Evolving Drinks Brands

Evolving Drinks Brands

Evolving Drinks Brands banner

I recently read and shared an article in Forbes by Patrick Hanlon called, “Why Brands Must Evolve” that is so spot on that it has led to a number of interesting conversations in the past week with some of my clients and partners who own brands in beer, wine and spirits. As one who spends a lot of time thinking about new brands, as well as igniting established brands in new ways, Patrick’s thoughts really resonated with me. I don’t think there is a better industry than beverage to illustrate his points about what is going on with brands. Brand proliferation is happening across the board making “breaking through the clutter” ever more difficult. At the same time, the reason this is happening if fundamentally that there is demand for new brands. As I wrote in “RE: Is Craft Beer In A Bubble”, there is a big and growing market for new brands in beer, but also in wine and spirits. Not everyone will succeed and in fact many new brands will fail. To the big brand manager, the fundamental challenge has also never been so big – how do you keep a loyal following when your following gets gigantic. I think about an Iconic brand like Patron Tequila. I was a distributor for Patron as it passed between different sales companies and was a very difficult sell. Five years from the time it launched, Patron was doing about 55,000 cases. Now that is a nice little brand, but nothing would have screamed, “This brand is on fire!” Then, it did catch on fire and became the very symbol of luxury. Check out Patron case sales for the first 10 years:

Patron sales first 10 years

Patron is an amazing brand and continues to outsell all of the other super premium tequilas (and frankly all other spirits brands at $40/750ml bottle and higher). They have a huge and loyal following. However, as brand manager for Patron today, the things one has to do to market the brand are quite different than in the early years. How does one keep the “cool” factor going when you are the largest brand in your category. There are dozens of new entrants who are going after their market and have the advantage of being smaller (think Avion, Casamigos, Don Julio) and bringing a new “cool” factor to the market. Clearly there are many that succeed at this but being true to your brand and your audience while changing things up can be quite difficult. Absolut Vodka was THE luxury brand of the late 1980s and early 1990s. It was the “it” brand among the “it” crowd.

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Pernod Ricard paid over $8 billion to acquire the brand a few years back. How does Pernod now manage a giant brand that was formerly the top luxury vodka in a market with such massive proliferation of brands that the high-end vodka category has experienced. I’m told there are 800 vodkas in the Beverage Media New York book. Pernod recently announced a new bottle. Absolut is one of those brands that defined itself by its bottle.   Changing the bottle is a big move even in subtle ways. Adding the big A is a pretty big move. Large companies don’t usually make big moves, but staying relevant in a crowded market sometimes requires big moves.    Pepsico made an even bigger move a few years back with their Gatorade brand. I thought at the time, it was fairly risky, but it appears to have paid off (does anyone know details?).

gatorade new gatorade old label

Patrick’s article certainly cites a number of great examples of big brands that have managed to evolve over time and keep or even build on their past successes. “…the challenge for brands has evolved from creating awareness to creating meaning.” How do you keep creating meaning at scale like Nike, Apple and Disney have successfully done.  They each connect to their consumers and continually create meaning.

The wine market has evolved so dramatically, that I have to look up many of the brands on the grocery shelf today and I have been involved in selling $100s of millions of wine over the years. Why? New brand proliferation to attract the millennial consumers.

barefoot wine logo Meiomi wine

Take a look at the top 10 domestic “Hot Brands” put out by Marvin Shanken’s Impact Databank:

  1. Barefoot
  2. Black Box
  3. Bota Box
  4. Liberty Creek
  5. Boggle
  6. Apothic
  7. 14 hands
  8. Barefoot Refresh
  9. Gnarly Head
  10. Meiomi

Four of these are Gallo Brands, but none say Gallo. All have interesting, contemporary labels. To succeed in this hyper-competitive market, every brand must have a number of things. Great branding is vital, without it your brand is lost and has no chance. Great liquid that fits the taste of your target market is key, without it they won’t buy a second time. Distribution is essential, a brand cannot become relevant if consumers can’t find it. But how does a brand build a real following of consumers who care? That is, how do we create meaning? That is the question every new brand team needs to answer.

 

To quote Patrick again: “We want the added value of believing in something. The added value of belonging to something: being a part of something that hard-wires us to a larger community of “people like me””

 

Seth Godin in his fantastic book “Tribes” articulates this concept well.

“Seth Godin argues the Internet has ended mass marketing and revived a human social unit from the distant past: tribes. Founded on shared ideas and values, tribes give ordinary people the power to lead and make big change. He urges us to do so.” Brands have to figure out how to reach their tribes and how to engage with them. Notice, I did not say create their tribes. This is an important distinction. I believe tribes are discovered not created. Brands who overtly try to create one typically struggle. If a following is not organic, today’s savvy consumers sense it.   I think brands can make themselves relevant and worthy of a following and then as that following begins to show signs of life can play a role in fostering and accelerating it.

 

I’d love to hear your stories of brands you think are doing this right.

 

Cheers,

 

Smoke

 

YPO Food & Beverage Roundtable 2015

YPO Food & Beverage Roundtable 2015

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I spent the past week in Orlando, FL with an inspiring group of CEOs from the food and beverage industry. The roundtable is a once a year gathering of presidents involved in or interested in the industry. The network consists of over 1800 leaders doing everything from farming to production to distribution to food service/restaurants. It cuts across industries, from my world of beer, wine and spirits into the vast world of food (we merged the Global Beer, Wine and Spirits network with the Food & Beverage Network in 2013), so the network is truly from Farm to Fork and from Grape to Glass. A roundtable of thoughtful leaders from so many diverse areas is as much about learning from each other as it is the specific resources and education programming.   I come away from my 7th such meeting with a renewed vigor for pursuing my business and life goals, and an appreciation for the many friendships, old and new, I have through YPO. Here are some of the highlights:

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I’ll start with the integration of outstanding dining experiences with world-class beverages. We enjoyed a beautifully done dinner at Il Mulino at the Walt Disney World Swan (Walt Disney World Swan, 1200 Epcot Resorts Boulevard, Orlando, FL 32830). Il Mulino is world famous and their flagship restaurant in Greenwich Village remains top rated in New York’s elite dining scene. The Orlando Trattoria version is well executed. Of course, the making of a perfect meal is all about pairing the right flavors with each other and with the right beverages. Banfi Vintners, one of the largest importers of wine and a major producer of Italian wines was the perfect resource for our evening. I’d like to give a special shout out to Bill Whiting, Wine Education Director from Banfi who gave a delightful narrative to the wines and business as we progressed throughout the evening. All of the pairings were enjoyable, but my personal favorite was the 2009 Banfi Brunello Di Montalcino with Primo Piatto Tagliatelle (Lamb Ragu, Mirepoix, Pecornino). Wow.

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We went in a completely different direction at Fulton’s Crab House (A YPO company, Levy Restaurants) and a thoroughly enjoyable evening of one of Oregon’s greatest wine producers, Sokal Blosser. A special shout out to YPO member and winery leader, Alison Sokal Blosser who not only educated our group on the Oregon wine business and her wines, but entertained us with personal stories growing up in the vineyards in a wine family.   As a Pinot Noir fanatic, I was certainly in my element as Alison shared their outstanding 2012 Dundee Hills Pinot Noir and then dipped into the very limited production Goosepin block 2010 and 2011. Capping off the evening was a special treat of her 2013 Dessert Riesling. It was, on the whole, an enjoyable evening interacting with members.

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On our final evening together, we were able to visit member and Chef John Metz Jr.’s Marlow’s Tavern. As they describe it “Marlow’s Tavern features the “Best of the Best” in American tavern fare served in a modern atmosphere.” I would call it a modern gastro pub and simply a great place to enjoy high quality food in a very relaxed atmosphere. John and his partners now have 13 Marlow’s in Atlanta and 2 in Orlando. Craft cocktails accompanied the expertly executed appetizers and my friends at the Belhaven Brewery from Scotland provided us with some Belhaven Black Stout and Belhaven Twisted Thistle IPA.

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From Marlow’s we moved on to a tequila pairing dinner at the vibrant (one might say ROCKIN!) Rocco’s Tacos. Our friends at Brown-Forman were the perfect partner as we enjoyed a full range of their Casa Herradura tequilas. Thanks to both Michael Ring and Greg Stewart of Brown Forman. The tequilas matched the courses nicely but the final offering of Selección Suprema Extra Anejo, aged 49 months on oak was spectacular. This is a true sipping tequila.

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The educational aspects of the meeting were a mix of in industry (Food & Beverage) and outside industry but all focused on “president level” education. In other words how do I perform better as a president and how do I make my organization more effective. I share here a few non-confidential highlights from the many outstanding educational sessions:

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  • Celebrity Chef and Top Chef season 11 fan favorite Nina Compton, gave a personal account of her journey as a chef from growing up in St. Lucia to chopping carats in the back of kitchens to a becoming major TV celebrity. I have had the opportunity to enjoy the four-star food at Scarpetta in the Fontainebleau where Nina was chef de cuisine until June 2014. She has a great energy and I cannot wait to try her new restaurant she is opening soon. Details to come once it is announced!
  • We had an only in YPO discussion on family business with four leaders from YPO companies who are all in the same family. It was fascinating watch their interaction and how they have tackled the jugular issues any family business faces in success and succession.
  • WPO member, industry leader (and recent National Restaurant Association Chair) and Executive Chairman of Miller’s Ale House, Phil Hickey gave us compelling insights into the election results and the importance of each of us to be involved politically. There are a lot of bad for business movements that are well organized and need to be countered by the people that actually create the businesses that support jobs and the economy. If we don’t do it who will?
  • A leading expert in risk management, Richard Shanks of Aon Risk Solutions, gave a compelling if not disturbing talk on the risks to the food supply and what leaders in industry are doing to mitigate and prevent problems. This is a topic that anyone in the food and beverage business at every level (farming, production, retailing, serving) need to be knowledgeable in and prepared for.
  • Richard Van Warner of the Parquet Group, a leading restaurant consulting firm, gave a talk that brought the risks of not handling a problem, in a timely and well-considered way, to life. His war stories and examples of what not to do were entertaining and at the same time a wake up call to everyone in the room.
  • If we did not have enough to be concerned about with the food supply risks and the PR issues in handling problems, the truly scary world of cyber security came to life in Tom Noonan’s talk. Noonan is Chairman of Tessentee Capital and a WPO member, and has had a lot of experience dealing with cyber threats. His deep dive into the Target fiasco was telling. People are involved in every business. People are the biggest risk. In many cases, the very basic, simple steps that can be taken, and need to be taken to encrypt sensitive data and manage the outside access to the web, are simply ignored. Any company leader not taking this serious threat at the CEO level is risking not only their job, but their company.
  • The recent changes President Obama has made with regard to Cuba, has made it a very interesting topic indeed. We enjoyed a briefing by business intelligence experts Javier Ortiz and Marty Martin of Crane & Crane Consulting. The bottom line is Cuba is opening up, but there is a lot of uncertainty on how fast. It has unique potential as a destination for Americans with its close proximity to the US, natural beaches and friendly people. I think there will be a lot of investment flowing into Cuba from all over the world as the relations with the US continue to normalize.
  • Marshall Chiles of Humor Wins gave us a methodology for injecting humor into our presentations. It was a fun (and humorous) walk through the mind of the comedian. I don’t think any of us will give up our day jobs, but the approach he shared can certainly liven up our presentations. Thanks Marshall!
  • Our behind the scenes tour of Disney’s EPCOT Center “Land Exhibit” was interesting. EPCOT has had a sustainable farming operation for over 25 years and continues to do extensive research on best practices. With the world’s population growing at the current pace, it is clear that food supply and conservation of clean water is going to be among the biggest concerns going forward. I don’t think enough people are thinking about this or doing anything to prepare for it. I’m glad Disney is playing some part and I hope they think of more ways in which to spread the word.

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  • We had an interesting talk from a senior executive at Disney, Elizabeth Ann Williams General manager F&B for Disney’s Hollywood Studios/Walk Disney World Resort -who shared the “DISNEY WAY” = Safety, Courtesy, Efficiency and Show.   Her passion for the EPCOT Food & Wine Experience was great to see, as it is one of the coolest events in our industry and Elizabeth had a hand in its creation.
  • Michael Pavone, a friend and YPO member, gave us an updated summary of his “Trends in Food & Beverage” report his agency puts together annually. It is always an interesting check on the pulse of what is happening in F&B.
  • In her “inside the mind of the millennial woman” (my title), Cindy Judge of Sterling-Rice Group shared insights and observations of the largest generation to date, that is increasingly driving decision making globally. As the father of three millennials and one of whatever comes after that, her research rang true. Anyone leading a business, who does not take into account this generation and their ways of making decisions around brands and life, does so at their own peril.

 

3 or 4 Cornellians at YPO F&B 2015

3 of 4 Cornellians at YPO F&B 2015

As always, the biggest benefit of YPO comes from the interaction and learning among the members. As event champion for the 2016 F & B Roundtable in Napa Valley, CA, I’m looking forward to putting another world-class program together to build upon this year’s successful event.

Mixing It Up With – Whisk(e)y, Wine, English Ale, Mixology, Chefs and National Hospitality Providers

Mixing It Up With – Whisk(e)y, Wine, English Ale, Mixology, Chefs and National Hospitality Providers

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Every once in a while, I take a step back and recognize just how cool this industry is and what a privilege those of us in the food, beverage and hospitality world have. This is not to say all of you in other industries are not cool or that ours is so much better. It is simply a fact that this one is a lot of fun.

I spent the past week mixing it up with celebrity mixologists, chefs and a whole bunch of smart industry people who are making their mark in their own ways. The Rancho Bernardo Inn in San Diego, CA did a fantastic job of hosting our group.   A special thanks to Director of Food & Beverage, Jocelyn Kraus and Executive Chef Carissa Giacalone.  Aside from the amazing food and beverage we experienced, one thing that struck me from these industry leaders is the appreciation of history and those who came before us.

In his excellent presentation on his journey in mixology, Tony Abou-Ganim “THE MODERN MIXOLOGIST” offered his insights on the industry as a whole, both past and present and how the industry evolved right before his eyes. I loved his personal stories of getting started bartending and his open appreciation for the individuals who helped him along the way. That’s really what makes the hospitality industry special. The people are what make great service and experience. The people who come before you and help you along the way, are the foundation for everything that you get to do and be.

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Tony gave thanks to the legendary Dale DeGroff “THE COCKTAIL KING” who gave him an early appreciation for loving what you do and taking pride in it. It was not so long ago that everyone bartending or waiting tables was doing it to get the next “real” job. Today, there are a whole generation of young people who are pursuing their passion with the explicit goal of being an excellent mixologist, brewer, wine maker, hospitality professional. Dale also recommended Tony for the newly created Director of Beverage role at the newly opened Bellagio way back when, that changed his life forever. Dale gave us a true appreciation for the great mixologists of the 1800s and pre-Prohibition era. His entertaining and spirited history of bitters was fascinating to experience, as we tasted 6 different modern bitters.

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Tim Kirkland “THE RENEGADE SERVER” gave us incredible insights into the simple nuances of what separates truly exceptional hospitality service operations from merely good ones. His observations on customer service have direct application to training and inspiring front line crews to sell more and serve better. Michael “Bumby” Bombard “Straight Up Solutions” shared his learnings in cocktail menu development and presentation including a valuable discussion on glassware, ice and a drill down into garnishes. Its all about the presentation.

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We had the opportunity to share some of the finest beers in the world with my industry friends. Anyone who has visited an English pub would recognize Old Speckled Hen, the #1 English Ale.

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It was fun to introduce this quirky English brand to the hospitality folks in attendance. Judging from the response, there will be some Hen coming to a restaurant near you soon.

Chef Kathy Casey of Liquid Kitchen and Master Mixologist & Chain Accounts Manager for Beam Suntory Philip Raimondo shared a fun presentation of “Bar Redux” – in which they discussed new ways to train hospitality operator staff, jazz up your drink program and bring your bar layout up to date. Of course, Phil also served as lead pianist and singer for the groups late night escapades, all legendary, none reportable.

IMG_5111 D'Lish Eggs by Kathy Casey

In Whisk(e)y “Boot Camp” we took a tour around the world from Scotland to Ireland to Canada and the US and back to Scotland. Led by the knowledgeable William Grant & Son’s Whisky Team, this fun survey of different styles of whisk(e)y was enjoyable and informative. Interesting facts – top Scotch whisky export markets 1. USA 569$, 2. FR 330$, 3. Singapore 288$, 4. Germany 138$ 5. Spain, 6. Taiwan. Among my favorites were the Glenfiddich 15 Solera and The Glenfiddich 18, but there were many other excellent ones including The Balvenie 21 and Irish Tullamore Dew. Monkey’s Shoulder was interesting too.

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After the whisk(e)y tasting, several chefs joined me to taste some Scotch along side some BELHAVEN beer, Scotland’s #1. The BELHAVEN BLACK was particularly popular among the culinary set as an accompaniment to the fine sipping Scotches. We all decided this would be an excellent way in which to offer guests an enjoyable and true Scottish experience.

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Celebrity Chef Rick Moonen (rm seafood at Mandalay Bay) shared inspiration at the final dinner as he gave us a fireside chat tracing his culinary roots to the great NY French restaurants and today with his focus on sustainably and seafood. Rick shared his great successes as well as some of the tough times he experienced during the downturn and how he had to be resilient and reinvent himself and his restaurants to survive. I love what he is doing with mixology and cannot wait to go check out his newest iteration in Vegas (RX Boiler Room)! We played a tasting game, whereby we all tasted different ice cream creations of his and had to guess the flavors. It was quite difficult but enjoyable. Apparently he does this regularly with a group of sommeliers in Vegas but instead of 3 types, he gives them 16 types to guess. Yikes!

IMG_5113 rm ice cream creations RX Boiler Room

As always, “The DUTCHESS”, Jen Robinson was the hostess with the mostess and kept everyone moving and staying on track at the Executive Hospitality Exchange West #HEEWEST. Thanks Jen for an enjoyable experience once again and I look forward to our next adventure together!

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There are many other great stories, but alas, not for this post (not mentioning any names Mike Tolley “Beverage By Design”). It was great spending time with some of the leading hospitality accounts and learning how they are thinking about their businesses and how to compete and differentiate. There may be no more competitive environment than that of the restaurant and bar business. Many of the most successful in today’s environment are differentiating on service and their unique offerings. In many cases, the beverage side of the house offers the best opportunity to achieve this. I look forward to further discussions on this front with savvy operators and brands that want to activate their business.  My next such opportunity will be at the YPO Food & Beverage Roundtable in February where I have the privilege of being Co-Champion for the event. We expect 60+ F&B CEOs for an educational and enjoyable week hosted by Disney.

As Jack says… all work and no play, makes Smoke a dull boy …

 

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