The Last Word: South Africa

From Booze to Boutique Hotels—The Peter Fleck Story

My wife and I, and another couple, recently returned from a trip to South Africa. A wonderful experience as we toured from one end of the country to the other—major cities, photo safari, animal reserves, seaside towns, and, of course, wine country.

I’ll be writing about South African wines at a later date. But, now, I’d like to tell you about a former Seagram colleague and the incredible boutique group of hotels he owns, called The Last Word.

About Peter Fleck

Peter Fleck
Peter Fleck

Peter’s work life started as a journalist for a local newspaper, which led to a PR position with KWV South Africa (Pty) LTD, a large wine cooperative, and currently a leading producer of wines and spirits. From there he moved to International Distillers and Vintners (IDV), a predecessor company to Diageo, starting as a brand manager and ending up as the South African CEO. Along the way, together with James Espey and Tom Jago, he created Malibu Rum. (He also has been involved with James and Tom in the Last Drop Distillers.)

In the early 1990s, he joined Seagram to start a new affiliate in South Africa and was the country’s GM until the sale of Seagram in 2001. Those of us who knew Peter in those days always admired his tenacity, business skill and sense of humor—an all around terrific guy with a focus on innovation. But I didn’t realize just how innovative.

On a business trip to the Cameroons, in West Africa on behalf of Seagram, an idea struck him. He had just finished lunch at “the best eating place in Africa.” The restaurant was part of a small hotel that was an oasis amidst “Africa’s trademark poverty.” It was an oasis of warmth, friendship, and full of hopes and dreams. In his words,

No amount of imagination could have anticipated such contrast; leafy-green palms, bamboo and lawns surrounding a sprawling mansion in immaculate condition. Inside were seven luxurious bedrooms and, of course, an intriguing restaurant. The smiles, laughter and charm were enchanting… The restaurant, like the accommodation, was Africa’s hidden secret.

Despite an old colonial style it was authentic Africa, full of hopes and dreams… This was my kind of place, a diamond discovered in the rough, a vivid memory of geniality where time and space worked together to produce one of the world’s best places to stay. 

In 2003, the daydreaming stopped and The Last Word was launched.

The Mice That Roar

Peter and his team put together an employee manual in the form of a book for the staff to understand the properties, their goals and values and what it takes to exceed expectations. How many employee manuals are you aware of that are 170 well-written and thoughtful pages? How many hotels—or any service entity for that matter—have “delight the customer” at the heart of their business proposition?

An excerpt from that manual:

The mice that roar

While we are a little known travel product we take on the quietness of a mouse, moving into new space as though by stealth, under the radar. We act with grace; our preparedness nevertheless has to be extensive. Even in mice survival requires a big heart. And if we are heard about only in whispers initially, this is also by design, for to be discovered as a hidden gem and whispered about like a secret has an innate power of its own.

The Hotels

Let’s look at the three Last Word properties. All are a 5 star experience and none have more than 10 rooms. They are all consistent in their spaciousness, ambiance, hospitality, and the staff’s desire to make you feel welcome and at home. The only difference among them is the locale, which is why we stayed at all three.

Franschhoek Hotel

The Last Word Franschhoek 2015 (91)

In the heart of wine country, with amazing vineyards in Franschhoek and nearby Stellenbosch, this hotel consists of 10 rooms (including 2 pool suites), and is in the heart of the city. The hotel reflects its Huguenot heritage, and has been a consecutive finalist in the World Travel Awards for South Africa’s Leading Boutique Hotel.

Constantia Hotel

Constania

Here is how I described this property in TripAdvisor. It is in a Cape Town suburb and near to sites like Cape Point, Victoria & Albert Waterfront, a penguin reserve, and more.

“All the boutique hotels in The Last Word group are magnificent and special. But, this property was outstanding. The grounds, the rooms, the overall ambiance, and the helpfulness of the staff were just terrific. The setting is not to be believed and a joy to come back to after a hard day of sightseeing.”

Long Beach Hotel

The Last Word Long Beach 2015 (20)This was a wonderful way to relax and unwind on this beach property, which is exactly how we ended our trip. Each of the 6 rooms overlooks the beach and ocean. In fact, you go directly on to the beach from the hotel. It turns out this was the first of three properties and started as a B&B in Peter’s home.

Long Beach

* **

The worlds of spirits/wine and hospitality have much in common. Both thrive on product excellence and innovativeness. And, selling entertainment in a bottle is not all that different than selling entertainment in an experience.

By the way, an outstanding breakfast, wifi and premium spirits and fabulous South African wines are included.

The Last Word locations
The Last Word locations
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Spirits of the world: Mastiha from Greece

How a chewing gum became a liqueur

Mastika or Mastiha (‘mahs-Tee-ha’) is a liqueur from the Greek island of Chios that is flavored with a resin or sap from trees on the island. The word might sound familiar—it is derived from the Greek “to chew.” In English, it is ‘masticate’—meaning to chew or munch on.

Mastiha Trees
Mastiha Trees

It turns out that this resin/sap sheds its “tears” and became the original chewing gum

The resin or "gum"
The resin or “gum”

enjoyed as far back as the 5th Century BC, according to Difford’s Guide:

The ancient Greeks chewed mastic for fresh breath, as did the Romans, Byzantine Greeks and later the Venetians, Genoese and the Ottoman Turks.

The mastic gum is made into a liqueur that receives the “Protected Designation of Origin status on the island of Chios since it is the only place where the trees “cry teardrops” during harvest.

In Greece, Mastiha is served a number of ways: With appetizers, deserts or as a digestive. In the hands of the bar chef and mixologists, there are some terrific Mastiha cocktails being made around the world.

You can also buy the mastic gum itself on Amazon and there’s even a store called Mastihashop, where you can buy not only the gum but also other products made from Mastiha.

But if it’s okay with you, I’ll stick with the booze product.

Ya Mastiha

Ya Mastiha
Ya Mastiha

Allow me to introduce Nicholas (Nick) Papanicolaou, a passionate entrepreneur and founder/owner of Ya Mastiha, which is derived from the Greek toast Yamas—“to our health.” Nick is a Greek-American who had one of those ‘aha’ moments, which led him to shift his entrepreneurial efforts to the Booze Business and introduce Ya. Here’s how it started:

Growing up Greek-American, I remember longing for my summers to spend a few weeks in the picturesque Greek Islands. Every year, I invited a friend to join me so I could share my heritage. In the summer of 2009, twenty-eight of my friends from all over the world joined me in Mykonos to celebrate my birthday. Despite vast differences in cultures, personalities and ages, we bonded with the help of one unifying force: Mastiha liqueur.

Like most startups, the brand faces many uphill challenges—limited resources (people and money), trade acceptance (distribution, bars, and stores), and building consumer awareness and trial. But like any tenacious businessperson, Nick is well equipped to roll with the punches.

The brand is only in New York, but can be purchased on YaMastiha.com/Buy where a retail partner will ship it to most states. It has some traction among Greek-Americans, for obvious reasons. I was surprised when he told me that a significant number of sales are in Tarpon Springs, Florida, which, I learned, is one of the largest concentrated communities of Greek-Americans in the U.S.

Entering the mainstream drinking market is among the list of challenges.

The product

Ya Mastiha is 30% AbV (60 proof) and made with natural cane sugar and Mastiha from the Chios Island in _MG_3737Greece. It’s produced in the U.S. but Nick has plans to also introduce a product produced in Greece.

The taste? Well, a bit unusual. I enjoyed it on the rocks and found it to be an excellent digestif. I don’t generally provide taste reviews but to me Ya has a slight Ouzo/anise aroma but doesn’t get milky over ice. What I really like about it is what it does to a cocktail. Difford’s has some interesting recipes like the Greek Martini (Mastiha, gin, dry vermouth and a touch of ouzo) or Smoky Tears (Mastiha, mezcal, pink grapefruit juice and simple syrup) or Cosmopolis Cocktail (a variation on the Cosmo with a splash of Mastiha added).

Ya Mastiha sells for $32.99 and you can buy it online here, here and through Craft Spirits Exchange.

It’s a fun product best shared with a group of friends. Plate smashing is optional.

Yamas!

(Dear Reader — If you come across an interesting spirit/liquor from around the world that is not widely known, contact me and tell me about it.)

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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.

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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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