Amid heavy expectations, young biz scion knows what to 鈥榗ancel鈥�
VINTAGE Tanduay Distillers has long evolved since this photo of its factory in Hagonoy, Bulacan, was taken. Behind the rum that Filipinos—and now the global market—have known and enjoyed for decades are roots dating back to 1854. —Contributed photos
MANILA, Philippines — Being the grandson of tycoon Lucio Tan, founder of the LT Group of Companies, comes with undeniable benefits: wealth, power, influence and everything in between—but also the unenviable weight of expectations to move a 170-year-old, internationally acclaimed enterprise forward.
The appointment of Kyle Ellis Tan to a top management position at Tanduay Distillers Inc. following the unexpected passing of his father, Lucio Jr., in 2019 got tongues wagging and naysayers already predicting his failure even before he could warm his seat.
Tan was seen as quite young—he was 24 at the time —and a stranger to the workings of the local corporate world, having grown up in the United States, detached from the family business.
Personal compass
The younger of two sons of the late Lucio Tan Jr., however, is proving his mettle and has already started contributing to the growth of Tanduay, with his sights set on further expanding the international presence of the world’s leading rum brand that is “distinctly Filipino, undeniably world class.”
Taking over the role of chief operating office early this year, Tan is very much aware of the pressures that come with his last name. But he does not let any negative thoughts bring him down.
Article continues after this advertisement“Honestly, if you keep thinking about [the pressure and expectations], you are going to get stuck. So what I kind of do is to cancel all of the pressure and all of the stigma attached to this role that I am in and just look internally, to my work ethic and skills I developed in school and with the family, and use that as my compass,” said Tan, who was a software engineer at Microsoft before becoming the executive vice president and then COO of Tanduay.
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“So I don’t really pay attention to the external pressure and I just trust in me. I think me and my brother (Lucio III, and LT Group president) are aligned on that one,” he said in an interview with the Inquirer.
Tan graduated magna cum laude with a bachelor’s degree in Computer Engineering from the University of Southern California, where he also finished his master’s degree in Computer Science.
Now, Tan is moving the international expansion of Tanduay into high gear. The growth potential, he said, is huge as drinkers of all ages appreciate the rum’s quality and long 170-year-old history, starting out as a distillery in Hagonoy, Bulacan, owned by Elias Menchattore y Cia back in 1854.
“When we looked at the numbers and delved into the operations, we saw that we have a tremendous product. We have a grasp on the Philippines, but one of the biggest growth factors we have is that we have not really touched the international market, and we are No. 1 in the world despite mainly being local. So imagine the potential in the global realm where we are just getting a small market share,” Tan explained. “That is why we figured that this is where there is the most room for growth.”
Market leader
Tanduay, which his father headed before his untimely passing, recently reported a 31-percent increase in its net income in the nine months ending September to P1.51 billion, from P1.15 billion in the same period last year, partly attributed to the increase in liquor volumes and higher selling prices.
Tanduay’s nationwide market share for distilled spirits did slightly decline to 32 percent in September 2024 from 32.6 percent in September 2023. However, it remains dominant in the Visayas and Mindanao regions with a market share of 70.7 percent and 79.7 percent, respectively.
Tanduay Distillers Inc.’s Kyle Ellis Tan
It has no plans of loosening its hold on the local market for distilled spirits, but the grand plan is to deploy more resources to penetrating markets overseas.
To get the most bang for its buck, Tanduay will focus its expansion on large markets, such as Canada as well as the United States, where it has already made significant inroads, particularly in states with large Filipino populations, such as California.
Overseas sales
“The Middle East is also very promising because we have a lot of our brand ambassadors there, so that is our focus right now,” Tan added.
He also noted the unexpected popularity of Tanduay in Belgium, the Netherlands and Luxembourg, which encourages further inroads into Europe.
Tanduay’s line of rum products is also available in China, Singapore, Qatar, United Arab Emirates, France, Germany, the United Kindom, Poland, Georgia, Costa Rica, New Zealand, Ukraine and Taiwan.
In 2023, Tanduay’s overseas sales surged by close to 60 percent from the previous year, and the momentum is expected to have carried over this year.
Acclaimed product
Recently, Tanduay won a gold medal for its Asian Rum Silver at the 2024 San Diego Spirits Festival in California. The same spirit had won a gold medal at the RumXP International Tasting Competition during the Rum Renaissance Fesitval in 2014 and a double gold medal from The Fifty Best’s Best White Rum Awards in New York in 2020.
The Tanduay Double Rum was also awarded a Grand Gold Quality Award from the Monde Selection Quality Institute.
Tan stressed that whatever he decides on, it will be aligned with what his brother wants for the group.
“Whatever we do, we align it. Me and my brother, we don’t go out and go rogue and make decisions and then tell us about it later. We make a decision as a team. When I have an idea or he has an idea, we make sure both of us agree,” Tan said. “Right now, the direction that we are all taking is to really go global.”
