US cheap-liquor bil­lion­aire looks abroad as sales slow

China Daily (Hong Kong) - - Q&A WITH CEO - By BLOOMBERG

You may not have heard of Amer­ica’s rich­est spir­its bil­lion­aire, but odds are you’ve sipped one of his of­fer­ings. Or, more likely, chugged it.

Wil­liam Goldring, 73, built his em­pire on a sim­ple model: ac­quire cheap brands, hype them and then stack them on the bot­tom shelves of liquor stores across Amer­ica.

His closely held Saz­erac Co has be­come the coun­try’s sec­ond-largest dis­tiller by hawk­ing dis­count brands such as Bar­ton, Mr. Bos­ton and Fleis­chmann’s. You can buy 1.75 liters of each of his seven most pop­u­lar vodka la­bels for a to­tal of $80, the same price as one bot­tle of Ab­so­lut’s premier-level Elyx.

Enough frat brothers are grab­bing plas­tic bot­tles of th­ese and Goldring’s 300 or so other brands to drive his per­sonal for­tune to $3.9 bil­lion, plac­ing him among the world’s 500 wealth­i­est peo­ple in the Bloomberg Bil­lion­aires In­dex, the first time he’s landed in an in­ter­na­tional wealth rank­ing.

Goldring is lit­tle known out­side his na­tive New Or­leans where he moves among the char­ity-cir­cuit elites and has helped fund Tu­lane Univer­sity build­ings and ath­letic fields.

He’s be­com­ing bet­ter known now amid a year-long ac­qui­si­tion binge that’s vaulted Saz­erac into in­ter­na­tional com­pe­ti­tion.

“Bot­tom-shelf liquors can be tremen­dously prof­itable on the bot­tom line,” says Jor­dan Si­mon, a New York wine and spir­its writer and con­sul­tant. “They’re cheap to make, cheap to sell and you get a lot of turnover.”

Saz­erac doesn’t dis­close its rev­enue. The fig­ure prob­a­bly reached $1 bil­lion this year, ac­cord­ing to data com­piled by An­der­son Eco­nomic Group. Both the com­pany and Goldring de­clined to com­ment for this story.

While Saz­erac also owns pre­mium bour­bon brands Blan­ton’s, Buf­falo Trace and cult fa­vorite Pappy Van Win­kle, which com­mands $500 a bot­tle or more, most of its money comes from giv­ing unloved brands a prof­itable re­birth.

Fire­ball Cin­na­mon Whisky was just a Canada-only schnapps among a clutch of fla­vored Dr. Mcgillicud­dy­branded drinks that Goldring bought in 2000, ac­cord­ing to the com­pany. He dropped the doc­tor from the name and hired a so­cial me­dia guru in 2010.

Now the candy-sweet liquor has sup­planted Jager­meis­ter as the best-sell­ing US liqueur. Sales have bal­looned more than 3,600 per­cent since 2010, ac­cord­ing to mar­ket re­searcher Euromon­i­tor In­ter­na­tional Plc. The brand prob­a­bly sold at least $150 mil­lion in 2015, ac­cord­ing to data com­piled by Bloomberg.

Now, at least 16 cin­na­mon whiskeys are on the mar­ket, Fire­ball sales are cool­ing, and the bil­lion­aire is push­ing into for­eign mar­kets in search of growth.

South­ern Com­fort forms a key part of that shift. In Jan­uary he paid Brown-For­man Corp. $544 mil­lion for the sweet, peach-fla­vored whiskey drink that orig­i­nated in New Or­leans in the late 1800s and hit its cul­tural peak in 1970 as a sta­ple of Ja­nis Jo­plin’s purse. It’s mor­phed over the years into a brand al­most as pop­u­lar abroad as at home.

For­eign mar­kets ac­count for 37 per­cent of South­ern Com­fort sales, said Jeremy Cun­ning­ton, a Euromon­i­tor an­a­lyst in Lon­don.

Then in Septem­ber, Goldring bought Aus­tralian im­porter and dis­trib­u­tor South Trade In­ter­na­tional, im­me­di­ately adding South­ern Com­fort to its an­tipo­dal of­fer­ings.

In May, the bil­lion­aire paid Di­a­geo an undis­closed sum for Paddy, an Ir­ish whiskey sold in 26 coun­tries. He took Dan­ish vodka, Fris, off Pernod Ri­card’s hands.

“Spir­its is a ma­tur­ing busi­ness in the United States, al­beit one that still has some sur­prises. But it’s a ju­nior mar­ket in a lot of other coun­tries that has tremen­dous op­por­tu­nity to grow,” said Pa­trick L. An­der­son, CEO of An­der­son Eco­nomic Group, an East Lans­ing, Michi­gan, con­sult­ing firm.

Good times

Goldring grew up in a town awash in cheap drinks and good times. His father, Stephen, and a part­ner helped fuel the end­less party through a beer and liquor dis­tri­bu­tion busi­ness. Even in such a per­mis­sive cli­mate, the al­co­hol game had stigma enough that his father dis­cour­aged him from join­ing the com­pany af­ter grad­u­at­ing from Tu­lane in 1964 and a stint in the mil­i­tary.

“I told him, ’Well, I’ ll take my chances,’ ” Goldring said, ac­cord­ing to an ar­ti­cle in New Or­leans mag­a­zine. Goldring was soon run­ning the busi­ness and, a decade later, be­gan buy­ing it, ac­cord­ing to a 2009 de­po­si­tion.

In 1984, he bought shares in Saz­erac Co, founded in 1850 as a cof­fee shop. He even­tu­ally ac­quired the whole com­pany.

Goldring keeps a low pro­file, so low that it’s hard to find his name on the Saz­erac web­site. He has given in­ter­views only to lo­cal pub­li­ca­tions and to a tele­vi­sion show about the Jewish ex­pe­ri­ence.

Ex­cept for an item not­ing that he at­tended a Ted Cruz event this year, Goldring’s press al­most al­ways cen­ters on phi­lan­thropy.

A rare spate of bad pub­lic­ity came this year, when a tele­vi­sion news pro­gram found that the non­profit Audubon Na­ture In­sti­tute, where his son Jef­frey and a com­pany ex­ec­u­tive were board mem­bers, had a deal since 1992 to buy al­co­hol from his com­pa­nies. The two re­signed from the or­ga­ni­za­tion.

per­sonal for­tune of Wil­liam Goldring, mak­ing him among the world’s top 500 rich peo­ple es­ti­mated rev­enue of The Saz­erac Com­pany this year

Wil­liam Goldring, head of The Saz­erac Com­pany, the largest dis­till­ing com­pany in the US.

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