After reading all sorts of predictions for the upcoming year, I’ve decided to add my own.

However, I should alert you a few things. First, while this blog has a diverse audience, these predictions are distinctly spirits and wine industry oriented. My ‘editor’ thinks they’re a bit too insider. But, it’s call Booze Business…duh.

Second, please be aware of the fact that any similarity between these forecasts and the likelihood of occurrence is, well, unlikely.

Without further ado, here are my tongue-in-cheek predictions for 2011.

Companies

In a complete reversal of expectations, Fortune Brands will become the majority stockholder in Diageo and the expected owner by 2012. “Hey, we’re one of the only American owned spirits companies left,” a Fortune senior executive will say, “…and the groundswell of patriotic fervor helped us raise the funds.”

Wholesalers/distributors

McLane Company (whose parent company is owned by Warren Buffett) will finish 2011 by buying nearly all spirits and wine wholesalers except for Southern Wine and Spirits.

Meanwhile, in a related action, Southern will announce that it is vacating the distributor tier and will become a spirits and wine supplier. Someone with the company will say, “What the hell, we’re the ones who build the brands anyhow… it’s time we started making the stuff.”

Products

The blended scotch market will start to grow dramatically led by Haig, Cutty Sark, Old Smuggler and Black & White. The Scotch Whisky Association will declare a drought of inventories and prices will soar. As a result, consumers will leave scotch by year’s end.

Next year will indeed be the year of brown goods, as sales of blended American whisky will increase, led by interest among millennial drinkers. Brands like Philadelphia, Carstairs and the venerable Seagram’s 7 will lead the growth. Some entry-level consumers will remark, “If it was good enough for my great granddad, it’s good enough for me.”

The maker’s of 4 Loco will reformulate the product replacing the energy drink component with a Viagra-like ingredient. Their advertising will include the statement, “We make no claims about sexual prowess but do suggest that it’s the best 4 hours you’ll ever have.”

Also in the new products area, trying to capture a large share of the aging baby boomer market, the makers of Metamucil fiber products will license their name and ingredients for a liqueur. A spokesperson will explain, “While everyone concentrates on the youth market, we’re looking at the other end of drinkers.” The brand will bring a new meaning to the phrase, the morning after.

Privatization

In a startling development, all the control states looking at privatization will decide to keep the status quo and remain state run. They will explain that control states are the only way for small brands to survive. Not to mention the financial well being of their employees.

Retailers

Big box store chains will reverse course and stop selling major brands at extremely low prices. They will say, “We’re less interested in deep discounts and more interested in building brands and making sure that the independent stores are able to compete.”  Executives in charge will be committed.

Seagram

The former Seagram owner will sell his shares in a music company to invest in a new spirits product that consumers will love, will generate huge profit margins and will revolutionize the spirits business beyond imagination. Unfortunately, none of the distributors will handle the brand.

Now for something totally different and unrelated to the booze business…

My last posting on vodkas from around the world stimulated a lot of conversation about Americans doing business internationally. My friend Ernie Speranza, a toy industry executive and former head of marketing at Toys R Us told me the following story that I want to share with you.

“Ah, the fun of working for an international company. While not as much fun as the spirits world, the international toy world had its share of strangeness too.

We (Toys R Us) were opening our first store in Saudi Arabia and the night before we opened the authorities came in and told us we could not open because of the packaging for Bathing Suit Barbie. It seemed they were concerned that people could not handle such an obscene display of western flesh…. or plastic.

We then had to work into the night using black magic marker on the see-through packaging in order to hide Barbie’s breasts. Here I am, an MBA, the head of marketing for arguably the largest toy retailer in the world with 20 years experience in marketing, and I am sitting on a concrete floor in an Arab country under penalty of jail time using a black magic marker to hide Barbie’s breasts. You just can’t make this shit up.”

A new product idea — Burqa Barbie

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Getting back to the booze business, Ernie once told me a story of his experience doing business in Japan and I used his story when working with the Absolut brand owners.

Let me set the stage for you… When we started working with our Swedish partners, every now and then they would lapse into conversations with each other in Swedish. Since their command of English was as good or better than many of us, we were a bit dumbfounded and not sure what to make of it. Invariably we were told something like, “oh, please excuse us, it’s sometimes easier to share our thoughts among ourselves in Swedish.” Sure.

On one occasion I decided to relate a story my friend Ernie had told me about a trip to Japan to open the retail market there on behalf of Toys R Us.

They brought an American with them who was fluent in Japanese, and was told to not to let it be known that he was translating. His role was to quietly inform the American team of what actually was being said. The meeting was with a leading Japanese ad agency to discuss messaging, media and related topics. As the meeting ensued, the Japanese translator was giving sanitized answers to the American team’s requests and the American translator was providing the real statements.

When the Japanese ad folks were supposedly saying “good idea”, “we understand what you’re looking for and we’ll work on it” they actually were saying things like “they don’t understand the Japanese culture or people” “keep smiling and shaking your head, they will go home soon and we’ll do what needs to be done.” Ernie kept telling his translator to keep a low profile and his role will be revealed when the time is right.

After an entire morning of this, it was time to go to lunch. The agency execs were still making comments and their Japanese translator kept sanitizing their remarks. Finally, the team from the States could no longer take it. As the waiter came by to take the table’s order, Ernie whispered to his American translator, “now!”  In fluent Japanese, this American, who had sat quietly through the meetings and just taking it all in, began to order food in perfect Japanese. The agency executives turned pale and lowered their heads.

Ernie said, “Please tell them that after lunch we will start all over.”

When I told this story to the folks from Absolut, they just smiled and nodded their heads.

I’ve been thinking about expanding the Absolut Tales that you see in the Categories section to the right. So as I was gathering my notes and recollections, I was reminded of two attempts at trying to launch vodka as the category was beginning to show its strength.

Both attempts failed.

I was running marketing for the Asia Pacific/Global Duty Free division and like the rest of Seagram we needed a vodka brand. By the time I got there plans were well underway — a concept, package, manufacturing, sales and marketing plans and an interesting name, Bolshoi. The brand was made in an eastern European city and the idea was to ship it through Siberia to the port city of Vladivostok and then on to markets in Asia.

When I got to the group, I was greeted with the marketing plan and budget. As I went over the materials to acquaint myself with what was going on, I noticed something peculiar in the shipping costs. There was an invoice for close to or over $50,000 (I can’t recall the exact amount) that was over and above the actual transportation costs. It was marked, “Transport Support.”

I asked about it and was told it was for a company of security guards (probably soldiers) who would accompany the initial shipment through Russia, the Urals and Siberia. The guards were needed to make sure the shipment got there safely.

The brand did well in Asia but was discontinued when Absolut came along. Good thing because the cost of goods would have killed it anyway.

The other attempt involved Wyborowa from Poland. The W’s are pronounced as V’s and therein lies part of the tale.

Imported vodkas in the US were just beginning to make their move and somehow we got a shot at getting the distribution of this brand with a long pedigree. It dated back to 1823 where it sold domestically, became a strong export brand throughout Europe and the first vodka brand to get an international trademark in 1927. Best of all, the Soviet Union dissolved and the Poles were eager to go capitalist.

A group of us went over and quickly learned what it takes to deal with a country emerging from the shadows of communism. We were at a conference table and there were many different liquids for us to drink, as you would expect, while we discussed the prospects of doing business. Mineral water, sparkling water, spring water even tonic. The bottles were in all different colors, some were brown, some clear, some tinted. So when you poured a liquid from a particular colored bottle (none had labels) thinking that this one was the sparkling water, it would turn out to be tonic. Our hosts made it clear that the economic difficulties meant that all bottles were reused and did not allow the “luxury” of dedicated glass.

Okay, I thought, these folks are doing the best they can, making do and trying to move forward despite the obstacles. Good for them.

As the discussions progressed, the issue of package size came up. They had a litre size but the next size down was a 700ml, which is the required size in Europe. Unfortunately, that size is not legal in the US, which requires a 750ml. We explained that in order to sell in the off-premise trade, we needed them to produce that glass. After much whispered conversation and heated exchanges in Polish, the managing director said that they had found an answer. He informed us that rather than go to the expense of new molds and glass manufacture, they would use the litre bottles and simply fill them three quarters full.

None of us laughed nor revealed our amusement. It was, after all, a creative solution stemming from a difficult economic environment. We merely pointed out that the US government wouldn’t allow that and joked about the interference of bureaucrats — east and west.

Turns out that the production problems were solved, a new contemporary package was developed and the brand was launched. Nothing, however, could overcome the brand name and call issue. No one wants to stand in a bar and call for a brand they can’t pronounce. Ad campaigns and on-premise programming couldn’t counter the verbal stumble of saying Wyborowa.

The brand does under 2 million cases around the world — most of it in Poland. The rest is in Italy, France and Mexico. Proper pronunciation is not required.

I came across an interesting and fun piece in Ad Age Daily I wanted to share with you, in case you haven’t seen it.

Derek Walker, whom I’ve never met but hope to, has a blog about advertising. He describes himself as “the janitor, secretary and mailroom person for his tiny agency, brown and browner advertising based in Columbia, S.C.” So right off the bat I like him.

His posting in Ad Age was called, Clients Say the Funniest Things. Since I’ve been on both sides of the desk I found his client quotes and reactions to advertising creative to be right on target and very funny.

So to those of you on the agency side, please enjoy. Those of you on the client side, well, here’s what some of your counterparts elsewhere, ahem, sound like.

For those of you who haven’t witnessed the presentation of creative messages and the reactions, this will be a window on the dance that sometimes takes place.

Here’s the interesting part — these reactions often happen to marketers themselves when they present creative work to their management who, in effect, is a client.

With thanks to Derek Walker for his approval, here are some client comments he has heard:

• “We love the concept, it’s great! But can we change the visual, rework the headline and adjust the copy. Other than that we love it!”
• “We don’t want ‘friends’ or for people to ‘like’ us. We want customers.”
• “In the marketing class I took in college, the instructor said you should mention your company’s name at least seven times in a radio spot to be effective. Can we add 5 more mentions? That would make it great.”
• “We don’t want to use emotions, we’re talking to business people and they don’t have them.”
• On social media: “I get it but I’m worried that people will start talking about our product without us.”
• After laughing hilariously for a couple of moments: “That’s great! It does everything we want and it stands out. But seriously, let’s see the real work.”
• “Everyone loved the concept, then I took it home and showed it to my wife who used to be an English teacher and she said the line isn’t grammatically correct. Can you write a new headline?”
• “We can’t do this; it is nothing like what we’ve done in the past.”
• “Why talk to customers, can’t we just tell them what we offer?”
• “I don’t understand why you put in so much effort. It’s only a website. Couldn’t we just throw up something and be done with it?”
• “None of our competitors are doing or saying anything like that. How do we know it will work?”
• “We don’t want to spend any money but we want everyone to know about us, we want to be everywhere our customers are.”
• “Do we really need to be creative? I mean, isn’t our product great enough to attract attention?”
• “I don’t believe in advertising, we’re only doing this because our competitors are.”
• “I sure miss the days when all we had to do was produce a calendar with tits and ass and everyone was happy.”

For some of us in the booze business, the last one really resonates.

My own personal favorite is when a presenter of creative gets pushback from the client and asks for specifics on how to address the concerns. Too many times, I’ve heard the phrase, “I can’t tell you… I’ll know it when I see it.”

After reading my last post on quality control, a good friend and marketer from outside the booze business wrote me about his recent observation of consumers making a wine purchase decision.

(Of course, I’m taking some liberty and embellishing the story.)

A husband and wife are walking back and forth in the wine section just before Thanksgiving. They are obviously having a hard time deciding what to buy.

At a different time and place somewhere in this world, the owners of a vineyard have worried about the harvest, pressing, fermentation, testing, blending, fining, filtration, bottling and dozens of other things the vintner and owners are concerned about. They taste, refine and taste again. On and on it goes until they are satisfied.

At the same time, the marketing and sales people are concerning themselves with the name, packaging and brand identity. They fuss over the label; they agonize about the back label copy; they pray for good reviews.

We now return to the retail shop where this new wine is on the shelf. Our consumer couple is staring blankly at the shelves. We eavesdrop on their conversation:

He: What difference does it make? Pick one.

She: I’m confused. Should we pick it by price? Or, based on these little cards with ratings?

He: I don’t know. Price doesn’t always mean anything. Do you know what the Johnson’s like?

She: No idea. Let’s ask the sales guy.

He: Are you kidding? Does he look like he knows anything about wine? I might ask him about beer but… It’s like asking for directions. Forget it. Let’s decide ourselves.

She: How about this one? It’s a cute name.

He:  Dancing Elves? Looks more like Fornicating Elves to me.

She: If it were up to you, you’d probably pick Farting Bears.

He: Okay. Enough. Just pick one.

She: I got it. Look at this bottle. It’s all in earth tones. Marge’s dining room décor is orange, yellow and brown — this one will match her table setting!

He: Great. Let’s go. The game starts soon.

Somewhere in the world there is the sound of gunfire. Another vintner has blown his brains out.

I can’t tell you how many times I’ve heard or even used the expression — “It’s all about what’s in the bottle” — when referring to the appeal of a spirits brand.

It’s homage to the intrinsic appeal of the product and recognition that image alone is not sufficient.

Couple of interesting questions…

If that’s the case why do some awful tasting brands of booze sell well? To maintain my friendships in the industry I won’t cite any examples but lets just say there are brands that sell more on image than product taste.

The more important question is, who decides if it’s “in the bottle?” For the smart marketer it’s based on consumer taste tests, sensory panels and research of that nature. Generally there are benchmarks, action standards and criteria or hurdles of acceptability.

Except when the owner or senior executive decides that he/she knows better than the consumer.

At Seagram there were the owners who made the decisions and their deputies who established the criteria.

I once asked the head of quality control who had been trained by Mr. Sam about Jack Daniels and got a 20-minute lecture on what was wrong with the quality of the brand. I protested that his view of the product was counter its performance in the market place and consumer appeal. Good thing Mr. Sam was long gone by this time or my head would have been rolled down the building plaza.

A good friend who was there when Seagram introduced a Scotch called 100 Pipers recently told me a story that illustrates the point.

Despite the fact that the company owned Chivas Regal, the leadership at the time, from Mr. Sam on down, was Canadian whiskey driven. So when the idea of 100 Pipers came along the QC folks, led by the owner, kept rejecting the formulation until it reached their notion of acceptability. Research was ignored; R&D and production was ignored; they kept fiddling with it until it tasted the way they thought it should. They felt that no one wants to drink Scotch so take the Scotch taste out.

The result — a good tasting Canadian whiskey that Scotch drinkers hated and Canadian whiskey drinkers wouldn’t consider. It never clicked.

Guess what? According to data I recently saw, it sells over 2 million cases today with more than half of that in Thailand. Who knew?

Still made by Chivas Brothers and owned by Pernod Ricard. Bet it tastes like Scotch too.