6 Jun 2022
Damian Mckinney, head of the Stoli spirits empire: “We want to make Miraval the best rosé in the world”
The ambition of the Stoli Group is immense. Damian Mckinney, CEO of the group, is determined to raise the spirits company to the top. Yesterday a vodka voted best in the world, tomorrow owner of the best rosé?
Damian Mckinney joined the Stoli teams 19 months ago, the group known for its Stolichnaya vodka, created in 1938 – now rebranded as “Stoli” to assert its European origin – and for the ultra premium Vodka Elit, launched in 2003. Partner of Formula E in Monaco last April, the race takes on its full meaning for Stoli who, like the drivers, is embarking on a real race against the competition. And the group intends to win the podium. Damian Mckinney has been CEO of Stoli since October 2020. After a career in the Royal Navy, he created the international consulting firm Mckinney Rogers, to advise companies on the execution and implementation of their strategy. In this role, he has worked with a wide range of companies, including the Diageo Group.
LE FIGARO VIN. – Stolichnaya, is the 5th best-selling vodka in the world in 2017, and Elit vodka has won the title of best vodka in the world 10 times. What is the recipe for this success?
Damian Mckinney. – The recipe for our success lies in three fundamental ingredients. First of all, quality is very dear to Yuri Shefler, our founder. Since the creation of the group, he has never hesitated to return vodka samples many times to correct them, dissatisfied with the quality. Every year the samples are tested again and if the teams feel that there is room to maneuver to achieve the perfect vodka, then changes are made. For our Elit vodka, distillation is pushed to a higher degree, so that methanol – the chemical compound responsible for the “hangover” effect – is completely excluded. To obtain the purest vodka possible, in addition to conventional filtration methods based on sand and coal, an ancestral process consisting of freezing the vodka at minus 18 ° before lowering it very delicately to the liquid state. That’s why our Elit vodka is so sweet and I challenge anyone who doesn’t like vodka to taste it and tell me otherwise, he will definitely change his mind.
At the same time, it is essential to make the link between our products and our consumers: if we seek perfection for our vodka but there is no demand for this product, then it cannot be perfect. Only by responding to real demand will we raise our vodka to the top.
Finally, and surely most importantly, we want our vodka to be virtuous. May its production be in line with our values. That is why our commitments are strong and carry with them concrete actions. We display genuine solidarity for Ukraine, therefore, we are launching a limited edition of our Stoli vodka, in the colors of its flag, the profits of which will serve the cause of Ukrainians. The goal is to have raised $1 million by August 24, 2022, Ukraine’s Independence Day. The World Central Kitchen Association (WCK) will use these funds to provide meals to Ukrainian refugees on the ground and in countries bordering Ukraine.
The Stoli group behind the two vodkas Elit and Stoli is one of the great references in the world of spirits and in the premium market of vodka, what is its ambition today?
The Stoli brand was created in 1938 and has lived many chapters, today I have the chance to write the next one. When I arrived 19 months ago, the Stoli teams asked me “what direction should we take?” and I responded with a direction: by 2026, we will be the most powerful and sustainable ultra-premium wine and spirits group in the world. In this road to success, we must ensure impeccable product quality and rely on trusted partners and employees. If we have to win this race, then we need the best players. We are aware and transparent about our carbon footprint, our ambition is of course to excel in this area as well. For example, to transport our bottles we use containers where the space between the bottles is reduced so as not to travel empty, as many companies can do. But this is only the bare minimum in my opinion. To date, we are thinking about alternatives to glass for lighter bottles, made of organic matter. But this is still not enough, we want to go further in our approach. We have the ambition to partner with ECOALF, a foundation that collects and transforms plastic waste found at sea into clothing. We want to prove that it is possible to work in luxury while remaining virtuous and consistent with sustainable development.
Stoli is very committed to LGBT minorities. Where does this commitment come from? Is this a personal will of Yuri Shefler or opportunism?
First of all, this commitment is not new, Stoli has been an activist with the LGBT community for 30 years. It is an authentic fight that is shared by all our teams. To prove it, we want to go further than the actions put in place at the beginning. Stoli has been involved for many years with the Harvey Milk Foundation in the United States, created after the assassination of San Francisco City Councilman, the first openly gay American politician to hold an electoral mandate. To celebrate the 40th anniversary of the Harvey Milk election in 1978, we created a limited edition bottle of Stoli vodka bearing his likeness to raise funds for the foundation.
Yuri Shefler is a Russian oligarch, but he considers himself a dissident opponent of the Russian government, why?
Yuri Shefler cannot be an oligarch because by definition he does not rule an oligarchy. His company operates in a very competitive market, among the many players in wines and spirits. In 1991, at the fall of the Soviet Union, Yuri Shefler is this young entrepreneur who wants to believe in a democratic Russia. When he bought the Stolichnaya vodka brand on the public market in 1997, under the government of Boris Yeltsin, the purchase was legal. Vladimir Putin took power in 1999 and Yuri Shefler saw a terrible change: either he approved of his government and his policies, or he was forced to leave. Since Putin came to power, Yuri Shefler has been convinced that this politician is harmful and does not wish to have any connection with him or his government. Although Yuri Shefler did not equate himself with the Russian oligarchs – from whom Putin demanded shares of the companies they owned – he was finally forced into exile from Russia in 2002 for Switzerland. There, Putin pursues him to extradite him, he then goes to London where he ends up obtaining a passport, supported for his resistance to the Russian government. Meanwhile, Stoli production is moved to JSC Latvijas balzams, a historic distillery in Latvia, in Riga. Since then, the production of our vodka has been entirely European.
Does the current Russian-Ukrainian conflict affect your business?
Yes, initially, when we were still equated with a Russian vodka, produced by a Russian company, run by a Russian. After the announcement of the Russian offensive, bottles of our Stoli vodka, then labeled Stolichnaya, were removed from the shelves and emptied for protest in the United States. From February 24, 2022, our first reflex was to clarify the most important element: our vodka is Latvian and its elaboration is even partly carried out by Ukrainian employees. From there, we announced our position transparently, in all respects and regardless of the consequences, we are against Putin.
Precisely, do you think that all your consumers know the European origin of your Stoli vodka?
There are two things at play in this context. On the one hand, I remain very concerned about the war between Russia and Ukraine and everything that can be related to it at the moment. But reason tempers this emotional aspect. For example, in the United States, our largest market, only 1.6% of vodkas are truly Russian, with the vast majority being American or international. Today, I am convinced that our consumers have understood that our vodka is 100% non-Russian. In addition, I think our customers have become aware of our position in the face of the Russian-Ukrainian conflict, our limited edition of Stoli vodka #liberateukraine clearly announces the color.
Generally speaking, do you think vodka has a future?
Absolutely. First of all, vodka is a very versatile alcohol, which allows it to adapt to several moments of tasting and this is a strength. The recent crisis has had the effect of placing vodka at the heart of the debates and paradoxically, it has been brought back to the forefront. From a consumer point of view, vodka has gained visibility and is now just waiting to regain ground on the international scene. One may also wonder why consumers abandoned vodka in the first place. In my opinion, consumers have seen a ‘premiumisation’ of spirits that they could enjoy alone, such as a cognac or even a high-end tequila like Patròn for example. Today, vodka takes the same path and there are many premium and ultra premium vodkas like Elit. Consumers consider that there is something extra to the product and vodka intrigues again. Not only am I convinced that it has a future, but that it may well dominate the market again, as it may have been the case before.
Stoli, how many bottles of alcohol – including vodkas and other spirits – are sold per year?
That’s millions of cases sold every year. I could not give more precise data because we are a private company and these figures are confidential. To give you an overall idea of our growth, last year the Stoli Group achieved a 38% increase in its entire portfolio.
Vodka represents what percentage of your overall sales?
19 months ago, vodka accounted for 84% of our overall sales. Today it represents 68%. In no way does this mean that we do not grow, it is the entire portfolio that grows and evolves, but in the same way that large groups like Pernod Ricard – originally specialized in Pastis – our company – originally specialized in vodka – now has a large portfolio. Finally, our main clientele was mainly American but we now have a global reach. Our markets extend to Africa and Asia and we are determined to continue to expand.
In how many countries is Stoli vodka sold?
Stoli covers 176 different markets through its network of 200 distributors around the world. Stoli is headquartered in Luxembourg, but the group has production sites in Spain, Italy, Argentina and the United States.
Which spirits and wines are making the most progress?
We strive to offer the most powerful and sustainable portfolio of ultra-premium spirits and wines in the industry. Thus, we invest in categories and segments that are destined to develop over the long term. Currently, we are focusing our growth strategy on strong products in our range. This is the case of our Kentucky Owl brand, recently awarded at the San Francisco Global Spirits Competition, and growing. We recently announced a major investment in a distillery and visitor center in Kentucky. But also in agave-based spirits: we count in our cenote and Villa One portfolio, in the fast-growing tequila segments, and in the luxury mezcal segment with Se Busca. Rum is also part of our growing products, along with Bayou Rum, an American rum from Louisiana as well as premium gin with our Tulchan gin, from our Tulchan estate in Speyside, Scotland.
On the wine side, we have a luxury positioning. Last fall, we announced the purchase of 50% of Château de Miraval and associated brands. Miraval will enrich the portfolio alongside the Achaval Ferrer range, where we are seeing unprecedented interest in wines such as Altamira, a rare cuvée from very old non-grafted vines located at altitude in the Andes.
Many stars invest in rosé, today the Stoli group joins the movement by partnering with Brad Pitt in Miraval, why this choice?
First of all, Yuri Shefler is not the owner of Miraval, it is the Stoli group that owns the 50%. The purchase was a group decision, which aligns with our overall strategy to offer the best products that exist, whether spirits or wines. So, when we looked among the wineries in the world, Miraval presented itself to us as one of the best in its category, as a premium rosé de Provence. Miraval ticks all the boxes, it is a well-made brand, a quality wine in which the terroir is expressed, with a brand image linked to Brad Pitt, which brings visibility internationally. All this together, we win the jackpot. It was a real opportunity and we took it. In this partnership, each of the partners will be a winner. At Miraval, we bring our marketing expertise and our international network, while the Provençal estate offers us a high-quality product associated with the image of a world-famous celebrity.
Tenuto del Mundo – the wine subsidiary of the Stoli Group – has in its portfolio iconic Italian estates such as Masseto, Orneillaia but also the Argentine properties Achaval Ferrer, Melipal winery and the Arínzano estate in Spain. Miraval is the first French winery to enrich the offer of the Stoli portfolio, why a rosé and why Provence?
The rosé de Provence symbolizes the French art of living. More generally, rosé wine represents a real combination between art and science in my opinion, requiring a high degree of precision in the elaboration and in the blend Miraval is a combination of all these elements. Marc Perrin has experienced this, which is why he is perfect in his role. Thanks to him, Miraval is an excellent rosé.
By buying half of Miraval, Yuri Shefler enjoyed global exposure and the world is now burning to know who he really is, will he say?
Yuri Shefler does not have this ego, he does not want to praise his qualities and virtues to the whole world. He is first and foremost a founder and that’s how I call him, quite simply.
Is a wine brand more powerful when paired with a celebrity name?
Not necessarily. For example, there are brands of tequila that associate with celebrities and it works. But for wine, I think that the terroir remains the essential element because it results in a history and a trademark. So the real question in my opinion is rather “what does a celebrity bring to a winery?”. Also, I think Brad Pitt contributes to the field thanks to his taste for art, the rehabilitation of Miraval studio is an example. That is why the partnership is interesting.
What is Stoli’s ambition in Miraval, its vision?
We want to make Miraval the best rosé in the world. And we will achieve this together with the Teams of Stoli and Miraval. Our first concern will be to ensure that the amount of rosé available is sufficient to meet the demand. We will bring our expertise to continue to co-build this brand and we want to give more freedom to Marc Perrin so that he can bring his expertise as a winemaker.
What role will Yuri Shefler play in Miraval?
To be very clear, the only role that Yuri Shefler plays is that of an investor. It does not interfere with our activities. Jon Pepper, holder of a “Master of Wine” and CEO of Tenuto Del Mundo – our wine unit – will be Marc Perrin’s interlocutor. He looks forward to working with Marc Perrin to help develop Miraval and to participate in the next stage of its evolution.
In Miraval, the Perrin family is in charge of the production, distribution and marketing of the wines. What is your relationship with her?
We have a very good relationship with the Perrin family, I really feel that we are lucky to have met a friend in Marc Perrin, more than just a partner.
Today Stoli recovers 50% of Miraval, does it dream of owning the entire estate tomorrow?
No, we own 50% of Miraval and what we want above all is to create a real added value from this partnership, as a couple of us will go further. Our agreement with Brad Pitt is to make the castle a place where art and wine are one, with the most incredible of music studios.
In your opinion, what are the most exemplary brands in the world of spirits, wine, rosé? What for?
We believe Miraval is the most exciting brand in the rosé industry. Consumers are looking for a strong brand with true quality and here, Miraval is really above its competitors in the category of rosés de Provence.
If your vodka had to choose a muse what would it be?
That’s a great question. I think the symbol of our vodka is more than just a muse. It’s too hard to put a face or a name on it but if that person existed, I’d really like to know them! To describe our vodka to the world, I would like us to turn to Stoli realizing the difference and the good she has been able to do in the world.
What is the motto of your vodka?
Free your mind is Stoli’s original motto, but here I want to quote Susie Wolff, general manager of the Formula E team Rokit Venturi. On the eve of the race, she simply said “let’s go do this race to win it, but in the rules of the art”. So we, too, keep this taste for competition and do this race to be the best, but let’s do it well.