F. Paul Pacult

The Whiskey Authority—In More Ways Than One.

I first met Paul Pacult in the early 90s when I was running marketing for Seagram Americas. He and Gary Regan whiskey-authority1invited me on their radio show to discuss Single Malts and The Glenlivet. Over the years I’ve come to admire his passion for the spirits and wine industries.

I consider him to be among the top experts in the business. Consequently it’s not a surprise that I jumped at the opportunity to attend his first The Whiskey Authority (TWA) session in New York. Before I go into that, for those of you who don’t know him or of him, here’s a brief background.

Writer, educator, journalist, consultant, and more

In a 2006 article, Forbes described him as “America’s foremost spirits authority.”  His F. Paul Pacult’s Spirit Journal (which I read avidly) is considered a top notch and independent source of reviews and ratings. He has also been a journalist writing for such publications as The New York Times and scores of magazines.

F-Paul-Pacult-256x300What I find most interesting is his consulting and educational training practice. In fact, when I was managing the introduction of a Mongolian vodka a few years ago, I turned to Paul for an evaluation of the brand’s taste profile and its strengths and weaknesses versus competition. What I learned was extremely helpful.

While there are many wine and spirits tasting competitions out there (I often think too many), Paul’s Ultimate Spirits Challenge and Ultimate Wine Challenge, are, in my view, the best and most meaningful. (Here’s an article I wrote a few years ago about the spirits competition.)

A number of years ago, Paul launched The Rum Authority, described as “a series of seminars dedicated to demonstrating Rum’s universal appeal to both the novice and expert alike.” Which brings me to his newest endeavor, The Whiskey Authority (TWA).

The Whiskey Authority sessions

The inaugural session I attended was fascinating and well worthwhile. Here I am with none-of-your-business number of years in the industry, worked for the biggest and best (as an employee or consultant), and “been there

The session at Keens Steakhouse in NYC
The session at Keens Steakhouse in NYC

and done that” knowledge and understanding of booze. Well, I’m not embarrassed to tell you that I learned a great deal in the few hours I spent at the seminar.

First and foremost, Paul is an outstanding speaker/lecturer and very entertaining as he educates his audience about a serious and often confusing subject. The audience at the seminar is primarily bartenders (the critical consumer influencer these days) with a smattering of distributor sales reps and (ahem) one or two bloggers.

The session begins with a fun-filled and informative talk about whiskey including the critical elements and their role, all laced with amusing and engaging stories based on Paul’s 30+ years in the industry. Each of the products presented were first given the “nose test” then two blind taste tests. It was particularly fun to try and guess which brand was being tasted, before Paul revealed the brand.

Brand members support TWA and there were 12 brands to taste. Sue Woodley, Paul’s wife/partner, told me they had more than 15 wanting to participate but they felt that was too many for one session.

The session had whiskies from Scotland, Ireland, and the United States. I asked Paul why he did that rather than concentrate on one particular country. His answer makes good sense to me:

“The guiding mission of TWA is to erase the conflicting and confusing information about whiskey categories, so Fiveit’s necessary to showcase whiskeys from around the world. In this case in 2016, we feature whiskeys from three nations in various subcategories to draw explicit differences. In the future we hope to have whiskeys from Canada, Japan, India, etc.”

I also asked Paul about the sponsors and why they participate. His answers were not surprising. TWA provides an opportunity for brand’s to have their story told to leading bartenders in important markets; to have their brand blind taste tested on “a level playing field” to highlight their virtues in a friendly environment; and, to be part of a program that’s purely educational.

I think it’s more than that. It’s all about Paul Pacult, an acknowledged and unbiased expert, who gives the presentation greater seriousness and credibility.

The brands that participated included Chivas, Michter’s, Highspire, Aberlour, Johnnie Walker, Redbreast (the one I fell in love with), among others.

* * *

In addition to the session in NYC, there was one in DC and one coming up on June 20th in San Francisco. Three more are in the planning stage for this year. But, they are by invitation only.

As far as I’m concerned, this is a showcase and opportunity that should not be missed by either large or small brands.

Hey Paul, where were you when I needed you? I would have had as many Seagram brands as you could accommodate at your sessions.

Yours Truly hard at work
Yours Truly hard at work
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How an Olive Launched a Brand

The Ketel One Story

Nolet, the distillery behind the vodka, recently celebrated its 325th anniversary and is run by the 11th generation of the Nolet family. While they rightfully take pride and recognition for this accomplishment, the real credit for the success of Ketel One (partially owned by Diageo) belongs elsewhere.

The distillery has been around since 1691 but they’ve only been producing Ketel One vodka since 1983. And, that’s where our story begins.

David van de Velde

I first met Dave back in 2010 when I started writing this blog. Here is that story. But, there is much more to the launch of Ketel One than I realized at the time I wrote that article.

David van de Velde
David van de Velde

In recognition of the sustained growth of the brand—reportedly selling at 2.1 million cases and the fifth largest import—and given the 325th anniversary, I contacted Dave to get more of the back story. Specifically, what were the most important elements in successfully launching the brand?

Before I get into that, here’s a brief historical context.

Vodka’s growth spurt began in the mid 1980s. The market was dominated by domestic brands (Smirnoff, Skyy was beginning its ascent, and others). Based on a number of factors, Absolut led the charge of the imports and became the poster child for vodka. Suddenly, two other market imports entered the fray with price points much higher than Absolut. One, Grey Goose, had a range of things going for it (name, packaging, country of origin, and the Sidney Frank team). The other had Carl Nolet Sr. and his belief in the ingenuity and business skills of David van de Velde.

The Challenge

The relationship with Carl Nolet, Sr. started with a handshake, a 20-foot container of Ketel One (litres and no 750ml bottles) worth around $20,000. Dave put up around $250,000 and no salary for two years. The US operation started in Dave’s garage in Sebastopol, CA under Luctor International, his licensed import company.

The obstacles were clear and considerable: Limited resources and going up against some powerful competition.

I was head of US marketing for Seagram at the time, and as mentioned in the earlier blog post, all I kept hearing about was this upstart brand and it’s appeal to bartenders and retailers. We paid some limited attention, but often Goliath doesn’t take action until David has made it too late.

How the brand was launched

Three elements became the focus of the launch of Ketel One:

1. An emphasis on the bartender and enlisting them as brand ambassadors.

2. Convincing the trade (sales reps and bartenders) of the taste superiority of the brand.

3. A very unique promotion and value added piece at point of sale in off premise stores.

The Bartender

Dave and Ketel One were not the first to recognize the power of the person behind the bar in influencing brand IMG_0490choice. But he did it in a most unusual way and with the help of technology. The most common approach to sway the views of bar and restaurant people—then and now—is face to face with brand ambassadors, sales reps, other bartenders, special tasting, events, and so on. But what do you do if you can’t afford this approach?

In Dave’s case, he told the Ketel One story on VHS video (this is before DVD) and mailed copies to the top bars, stores, restaurants, hotels, etc. He reports that, in his estimation, the videos were viewed by around 20% of those who received it, and that it created ambassadors on its own.

All I can tell you is that wherever I asked about Ketel One, a bartender or food and beverage manager would wave a copy of the video or tell me about it. While we take such actions for granted today, it was ahead of its time.

The Smell and Taste Test

At the heart of the Ketel One story was it’s clean, smooth taste, based on its unique (at the time) distillation process. How do you get this message across?

For Grey Goose, it was the Beverage Testing Institute (BTI) taste test showing Grey Goose on top of its competitors with a score of 96.

For Ketel One, here’s how Dave describes their program:

“We trained the distributor sales reps to do a “Smell and Taste Test” with the trade. That consisted of asking the storeowner or bartender to smell and taste a sample of his or her own favorite vodka. But, of course, when the alcohol touches the taste buds there is a numbing effect. So the next sample—which was Ketel One—with the nose and mouth taste buds numbed, tasted a lot smoother.”

The “trick” as he puts it, worked very well.

{For another clever/tricky sales taste test see the posting called Salesman in Winter.}

About That Olive…

Actually it wasn’t an olive, it just looks like one. It’s called a TomOlive and is a small green pickled tomato. “For a TomOlives_Aasmall company in the startup mode, it was extremely difficult to get Point-of-Sale (POS) materials into a store…so we decided to do something very unique,” Dave recalled.

It happened this way. Dave received a phone call at home from a stranger, who he assumed was a stockbroker, but turned out to be someone in the movie business. The man told him, “Find TomOlives, make a Ketel One martini with it, and you’ll have discovered the ultimate martini.” Dave tried it and it was indeed sensational.

(Having bought some recently on Amazon and tried them with vodka, I can attest to the fact that they taste great. In fact, we sometimes, add TomOlives to a salad to add a bit of a kick. But I digress.)

photoA week later, Dave was on his way to Alma, Arkansas to meet with the producer of the TomOlive. The next thing you know, he buys the annual production and co-packs it with Ketel One. Some of the Nolet people were “aghast” and said, “we’re not in the fruit business!” But he did it anyway and came up with a terrific marketing program that had bars, stores and consumers clamoring for Ketel One and TomOlives. It became the darling of the sales force.

I know this for a fact, because after telling me about the video, people would add, “and why don’t you have those olives?”

The punch line to the story is twofold. David van de Velde never found out the identity of the mysterious caller with the idea for TomOlives. Second, Diageo no longer uses the exclusive Ketel One TomOlive program. Sounds like an opportunity for another brand, if you ask me.

Oh, by the way, according to Dave, Diageo had the opportunity to own a chunk—if not all—of Ketel One in the early days but let it go by. When they finally got around to a significant investment, it had gone from millions to billions.

He’s Still At It

Power Assist Golf - StrikerOne

Finally, Dave continues to be motivated by the notion, “Find a Hole and Fill it.” He and some colleagues have invented The Striker-One™ Smart Golf Club. It is designed for golfers who can’t play anymore because of injury, disability, age or any number of reasons. You can learn more at info@PowerAssistGolf.com. Or contact me and I’ll put you in touch with David van de Velde.

A remarkable man with a thirst for ingenuity and creativity.

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The Bacardi Story: A Different View

An interview with Mr. Cynic

Bacardi announced this week that it is realigning its U.S. distribution network and joining Southern Wine & Spirits and Glazer’s. They are leaving more than 30 former distributors including RNDC, Charmer (now Breakthru Beverage), Young’s Market, and others.

The spirits and wine industry has been abuzz with press releases, interviews, and statements. Many in the business have done little work this week, instead spending time speculating on why this happened and what the implications might be.

Booze Business has spoken with many people throughout the industry and, aside from those employed by those involved, the reaction was pessimistic and negative. To capture this mood, we conducted an interview with an imaginary industry executive known as Mr. Cynic.

So, here is another side to the Bacardi story.

*          *          *

Booze Business: Mr. Cynic, let’s start with the basic question. Won’t this change in distributors, this consolidation, improve Bacardi’s standing in the market?

Mr. Cynic: Let me ask you a question. When was the last time you went into a bar or restaurant or even a hole-in-the-wall joint and Bacardi Rum or Grey Goose wasn’t there? What distribution problem are they correcting? Seems to me that the wholesaler network they’re leaving did a great job with their two leading hemorrhaging brands. It wasn’t their fault that the company couldn’t fix the problems. How are they going to get deeper penetration than they already have?

Booze Business: Well, they’re saying that they want to consolidate their wholesaler network and have one national entity.

Mr. Cynic: Sure. Dealing with one distributor makes it easier to poke your finger into one chest and demand sales increases than into thirty. Charmer and RNDC made their brands, including the stuff that was impossible to sell. They got screwed. What I don’t understand is how competing brands can be in the same house.

Booze Business: What they’re saying is the Southern-Glazer operation will have dedicated and incremental sales forces.

Mr. Cynic: So they are adding people. Tell me, what were these people doing until now? You mean they’re not getting the best and brightest? Or, are they moving their best people to work on Bacardi?

Booze Business: Come on, a larger and more powerful Southern and Glazer has got to benefit other brands they already handle.

Mr. Cynic: Are you kidding me, we can’t get their attention now.

Booze Business: Well, then aside from Bacardi, will anyone benefit from this change?

Mr. Cynic: I’ll tell you this… there’s a lot of nervous sales reps on the street. But, my money is on the distributors who are losing Bacardi.

Booze Business: Why’s that?

Mr. Cynic: Hell hath no fury like a distributor scorned. This move ignores the consumer and the changing industry. It’s no longer about dinosaur brands like Bacardi Rum or yesterday’s vodka. The industry has become more grassroots focused and this move is old-old school. The distributors they dropped just got a wakeup call. They’ll focus on the new crop of brands.

Booze Business: So who benefits?

Mr. Cynic: Don’t you get it? The winning brands these days didn’t come from the large traditional powerhouse suppliers. They came from consumers—mainly Millennials—with brands like Fireball, Rumchata, and Tito’s. Brands made with “pull” not distributor “push.” These distributors, if they’re as smart as I think they are, will start asking themselves, “Where else can we make money?”

Booze Business: And the answer?

Mr. Cynic: Make the second tier brands stronger and more available. Focus on craft and startups. Take some risks. Change the business model. Give the consumer what they want not what the supplier and wholesalers want.

Booze Business: But won’t this new alignment mean Bacardi will do better with startup brands?

Mr. Cynic: Give me a break. The first order of business will be to manage the consolidation—legal, logistical, resources, etc.—then they need to show the owners that this was a smart move and start making money. The smaller brands… the brands of the future? Forget about it.

Booze Business: What do you think was the most important driving force behind the change?

Mr. Cynic: You want to hear cynical? Can you handle it?

Booze Business: Go on.

Mr. Cynical: Over the last 10 years or so—no, make that ever since I’ve been in this business—Bacardi has changed executives and management more than any other major player.

Booze Business: So what?

Mr. Cynical: This move will take time for the dust to settle. They say one to three years. Ha! This year and part of next will be focused on consolidation. The following year will be better because they’ll be going against soft numbers. Then maybe further growth down the road. Meanwhile the owners will be pleased, and management will have 3 to 4 years of job security. That is, until it all catches up with them. Brilliant move. Better job and income protection than a series of line extensions. Meanwhile, the brands at the other distributors will have real and steady growth.

Booze Business: Why do you think this happened?

Mr. Cynical: Who knows? Maybe it’s as they say, consolidation and one giant footprint will benefit Bacardi. Or, maybe, desperate times call for desperate measures.

Booze Business: Care to sum it up?

Mr. Cynical: Yeah. This deal will cost tons of money to make it happen. And, while they’re focusing on winning, it will create opportunities for the rest of the industry. While Bacardi and their new distributors are concentrating on their new arrangement, everyone else will be moving in a new direction.

Booze Business: Thanks for your time, and a word of advice.

Mr. Cynical: What?

Booze Business: Stay out of Southern Florida.

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