The headlines and press statements around some of the latest beverage alcohol industry channel conflict are extraordinary and gaining attention across the country.
Anheuser-Busch forced to sell its two Ky. distributorships? Source: WHAS11 Bethanni Williams March 4, 2015 – A defeat in Frankfort for Anheuser-Busch after the state senate voted to force the beverage giant to sell its two Kentucky distributorships. The bill strengthens Kentucky’s three-tier alcohol beverage control system, banning brewers from also owning distributorships. Craft breweries worried Anheuser-Busch would only sell and market its own products if it owned distributors. Governor Steve Beshear’s office indicates he will sign the measure. Anheuser Busch says the fight isn’t over.
A new craft brewery is opening up every day, adding to the over 3,000 currently operating in the USA (Brewers Association).  There are 100s of new craft distilleries that have opened up over the past few years with many more in the works (American Distilling Institute). There are more than 7,000 wineries as well (Wines & Vines).
All this growth in new entrants is the result of renewed consumer interest in trying new things. The Millennials have driven much of the new growth and vibrancy. It’s an exciting time in the beverage industry. That said, every large-scale established consumer brand across multiple industries is trying to figure out what to do and how to keep their base, grow it and remain relevant.  Anheuser-Busch Inbev was roundly criticized for their “anti-craft†beer advertisement for Budweise
r during the Super Bowl. As I wrote about, this was them playing the hand they hold and making the best for a giant brand in decline.
These issues are a lot more complex than they appear and have interesting and changing industry alliances. I am constantly asked (last night included) why the laws are the way they are, by consumers and business people who are not from the industry. Here is a brief explanation:
The simple answer is the current legal and regulatory framework in the US is the result of two Constitutional Amendments. The first one was to ban all alcohol aka Prohibition (18th Amendment in 1919). The second one was to repeal Prohibition (21st Amendment 1933). To pass a Constitutional Amendment the Congress must pass it with a 2/3 majority vote in both houses and then it goes to the 50 states and must pass ¾ of the statehouses to become ratified.  A very high bar indeed. Prohibition was a national disaster of epic proportions. However, it was created in response to some significant excesses by the industry and public. A lot of the excesses were blamed on what is known as “Tied-Housesâ€, whereby the brewers owned the taverns. The drunken excess of many in the public was attributed to the brewers have a direct interest in selling as much beer as possible and controlling the point of consumption. The saying “There is no such thing as a free lunch†came from this era. The brewers would give away free sandwiches at the taverns they owned. Sounds good, but they would salt these sandwiches excessively so that the patrons would drink more beer.
Whether you agree or not that “tied houses†were the root of all evil, this was the majority view when in 1933 the nation’s failed experiment in Prohibition came to an end. Even though it was clear to most that this government intrusion into industry was a disaster, there were still large numbers of anti-alcohol constituents throughout the land. The compromise to get the 21st Amendment passed was to allow each state the absolute right to regulate the sale and distribution of alcohol within its boarders. The 21st Amendment does not have an opinion on tied houses or any other aspect of how the industry does business. The Federal Alcohol Administration Act did spell out specifics on regulations of the industry to insure the revenue and to protect consumers. It did not however, spell out any specifics regarding a “3 tier systemâ€, but rather defers to the 21st Amendment that in turn defers to the states.
Each state proceeded to set up its own set of laws and regulations.  There are 50 states and 50 sets of laws that while some may resemble each other, none are identical. Layered onto the specific statutes and regulations are the interpretations by alcohol boards or chairmen and the courts.  The most common way in which the states addressed the tied house issue was to legislate a middle tier (wholesaler) to be a buffer between the suppliers and the retailers. This is what is commonly referred to as the 3 tier system. There have always been some states that allowed brewers to own wholesalers, though this was the exception.
In the case of Kentucky’s new law, Anheuser-Busch Inbev has owned distributors there for more than 40 years and had attempted to buy a 3rd. That prompted the wholesalers to attempt to stop them and when other means failed, it ended with this new legislation not only not allowing them to buy the new distributor, but also forcing them to sell their existing businesses. I have no idea of how the courts will view this, but from the sound of it, ABI will not go quietly.
I can’t help but think the latest turn in the 3 tier beverage alcohol industry channel conflict is an example of overreaction that will do nothing but cause further escalation. When one considers all the new brands that have launched and keep launching in beer, spirits and wine and the need for each to find ways to market, it is clear that broad based full line distributors provide a viable route to market for many. All of the main distributors have giant books of brands now, and they serve some very large suppliers and many smaller ones well. In many cases they serve these needs of smaller brands by creating specialty sales divisions. They do not serve every brand well, nor can they. This has created market conditions in most states where a new crop of smaller start up distributors have emerged, primarily handling specialty or craft brands. Where specialty/craft distributors have emerged, they have become a necessary escape valve for small and new brands getting distribution to retail. In markets that allow it, and many states have provisions up to a certain size, craft breweries can self distribute. This is expensive but a necessary option in cases where there are no viable distributors to carry a new brand. Stone Brewery in San Diego and Sun King in Indiana seem to be examples of self-distribution that has been successful. I wonder if this will become more prevalent with spirits as the number of craft distilleries grows.
 The current approach, though ugly at times, has worked to provide a route to market for a thriving craft community.  The pressure to get new brands to market is only going to increase. It is unclear to me where the craft community will end up better off – with strict laws that don’t allow suppliers to own distribution (of any size) or with looser laws that give options. I tend to think most small/new brand will end up supporting a more flexible system, but the bigger brands, that are doing well in the traditional 3 tier system, will support the stricter system.
It may be that there are simply too many competing interests to work out viable solutions to everyone’s satisfaction on these issues. It would certainly be better for the industry if there were agreement as opposed to legal or legislative fights. ABI is a powerful entity as are all the major suppliers. Poking them in the eye with a local legislative win, may end up being a case of winning the battle but losing the war in some ways. It is unclear to me that the KY law actually helps craft brewers or simply hurts ABI or it it even does that. ABI can still control largely the activities of an independent distributor, as they have been able to do, in many other states. What is clear is that this KY battle is not the end to this fight.
It will be interesting to see how this continues to play out. Love to hear your comments or questions. Cheers! Smoke
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Smoke has worked in all 3 tiers of the industry, built beer wine and spirits distributors, owned a craft brewery, a winery, and multiple craft spirits brands. He built the leading technology for pricing between suppliers, distributors and retailers. He also represented the WSWA as Chairman & President and the Brewers Association on the Government Affairs Committee.
I’m very pleased to announce the initial keynote lineup at this Summer’s WITS and BITS – please see below and registration is now open for the combined event here – Smoke
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10th Annual Wine & Beer Industry Technology Symposium to Unite Thought Leaders at Strategic Summit for Wine and Beer Brands
Hot Tech Topics to include Innovation, Breakthrough Marketing,
Keg Supply Chain Evolution, Data Security Breach, Internet Impact
(NAPA, Calif.) — Wine Industry Technology Symposium (WITS) in collaboration with Beer Industry Technology Symposium (BITS) has announced the Keynote Speakers for the 10th annual event set for June 30 – July 1, 2014 in Napa, California. An action packed series of keynotes will cover a wide range of topics affecting the wine and craft beer industries including: mobile e-commerce, data breach and security, breakthrough marketing, supply chain innovation, leading edge hospitality systems, new on-premise kegs and product tracking. Panels of leading restaurant and grocery operators will also provide valuable insight as they discuss their first-hand experience with wine and beer consumers.
“Every year we have worked hard to up the ante in terms of the quality of keynote speakers and breakout sessions. This year, our board has truly taken the program to a new level for the 10th annual WITS event,†said J. Smoke Wallin, founder and co-chairman of WITS and BITS. “Our new high-impact, rapid fire keynote addresses allow us to pack significantly more content into the event with the sole purpose of creating thought-provoking discussions that will deliver immediate take home value to all of our winery and craft brewery attendees.â€
“Upon reflection over the past ten years, and considering the vast evolution of technology in the wine, and now beer, industries, I am very pleased with the dynamic program we have set for 2014. I look forward to welcoming both wine and beer industry leaders, as well as many of today’s leading technology innovators, to our 10th Annual event,†added Lesley Berglund, co-chairman of WITS & BITS and co-founder and chairman of the Wine Industry Sales Education (WISE) Academy.
The Initial Keynote Lineup Includes:
“Ben Franklin: America’s 1st CMO Would Still Be A Pro in 2014â€
o  Drew Neisser, CEO and Founder of Renegade
“ROI of Digital Marketing: Myths, Facts & Measurement”
Karena Breslin, Vice President of Digital Marketing at Constellation Brands Inc.
“Engaging The Connected Consumers In The Era of Mobile + Digital”
o  Tim Schulz, Google Strategic Partnership Lead
“Confronting the Inevitable? Data Breach Offense, Defense and Playbook†– Panel
o  John Nicholson, Strategic Negotiator – Strategic Global Sourcing, INFOSYS
o  Gal Shpantzer, Contributing Analyst, Securosis
o  Tom Resau, VP W2 Communications
“Breakthrough Marketing – Case Studies on Digital Marketingâ€
o  Terry Wheatley, Founder, Canopy Management & Wine Sisterhood
“Trending Now: Progressive Tech Trends for Enterprising Businessesâ€
o  Sandy Tungare, Founder & CEO Vistaar
“If Digital Marketing had a Crystal Ballâ€
o  Aliza Sherman, MediaEgg
“Tech Trends: Predicting Future Technology and ROI by distinguishing between Fads and Trendsâ€
o  Rob Grimes, Founder, CEO and Chairman, Constratech
“The Internet of Things and the Nexus of Forcesâ€
o  Joseph Farrugia, Domain Lead, Partner, Oracle Enterprise Applications and BI, Gartner Group
“Applying Technology Innovation to Revolutionize Old School Industriesâ€
o  Steve Hershberger, CEO, SteadyServ Technologies, Brewery Founder, Social Media Founder
“Grocery And On-Premise Innovators On Technological Transformationsâ€
o  Randall Friedman, Restaurant & Food Group Publisher
o  Eduardo Dingler, Corporate Beverage Director, Morimoto Restaurants
The Wine Industry Technology Symposium® (WITS) is the focal point for thought leadership in the strategic and tactical use of technology in the global wine industry. WITS was created in 2005 by a group of wine industry and technology professionals to advance innovation and to address the unique information technology and services needs of the wine industry. The 10th annual WITS is June 30 & July 1 in Napa, CA. This year, the newly formed Beer Industry Technology Symposium (BITS) will be held in conjunction with WITS. To learn more, join WITS on Youtube, Twitter, Facebook, and LinkedIn
About BITS:
The Beer Industry Technology Symposium™ (BITS™) was created to address the unique information technology and services needs of the Beer industry. BITS is dedicated to bringing the world’s leading breweries, distributors and retailers together with the leading technology experts to foster learning and discussion. Expert panels and keynotes discuss leading edge case studies involving consumer direct marketing and sales, operations, financial management, trade sales and distribution, brewing and input management. Join BITS on Twitter, Facebook, and LinkedIn
For more information, contact Kathy Archer of the Wine Industry Symposium Group at 707-261-8719 or kathy@winesymposium.com. For sponsorship and registration, contact Waunice Orchid of the Wine Industry Symposium Group at 707-261-8716 or waunice@winesymposium.com.
We are in full planning mode for the 10th Annual WITS… hard to believe that a few of us sat around brain storming ideas for a “technology extravaganza for the wine industry” almost 11 years ago. Â Please plan on joining us this year in Napa, CA as we celebrate a decade of WITS, for what promises to be our most exciting and well attended event. Â Here is the link to the press release and posted below as well.
10th Annual Wine Industry Technology Symposium to Unite Wine Business Leaders, Technology Experts on June 30 & July 1, 2014
(NAPA, Calif.)  —The 10th Annual Wine Industry Technology Symposium (WITS)®, the premier event showcasing the strategic use of information technology and services for the wine industry, has been set for June 30 – July 1, 2014 at the Napa Valley Marriott Hotel. www.wineindustrytechnologysymposium.com
Executives from wineries, distributors and retailers gather annually at WITS, the only annual conference designed exclusively to foster education and debate around the application of technology solutions for the wine industry. The 2014 WITS program includes:
Educational Tracks – Sessions on Technology Leadership, Small Business, Consumer Direct, Trade Sales & Marketing and Vineyard & Winery Operations
Speed Dating – To celebrate the 10th technology extravaganza, WITS has introduced “speed dating†for winery CIOs and technology companies. This will provide opportunities for quality one-on-one time with key decision makers and thought leaders.
Plus Beer, with BITS – WITS has united leaders in the craft brewing industry to add the first Beer Industry Technology Symposium (BITS™) that will run concurrent with WITS this year.
“In today’s rapidly changing business environment, where consumers are driving massive change throughout the industry, it is vital to get it right when it comes to your route to market, as well as the strategic and tactical use of enabling technology,†said J. Smoke Wallin, WITS Co-Chair. “WITS is the only place where winery owners and GMs can sit side by side for a day of learning and discussion with CIOs and other technology leaders from across the three tiers,†he added.
The WITS Steering Committee, comprised of technology and business leaders across the wine industry, is currently finalizing panel topics and keynote speakers. Past speakers have included the CEOs, CIOs and leaders from Amazon, Facebook, Groupon, garyvaynerchuk.com, FedEx Office, Nielsen and 1800-Flowers, as well as experts from IBM, Oracle, Cornell University, UC Davis, Sonoma State University and many others.
Attendees and sponsors are encouraged to register early, as space is limited and expected to sell out quickly. Registration will open March 1, 2014. For more information visit www.wineindustrytechnologysymposium.com.
About The Wine Industry Technology Symposium (WITS)
The Wine Industry Technology Symposium (WITS) was created to address the unique information technology and services needs of the wine industry. WITS is dedicated to bringing the world’s leading wineries, distributors and retailers together with the leading technology experts to foster learning and discussion. Expert panels and keynotes discuss leading edge case studies involving consumer direct marketing and sales, operations, financial management, trade sales and distribution, winemaking and vineyard management. www.wineindustrytechnologysymposium.com
Note: This is the first in a series that Vanderbilt Business (the Owen Graduate School of Management at Vanderbilt University) is doing on Alumni to share their stories.  Interestingly, I have subsequently left Lipman Brands and sold the majority of my interests in Napa Smith Brewery. So it is already a little out of date in terms of what I do (the first question), however, the rest of the Q&A is not.  That’s why the title is a little bit off.. I’m not done doing what I’m going to do (stay tuned). I hope to encourage and inspire those who aspire to achieve their success in any way I can. Hopefully this interview gives a bit of insight to some and is encouraging if you need it. Kind Regards, Smoke
I turn ideas into actionable things. Whether working on community issues, industry issues or business ideas, time and time again, I tackle a challenge by manifesting something that was not before.
J. Smoke Wallin
Wallin
In recent years, I have been looking for ways to acquire or create new brand businesses in the beer, wine and spirits space. This pursuit has taken many a twist and turn, and the process has not always been pretty. Today I run several businesses.
I am president and CEO of the Napa Smith Brewery and Winery in Napa, Calif. I acquired the brewery in late 2010 with some partners. We sell in 10 states and Sweden, the U.K. and Hong Kong.
I serve as managing director of Lipman Brands, a brand marketing and sales company. My task has been to build out the infrastructure (systems, process and people) for Lipman Brands to be a national selling organization.
I am chairman, CEO and founder of eSkye Solutions, a technology dot-com I started with a number of Owen alumni back in 1999. Though we have changed our business model a number of times, acquired numerous companies and sold our winery software division in 2007, we continue to build our national account pricing business with large retailers and brands.
And through my holding company, I am still engaged in various consulting projects for new brands, existing businesses and startups. This is a minor part of my job, but it keeps me in touch with new ideas, people and opportunities.
Q. What’s your educational background?
I started as an engineer at Cornell, then was in the hotel management school and then settled on agricultural economics (Cornell’s undergraduate business program). It turns out my time in hospitality management and the agricultural economics department—with a huge emphasis on the grocery and consumer packaged goods industries—gave me a great initial preparation for the beverage industry. At Owen I had a triple concentration in finance, marketing and operations. My view was I wanted to be a general manager/entrepreneur so I needed to learn about all those areas.
Q. What was your first job?
My first job out of Cornell was with Seagram in their management training program. After a summer at Seagram, I had the opportunity to join them full time or join their distributor, National Wine and Spirits. I joined NWS when it was doing $150 million annually. When I left 14 years later, we were a $1 billion operation.
Q. Tell us about your consulting and brand work.
With eSkye, we were doing business with beer, wine and spirits companies all over the world. At one point we had over 250 wineries making or selling their wine using our software. I ended up advising many clients on not just their technology but also on their distribution and business strategy.
I got a bit frustrated with trying to get an old, sleepy and successful industry to be creative in their business strategy. This inevitably led me to want to own my own brands so I could demonstrate my ideas in real life. Starting a new business takes a level of commitment that has to overcome huge obstacles. To make such a commitment, one has to be fairly passionate about whatever it is one does. I have been passionate about the brands business for some time now.
Q. What would you say was your big break or opportunity?
Growing up with a mom who was (and is) very independent-minded, hard-working and stubborn. Becoming a wrestler in high school and later at Cornell. No sport teaches better discipline and self-reliance. Select coaches, teachers and mentors along the way who saw potential in a kid with big ideas and no wallet.
Q. What was—or has been—your biggest challenge?
Overcoming financial distress when either markets or circumstances have gone against me at select moments. …The good news is, if you can get through those times and never forget them, it makes for a wiser, more humble perspective. This is something I think I was meant to learn.
Q. What was—or has been—your greatest thrill (or accomplishment if you’d prefer to answer that)?
Biggest thrills: Closing on a $110 million bond deal for NWS as CFO, closing on a $60 million equity deal for eSkye as CEO and acquiring the Napa Smith Brewery. Also a handful of sales closes over the years that were big enough to materially impact that particular business.
Biggest accomplishments: I would say seeing some of the people I hired, believed in and worked with go on to be very successful in their own right. That includes some Owen grads and many others along the way.
Q. If you could give one piece of advice, what would it be?
I’ll give two:
Don’t let fear prevent you from pursing your dreams. Nothing great was ever accomplished by someone who simply thought great things. It only happens in doing.
Enjoy the journey. I spent a lot of energy focusing on outcomes: raising money, IPOs, deals and sale closes. Those are important, but enjoying the process of getting there, each and every day, needs to be constantly remembered. This is where we spend most of our time and if that is so, how do you want to remember most of your time?
Keynote Announcement… please join us this summer at our 9th annual WITS conference… it will be great!
FOR IMMEDIATE RELEASE APRIL 25, 2013     Contact: Waunice Orchard                                                waunice@swgnapa.com
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Thought Leaders to Discuss Strategic and Tactical Uses of Technology, Building Elite Teams and Lessons From the U.S. Military Special Forces.Â
Best Practices To Drive Wine Brands and Businesses
 at the 9th Annual Wine Industry Technology Symposium Symposium
Napa, CA— April 25, 2013— Wine Industry Technology Symposium (WITS) today announced its Keynote speakers for the 9th annual event to be held July 15 & 16 in Napa, CA.  Keynotes by Larry Broughton, Jonathan Good and Miles Ward bring elite leadership, social media and the transformative cloud to the wine industry.
Keynote ELITE: 5 Special Ops Success Strategies for Building Top Performing Teams: Imagine what would happen if you place 12 highly intelligent, Type-A personalities in a boardroom and gave them a task to perform. The result would likely be complete pandemonium! Yet the U.S. Military has discovered a way to turn top individual performers into unstoppable teams literally capable of toppling countries. Award-winning serial entrepreneur, author, speaker, and former U.S. Army Green Beret Larry Broughton shares his insights on transforming ordinary teams into extraordinary ones.
“I’m very pleased to have Larry, Jonathan and Miles join us on our Keynote program.†said J. Smoke Wallin, founder and co-chairman of WITS. He continued, “I have had the privileged of interacting with each of our speakers and know they will each deliver inspirational and thought provoking discussions that will deliver real take home value to all our winery attendees.â€
Jonathan Good, Senior SMR Solutions at Oracle will give a keynote on “Developing a Social Relationship Management Strategy in the Wine Industryâ€.
Find out how to create a strategic social media program that will build brand awareness and buzz, drive revenue and gain the trust of your online community. Learn social media best practices and how to manage and recruit a community of supporters who will embrace and recommend your brands through the use of social relationship management best practices.  Jonathan Good is a Senior SRM Solutions Consultant at Oracle. He provides technical and functional support to prospective clients and customers for Oracle’s Social Relationship Management platform.

Before joining Oracle, Jonathan was the founder of HelloSocialMedia.com – a social media and marketing agency that focused on the creation and execution of social media programs, including blogging, community development, Internet marketing, design and web development.
In addition, Amazon, a company that has revolutionized whole industries, has now gotten serious about the wine industry. Find out about how Amazon is building the next generation platforms that are literally transforming how software and services are delivered, from Miles Ward, Solutions Architect, Amazon Web Services.Â
Miles will speak about Big Data for Real World Businesses showing tools, techniques and clear ROI for analysis in the cloud. Miles helped NASA live-stream the Mars Rover landing, developed the Obama For America 2012 presidential campaign, and has helped thousands of companies make the leap to the cloud.
“I’m very pleased to have such a strong program for 2013. I look forward to welcoming the industry to our 9th Annual event!†said, Lesley Berglund, co-chairman of WITS and co-founder and chairman of the Wine Industry Sales Education (WISE) Academy
Berglund continued, “When Larry Broughton is not speaking and coaching, his day job is running his luxury hotel company, Broughton Hotels. Having an operator who knows the wine business where it touches the consumer will provide a unique perspective to our winery attendees.â€
Early bird pricing to attend WITS end June 1, 2013. Attendees can register at www. wineindustrytechnologysymposium.com beginning May 1.
About WITS: The Wine Industry Technology Symposium® (WITS) is the focal point for thought leadership in the strategic and tactical use of technology in the global wine industry. WITS was created in 2005 by a group of wine industry and technology professionals to advance innovation and to address the unique information technology and services needs of the wine industry.  The 9th annual WITS is July 15 & 16 in Napa, CA. Join WITS on Youtube, Twitter, Facebook, and LinkedIn to learn more.
For more information, contact Waunice Orchid of the Wine Industry Symposium Group at 707-261-8716 or waunice@swgnapa.com
I came across this video of my address at Vanderbilt back in 2008. Â I had tremendous feedback from this from those in the audience. Â I thought I’d share…
 Vanderbilt University – Alumni Weekend 2008  J. Smoke Wallin the 1998 Distinguished Alumnus and incoming President of the Vanderbilt Owen Alumni Board introduced by Jim Bradford, Dean of the Vanderbilt Owen Graduate School of Management.  Smoke addresses students, faculty, staff and prospective students on what matters in life, business and friendship.  He reflects on some difficult experiences.
I’m posting the Kane’s article from Fall 2009 tracking some of my activities and discussing the launch of Pelican Brands… now that we have begun adding a strong platform of brands, I thought it was relevant to share this as we articulated our strategy well here.
Kane’s Beverage News Daily
Volume 5, No. 184 The National Beverage Dailyâ„¢ Monday, October 26, 2009
In Today’s Issue:
Meet Smoke Wallin: Former Amway Salesman Thinks This is a Great Time to Get U.S. Rights to Singha Beer, Expects to Grow Its Sales Five or Six Fold
Only 4 States Had Increased Beer Shipments in September
How Europeans Drink Differs from Country to Country
F.Y.I. — Voters Trust Republicans More Than Dems on 10 Key Issues: Rasmussen
Meet Smoke Wallin: Former Amway Salesman Thinks This is a Great Time
To Get U.S. Rights to Singha Beer, Expects to Grow Its Sales Five or Six Fold
Why in the world would anyone launch a new company in this economy? Even more to the point, why would anyone take a small, ethnic beer and confidently expect to grow its sales five or six fold in just a few years?
That’s exactly what J. Smoke Wallin is doing. And he’ll tell you this is a great time to do it.
Wallin has been around the alcohol beverage industry long enough that nearly everybody knows of him.
But if you don’t know he grew up on Longboat Key, the nicest place in all Sarasota to live,  or if you don’t know that while in the seventh grade he won second prize in a science competition for a writing a computer program in BASIC on a Commodore 64 that took the user through a series of questions about the solar system and then scored them on a test, well, you just don’t know Smoke Wallin.
And you won’t understand why he thinks his new company, Pelican Brands, a national sales and marketing company set up to manage beverage brands throughout the U.S. and Europe, will do well.
First Client: Singha, Thailand’s No. 1 Beer Export
Pelican’s first client: Singha, the No. 1 exported beer from Thailand. Wallin thinks he can grow Singha’s sales to five or six times their present level. And that technology will let one person do what it used to require five people to accomplish.
“The appointment of Pelican Brands represents a very important step for Singha in the U.S. market. We expect Pelican Brands to have an immediate impact on our brand distribution and to position Singha as a leading growth import for the coming years,†said Theera Vongpatanasin, Managing Director of Boon Rawd Trading International.
Says Wallin, “Singha is an incredible brand which deserves focused attention from distributors, retailers and national accounts. It has all the right characteristics which, when properly promoted, will drive excitement and ultimately, consumer demand, in the better beer market.â€
Adds Mark Smith, Pelican Brands vp-marketing, a marketing veteran of the global beer industry:  “Singha is an incredible beer — both its flavor profile and rich traditions capture the exotic and beautiful country of Thailand. This makes it well positioned to appeal broadly to the U.S. consumer well beyond the Thai channel. The growth of Asian fusion restaurants across the U.S. creates a compelling platform for the expansion of Singha.â€
Peddling Amway
Wallin’s first entrepreneurial venture was far from alcohol beverages. While a youth on Longboat Key he and his brother, Clay, who’s now at Vintank a Wine Industry Strategic Consultancy, sold Amway products.
“I learned that Clay is a better street sales person than me as he basically cornered the market in our neighborhood,†says Wallin. “I was always better at looking at the bigger picture,†he adds.
Soaps and detergents lost their appeal by the time he went to Cornell University where he shuffled between the university’s famed School of Hotel Administration, engineering and the School of Agriculture & Life Sciences with a degree in Agricultural Economics.
While studying hospitality management, he worked during summers at Longboat Key’s famed Colony Beach & Tennis Resort, the Tropicana in Atlantic City and did an nine-month internship at the Ritz-Carlton Hotel in Boston while also taking classes at Harvard before returning to Cornell.
When he got out of college, he was torn between working in the hospitality industry and the consumer packaged goods industry.
Resetting Wine Sales
As luck would have it, he was dating Karen LaCrosse, daughter of Jim LaCrosse, owner of National Wine & Spirits in Indianapolis. That may have helped him land a job with Joseph E. Seagram & Sons as a retail account manager. He spent the summer driving around Indiana in vans, putting up posters for various Seagram products.
That led to two job offers: one from Seagram and another from National Wine to be a salesman selling wine to groceries. Wine wasn’t big in those days. Wine sections were shrinking and the business – or at least the grocery segment – was controlled by E&J Gallo Winery.
Gallo had convinced grocers to set their shelves by brand, which helped Gallo. But with wine sales slipping, Wallin argued grocers would get better results if they set their shelves by varietal rather than by brand. “I reset my entire territory from a brand set to a varietal set in a year,†he recalled.
It was the first of a series of entrepreneurial moves Wallin made while at National Wine.
$10 Million Sales from $1.5 Million
LaCrosse won the right to distribute Perrier and a couple of mixers. National was using a brand management strategy, one of the few wine and spirits wholesalers to do so back then. “I had the opportunity to be the first brand manager for the nonalcohol division,†he recalled. He added a number of other products, including Clearly Canadian waters, created a home and office delivery company and took the unit to $10 million in sales from $1.5 million. It was sold to Nestle after 10 years.
Wallin went to Vanderbilt University for an MBA. Meanwhile, back in Indianapolis, LaCrosse had acquired Union Beverage Co., gaining entry into the Chicago market.
“My second year of business school, I was actively managing the category management efforts and MIS group at Union Beverage from school.â€Â Many weekends classes would end on Thursday, and he’d fly to Chicago, where he would work on revamping Union’s technology before heading back to Nashville Sunday night.
National Wine acquired Federated Industries in 1993, two years after acquiring Union Beverage. It had become clear to LaCrosse that the wine and spirits distribution industry was entering a period of consolidation – first at the state level, then regionally and ultimately nationally.
Jumping Right In
Coming out of Vanderbilt’s Owens School of Management, Wallin was considering two job opportunities: One with Boston Consulting Group (BCG’s founder, Bruce Henderson, was a professor at Vanderbilt at the time) and the other with National, where he would head NWS’s Corporate Group and deal with the Federated acquisition.
“BCS was very appealing to me because of the level of intellect among the team and the type of business issues they worked on,†Wallin recalled. But he had the opportunity to “jump right in and deal with a several hundred million dollar acquisition of Federated.â€
Over cocktails in Chicago, he discussed his dilemma with Phillip Kotler, a well-known marketing professor at Northwestern University’s Kellogg School of Management. He knew Kotler because of his work with Union. Should he be a consultant with Boston Consulting or jump right back into National Wine?
“Smoke, a lot of guys with five to eight years at BCG would love the opportunity to do what you’re able to do now,†Kotler said.
Backing a Startup
Meanwhile, National was backing Joe Fisch, who was starting U.S. Beverage in Connecticut. “Joe had a clear vision of what he wanted to do with USB that was quite similar to what he had done at the Seagram Beverage Co. National was the capital behind this effort, and I led that investment.
“We worked with Joe to set up the back of house, systems and financial infrastructure in place. We placed two of my corporate team members – who were also classmates from business school – into USB to manage this aspect,†Wallin recalled.
Critically for his future, Wallin spent a lot of time with Fisch, going to Europe when USB got the rights to Staropramen and Tennents and, later, Hooper’s Hooch from Bass Brewers.
Eventually Wallin became chief financial officer of National Wine. When Michigan privatized its state liquor wholesale operation, Wallin was able to put together the deal that led to NWS Michigan, which today ships about $400 million of product a year.
Talking to Wall Street
National had been using its bank lines of credit to expand its business, and in 1999 it hit the limit. Wallin worked with Donaldson Lufkin & Jenrette, a Wall Street investment banker, to put together a bond offering that raised $110 million. The banks were paid back, and National had cash that it could use to buy some more distributorships.
But Jim LaCrosse decided he wasn’t interested in expanding, Wallin said.
“I was always about building things,†Wallin said.  Disappointed, Wallin stayed involved with National Wine, and continued to rise in the Wine & Spirits Wholesalers Association becoming president in 2002-2003 and chairman of the board in 2003-2004.
But his next move had its roots in that seventh-grade science project in Longboat Key. Wallin raised $60 million from various investors, including National Wine and created eSkye Solutions, which became the leading provider of wine and spirits software and Web-based solutions for the beverage industry.
After the dot-com bubble burst in 2000, he was able to buy several companies that made software for wineries. Some 250 wineries were using eSkye’s software to run their business.
In 2007, he sold the software business to Constellation Software Inc., Toronto, Canada. But he kept eSkye and the National Account Price Manager software. It turned out to be a smart move: National Account Price Manager handles all the pricing and product synchronization between six of the largest brand owners in beer, wine and spirits, their distributors and Wal-Mart.
Meanwhile, eSkye is working to expand its footprint to on-premise so suppliers can manage pricing for accounts like Darden Restaurants, Brinker and Outback.
Becoming a Supplier
Meanwhile, that hankering to be involved in consumer packaged goods, which Wallin put aside after graduating from college, kept gnawing at Wallin. He conceived “a different kind of platform – a sales and marketing company that understood wholesale distribution, that would be good for brand owners and wholesalers.â€
What Wallin wanted was to pick up some smaller brands from major spirits companies – brands that were too small for top tier suppliers but which could be profitably grown by smart management.
“We bought Red Eye Bloody Mary Mix opportunistically. But before we could do the next couple of deals, the financial system melted down,†Wallin recalls.
Meanwhile, Wallin was consulting with several suppliers, including Boon Rawd Brewery.  A family business, Boon Rawd was the first Thai-owned brewery in Thailand, and it had a solid niche in Thai restaurants in the U.S. Boon Rawd’s owners wanted to expand beyond that niche to get into national accounts in the U.S.
‘Great Beer from Exotic Location’
“I told them, ‘Your beer is a great beer from an exotic location’,: Wallin said. And he thought expanding beyond Thai restaurants should be doable. “After all, you don’t go to a Dutch restaurant to drink Heineken in the U.S.,†he said.
One reason for his optimism: Thai food, and Thai-influenced food, is popular in the U.S. “We feel strongly we can grow Singha’s business to five or six times their base,†Wallin told us
Wallins is announcing the creation of Pelican Brands this morning. Pelican is using independent brokers – including Anheuser-Busch and MillerCoors houses. It has 60 brokers and is in all 50 states.
Meanwhile, Pelican’s sales team, led by Don Hammond, president, is calling on national accounts. Hammond began his career with Procter & Gamble and Gallo, and ran several major beer wholesalers. Already Pelican has secured placements in 446 accounts, including 26 cruise ships operated by Royal Caribbean Cruise Lines as well as Mongolian Beef, Ghengis Grill, Studio Movie Grip and World of Wings restaurants.
Pelican is focused on building Singha as quickly as possible. In addition to Wallin and Hammond, the team includes Stan Mace, director of sales, who helped build Bavaria, and Carlos Barone, director of national accounts, who worked with Wallin at eSkye. “We’re looking to fill in the team as we go along,†Wallin said.
Self-Funding a Start-Up
Where eSkye involved significant outside capital, Pelican is completely self-funded. “I’m being very cautious about adding overhead. I believe by using smart technology we can do with one person what would have taken five people only a few years ago,†Wallin said.
For example, when visiting a distributor, Pelican’s staff knows the 50 top accounts in the territory. This lets Pelican sales people be very focused, rather than going in randomly.
Wallin noted that his first 14 years were spent on the distributor side of the business. “I know these people very well, and relationships matter a lot. But it’s much more powerful if you’re informed by technology.
“Technology makes it easier to do business. As an industry, we’re still way behind other industries.â€
Today it’s all about Singha, which Wallin describes as “a great family company with a great brand. It’s not like we’re dealing with a startup. You’ve got to be able to support the brand,†he says, “and we’ve got that resource in hand.â€
Wallin and Karen were divorced a few years ago. Wallin’s new wife, Anitra, owned Michael’s of Cherry Creek, a fine dining restaurant in Denver.  She won a Wine Spectator Award for her wine list and “is a total wine/food person,†Wallin says.  An accomplished singer/songwriter, she also runs Wallin’s Wine 2.0 (www.winetwo.net) events, including next month’s Wine 2.0 New York.