Wild Geese: Paul Duffy, chairman and chief executive of The Absolut Company
Clear view on what’s needed to succeed
Paul Duffy: ‘Sometimes in Ireland we can be a little critical of people who try.’
Paul Duffy may spend his time travelling the world as the chairman and chief executive of the Absolut Company, but he hasn’t forgotten his roots. Back in Dublin to visit Launchbox, a start-up incubator programme at Trinity College Dublin, which he has invested in, he says people always get drawn home.
“You get pulled back to your roots. With brands as well, we are always talking about village of origin. We have a series of city editions such as Absolut Moscow and Absolut Brooklyn. We really try to instil relevance for people on a local basis.”
Duffy, who is in charge of the Absolut Vodka, Malibu and Kahlúa brands, first heard about the programme from a former TCD classmate, Joey Mason of venture capital firm Delta Partners. “He asked if I wanted to get involved with Launchbox.”
The initiative is the brainchild of dean of research Prof Vinny Cahill and is supported through alumni donations from “Trinity angels” such as Duffy, who also provide expert advice and masterclasses.
“We do a lot of anthropological research for brands,” Duffy says. “The future isn’t a given. It’s what you create. I’m so impressed that these undergraduates and postgrads are creating their future. They didn’t want to spend time doing an internship at a big company. They wanted to be their own bosses.”
Duffy graduated from Trinity College in 1987 and joined KPMG in Dublin where he trained to be a chartered accountant. He moved to the Paris office of the accountancy firm in 1991 before returning to Ireland in 1994 to take up a finance role in Pernod Ricard’s Irish Distillers (IDL) unit.
He was appointed chief operating officer of IDL in 2000 and moved to the UK the following year to assist with Pernod Ricard’s $8.15 billion (€6.18 billion) acquisition of Seagram.
Pernod contributed about $3.15 billion or 38.6 per cent of the total purchase price, while Diageo contributed the rest.
In July 2008 he was appointed chairman and chief executive of Pernod Ricard USA. “The US was a tremendous experience,” he says. “It’s such an enormous market and if you get it right there, it can be very exciting. In 1979 when Absolut first came to the US it was very disruptive. Vodkas at the time were all Russian and Polish. Absolut was priced at double the price in its category.”
Absolut is now the second-largest vodka brand in the United States. The global financial crisis, particularly the four months after the Lehman crash, was a particularly trying time for Pernod, he says. “Anybody around during the financial crisis who didn’t find those times challenging must live in a different world,” he says. “Even consumer goods were hit. People traded down in brands and bought lower priced products.
“We bought Absolut in July 2008 [for $8.9 billion] and the financial crisis happened in September, before we had properly moved it into the company. It was a difficult process as we took over the distribution of Absolut in October then had to transfer Stolichnaya over to another party in December.”
Last year, Duffy moved to Sweden to head up Absolut, which is the world’s fourth-largest vodka brand, selling 100 million litres or 11.4 million cases each year.
“The US is fundamentally a single market,” he says. “Now I am dealing with lots of markets. You don’t get the same economies of scale with communications. In France you have to do it in French. In Germany you have to do it in German. It’s difficult as you have to speak cohesively as a brand around the world but be relevant locally.”
Despite living in Sweden, he says there have been no language barriers as English is the language of the company and he spends a lot of time out of the country. “I’m on the road most of the time,” he says. “There was only one week this year I haven’t been on a plane. You get used to it.”
The company recently launched a luxury version of Absolut, which is painstakingly handcrafted in small volumes. The company says the last few years have seen a wave of super premium vodkas that have been mostly about image, something it wants to differentiate from.
“We launched a luxury variant recently called Absolut Elyx,” he says. “It is double the price of existing Absolut but it’s handcrafted.”
He has no doubt the company’s latest offering will be a huge success, but is quick to point out the importance of taking risks and trying new things. “If you’re not making mistakes, then you’re not pushing boundaries and trying things,” he says. “Sometimes in Ireland we can be a little critical of people who try.”