Booze Business | A blog dedicated to the business of spirits and wine

Super Bowl Ads

February 8, 2011 No Comments

So by now, you’re over the game (pretty exciting by super bowl standards) and you’re tired of hearing the ad and marketing pundits give their views on the bad, the worst and the ugliest.

Got time for one more opinion — one that relates to the booze business?

In the past, the Budweiser ads were often more interesting than the game. Not this year.

Is it just me or has the quality, and therefore the effectiveness, of Budweiser advertising declined ever since InBev took over? I used to think that the international owners just didn’t understand the US market and that cost reductions were more important than brand building. I think I was wrong. The Budweiser ads were expensive to produce and cost a fortune to run. So it has to be something other than the owners.

Ad Age reviewed the Super Bowl ads and gave 3½ stars to a Motorola ad and none to A-B. Yet, both came from the same agency, Anomaly. So either Motorola got the better creative team or the marketing folks there are sharper.

There’s a company called Ace Metrix, which uses online panels of TV watchers to score the ads based on metrics such as persuasiveness and likeability, among others. They reported that the Dorito ad was #1 with 662 points (out of a possible 950) and Bud Light was #23 with 567.

So here’s my takeaway/insight – in the beer category, as in many others, consumers select brands on price, promotion and “group brand loyalty.” Inclusion in the group is based on many things, including image as a byproduct of communication or advertising.

Seems to me that the opportunity to reach the single largest audience at one time would compel a beer marketer to present ads that capture the audience’s attention and generate positive word of mouth.

But, then again, what do I know. I’m a spirits and wine guy. We can’t afford to advertise on the Super Bowl.

How to increase sales

February 2, 2011 No Comments

As a group, spirits and wine distributors are among the smartest business people I know.

But there are exceptions.

Back when Metro New York had many distributors and wholesalers, there was one operation whose owner was – how should I put it? – the runt of the litter intellectually.

On one occasion, or so the story goes, a sales manager was having difficulty meeting the NYC plan for Chivas Regal. He paid a visit to this particular distributor and I imagine the conversation went like this.

Sales person: Listen XXXXX, we’re having problems making the numbers on Chivas and I need you to increase your inventory.

Distributor (in a slow whiny voice): But, YYYYY, I already have a warehouse full of Chivas. It’s moving slowly. How can I take more?

Sales person: I don’t care. We need to increase our shipments.

Distributor (in an even whinier voice): Well, what should I do with the cases I currently have.

Sales person (getting angry): Listen to me. I don’t give a damn what you do with the goods in the warehouse – sell it, give it away, spill it out, burn it, whatever….

Distributor (now very confused): Slow down, slowdown, I want to make sure I got it…you said sell it, burn it, what else?

Rumor has it that the distributor is now a supplier.

The Bronfman Enigma

January 24, 2011 2 Comments

There have been lots of conversations among Seagram alumni since it was announced on Friday that Edgar Bronfman Jr. was convicted of insider trading in a French court.

The news reports I read raised a number of questions. According to Crain’s NY Business, “The conviction came even though the prosecutor had recommended acquittal…” That’s curious.

The report went on to say that “the prosecutor felt the executives did not have enough information themselves about the company’s health.” What? Are we talking Edgar Jr. here? Didn’t have enough information after having bet the heritage and fortune on a guy who referred to himself as Master of the Universe?

I wonder what the judge heard and saw that the prosecutor missed.

Edgar Jr. sometimes referred to the ease and depth with which people in Hollywood were capable of lying. He described studio executives as people who can swear on their mother’s life that it is raining outside when you and they know it’s a beautiful sunny day. Yet, he couldn’t wait to do business there.

Every year since the 1950’s, Seagram ran the Seagram Family Association (SFA) meeting, an annual session for senior managers and distributor principals. At what turned out to be the last SFA, while it wasn’t known at the time, the deal to sell the company was in the works. Rumors were widespread and felt to have more than the ring of truth. Every conversation, among distributors and management alike, dealt with the speculation. Junior was at the event but hardly visible. Stayed in his suite the entire time, and based on subsequent events, was probably cutting the deals.

He showed up at the last session where customarily the owner addressed the distributors to remind them that Seagram was a family in both the literal and figurative sense of the word and to provide remarks on the state of the business and the future.

When he walked into the back of the room, he stopped and asked what we thought he should touch on in his remarks. What was the tempo, what were the top issues, what’s on their minds?

The answer was candid. “What’s on everyone’s mind is — are we going to be sold?” “The concerns are palpable…they, we, all want to know what’s going on.”

He just looked at us and went on the stage. Immediately, he began to address the topic of a sale in no uncertain terms. He said emphatically and repeatedly that Seagram was not for sale. He didn’t say this — but it was almost as though he swore on his grandfather that would not happen. Less than a month later the announcement of a sale was made.

It was a sunny, beautiful day in southern California but inside the meeting room the rain was pouring down.

In a previous blog on the Bronfman’s I wrote about pity or scorn. This is another occasion for pity. Junior orchestrated the end of his family’s spirits and wine business in favor of the idea of integrating media, entertainment, information and communications in one hand held device. The Smartphone. The idea he had was ahead of its time and with the wrong people.

Quel dommage.