Seminar Snapshot: Diageo, Bacardi, William Grant Firmly Focused On Future

Diageo, Bacardi and William Grant & Sons market some of the most established and best-known spirits brands in the world. However, in addressing attendees at last week’s 40th annual Impact Seminar, top executives from all three companies stressed the need to embrace change as a core element for achieving success in today’s drinks market.

Family owned for more than 150 years, Bacardi Ltd. has made efforts to diversify its leadership team in recent years, bringing execs from a variety of industries, such as former IMG Worldwide CEO Mike Dolan, into the fold. Dolan—who was appointed Bacardi’s interim CEO in 2014 and named permanent CEO last year—detailed the ongoing evolution of the group’s growth in his seminar presentation.

According to Dolan, one of Bacardi’s biggest changes was last year’s move to consolidate advertising operations for its core brands, which include Bacardi rum, Bombay Sapphire gin, Dewar’s blended Scotch and Grey Goose vodka, among others.

“We took all the ad agencies that we had—we had hundreds of agencies around the world—and fired them all. In place of that, we went with a single ad network, giving BBDO and their sister agency, OMD, all our business,” explained Dolan. “But the proviso was that we wanted great ideas that travel—we want them to work in North America, Europe, Africa and in Asia. And we want these ideas to live on social media just as easily as they live on TV.”

In her presentation, Diageo North America president Deirdre Mahlan—a native New Yorker who previously served as Diageo PLC’s CFO before returning to the U.S. to take over for the retiring Larry Schwartz late last year—provided a unique perspective on a market that has seen an accelerated pace of change and innovation in her eight years away. “Today we are a part of a significant consumer shift,” Mahlan told seminar attendees. “It is fundamentally changing the dynamic between consumers and the entire consumer goods supply chain.”

Mahlan went on to highlight four current trends among consumers and how they socialize today—digital ubiquity and mobile shopping; the pursuit of healthy lifestyles as alcoholic beverages compete with a new field of nutritious beverages and fitness occasions; fluid social spaces such as pop-up stores; and, lastly, a variety of meaningful experiences consumers seek out. Mahlan concluded by urging drinks marketers to adapt to deliver relevant propositions for today’s consumers at the right places, times and price points.

As consumers in today’s marketplace increasingly turn to products with heritage and authenticity, William Grant & Sons has sought to link its centuries-old Scottish heritage with a contemporary marketing message. Simon Hunt, recently appointed William Grant’s CEO, pointed out some of the company’s recent initiatives that illustrate this effort—including two short videos highlighting the company’s journey from creating quality Scotch whisky at a time of few regulations and standards to its competitive position in today’s marketplace.

William Grant has also worked to diversify its portfolio in recent years, Hunt told the seminar attendees, either developing or acquiring brands like Impact “Hot Brand” Hendrick’s Gin, Tullamore Dew, Drambuie, Sailor Jerry and Monkey Shoulder.

Dolan, Mahlan and Hunt all showed the seminar audience that, along with their illustrious histories, their companies are well-positioned for the future.

TTB Offers Clarification On Recent Tied-House Ruling

After handing down guidance last month related to tied-house laws—in response to queries on Kroger’s plan to allow Southern Wine & Spirits to oversee its shelf displays—the TTB has issued further clarification with a set of frequently asked questions and answers.

The TTB reiterated its stance that industry members may provide to retailers “a recommended shelf plan or shelf schematic, and nothing further,” and may not provide inducements or “things of value.” If a retailer’s “category management” arrangement with an industry member results in the “exclusion of competitor products … such that the retailer’s independence is at risk … the practice would violate the FAA Act,” the agency added.

However, the TTB flagged certain minor exceptions to its “things of value” designation. Exceptions would include “product displays not to exceed $300 per brand; point of sale/consumer advertising items such as posters, coasters, paper napkins, foam scrapers, calendars, ash trays, cork screws, shirts and caps; consumer coupons and direct contests; and consumer tastings and samplings.”

The agency noted that in any potential investigation it will look to “determine if shelf plans or schematics are being provided as mere recommendations,” which are exempted, “or the de facto ultimate plan adopted by the retailer as a result of a unique relationship between it and the submitting industry member,” which would be a violation.

News Briefs:

•Single malt Scotch brands Highland Park and Laphroaig each have new whiskies coming to market, Whisky Advocate reports. Available at specialty retailers, Highland Park’s newest release is the Ice Edition 17-year-old (53.9% abv). The global release is limited to 30,000 bottles and carries a suggested retail price of £190 ($268). Highland Park Ice Edition was aged predominantly in Bourbon casks. Laphroaig’s new entry is Lore, bottled from a selection of casks including Bourbon, first-fill Sherry butts and smaller quarter casks. It is bottled at 48% abv and will be available globally, hitting the U.S. in May at around $125.

•Boutique fine wine distributor Pioneer Wine Company, operating across Texas and Colorado, has named Glazer’s veteran Dawn Cook as state operations manager for Texas. Prior to joining Pioneer, Cook served in a variety of financial, operational and administrative roles with Glazer’s.

Craft Brewing and Distilling News:

•Detroit, Michigan’s Atwater Brewery has partnered with Texas-based Flemish Fox Brewery & Craftworks to open a new collaboration brewery in Flemish Fox’s home market of Austin. The future brewery will span 27,000 square feet on three acres and have capacity of more than 60,000 barrels. It’s expected to start producing beer by the first quarter of 2017. In addition to brewing capabilities, the location will feature a tasting room, outdoor beer garden with an entertainment venue, retail shop and brewing museum. Atwater, which brews 26 styles of beer led by Vanilla Java Porter and Dirty Blonde, is distributed in 21 states, and the new brewery will help fulfill orders in Texas and other western markets.

•Atlanta-based Second Self Beer Company is extending its canned beer lineup as part of an effort to ramp up production by 150% via an expansion set to be completed this summer. Second Self, which opened in 2014, has been operating at capacity for the last 12 months. Currently, the company outsources canning on two of its beers, Thai Wheat and Red Hop Rye. Under the expansion plan, Second Self is introducing its own canning capabilities and will be adding its Maverick & Gose and Mole Porter to its canned portfolio.

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