping to establish, it’s a huge a catalyst for consumption.
We also find an older generation (in the late 30s) coming into that category. Potentially, they are single malt drinkers and they want to experience something different. People are jumping across categories – which we love. It’s all about variety.
Again, education: what’s the difference between cognac and whiskey? And the occasions are infinite. You can drink Hennessy as neat, with ice, mixed cocktail. Cocktail is another thing we’ve seen that has started to emerge. And that’s a big opportunity for Hennessy to play in the cocktail space. Growth isn’t from a single group or occasion we decided to tap into.It’s such a versatile brand.
Can you differentiate between Jameson, which is doing well in Nigeria, and Hennessy?
Jameson is an Irish whiskey. It’s made from grains. It’s a great product performing well in Nigeria and, globally, it’s in a lot of markets where Hennessy is doing well.
Hennessy is a cognac made from grapes. Both are consistent products. It’s very hard to make consistent cognac because you have different tasting grapes, depending on the season, which give different tasting edelweiss after we distill the grapes. Access to a wide supply of different edelweiss is important.
The big thing at Hennessy is the forward-thinking you need to be a successful cognac house. The minimum age of edelweiss in VS is three years; we blend edelweiss from three to eight years. For VSOP, the minimum is 4 to 15 years; for XO, the category we set recently is 10-year old edelweiss but we go above that to 12 years and up to about 30 years.
This s isn’t to say whiskey is easier to make by any stretch but cognac is very complexbecause you need all different components to make consistent cognac. And you need to be thinking 5, 10, 12 years down the track to be successful. In order to respond quickly you need to foresee what the future holds in terms of the different classifications. For example, where is XO going to be in Nigeria in 10 years? That time frame is the minimum it takes to produce grapes. You have to have a long term view.
Champagne imports to Nigeria over the past four to five years have shrunk. Consumers’ purchasing power too is shrinking. How has Hennessy fared?
Hennessy isn’t immune to economic circumstances. During a slump a softening is expected. From 2014 through to 2016 we suffered, like all brands.
At Hennessy it isn’t about knee-jerk reactions, panicking. You need to have a long term strategy because it takes a long time to make our product. And we’re confident with our strategy. We know Nigeria is a dominant market, we knew it was going to bounce back; we didn’t make any drastic change. We knew we would ride it out.And the last two years have been impressive. We’re back.
Data shows that when things are tough people look for affordable luxuries, even when times are tough you still want to reward yourself sometimes. Maybe you can’t buy a handbag or a new car; you can reward yourself from time to time. Hennessy sort of fits in that affordable luxury.
What has changed since your last visit to Nigeria?
This is my third visit to Lagos and my first time to Abuja. Things are always changing especially the nightlife. All the clubs are trying to take the experience one level up. You get the impression this is the experience then another club raises the level.
For me the energy you feel at night I haven’t felt elsewhere, the music, the energy, the sense of community.Everybody is there to have a good time. And it doesn’t matter what day of the week it is. I felt this partying with passion and connection with Hennessy during my previous visit but it’s the intensity that has changed.
I love every minute of my visit to Nigeria. It was good to visit Abuja as well; it was my first time there. Very exciting market, different but the love for Hennessy is there. You can’t take it for granted. It has to be nourished. We have a great local team here, strong long term partnerships with the venues; they are the key. If you’re not in those venues you can’t create the experiences needed for the connection.
I can’t wait to come back for the 10th anniversary of Artistry in December of which you’ll hear more about. We’ll soon communicate about what’s in store. It’s more than an event. We have our VS-Class auditions happening across Nigeria, to unearth the next generation of Afrobeats artistes who will perform at the event as well as our headliners plus a few other exciting developments I can’t talk about yet. We’ll be back. I can’t wait.
