Benet Slay is the man that gave an unsuspecting UK public the Dorito. The flavoured corn chips are a brash, American sort of snack and, therefore, not a gift one would expect from the Welsh-born Slay, who comes across as a modest, measured sort of fellow.
Less memorably, the former management consultant and ex-PepsiCo man also gave us Smirnoff Norsk during his time at Diageo, where he worked in various roles from 2004 to 2011, before joining Carlsberg as a replacement for Isaac Sheps six months ago.
You may well not remember Smirnoff Norsk, which was launched in 2005, because it was not one of Slay’s success stories and flopped soon after appearing. “It was a blueberry-flavoured vodka, which we were trying to get people to drink neat over ice on low to mid-tempo occasions,” he explains. “So we were pretty much reframing everything about vodka all at the same time and it was too big an ask. We pushed the innovation boundary too far and consumers didn’t come with us.”
Exactly the opposite was true of the Doritos launch, however, which, while it looked as ambitious at the outset, proved a huge success.
“Doritos took salty snacks out of lunchtime and into the evening for the first time in the UK. They were made of corn, which was at the time unheard of in this market, and they came in new sharing-sized bags so there were a lot of new ideas there, but we took it slowly.
“For example, they were heavily flavoured at launch so people could get used to the corn taste and we used very simple media showing the occasion, to get our message over. If you look at the early ads all they show is people with friends, in the early evening, sharing a bag of Doritos and having fun.”
Move into cider
What these two invaluable lessons have taught Slay, he says, is that to innovate successfully in food and drink, it needs to be done slowly, to give consumers the chance to adapt. It’s a philosophy that clearly suits Slay’s (one imagines) methodical approach, and can be seen in the launch of Somersby, Carlsberg’s first cider, which it has been trialling in the off-trade since July.
“It’s not too challenging, it’s an accessible mainstream cider,” Slay says. “It’s not wacky, it’s right in the heart of what you’d expect from a cider, but it’s also a good smooth, easy-drinking product and that’s a very important space to be in.”
The brand will remain in a small part of the off-trade only for the moment, with the aim of a full launch in early 2013. The move into the cider market is significant for the brewer. Lager is a mature category and is “probably as big as it can be,” says Slay, so cider represents a potential share gain for Carlsberg. But it is also more significant — a shift from brewer, to drinks company.
“We believe offering a full portfolio to the on-trade is a key part of our business,” Slay says. “For Carlsberg globally, our goal is to be the fastest-growing beer company in the world, and that brings an emphasis on beer and emerging markets, but in the UK, and a number of other mature European markets, we are developing a broader footprint. It’s a share game and if there’s an adjacent pool of profit, to use a bit of strategy speak, such as cider, then those are good opportunities for us.”
As part of this move Carlsberg has rebranded its wines and spirits arm to Crown Cellars, widening and premiumising the range. It has already spent some £500,000 on its cask-ale business, which includes its own Tetley brand, as well as 38 ales from other brewers, to achieve Cask Marque accreditation. The only major brewer so far to do so.
Slay says he isn’t ruling out further acquisitions in the UK to help achieve his vision of a cross-category business, particularly in the brewing sector, but says the company is unlikely to go out and buy, “a Jacob’s Creek or a Blossom Hill”.
“Our primary job right now is to grow the portfolio we have because it has momentum, it is performing well and so we need to keep putting wind beneath its wings.”
Customer focus
He also has some work to do making efficiencies in the business and to accelerate the work already started by his predecessor Isaac Sheps, to make the brewer a more customer-focused business. “I think alcohol companies are not the best examples of customer-centric organisations. Herman Lay (the founder of Lays, PepsiCo’s American snack business) had a mantra: ‘Nothing happens until somebody sells something’, and I think that philosophy is very present in companies that are successful,” he says.
“I think all companies are working towards the same goal, which is to optimise the customer proposition by achieving the best levels of sales, while at the same time driving efficiency through the organisation.
“The difficult thing is to manage that trade-off, but when we get into these trade-off considerations we will go with what the customer needs first and get the efficiency second, rather than drive the efficiency first and see what is left to meet customer need. And that’s an important characteristic for Carlsberg.”
During his tenure with the brewer Slay says he has ambitions to not only achieve this in the UK but also to take that model to the rest of the Carlsberg group, and he also wants to use his time to make the UK business a more nimble organisation.
“We are pretty flexible already, but the demands of the market are going to make this even more of an imperative. The biggest problem is that we’ve got quite complex relationships with some of our bigger on-trade customers because we have supplier relationships, brewing relationships, logistics relationships, as well as sales and marketing relationships with them. Managing that holistically, in other words having a complex relationship with a customer and at the same time having speed in the way we work with them, that’s where the work needs to be done.”
Tax-ing issues
On top of these internal challenges, Slay will also have to prove himself a shrewd political mover, as the alcohol category comes under more and more pressure from health campaigners and the Government. He has experience of the former as a founding member of the Drinkaware Trust, of which he remains a trustee, and, as for the latter, his mettle is currently being tested.
“There is still a significant amount of proposed legislation on the table around alcohol, but there is little evidence from my perspective to support some of it,” he says. “A legislative approach quite often tends to draw lines around the problem to contain it, but what we quite often see is the unintended consequences of the legislation creating another problem. That’s one of the challenges and it’s hard to see if it’s going to work.
“Take Norway, which is the highest taxed regime in Europe, they still have massive binge-drinking issues. In France you have very tough marketing restrictions, but you’ve still got very, very high levels of alcohol harm. So we have to find a solution that is right for the UK. I think a bit of carrot and stick will probably be needed, but I don’t think blocking consumers (in terms of restricting sales or introducing minimum pricing) will work.”
The beer-duty escalator is another area of concern for Slay. “We need to keep getting more sophisticated in the way we approach that and fight our corner. It’s damaging in an industry that employs more than one million people, a good proportion of whom are under 25 — and unemployment levels among the under-25s is another issue we have in the economy — yet we are still seeing significant pressure being brought to bear because of high duty levels and increases in duty levels.
“So, although I think the case for removing the duty escalator is very clear, when it comes to squaring up budgets it’s a very difficult thing for the Government to give up. It’s easy, I think, for Government to say, ‘it’s there, so we aren’t going to change it.’”
In among all this, though, Slay says he mainly aims to keep having fun.
“Beer is an experiential market and I think it’s very easy in the pressure of day-to-day operations to get caught up in the idea of just running a business. However, we need to keep hold of the idea that these are great brands that bring pleasure to millions of people. That’s a great position to be in and a great legacy.”
A legacy that will perhaps outshine even the gift of Doritos.
Key dates:
1984 – 1988
Various commercial roles, Unilever
1988 – 1990
Management consultant, Deloitte, Haskins & Sells
1991 – 2004
Various sales and GM roles, PepsiCo
2004 – 2009
Council member, the Portman Group
2004 – 2005
On-trade managing director, Diageo
2005 – 2006
Off-trade managing director, Diageo
2006 – 2009
Managing director GB, Diageo GB
July 2009 – July 2011
Managing director Northern Europe, Diageo
2007 – present
Trustee, Drinkaware Trust
March 2012 – present
CEO of Carlsberg UK; rejoined as council member, the Portman Group