Spirit of the Nordics

Arcus is the proud standard-bearer of aquavit – the traditional alcoholic drink in the Nordic countries, holding the majority of the market share in this niche category

Numerous are the reasons that have led to the recently-renewed interest in the social, cultural, and economic state of the Nordic countries. Norway, Sweden, Finland, Denmark, and Iceland regularly occupy the top spots on various tables measuring happiness and well-being and these countries are often portrayed as modern-day havens, thanks to their successful implementation of the welfare state concept. The Nordic model, as it is known, is an extraordinary blend of the promotion of individual autonomy and social mobility, protection of the workforce (with it being highly unionised), and commitment to private ownership and the basic principles of free market capitalism. As a result, the Nordic countries are among those with the highest quality of life worldwide and a popular destination for expats and tourists alike.

It would not be a far cry from the truth if we said that Arcus is one of the Nordic companies with the highest potential to ‘export’ the region’s beverages heritage. The Norway-headquartered organisation is the leading distributor of aquavit – the authentic Nordic spirit and a staple in Scandinavian drinking culture, having made great strides in its overseas activities in recent times.

“Aquavit has some similarity to gin, but instead of deriving its flavour from juniper, it is made with caraway or dill seeds,” explains Erlend Stefansson, Head of Arcus’ Spirits division. “Our brand has a history, which dates back to 1805 when the Linie aquavit first travelled from Norway to Indonesia and the Far East on a ship, acquiring its distinct taste during the journey.”

Here is a fascinating story shared by Erlend: “When a group of Norwegian merchants set out on a two-year journey from Trondheim in that year, they loaded their ship with all kinds of merchandise. To their astonishment, when they returned, they discovered that the taste of the spirit they had brought with them was very different from the one it had at departure. The uniqueness of the Linie aquavit lies in the fact that it undergoes a fast maturation process as it travels around the world and is subjected to different meteorological conditions, such as various humidity levels and temperatures, which give the spirit its milder taste.

“Impressive as it may sound, the tradition of the Linie aquavit travelling from Norway to The Far East (now Australia) and back again to develop its taste, continues to this day. It is a journey that takes four months and for those who want to follow it, it is being streamed live on,” he adds.

Arcus has been operating in the wine and spirits market since 1996, following the demerger of the state-owned Vinmonopolet, and has been privately-owned since 2005. The change of its ownership model has enabled the company to grow considerably in size and in 2016, it was even listed on the Oslo Stock Exchange.

“We also have a track record of strategic acquisitions, the most notable of which came in 2013 when we purchased Denmark’s leading aquavit company in Aalborg, covering the Aalborg and Malteserkreuz aquavits and the Gammel Dansk bitter,” Erlend points out, moving on to discuss the commercial side of the business. “By operating two of the biggest brands within the aquavit sector, we have been able to secure some 60 per cent of the market share globally and we distribute our products to approximately 30 different countries. While the bulk of the business is in the Nordic countries and Germany, we also ship substantial volumes to the US, the UK, France, the Benelux, Spain, Asia, Australia, and New Zealand.”

New product development
In order to create the best possible proposition for each of its markets, Arcus works tirelessly on developing new products that are tailored to the specific requirements of the geographical area they are being sold within. “There are some important differences in consumer preferences in the countries where we are present and for us to keep our finger on the pulse, we have established local sales and marketing offices in all the Nordic countries, Germany, and the US. Taking into consideration the feedback we receive from these organisations, we adapt our products and release between 30 and 40 new variants across these markets every year,” Erlend comments.

The flexibility displayed by Arcus in new product development has inevitably helped the company become a leading spirits operator, as the business is now no.1 in the Norwegian market, no.2 in Denmark, no.5 in Sweden, and no.6 in Finland. In addition, Arcus is the biggest aquavit company in Germany.

“We can see an increased interest from all over the world in Linie aquavit, in particular,” Erlend reveals. “More and more bartenders and mixologists discover this unique product and start using it in their cocktails. I believe that they are fascinated by its authenticity, because this is what consumers want nowadays – they are keen on choosing original brands whose story can be traced, and we are certainly winning on this trend.”

The big picture
Together with distributing purely Nordic spirits, Arcus is also the regional representative for a number of international brands such as Bushmills, Jose Cuervo, Kraken, Label 5, Negrita, Plantation Rum, Buffalo Trace Bourbon, Fireball, Glen Moray, and Clontarf. Erlend highlights the key strengths the company possesses that have allowed it to gain the trust of its foreign leading spirits brands: “As it became clear, we have a very strong presence on every level in all the Nordic markets. Our knowledge and competencies in the region are especially valued by our partners, because we have adopted a sort of a ‘think global, act local’ approach. Although the company’s headquarters is in Norway, we have two directors living in Denmark and one in Sweden who are part of the integrated management team we have in place that has the ability to work across the separate markets, while keeping an eye on the wider picture.”

The seamless succession of the processes run by Arcus is ensured by the state-of-the-art facility the company opened in 2012. Being one of Europe’s most modern production, bottling, warehousing and logistics sites for spirits and wine, Arcus’ complex even features its own coopers’ area where professionals make and refurbish casks and barrels. “We are the only company in the Nordics to employ our own coopers,” Erlend states proudly. “Other than that, we have every type of facility that can be expected from a spirits operator, including cask maturation and bottling zones, a logistics building, a warehouse, and sales and admin offices.

“From the start, the facility was conceived as one that was going to use only sustainable energy sources and much less water than most other companies,” he continues, drawing 29our attention to some of the practices Arcus has established to guarantee that it continually operates in a socially responsible manner. “We are currently working on introducing recyclable packaging and we partner with various interest groups in Norway to promote responsible drinking. Last but not least, we are fully committed to keeping HSE-injuries at the lowest possible level.”

In conclusion, Erlend names the overarching goal before Arcus in the years to come: “We want to make aquavit a true global trend and we are pleased to report that we are already seeing some encouraging results. In Germany, for example, it has been selected as the most important emerging trend for a second year running, and we hope this will develop further not just there, but across all of Europe, and the US, as our presence in these markets is growing stronger than ever.”