Q & A
Alumnus Bengt Baron talks about leading the well-known Swedish spirits company
Interviewed by Ronna Kelly
Bengt Baron, BS 85, MBA 88, has had a busy year. As CEO of Vin & Spirit, parent company to Absolut Vodka, Baron led the Swedish conglomerate through a nearly $9 billion acquisition by France-based Pernod Ricard. Before joining V&S in 2001 as president of its Absolut Vodka division, Baron worked at McKinsey & Co.; several consumer product companies, including Coca-Cola and Kodak; and led a successful dot-com IPO for a European Internet job posting board called StepStone ASA.
During his time at Cal, meanwhile, Baron won two Olympic medals swimming for the Swedish team in 1980 and 1984.
Baron plans to leave Pernod Ricard this fall after helping with the integration of V&S and has not yet decided on his next move, although he says he hopes it's as exciting as his run at V&S. In an interview at Haas before giving the class of 2008's commencement speech, Baron talked about the Pernod Ricard merger, innovation at Absolut, and Berkeley.
What were some challenges you faced planning a merger with another large company?
The challenge is how do you maintain the integrity of the old company, and to what extent do you break it up and merge it into the larger company to maximize the benefit of the new structure. That's a trade-off, and I don't think there's a simple model for that.
The potential of the Absolut brand is mind-boggling, and we don't want to lose momentum. Now, many of the emerging markets like Brazil, China, India, and Russia have tremendous potential because Pernod Ricard has wholly owned distribution companies in approximately 70 markets around the world.
Absolut is well-known for its innovative advertising and flavors. How do you drive innovation?
I'm not the believer in the "innovation department." It has to be in the fabric of every employee and part of the culture.
I think we've taken some steps forward where we're actually taking innovation to the next level. We launched a product last year, Absolut New Orleans, which was a limited edition local unique flavor which was very tailored to the Cajun taste — mango and black pepper. Then we donated all the proceeds from that limited edition to the rebuilding after Hurricane Katrina. I thought that was a very nice way of responding to the disaster: We do something good, but also showcase the brand.
In advertising, we have evolved the campaign over 27 years. Last year we launched the next generation of the campaign. Now we're talking about "In an Absolut World." We're viewing the world through Absolut eyes, sort of an idealized way of "What would it be like?"
How do you weave innovation into the fabric of every employee?
It's a lot about, what do we focus on? What do we communicate? What is success? What do we highlight? What don't we accept? We don't accept mediocrity; we don't accept same-as-yesterday. It's in the values and also the type of people that you bring in and the training that you do. Who do you compare yourself to? It's easy to benchmark yourself with players within the industry. We'd much rather benchmark ourselves with Apple or with Nike, which have taken innovation a long way.
Going back a few years, how did you end up at Berkeley?
I was a swimmer and heavily recruited. We don't have any collegiate sports in Sweden, so a lot of swimmers went over to the US. I chose Berkeley for several reasons. The swimming program was excellent. Number two, the academic reputation.
Luckily, people told me early on two truths in swimming in Sweden: One is you retire young, and two is you retire poor. There's no money in this sport. So getting an education to transition into the real world was a way forward. I was really keen on finding a good academic institution. Berkeley has a great reputation in the US, but an even higher reputation in Europe. I don't think people always realize that.
The third reason is the swimming program at Berkeley actually graduated the swimmers, unlike some other programs. And finally, it's just a beautiful place.
What did you take away from Haas and Berkeley?
One thing that I love about Berkeley is the diversity. You can find everything and then some, which I find very stimulating. Number two, being surrounded by brilliant people is always extremely beneficial.
I like to blend slightly more emphasis on the theoretical rather than just case studies. I thought there was a good mix at Berkeley. When I left, I had a solid toolbox that I could apply.
Have you applied any lessons from your Olympic training to your business career?
Being an athlete on the international level, you practice certain skills that I believe are very valuable in business as well. You understand the importance and power of setting ambitious goals and understand that there are no shortcuts to success — hard work pays off. You are able to remain focused on your target, and learn that achieving success is a team effort. And most importantly, if you want to achieve success, you have to truly enjoy what you are doing!