The art of being underdog and market leader at the same time

Anna Malmhake CEO, The Absolut Company.

Reconsider, redo and always rethink what you do. Those three mantras can perhaps summarize Absolut’s CEO Anna Malmhake’s view on how to stay on top in an industry where traditions and heritage constantly must be balanced against having the courage to stick your neck out and take a stand. We had the opportunity to sit down with her and talk about the importance of innovation, how to best nurture a centuries old cultural heritage and why you no longer need to go to New York to know what the next big food trend will be.

You have worked for Absolut previously, but was away on another assignment within Pernod Ricard for a few years. What has been most fun and challenging so far?

–  I would say globalization. To me, it’s a privilege to so often to be able to meet and interact with people I would never have come into contact with otherwise – both inside and outside of the company and the group. But of course, there are also some challenges due to us being present at so many diverse markets at the same time. As a company, we’re always at different phases on different markets, which is something we always need to take into careful considerations. In some markets, we are a clear challenger, while we are the leading brand and mature in others.

In which ways have TACs developed itself to keep up with innovation, globalization and digitalization that have been the driving trends lately?

– We’ve always had to realize that we must be agile. When we started exporting Absolut Vodka in 1979, we were the “underdog” in the market. We had no experience of exporting – Vin and Sprit, which previously had a monopoly, was a fully state-owned company operating solely in Sweden. So, we had no established distributors overseas. We had no experience in markets where alcohol advertising was allowed. We were the challengers, simply, and meant we always had to think like challengers. It made us entrepreneurs. Later, when we had transitioned into market leaders in the US, we were still new to other markets at the same time – so the culture of being fast-paced and entrepreneurial lies in our DNA.

How do you and TAC act to create and maintain an open and inclusive organization?

–  I think it’s about having a good balance. For a while everyone said it was cool and good to fail. But it is not at all always cool to fail; there is a big difference between for example failing because you did not spend enough time and effort or failing because there were unknown factors you couldn’t have foreseen before you started. When you do fail because of something unknown and you learn something – great! What you learn from that situation can probably be applied to lots of projects in the future. In an organization as big as TAC, there is room for several different types of entrepreneurship and innovations. We have those who like to sit by themselves and twist and turn a problem, throwing a solid solution on my table later. Then there are intrapreneurs who love the power and collaboration opportunities that exist in large companies. Absolut art.com is a good example of this type of intrapreneurial initiative. Here you have all the power from TAC summoned behind an initiative – with financial muscles and amazing contacts in many countries – but the project is run by a small group of committed and initiated people who themselves have a mandate to influence, in an entrepreneurial way, everything they do and want to do.

Is development constantly required or are there still some old truths that always apply?

–  I’m very conservative with everything that has to do with safety in product development, manufacturing and transport, for example”. I think it’s great to be able to lean on practices that have been tested and evaluated for a long period of time. However, there are always people in the organization who are a little more uncomfortable with innovation, but you have to remember that within such a large company as TAC there are a lot of positions where this is considered a strength. Not everyone needs to be creative or innovative.

What do you think TAC’s Swedish heritage means for how you act when it comes to innovation?

– I am convinced that Sweden’s long and successful engineering tradition is very important. It’s always been at the forefront of finding new and creative ways of doing things. We are used to rolling up our sleeves when it comes problem solving. There are, among other things, clear examples of this in our own industry’s history. When Eva de la Gardie came up with how to make vodka on potatoes and was elected to the Academy of Sciences, or when L.O. Smith presented the best way to make absolutely pure alcohol in Paris 1878. What he created back then has over decades become the company we are today. Our industrial heritage is deeply rooted in the values of our company.

What other innovative companies or entrepreneurs inspire you?

– Many of the companies I am inspired by are in a completely different place or sector compared to TAC. They’re usually smaller and more highly specialized. For example, I am very impressed by a L.A based company called Wave. I met the founders in February and was completely fascinated by their product. They do virtual concerts. What was most inspiring was that they, themselves, fully understood the power of their product. Their unique selling point revolves around design and creativity of what they do. Their approach to building and producing concerts and making them accessible – it is so much more than simply just another virtual experience. They work with creating different types of worlds, tailored for the musician and the music being played. For me, it was very visionary – not just the technology itself, because I’ve seen it before – but how they use and build around it. It is the kind of company inspires me very much.

How do you and TAC work to avoid being blamed for different types of communicative “washings”?

– When you are as big as we are, it is inevitable that sometimes people disagree with what you do or say. And as we sometimes talk about issues that are sensitive to some – LGBT rights for example – sometimes people assume we use do this for some kind of opportunistic reason only. But the truth is – all things we talk about are in our heritage and in the brand DNA. Of course, there are “trends” in which issues that are currently on the agenda. If you don’t genuinely have an authentic point of view or commitment to a particular question, it is better to stay away. After all, brands have no general public mission to work with activism. There are plenty of things that are right or worth fighting for, which is nevertheless inappropriate for us as a company or brand to begin to communicate around.

Which values do you think TAC brings to the table?

– First of all, I think Absolut vodka is an excellent product. Of course, alcohol has its pros and cons like everything on earth, but I genuinely think the world is a better place when people have the opportunity to go out and have a drink with their friends. I’m convinced that we can contribute a lot to Sweden’s reputation and how us Swedes are being perceived, as we at TAC are so international. Especially within the world of foods and drinks. TAC is a company that demonstrates that you can create a strong, idea-driven world around a brand that can live through the centuries. We show that communication can be both contemporary and relevant, but in a timeless manner: We’re timeless in a timely way, as my colleague Ann Mukherjee who is CEO in the US, so nicely puts it.

What do you see as your greatest opportunities going forward?

– A continued globalization is a huge opportunity for us. There are countries where we are beginners as a brand, where we have a great opportunity to talk through our products. We have been working in “stealth mode” for a long time with things that are very important and valued today: environment, sustainability, ethical business, communities and partners. These are all subjects that are becoming increasingly relevant and modern in all markets. We know that we are at the forefront in many areas here in Sweden, but the world is catching up.

And the biggest challenges?

– It is extremely important to know what is really relevant to people in different countries and it is obviously difficult to constantly keep track of it. It’s not possible for us to just sit in Stockholm and think that it is the center of the world and that all external monitoring can be done from HQ in Liljeholmen, Stockholm. Sweden is not the whole world and it is easy to overestimate what we have here on our home turf and believe that it is the benchmark for everything.

For many, at least in Sweden, Absolut has a strong connection to our cultural heritage. How is that reflected in TAC:s business?

– We are always very attentive to the fact that we are the heirs to the entire Swedish aquavit heritage. After all, LO Smith’s creation did evolve into State-owned Vin & Sprit, which was then sold off and became TAC. I think it’s an interesting circle that has been closed – that the company that was created to make absolutely pure spirits then became The Absolut Company. And given that Vin & Sprit was a monopoly in Sweden for decades, we are now sitting on the whole cultural heritage, which we care for and nourish very tenderly with the help of our archivist Lovisa. Among many things, we have a fully functional distillery from the 1920’s. Talk about cultural heritage! It’s also visible in our products. Take Åhus Akvavit for example, here, we’ve worked with Swedish craft throughout the product. Absolut was also the company that started and led the trend with flavored vodka and it ties back to our history with aquavit – pure spirits with added flavors. We find lots of inspiration for our products in the unique heritage that we have access to.

What impact does Swedish food and beverage heritage have on your business?

– It has a huge impact! We have amazing flavors and ingredients here in Sweden that’s also greatly appreciated internationally. And we have fantastic chefs and restauranteurs who know how to make the best of the best. This means that we have a unique situation when it comes to product development. Our team in Åhus have access to our entire cultural heritage and then add to that the fact that we have a domestic gastronomy that can give us fantastic inspiration about what is happening here and now. Today we have access to so many talented and creative people close to us. In the 1980’s and 1990’s, it was obvious that you had to go to New York or London to learn from the top chefs and foodies. But that’s simply not the case anymore. Today we have everything right here at home and people comes to us instead. Working with Swedish food and drink today is incredibly fun and rewarding. We’re also avid supporters of Swedish gastronomy through our initiative Tomorrow´s Table.

What do you look forward to the most if you gaze into the future?

– To see the continuation of developments on the US market. With Ann Mukherjee coming in, I’m sure a lot of exciting things will happen. She is exceptional when it comes to product marketing. I think a good example of this is that campaigns such as SexResponsibly have already been launched. It’s a more challenging way of communicating than what’ve done in a long time in the US, but the reactions from consumers has been very positive. It will be fun to see how we can continue down this chosen path. I generally think that we recently have done things that are more in line with what we used to do historically, where we dared to take a stand and stick our chin out way more often. I look forward to doing more of this in the future. My vision is for TAC is to become Northern Europe’s most innovative company and for Absolut vodka to become the largest spirits brand in the world. We will achieve this within the next 15 years. I am sure of that.

Paul Ricard had a motto to “make a friend every day” which is still a guiding principle within the group. What is your best practice for achieving this?

– If you are curious, it is easy to make friends! This can be exemplified by realizing that this chef you just met at a restaurant probably knows a lot of things I don’t know, and that I can learn something. Or that the bar owner I meet knows a lot about what it’s like to start a new business and work at this particular place. For me, it’s important to try and absorb all the knowledge that is around me all the time. Regardless if it’s while traveling or back home at the office. And when you listen to people, learn from them and share your own knowledge – then you make friends.

If you weren’t the CEO for TAC, what alternative career do you wish you would have pursued?

– I probably would have wanted to become an engineer. Astrophysicists for example – but of course it is only a daydream that I would be sufficiently talented for that kind of work.

This is an interview series where several members of TAC’s management team will participate. Next in line is Vice President of Corporate Affairs & Communications Paula Eriksson. What question would you like to ask her?

– Wow, how fun. Then I wonder how Paula Eriksson would describe that people outside the organization is viewing TAC today? I’m sure she can give a good answer to that.