Jägermeister to change track?
That’s a tipsy rumour if ever there was one. On 22 November 2011 the German edition of the Financial Times reported of a big board-room brawl at Germany’s privately-owned Mast-Jägermeister company, which is world-famous for its Jägermeister schnapps and its corporate secretiveness. Sluggish growth of its Jägermeister brand in recent years seems to have given board members a bit of a headache. While some board members appear unperturbed and would like the company to continue as a single-brand business, other more powerful members favour a bit of M&A activity to get the company out of the doldrums.
Jägermeister is a prime example of how advertising and marketing can turn a somewhat dusty old boys’ tipple into a cult brand. However, as screamed the German tabloid newspaper Bild, Jägermeister is nursing a massive hangover.
Between 2000 and 2008 Jägermeister managed to increase sales by a whopping 150 percent. In 2010, the company from Wolfenbüttel in Lower Saxony sold more bottles of Jägermeister than ever: 84.6 million bottles.
According to Impact’s drinks brand ranking, Jägermeister came 8th in 2010 among the world’s top 100 spirits brands, up one notch from 2009 (it ranked 9th) and two from 2008 (it ranked 10th). Most of Jägermeister’s sales are outside Germany. Only 25 percent of its sales volume is done over the counter in Germany.
In absolute numbers this is a success. But if you take a closer look, those naff talking deer contributed to hardly any growth between 2008 and 2010. According to Bild, sales went up by a meagre 3 percent.
Bild, ever the alarmist tabloid, concluded: Jägermeister seems to have gone out of fashion. This may not be quite the case but at the same time there is no denying that Jägermeister’s stagnating sales pose a huge problem to the company. The Mast-Jägermeister AG is dependent on a single brand.
Therefore a long-standing dispute has flared up again between the two boardroom camps, thinks the Financial Times Germany (FTD).
On the one hand, you have got the "traditionalists": Supervisory Board Chief Walter Sandvoss and the former international sales head Jack Blecker want to hold on to Jägermeister as their portfolio-of-one brand and take Jägermeister to new heights.
On the other hand, you have got the "revolutionaries": Florian Rehm (34), the great-great-grandson of company’s founder Curt Mast, and Michael Volke, the former boss of Bacardi Germany. These two are believed to be on the look-out for one or two brands to buy.
Mr Rehm, who owns 55 percent of the shares, seems to prevail with his strategy. Because he now enjoys the support of Mast-Jägermeister’s Chief Executive, Paolo Dell’Antonio, the FTD writes.
The FTD has no clue as to which brands Mast-Jägermeister has identified as acquisition targets. But in the past the "revolutionaries" did not seem too fuzzy. There was talk that they were even looking at buying Jack Wolfskin, a German outdoor clothing company, when its owners, the private equity companies Quadriga and Barclays Private Equity, wanted to sell out earlier this year.
Mast-Jägermeister could splash out on attractive targets. The FTD reckons the company is sitting on a cash pile of at least EUR 500 million (USD 665 million).
When approached by Bild, Mast-Jägermeister reportedly said that there was absolute agreement between the Executive Board and the Supervisory Board as concerns the company’s future strategy.
We shall see.
