Lysholm Linie Aquavit is marketed by the Norwegian spirits manufacturer Arcus Group (www
.arcus.no). In 2010, it had approximately 1.6 billion
Norwegian kroner (NoK) (€212 million) in sales,
NoK 132 million in net profit and 450 employees.
Around half of the Arcus sales are generated
outside Norway.
Aquavit (which means ‘water of life’), a slightly
yellow or colourless alcoholic liquor, is produced in
the Scandinavian countries by redistilling neutral
spirits such as those made from grain or potatoes
and flavouring them with caraway seeds. It is often
consumed as an aperitif.
The alcohol content in the various aquavits varies
somewhat, but starts at 37.5 per cent. most brands
contain about 40 per cent alcohol but Lysholm Linie
Aquavit has an alcohol content of 41.5 per cent.
(Lysholm is the name of the distillery in Trondheim
where the aquavit is made; hereafter we refer to the
spirit as Linie Aquavit.)
The history of Aquavit
Aquavit was originally used for medicinal purposes,
but from the 1700s stills became commonplace in
Scandinavian homes.
The definition of aquavit becomes complicated
when you try to distinguish it and other spirits popular
in the northern climate. The term ‘schnapps’, for
instance, is widely used in Germany, Switzerland and
Scandinavia (the Danish say ‘snaps’) to mean any sort
of neutral spirits, flavoured or otherwise. Then there’s
‘brannvin’, a term used similarly in Sweden. (Like the
Dutch word ‘brandewijn’ from which we derive the
word ‘brandy’, it means burnt wine.) The famous
Swedish vodka Absolut began life in 1879 as a product called ‘Absolut renat Brannvin’, which might be382 Part III Market entry StrategieS
translated as ‘absolutely pure schnapps’, said to have
been distilled 10 times. However, the Swedish
government’s alcohol monopoly launched Absolut as
an international brand in 1979, and labelled it vodka.
Making Linie Aquavit
Caraway is the most important herb in aquavit, but
the mixture of herbs varies from brand to brand. Linie
Aquavit is derived from Norwegian potato alcohol
blended with spices and herbal infusions, and caraway and aniseed predominate. After the alcohol and
the herbs have been mixed, the aquavit is poured
into 500-litre oak barrels. Norwegian specialists
travel to Spain for the express purpose of selecting
the best barrels from those used in the production of
oloroso sherry. Sherry casks are used because they
remove the raw, more volatile aspects of the liquor;
the aquavit takes on a golden hue, and the residual
sherry imparts a gentle sweetness.
many theories have been put forward to explain how
the man behind Linie Aquavit, Jørgen B. Lysholm, came
up with the idea of sending aquavit around the world on
sailboats in sherry casks in order to produce the special
flavour. In the early 1800s, the family tried to export
aquavit to the West Indies, but the ship, Trondheim’s
Prøve, returned with its cargo unsold. This is when they
discovered the beneficial effects the long ocean voyage
and the special storage had on the aquavit: the length
of the journey, the constant gentle rocking of the boat
and the variation in temperature on deck all helped give
Linie Aquavit its characteristic taste. Lysholm subsequently commercialized his maturation method and this
is still how things are done today.
Linie Aquavit has one of Norway’s long-established
shipping companies as its steady travel partner. The
first Wilhelmsen liner carrying Linie Aquavit set sail in
1927. Since that time, Wilhelmsen has been the sole
carrier of this distinguished product. The barrels are
tightly secured in specially designed cribs before
being loaded onto containers, which remain on deck
during the entire journey. The journey from Norway to
Australia and back again takes four-and-a-half months
and crosses the equator (or the line, as sailors prefer
to call it) twice. In fact, this is where Linie Aquavit gets
its name. on the back of each bottle is the name of
the ship and the date that it first crossed the equator.
International sales of Linie Aquavit
and Vikingfjord vodka
Arcus AS is Norway’s sole manufacturer of hard
liquor and it is this company which produces Linie
Aquavit. The company also taps (i.e. bottles) wine
from wine producers all over the world and imports
a select range of bottled wines. With a market share
of about 30 per cent, Arcus AS is the leading player
in the Norwegian wine and spirits market.
The international aquavit markets (primarily Sweden, Norway, Denmark, Germany and the US) are
dominated (except the last) by local aquavit brands.
At present, Linie Aquavit is the market leader in Norway with a 20 per cent market share. In Denmark and
Sweden the market share is 5 per cent. Germany is
the most important export market and Linie Aqavit
holds 10 per cent of the aquavit market in competition
with brands like malteserkreutz and Bommerlunde.
Arcus has established a subsidiary in Sweden,
but elsewhere it only uses export modes (foreignbased intermediaries).
Until 2009, Linie Aquavit was distributed by the
Berentzen Group in Germany. In April 2009, it transferred its German distribution to racke Eggers &
Franke (located in Bremen/Germany), which is a
subsidiary of racke GmbH Co. KG, mainz. racke
offers a broad assortment of spirit brands, especially
for retailers and the restaurant, hotel and catering
industry, not only for Germany, but also for the rest
of Europe. The current sales volume for Linie Aquavit
in Germany is around 750,000 bottles a year. Their
Source: Arcus Gruppen AS
(www.arcus.no).CHAPTER 10 ExPorT moDES 383
ambition is to push this figure up to one million bottles. With racke as its distribution partner, Arcus
hopes that Linie Aquavit can strengthen its market
position in the southern part of Germany, and in the
general on-trade segment (bars, restaurants and
hotels), where Linie Aquavit has, until now, been
relatively weak.
Linie Aquavit has long been the national spirit of
Norway and one of the flagships in Arcus’s portfolio.
However, with more than 80 years’ experience as a
supplier and producer of spirits and wine, Arcus has
a very diverse portfolio, including international premium brands such Vikingfjord Vodka. Despite the
fact that the US market is usually described as the
toughest vodka market in the world, Vikingfjord
Vodka has become one of the eight largest imported
vodka brands in the space of a few years, with a
volume growth of approximately 30 per cent per year
in the period 2008–2011.
QuEsTIons
1. What are the main advantages and disadvantages
for Arcus of using export modes, compared with
other entry modes, for its Linie Aquavit?
2. What should be Arcus’s main criteria for selecting
new distributors or cooperation partners for Linie
Aquavit in new markets?
3. Would it be possible to pursue an international
branding strategy for Linie Aquavit?
4. Which brand should be the major brand for the
US market: Linie Aquavit or Vikingfjord Vodka?