Here is another story from Bob McBreen…

An East Coast retailer persuaded Seagram to hire his son. He started his career like most, calling on stores during the day and doing on-premise promotions at night. On this particular night he was working a Captain Morgan drink night and since he was the “new guy” he had to wear the captain suit.

It seems that he had a bit too much to drink, and in direct violation of company policy he decided to drive home instead of finding alternate means. Shortly after leaving the bar, with his reactions a bit dulled from sampling the Captain, he rear-ended the car stopped in front of him at a traffic light. Realizing that he was in a bit of trouble he decided that his best course of action was to get out of there as quickly as possible. He left the car and ran to a nearby business where he caught a cab home.

Once safely home he made another fateful decision and called the police to report that his car was stolen. This was just about the time that a police car rolled up to the scene of the accident. When the officer asked the driver of the car that was rear-ended what happen he said that he wasn’t really sure but the guy driving the car that hit him was dressed as a pirate and ran away.

As you can imagine it didn’t take long for law enforcement to figure out what happened and a few days later the young Seagram recruit was back working behind the counter at his family’s liquor store.

Mark Brown’s newsletter reported today that Tony Foglio and Keith Greggor are the new owners of Anchor Brewing Company, which includes its portfolio of craft beers and artisan spirits, including the well-known Anchor Steam Beer.

In addition to wishing Tony and Keith well, I think it’s great for the spirits industry. Like many, I believe that craft (or artisan) spirits will grow in importance in the spirits world with lots to learn from craft beer.

I’m happy to know that mainstream players are on the case.

Even if they’re not ex-Seagram folks.

I was talking to a fellow Seagram Alum the other day and the conversation turned to what made Seagram unique and where people are today.

He pointed out that ex-Seagram folks occupy top positions in many companies in the industry.

He’s right; all of the top 5 spirits companies have former Seagram people in very senior spots. When you think about it further, the Seagram folks play important roles throughout the industry – suppliers, distributors, retailers and service providers.

I suppose it’s because of a number of things that characterized the company back in the day. Perhaps it was the combination of self-confidence (some would say arrogance) and humbleness. A belief that there was a Seagram way to do things and getting it done didn’t have to be in an overbearing manner. Strength of conviction combined with respect.

Me? I think Seagram people learned to adapt, survive, flourish and succeed because of the common enemy. Sort of like a successful person who grew up with dysfunctional parents but knew he could survive if he relied on his siblings. In short, it’s called camaraderie.

They did us a favor by shutting the lights.

There is an interesting article in this week’s Ad Age on Belvedere and their new advertising campaign.

http://adage.com/article?article_id=143351

Not much more for me to add other than what I said in the article.

However, what I didn’t say and was thinking at the time of the interview was why go in this direction in the first place? Most brands I know that are called for by nickname have traction and a following e.g., Crown, Jack, Captain, Stoli, etc.

Wouldn’t it make more sense to further develop the brand on-premise rather than through ATL spending? Even if the message was strong.

Ever since Sidney Frank sold Grey Goose in 2005 for billions of dollars, the industry has attracted many entrepreneurs with the dream of inventing a brand, building it, flipping it and moving on to the next one.

It’s a good thing. The growth of the industry, any industry, depends on the infusion of new ideas, capabilities and fresh passion. Look at the rising stars, fast track and hot brands of the industry. You’ll find lots of entrepreneurial and start up brands.

And, as I mentioned in previous posts, success comes from hard work and the tenacity of people not large corporations.

But for every winner there are loads of wannabes whose eyes are bigger than their stomachs. An investment banker friend described it this way –

“Almost every week I get a guy coming in, generally in his 30’s, who made some money in some type of entrepreneurial venture, was out drinking with his buddy and the two of them decide they can do this…build a winner. It’s usually a vodka with an over the top package, a half-baked story and they say they’re out every night pushing the brand. Most of the time I think that they use the brand and their ‘ownership’ to impress the ladies.”

There’s an old rule in new product development. A winning idea needs to be unique and relevant. To succeed, a brand needs both.

Also luck, the byproduct of hard work.

Keep your eye on Cachaca, Sake and specialty products.

I found Megan’s article on Constellation Brands in yesterday’s issue of Wine and Spirits Daily to be particularly interesting.

Here’s an excerpt:

Constellation may be one of the world’s largest wine companies, but its spirits brands had a phenomenal year.  Total spirits organic net sales grew 19% for the year, led by a 38% gain for its star Svedka vodka.  Svedka also recently launched it’s first-ever television advertising campaign “which marks an exciting milestone and serves as another example of how Svedka is setting itself apart in its quest to bring future fun to vodka lovers everywhere.”

The quote is from Constellation Chief Rob Sands who, in my opinion, is among the best executives in the business. Smart, knowledgeable and effective. But, obviously not an advertising maven.

Maybe it’s just me that thinks the ad campaign is ridiculous. It features a well-endowed, sexy, female robot (fembot) supposedly symbolizing the brand’s future achievements. If the marketing folks are looking to be more than a price driven brand and want to add image — keep looking.

Oh, and check out the TV campaign. I’m the guy who was there when Seagram and the industry decided to end the voluntary ban on broadcast advertising. This ad makes me think we made a mistake.

Svedka is a great brand built on hard work and smart marketing…excellent imported Vodka with high quality at a very competitive price. I’ve even been known to buy a 1.75L every now and then.

But its growth is not a function of the advertising. Its growth continues in spite of it.

Maybe mainstream advertising is not as important for brand building as it once was.

Just sayin’…

I once heard a historian/anthropologist describe America as having a love-hate relationship with alcohol. He characterized US history as consisting of tonic and toxic periods

He described it this way…

From the birth of the nation to the mid-1800s, alcohol was seen as a tonic. Think about the traveling “doctors” (aka snake oil salesmen) selling their alcohol-laced elixirs? Among other positive perceptions, alcohol was seen as “good for what ails you” and helped you to remain “healthy.”

After the Civil War, and for the next 60 years or so, alcohol was considered toxic culminating in the temperance movement and ultimately Prohibition from 1920 to 1933.

I found this online about our soldiers in WWI –

During WWI, British soldiers were rationed two ounces of rum or a pint of porter daily. Germans received a pint of beer, half a pint of wine and a quarter pint of spirits. Canadians got shipments of Jamaican rum. But U.S. soldiers, under Prohibition laws, observed a “dry” zone around its bases.

By WWII alcohol was widely available to our GIs and the tonic era started to come back.

The tonic period has gotten stronger thanks to 60 Minutes. The segment in 1991 called the “French Paradox,” described the benefits of red wine and has since extended to all alcohol. Many see moderate consumption as beneficial to health.

And no snake oil salesmen.

Oh, by the way, for some interesting historical trends on alcohol, wine and beer consumption check out the most recent information from Gallup

http://www.gallup.com/poll/121277/drinking-habits-steady-amid-recession.aspx

I saw this in Wine and Spirits Daily yesterday…

TITO’S HANDMADE VODKA, a Texas distiller, pleaded no contest to polluting an Austin, TX creek with production waste. Fifth Generation Inc. entered its plea Friday and was ordered to pay a $50,000 fine. The maker of Tito’s Handmade Vodka must also pay a neighboring landowner $11,728 for property damages and $1,120 to the state for sampling analysis.

Listen, the appearance of impropriety is as bad as the impropriety itself.

Love your cheap caps, by the way.

The Wine and Spirits Wholesalers Of America (WSWA, for those of you in the business) will hold its annual meeting next week. There have been lots of changes in the second tier over the past few decades. From marketing to logistics to the people on the street, spirits wholesaler operations have become much more professional.

But it wasn’t always like that as this story from Bob McBreen who worked at Seagram from 1984 to 1990 illustrates. (Bob was a GM in Missouri and a Manager in Massachusetts.)

Bob was working in Massachusetts in the 1980’s when the 375 Spirits Co. (one of the Seagram companies) introduced Mumm Cognac.  The idea was to use the Champagne credentials to enter the highly profitable Cognac business. In typical Seagram fashion, the new product introduction to wholesalers was an elaborate affair held in a hotel ballroom complete with a French themed dinner.

After dinner the team got down to the business of introducing the product to the distributor sales people. The focus was on the quality, romance, and the story of selling a cognac with the specialness of the Mumm name.  They educated the sales folks on the geography of the Cognac region, the type of grapes used, the distillation process, and the magic of aging… with terms likes Angel’s Share, Grande Champagne eaux de vie, quality grade differences, etc.

After an extensive tasting session with emphasis on the different characteristics of such a high quality product, the salesmen were asked if they had any questions. One hand when up.  It was from a salesman who had been in the business for years. “Yes Irving, what is your question?”

“Does this shit come in half gallons?”

Two things came to my attention recently.

First, David van de Velde, founder of Ketel One and Van Gogh was kind enough to post a comment on the “What makes a brand successful” piece below.

Second, the trade magazines have selected the ‘hot brands’ and ‘growth brands’ of the year.

Got me thinking…

The very successful brands since the 1980’s came from entrepreneurs – Grey Goose, Ketel One, Patron, Skyy and so on. When those brands were getting started it wasn’t about bureaucracy, process or systems it was about hard work, tenacity, ingenuity and persistence. No gates, no silos…just determination to win.

Take a look at the current roster of hot and/or growth brands. Nearly all of the 14 brands identified by Beverage Dynamics as “Fast Track,” were created by an entrepreneur or a company not among the top 10 suppliers.

I guess the slogan should be “Build it and They Will Buy.”