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Brown-Forman Announces Winners of its 2015 Distributor Recognition Program

Brown-Forman announced the winners of its distributor recognition program at its annual Distributor Growth Summit on July 15th at the Omni Hotel in Nashville, Tennessee.

Winners included Horizon Beverage of Massachusetts and Wirtz Beverage of Minnesota.

These national awards are presented annually to one large (Heavyweight) and one mid-sized (Middleweight) distributor partner. Awards are based on business performance measures including volume attainment goals, distribution criteria, and other brand-building activities during the company’s fiscal year ending April 30, 2015.

Based on its year-long performance and brand-building efforts on behalf of Brown-Forman brands, the Heavyweight Distributor of the Year was presented to Horizon Beverage of Massachusetts while Wirtz Beverage of Minnesota was named Brown-Forman’s Middleweight Distributor of the Year.

Horizon Beverage of Massachusetts and Wirtz Beverage of Minnesota each received a commemorative plaque as well as a $15,000 check to benefit a charity of their choice.

“We are thankful for these long-term partnerships that continue to contribute to the growth of our brands here at Brown-Forman,” said Marc Satterthwaite, Vice President North American Region Sales Operations.

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Progressive Drinking and Retailing

The Urban Grape’s tagline is “drink progressively.” The meaning is two-fold for this Boston-based retailer, which operates locations in both Chestnut Hill and the city’s South End.

On one hand, The Urban Grape is progressive in its use of retail strategy, technology and social media. On the other, the husband-and-wife ownership team of TJ and Hadley Douglas believe that each consumer’s palate progresses over time, and can be measured and then matched to an ideal wine list.

Where these two concepts meet is the core of The Urban Grape’s philosophy.

Progressive Shelving

The Urban Grape does not organize wines by varietal or region on its shelves. The reasoning is this: because the makeup of wines differs so greatly within those categories, customers may struggle to find something new if they’re only searching by varietal or region.

To reduce wine buyers’ stress, TJ and Hadley arranged the wine section differently when they opened their first location in Chestnut Hill five years ago (the South End shop opened two years later).

Before the store buys bottles, Urban Grape employees taste test each one. Wines are then ranked on a scale based upon their initial body. “The body of a wine determines whether a drinker will be into them,” says TJ, who heads the company’s business operations.

The lightest are classified as 1W, with 10W as the heaviest. “Think of it as the difference between skim milk and heavy cream,” TJ says.

Bottles are then organized based on this 1-10W scale. These groupings, TJ believes, more accurately reflect 
similarities across wines than varietals or viticulture roots. The objective is to help customers find wines comparable to those that they already enjoy. Of course, this setup relies on a key bit of information: where on the W-scale customers like their wine.

Pinpointing Palates

To determine that number, both Urban Grape locations contain a tasting machine. The device pours samples from ten bottles, each representative of a wine’s body level from 1W to 10W. Customers in the stores can use this device (with employee assistance) to identify their palate preference.

“We’ll start them on a 1W, and they might say it’s too light,” TJ says. “So then we’ll go the other way and they might say it’s too sweet. And we’ll work our way in until we find what’s just perfect, like with Goldilocks.”

Once the customer finds his number, store employees can recommend other wines with the same W-number. TJ believes that this method is more effective and eye-opening than alternatives.

“Some customers come in and say they don’t like a certain types of wine because it’s too sweet. But that’s because they’ve only ever had sweeter versions of that wine, and have built up a misconception,” he says. “What they really mean is that they don’t like wine that’s too sweet, regardless of the type.”

“Our system allows customers to explore more wines, without their blinders on,” he adds.

Within wines grouped by their body numbers, The Urban Grape further organizes bottles by price. More expensive products are, naturally, located on top. TJ calls the overall concept “Progressive Shelving,” a phrase the company has trademarked.

“We will find you whatever your palate tells us that you like, and then sell it at your price point,” he explains. “Our mission is to take intimidation out of beverages.

As part of that mission, the Urban Grape uses the Light Speed POS system, which digitally collects and categorizes information from customer purchases. This includes the wines customers have purchased in the past, arranged by W-Scale. Armed with this data, employees already know which bottles to recommend for returning customers.

Guesswork in trying new wines is replaced by scientific analysis, which is further beneficial because TJ believes that palates evolve over time — into different tastes and styles.

“When people start drinking wine, it’s usually in college with boxed wine, because of the juiciness and alcohol,” he says. “Once they graduate and earn more money, they’ll move onto Zinfandel, and then Pinot Noir, because of the similar juiciness. But then they’ll branch out and discover Malbecs and more.”

The Urban Grape would seem well-positioned to assist customers along this journey of progressing palates thanks to the company’s novel shelving system, and also its focus on employee hospitality.

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Hospitality in Retail

The Urban Grape seeks staff who can balance expertise with sociability. In his previous career, TJ created wine menus for restaurants (which is where he first employed a progressive wine format). He is familiar with the hospitality business, and wanted to bring elements of its customer service to liquor retail.

“Employees here have to be able to sell within The Urban Grape philosophy, but while also using their own personality,” he explains. “We hire here based largely on personality, along with education, knowledge and availability. But you can always train someone who has a great personality.”

The interview process is “pretty intense,” he admits. It includes a trial run, in which candidates work the sales floor on a busy night. This “stage” (a term TJ borrows from his restaurant days) helps determine whether the applicant is a good fit for Urban Grape — and vice versa.

The company provides staff with 401k, health insurance and other benefits. “We want to invest in our employees’ mental wellbeing,” TJ says. “You know the saying: If you have happy employees, you have happy customers.”

Training never stops after someone is hired. TJ takes notes about new products on Evernote, a digital note-taking service, which the staff is required to read. “We have educated consumers who come in already knowing key wine terms, so we need to have educated staff as well,” he explains. “Most of our staff also taste every product we bring in.”

With the education, sampling and Progressive Shelving, 
TJ puts his workers in the best position to succeed. “It’s a very easy system for the staff to sell, while also being honest to the customer,” he says.

Modern Marketing

The other half of the husband and wife ownership team is Hadley Douglas. “I’m the face and the palate of The Urban Grape,” TJ says, “and she’s the voice.”

Hadley handles all of the company’s marketing, relying on her background in PR and communications. Similar to how TJ has utilized hospitality strategies from his former career, Hadley has brought brand management into the alcohol retail industry.

“I wanted to rip out all the pages about liquor-store marketing from the past, and start anew,” she recalls. “I wanted to create a lifestyle brand around the store.” The Urban Grape’s website features a blog maintained by Hadley, which reinforces the company’s brand.

“It’s very much about our story, how we use wine and food in our lives, and all the traveling that we do around wine,” she continues. “I wanted to be in everyone’s lives, showing them why it’s important to go to the wine store and get better service.”

This meant eschewing traditional advertising techniques in favor of modern methods. Digital technology allows Urban Grape to promote its lifestyle brand across multiple channels frequented each day by a great number of people.

“I write our newsletter and we’re on Instagram, Facebook, Twitter – all the usual suspects,” Hadley explains.

Although that approach may be standard practice for the brands Hadley once represented, it’s nothing normal in her new industry. “I think in liquor stores, you don’t see retailers taking more of the brand-oriented approach,” she says.

This marketing strategy is not without its daily grind, as anyone who works in social media can attest. “I think there’s a huge amount of pressure to be present in our brand,” Hadley says. “Sometimes when I put dinner down onto the table, my kids will ask, ‘Why can’t we eat until mommy takes a picture first?’”

Fittingly, with Hadley positioning The Urban Grape as a lifestyle brand, her children have provided social-media inspiration. “I was doing a blog about one of our trips, and my son was scrolling through onscreen,” she recalls. “He said to me, ‘I think this would be better if you put in pictures of me and my brother.’ People really respond to seeing kids on Facebook.”

“I try to keep it fresh and fun online,” she adds. “I’m always introducing new products, but I make it about education, not just, ‘Here’s the product of the week.’ I want to make people feel comfortable walking through our door. I want to remove any intimidation about seeing our wall of wine.”

Hadley is considering a series of short, online videos. They would depict customers using the tasting machine to determine their palate, and selecting an appropriate bottle from the wall. The Urban Grape also has plans to launch a new website. Even with all these new ideas and platforms, Hadley does not intend to stray too far from what’s been working.

“Our message is about finding your palate, finding your voice. And our store’s system, the whole approach, makes that easy,” she says. “It’s up to me to make sure that that experience is being carried through by everything we do outside the store.”

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Beer and Spirits

The Urban Grape extends its progressive philosophy to stocking beer and other products. The company is continuing to expand its beer focus with the offshoot program called Urban Hops, which includes another novel shelving system.

“We used to arrange beers by style,” TJ says. “Just a few weeks ago, we switched over to arranging by their predominant format: malts, hops or yeast.”

Similar to wine, The Urban Grape further organizes beers within format groups on a 1-10 scale of intensity.

“People are making so many styles of beer nowadays, so this makes more sense,” TJ says. “For beer novices, this is much easier to understand. Do you like hops? Yes or No? Malts? Yeast? And to what extent?”

“But this is also good for beer geeks,” he adds, “because now they can head straight for the 9s and 10s, and try much different beers that are made for their more-developed palates.”

Whiskey is arranged based on style and taste, and by price point. “I can’t keep anything brown in stock,” TJ says. Because whiskey can be expensive, The Urban Grapes keeps around opened bottles for customers to sample.

“Buying whiskey is an investment,” TJ explains. “You keep a bottle of whiskey around for a long time. It’s something you fall in and out of.”

Stocked next to whiskey is tequila, because “a lot of whiskey drinkers are also tequila drinkers, they just don’t know it yet,” TJ laughs. The Urban Grape also stocks and organizes other spirits in progressive setups, including premium rum, sake, gin, bitters and liqueur.

Tasting Promotions

Urban Grape emphasizes its in-store tastings, which take 
place three times per week. A large wooden table dominates one end of the South End store, with window seats and pillows set up for customers to relax with their wine, beer or spirit samples.

“This gives people the opportunity to walk into our store learn about new products with no pressure to buy,” TJ says.

The South End store attracts many walk-ins, since it’s located in a high-traffic pedestrian area. Pets are allowed in The Urban Grape, as well.

The free tastings are held every Thursday, Friday and Saturday. When reps or creators sample their products in the South End location, the store asks them so sign a backroom door. Signatures and messages now stretch across this door from top to bottom, representing everyone from industry greats to up-and-comers.

This literal wall of comments from the store’s many connections is symbolic of a company that effectively blends progressive strategies with traditional service and hospitality.

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Rum’s Ready to Rebound

Premium straight and aged rums appeal to the modern, 
sophisticated consumer.

The second-largest spirits category isn’t resting on its laurels. It’s on the cusp of being the next big thing, say industry experts, as rum’s beach-bum image morphs into sophistication. Variety and versatility are rum’s greatest strengths – attributes that should enable the category to win market share from the hot whiskey and tequila segments. To do that, though, consumers need to better understand this multi-faceted spirit through changing consumption patterns, drinking occasions, marketing and educational efforts.

Rum has variety greater than just about any other spirit, ranging in character from white to gold to dark. Light rum’s mixability is unequaled by vodka or tequila, and gold rum brings complexity to cocktails. Rich, barrel-aged sippers can hold their own against other brown spirits, aficionados say, including bourbon. There is something for every drinking occasion and consumer palate. Rum has got it all.

“The rum category includes a wide range of products, including both light and dark expressions, to meet all of our consumers’ varied tastes and needs,” says Arvind Krishnan, vice president and brand managing director for the rum category at Bacardi U.S.A.

Some industry observers think that rum’s rise has been somewhat hobbled by its fanciful reputation, but that is changing.

“Rum is no longer about pirates, tropical beaches and tiki; that image is shifting. Rum today is more about the craft aspect,” says Marlana Persson, marketing coordinator for Niche Import Co. The New Jersey supplier was recently acquired by the Dutch group Marussia Beverages, which brought with it the Mezan label of aged rums. Niche also imports Stroh, an over-proof rum from Austria.

“Rum has a party reputation,” adds John Eason, COO & executive vice president at Serrallés USA, whose flagship is the Don Q brand. “What’s so exciting to see is that consumers are graduating from those occasions and discovering its elegance.”

“Pirates or beachside, that’s where the category has been. But now we are starting to see brands talking about rum in a different way – talking about the production process, the impact of tropical aging, the terroir,” says Andrew Floor, vice president of marketing for dark spirits at Campari America. The company’s portfolio includes venerable brands Appleton Estates, Wray & Nephew and Coruba.

Growing in the Right Direction

Compared to other spirits segments, rum’s expansion has been less than robust; however, it seems the category is moving in the right direction.

“Although rum consumption has been relatively flat over the past year, it continues to be the second-largest spirit category, behind only vodka, so the overall outlook is quite positive for brands large and small,” says Brendan Lynch, senior director of rum and cordials at Beam Suntory. Mid-sized players, like Cruzan, expect continued notable growth, he adds.

According to the Distilled Spirits Council (DISCUS), the rum category overall was down 1.5% in volume last year at 25 million 9-liter cases, while revenues were nearly flat at -0.8%, totaling $2.4 billion. Significantly, super-premium rum grew gangbusters, nearly 10% by volume and 12% in revenues.

Greg Cohen, VP of Corporate Communications at Patrón Spirits, is heartened by this evidence of premiumization. “We’ll likely see a similar trend this year, with ultra-premium brands like Pyrat outpacing the category,” he predicts. Patrón markets the Pyrat Cask 1623 and Pyrat XO Reserve labels. Volume has consistently grown every year, says Cohen, as more trade and consumers discover the brand.

“Rum is continuing to perform well and attract new consumers to the category each day. This is especially true in the ultra-premium tier, where people are learning to appreciate the nuances and complexities in quality sipping rums such as a brand like Zacapa Rum,” says Daniel Kleinman, vice president of rum for Diageo North America.

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Study in Brown

Many rum experts believe that there are lessons to be learned and tactics to take from brown spirits, especially the red-hot whiskey category. Indeed, there are many parallels in flavors and aromas that can be drawn between barrel-aged rum and whiskey. When enthusiasts have had their fill of Bourbon and Scotch, the thinking goes, consumers thirsty for the next bibulous frontier will turn to premium rums. Rum has the edge in price and retailers are starting to notice this trend.

“Whiskey is at a peak right now; retailers are rushing to get them on the shelf, but there is a barrel shortage and you can’t rush whiskey aging,” says Alex Vaughn, liquor associate at Liquor Mart in Boulder, Colo. “I can see people investigating aged rums to find those same flavor notes.” Among the rum brands moving well for the retailer are Mount Gay, Ron Abuelo, Zacapa and local distillers’ products.

“Bourbon has almost overtaken vodka as the best-selling spirit; but rum hasn’t gone away. And I think aged rums can take business away from whiskey,” says Jim Guzay, a manager at Minotti Wine & Spirits, one of five retail stores in the Cleveland area. Guzay says customers who are into barrel-aged spirits are also into dark rums. Mount Gay and Bacardi are big sellers for Minotti. Plus, Guzay adds, “Rum is more reasonably priced than comparably aged whiskeys.”

Brand managers are also predicting cross-over from the other brown spirits categories.

“In the last three to five years, brown spirits have grown exponentially. As a sub-tier, the premium segment in the rum category has grown with it. Consumers are ready for longer-aged, more robust sipping experiences,” Krishnan says. He cites Bacardi Gran Reserva Ocho Años and the Bacardi Facundo Collection as prime examples of aged rums.

“Dark spirit drinkers, Bourbon or whiskey, are more open to straight or aged rums, because of similar flavor profiles,” says Bailey Pryor, CEO and founder of The Real McCoy Rum brand. “Whiskey and tequila have experienced growth through premiumization. Rum is now experiencing the same transformation.”

“We see dark, aged rums like our Single Barrel and Estate Diamond Aged Dark being enjoyed neat or over ice,” says Lynch at Cruzan. “We expect to continue to see this trend grow as whiskey and bourbon fans seek out new spirits and rum drinkers explore the barrel-aged trends driven by these spirits.”

Swapping Spirits

Some producers are setting their sights directly on whiskey aficionados. “With Mezan, we are going after the rum geek, not the mainstream rum drinkers,” explains Persson. “We are targeting whiskey drinkers, too.” One hook is that Mezan XO is aged in used Bourbon barrels and produced in small batches. The company also makes a number of single-distillery vintage rums, such as Mezan Jamaica 2000 and Mezan Panama 2004. Rum is much more affordable than comparable whiskeys, too, she adds.

At Campari America, Floor advocates connecting consumers from American whiskey to rum. “It’s not going to take a lot to build those bridges. The aspects of whiskey that appeal to the Millennial audience are the flavors from wood aging, the sense of place and heritage, the skills of master distillers and master blenders. Rum can deliver all of those,” Floor says. He advocates substituting aged rum for the whiskey in classic cocktails like the Old Fashioned and Manhattan.

To that end, Zacapa offers a new signature Old Fashioned recipe created by Master Blender Lorena Vásquez and Miami mixologist Julio Cabrera. This take on the classic adds chocolate bitters, expressed grapefruit peel, and grates dark chocolate on top as a garnish, which brings out those flavor notes in the aged rum. “We’ve found that this is an excellent way to engage both members of the trade and consumers to experience the excellence of Zacapa in a cocktail that also harkens back to the importance of the Old Fashioned recipe in cocktail history,” says Kleinman at Diageo.

At Liquor Mart, Vaughn reports that consumers are substituting rum for vodka and tequila in their favorite drinks, like Moscow Mules and Margaritas. “Rum mixes well with fruit juices, too,” he says. To aid customers in this cocktail quest, the retailer has posted more rum recipes to its website and is adding them on shelf talkers.

“Mixologists are finding that aged rums make a great substitute for Bourbon,” says Eason at Don Q. “And there is a definite interest in tiki rum drinks with some amazing tiki bars opening up around the country.”

“Serious craft bars have embraced tiki and are bringing back the Daiquiri and Mai Tai, which had been bastardized,” echoes Floor. “If you are drinking a classic rum cocktail like Daiquiri, using a premium brand adds complexity and flavor, takes it to the next level.”

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Geography Lessons

One of the biggest challenges facing the rum category is education. Even though the industry is largely centered around the Caribbean, the spirit can be and is made just about anywhere. Even within the tropical sphere, it’s hard to discern the differences between Haitian rum and Barbados rum, Guatemalan and Nicaraguan rums. And Dictador, based in Cartagena, makes premium aged Colombian rum from cane syrup. Then there’s the rhum agricole category. Even industry pros, while knowledgeable about their own products, are less conversant about other rum producing areas. Obviously, more education is needed.

“Generally, most consumers do not have a broad knowledge of the differences between rums. Their choices tend to be driven more by brand familiarity than by production and provenance,” Krishnan says. The launch of the “Bacardi Untameable Since 1862” campaign in late 2014 was the latest effort to communicate the brand’s “larger-than-life heritage in a way that truly resonates with like-minded irrepressible spirits.” That campaign continues to evolve this year with new content.

For its part, Niche Import has hired five additional people to the marketing team, and engaged mixologist and author Warren Bobrow as Mezan brand ambassador.

“The problem with rum is not every country plays by the same rules,” explains Eason at Don Q. Various countries’ aging requirements—or lack of them—can lead to consumer confusion. In some countries, you can have a very small amount of 23-year-old rum in a blend and market it as 23 years old. Some companies add sugar after the final distillation process to artificially sweeten their rums,” he adds. For its part in educating the public, the Don Q “Unquestionable” campaign will have more TV time and a bigger digital presence this year.

Appleton Estate launched its “From Jamaica with Love” campaign a year ago, which focuses on the place and the people who make the rum, from the world’s first female master blender to the coopers who make the barrels. “It’s about the terroir and the people who have dedicated their lives to producing this rum,” Floor says. The VP believes that retailers should use a geographical approach in shelving their rum sections, and use more shelf talkers to educate customers.

A picture is worth a thousand words. Universal Pictures will be releasing a movie about rum runner Bill McCoy, known for never adulterating his alcohol and leading to the phrase, “The Real McCoy.” Pryor authored the screenplay for the film, which is coming to theatres in 2017 starring Chris Pratt.

Quality Sells

Overall, producers are bullish on the future of top-quality rum. “We often hear how rum is poised to be the next big category, and hopefully that’s true,” says Cohen at Patrón Spirits. “The category is very dynamic, and there’s truly so much to discover in this spirit.”

Predicts Floor at Campari, “I think premium aged rum is going to be the next big thing.”

For retailers, it’s still all about hand-selling, says Vaughn at Liquor Mart. “If we guide customers through the rum selection, they tend to choose more of the barrel-aged and small-batch products.”

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Cuban Connection

There may be more rum in the U.S. to talk about in the near future. As the United States and Cuba move towards normalizing relations for the first time in 50 years (and possibly lifting the trade embargo), interested parties speculate on what that will mean for Cuban rum in the U.S. market.

Pernod Ricard, which markets the Havana Club brand globally, has reportedly invested in its Cuban distillery and registered the Havanista brand in the U.S. Bacardi retains the Havana Club trademark in the U.S.

“Bacardi is proud of its Cuban roots. We have the utmost respect and sympathy for the Cuban people with whom we share a common heritage,” says Amy Federman, director of Global Corporate Communications at Bacardi-Martini, Inc.

“Regarding the current Cuban front, it is too early and would be highly speculative to comment on the embargo, sales, return and/or any actions relating to Cuba,” she adds. “We will need to wait and see what the impacts are. We hope for meaningful improvements in the lives of the Cuban people and will follow any changes with great interest. In the meantime, we continue to support the restoration of fundamental human rights in Cuba.”

 

Thomas Henry Strenk is a Brooklyn-based freelance writer with over 20 years experience covering the beverage and restaurant industries. In his small apartment-turned-alchemist-den, he homebrews beer kombucha, and concocts his own bitters and infusions.

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No Mixing Required

Americans today crave convenience. And in the spirits category, what can be more convenient than Ready 
 to Drink (RTD) cocktails and shots?

These products contain fresh, premium ingredients, often in small, sealed, one-serving containers. RTDs come in all shapes of packaging, including cans, bottles, shot glasses and plastic balls. They’re made for the busy, on-the-go consumer. Whether someone is camping, tailgating, at a barbecue, hosting a party, preparing for a night out, or just too tired to whip up a cocktail after work, RTDs offer a convenient alternative to the time-consuming, labor-intensive mixing of beverages.

“As long as Americans continue to be Americans, with 
their time becoming more valuable and less available, RTDs are going to see huge growth,” says Sandra Pacheco, national sales director for Southwest Wines, which produces a ready-to-drink mimosa line.

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RTDs on the Rise

Although RTDs have been available for decades, some have been available mostly regionally or overseas. Producing mixed shots with a female focus, Twisted Shotz has operated for 20 years in New Zealand and Australia, where comparatively lower taxes on RTDs drive consumer demand.

In the U.S., the RTD market has picked up considerably within the past five or so years after a period of stagnation. New brands are launching original, diverse entries into this growing category. Customers can now choose from a bevy of options when they want a convenient cocktail.

“Making shots is difficult,” says Harley Bauer, who in 2013 co-founded LIQS, maker of premium RTD shots. “Most people don’t know the correct proportions for shots. And you need a shaker. We were thinking, ‘There’s got to be an easier way to make shots’. And we saw the potential for making something like that.”

Many RTD companies were born from their founders wanting to merge quality with portability.

“I was drinking cocktails by the pool, grading papers, when I thought ‘I shouldn’t have this glass by the pool’,” says teacher-turned-entrepreneur Merrilee Kick, who first conceived of her product BuzzBalls in 2008. “So I brought the glass inside and then I thought, ‘Wouldn’t it be cool to have a little round bottle ball with a cocktail inside?’”

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Following the Low-Cal Trend

The brainchild for the RTD line Crafted Cocktails occurred in 2013, when founder Felicia Vieira, “noticed that something was missing. I’m a frequent traveler for business and I was going to a lot of metropolitan areas. I was finding great cocktails that were full of flavors and low in calories. But nothing of the like was available as RTD. There were mixes, and there were some RTDs, but nothing like what you’d get if you ordered a cocktail at a bar or restaurant. These RTDs would be low in calories, but would contain artificial sweeteners. Or they’d have real flavors, but also a lot of alcohol and calories.”

Vieira’s inability to find products with natural flavors and low calories speaks to a negative perception that continues to nag RTDs.

“There can be this stigma of people thinking, ‘if I’m buying something off the shelf at a grocery store, then it must be fake’,” she says.

This stigma lingers in the RTD market due to a history of inexpensive products – some consumers aren’t aware of the recent rise in higher-quality alternatives.

The question of whether RTDs are “low-shelf” is “why I ended up getting involved in this business in the first place,” Bauer says. “We’ve gotten so used to these RTD brands over the last 20 years that are very low proof, all artificial flavoring, loaded with sugar and carbs. That is why RTDs can have a bad rep.”

It is essential, therefore, for the new generation of RTD-makers to promote the natural ingredients and premium quality of their products.

“We take a lot of pride in what we put into our drinks,” Kick says. “This is not Gatorade spiked with vodka. Believe me, to do something like that would be a heck of a lot cheaper. But it was important for me to make these products like I would make a cocktail at home — with real juice. We try to make them as natural as possible. They’re almost all 100% natural. We also have kosher certification.”

Rob Boyer, director of marketing for the coconut water/vodka drink VO|CO (which launched to market in 2014), echoes Kick. “If you’re not using the best stuff that you can find, then it’s going to come through on the palate of the consumer,” he says. “We think of it in terms of what the customer is looking for, and that’s products that are high quality and natural.”

“I think the stigma towards RTDs is going away,” Boyer adds. “There is this wave of interest in the RTD category. Once you see our product and know the quality of our ingredients, there’s an interest level to at least check out the product.”

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Marketing to Millennials

Freshness and quality have both been critical to the lasting success of Twisted Shotz. “It’s all in the flavor,” says Peter Heyworth, VP of marketing for Independent Distillers, makers of Twisted Shotz and the new, male-focused RTD line Double Barrel Shots. “We’re experts in cream-based products. Cream is very difficult to package and keep fresh. We have a process — using New Zealand milk, which is very fresh — of maintaining the freshness right through to the consumer.”

Another reason why natural ingredients are imperative is because Millennials are especially keen to the legitimacy of product quality. “They’re the Whole Foods generation,” Bauer says. “They’re savvier about authenticity and nutrition.”

Among Millennials, the appeal of RTDs is strong. They fit into a Millennial’s active, diverse, pleasure-seeking lifestyle. And RTD-makers advertise and brand accordingly.

“Our colors and funny names are important marketing strategies,” says Kick, of BuzzBalls. “You can mix and match them. The colors are bright and vivid. The colors of the balls match the colors of the cocktails inside.”

The brand is unveiling a new marketing campaign this year. “It’s called The Party Counselor,” Kick says. “Basically, he’s this handlebar-mustache-wearing, country-boy-looking Texas guy who goes around fixing people’s bad parties.”

Ease of pleasure is a common theme in RTD strategies. “At their core, these were created for people throwing parties,” Bauer says. “LIQs can live in coolers, fridges, or be out by the pool. You can grab one, hand them out to friends, and keep the party going.”

A sense of youthful irreverence and experimentation is also prevalent within RTD marketing. With names like Buttery Nipple and Skull Crusher, Twisted Shotz and Double Barrel stand out from more traditional drinks. “I think part of the recent rise in RTDs is people’s openness to new flavors, and being irreverent with spirits,” Heyworth says. “People like having a little bit of fun. They’re not hung up on Old-World myths about how you’re supposed to drink spirits.”

Twisted Shotz are diverse in flavor and relatively low in ABV. This plays naturally into the sort of fun, shared experience popular among Millennials. “They’re a bit like a box of chocolate in our mix pack,” Heyworth says. “You can compare who’s had what and what they think about them. That’s how women shoot. They say, ‘This shot was delicious. You want to try one?’”

Social media remains an effective strategy for connecting with Millennials, partly because it appears indirect. “We try to be organic with our marketing, so that it feels like they’re discovering it on their own terms,” Vieira says. “Of course, with Millennials, you have to be on Instagram.”

Bauer agrees: “Millennials don’t want marketing that tries to convince them that something is healthy. They want to be talked to straight. That’s why we don’t try to force our products down anyone’s throats. We really want people to come across our products organically. We just try to fit in.”

To boost the online presence of LIQs, Bauer buys localized ads on social media. “We do a lot of geo-targeting,” he says. “We will find a cluster of stores that all sell our products, and then we use that zip code for our Facebook advertising. That way, we can cater directly to our demographic. We will let them know what stores are doing tastings or having sales. It also drives sales at the stores themselves, which creates a nice win-win scenario.”

The connection factor is key on social media. “We try to engage with the customers and have them join into the conversation about our product,” says Bauer, of VO|CO. “We hashtag (#) the product, and obviously we want customers to do so as well. You can create a one-on-one conversation that way. That’s really important for us, because we’re new to market, and that’s how we can connect with customers over some of the bigger brands.”

More than Just Millennials

Millennials are not alone in enjoying RTDs. Surprising even the brands, these products have found a broad appeal across generations. “We figured our target-consumer sweet spot would 27 years old,” Heyworth says. “And that was not at all true.” As many brands have discovered, there is a major market for RTDs among Baby Boomers.

Crafted Cocktails have received similar reactions among non-Millennials. “We’re hot with the moms who like to entertain, the 30-50 age group,” Vieira says. “They like Crafted cocktails because it’s something unique you can bring to a party. And the packaging looks classy. Martha Stewart quoted our brand as being a great hostess gift.”

Bauer, too, has witnessed strong Baby Boomer interest in LIQs. “We were shocked to see that, at a lot of our tastings, the products were very popular among people in their 30s, 40s, even 50s,” he recalls. “Of course, we’re thrilled to see that. It means that we’ve created a good product. These people could be someone who wants to host a party with ease, and doesn’t want to be stuck making cocktails for their guests all night long.”

The Container Conundrum

Getting to the point where a new RTD enters the consumer consciousness entails a great deal of work. Producing RTDs is a difficult business from the onset. An industry still in its infancy, it requires extensive R&D and innovation prior to progress. The greatest struggle for many RTD companies is finding an effective drink-container design.

BuzzBall cocktails are sold in plastic, orange-sized balls. “We actually invented the first plastic cocktail can in the United States. I got the idea from a tennis ball can,” Kick says. “The lid posed problems. At first, I imagined a peel-away lid, like for yogurt containers. But you have to 
have something that can hold in a carbonated cocktail. So I looked into how coke cans held in carbonation, what parts per million worked to keep the beverage inside.”

That’s how Kick came up with the metal top, which is hot-sealed to the top of the plastic can.

Working with natural ingredients can also present obstacles — or so Crafted Cocktails discovered.

“We use a glass bottle and have to hot fill it above 190 degrees in order to fill it without preservatives,” Vieira explains. “There’s no way to hot fill a plastic bottle. That means that anything in a plastic bottle has preservatives in it.”

For its natural watermelon ingredients, Crafted Cocktails will dehydrate watermelon into a powder, and then rehydrate it during the hot-fill manufacturing process.

Bauer and his LIQs business partner faced a different problem. They could not find an American distillery that owned equipment necessary to fill and seal their shot glasses. Eventually, they located a machine that filled foodstuff, and spent $50,000 outfitting it to suit their needs.

“And then we had to find a company that could label our shot glasses,” Bauer says. “Our glasses are not perfectly round, like shampoo or soft-drink bottles. They’re shot glasses, so they’re angular. We probably went through 20 labeling companies. It would have been a lot easier to create another vodka brand – everything for LIQs had to be made custom.”

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Profiting from Gin’s Renaissance

With all due deference to vodka’s longstanding market dominance—which now accounts for almost 35% of all distilled spirits sold—drinking patterns do inevitably shift. The question then becomes, what will be the largest beneficiary of ex-vodka drinkers looking for something different in a light spirit experience?

Those in the gin camp conjecture that potential converts are being created on a nightly basis in the form of lapsed vodka drinkers, consumers who’ve grown disenchanted with its austere, aloof personality and overwhelmed by the continuing surge of new flavors. To explain gin’s nearly universal appeal, aficionados point to its trim, lightweight body, singular array of flavors and wafting aromatics.

“Frankly, gin is not for everyone and the category will never be as large as vodka,” says Andy Taylor, director of marketing for Vin Vino, Ltd. “That being said, the renewed interest in gin can be attributed to two factors. The first is the new brands on the market, most of which are well-conceived and of good quality, are sparking renewed interest in gin. It is a relatively small category, one still dominated by inexpensive domestic brands. Although the category volume is declining slightly, premium brands and imports are growing. The other factor is that younger, Millennial drinkers are experimental and willing to try all categories and types of drinks before deciding their favorites.”

The resurgence of the cocktail has attracted smaller artisanal brands of gin to enter the marketplace, as well as prompting established brands to introduce snazzy new variations on their centuries-old themes. So which brands have what it takes to become instant classics?

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New Arrivals

Every great gin must possess a singularly appealing quality that makes it standout from the crowd. Especially when it comes to gin, individuality is a must.

Caorunn Small Batch Scottish Gin is an excellent example. This super-premium release is handcrafted in the Scottish Highlands using a handful of botanicals indigenous to the Speyside and pristine spring water drawn from the surrounding boreal forest. So if you’re looking for a singular gin experience, Celtic-borne Caorunn is just the ticket.

The brand is distilled in small batches by famed whisky producer, Balmenach Distillery. There, gin master Simon Buley assembles a botanical blend featuring six traditional botanicals—juniper, orange peels, coriander seeds, cassia bark, angelica root, lemon peels—and five native to the Speyside.

“Caorunn is Gaelic for “rowan berry,” which thrives on the hills and rocky, peaty soil of the Speyside and adds notes of bitterness to the flavor profile,” says Caorunn Global Brand Manager Ibolya Bakos-Tonner. “The botanical blend also includes coul blush apple, dandelion, bog myrtle and Scottish heather. The combination of these five ingredients, in addition to the six traditional botanicals, work in harmony to create the balanced and delicate fruit and floral notes that define Caorunn.”

Another innovative brand—Brockmans Premium Gin—contains botanicals not normally found in a London Dry Gin. Produced in small batches, Brockmans is made on a foundation of continuously distilled, neutral grain spirits. The all-important botanical mix includes—among others—coriander, angelica, orange peels and juniper berries from Tuscany. The botanicals are steeped in the pure grain spirits for 24 hours prior to it being batch distilled in a copper alembic still that’s well over 100 years old.

And there’s a creative twist. After the second distillation, the spirits are infused with wild mountain blueberries and blackberries from northern Europe. The fruit imbues Brockmans and smoothness uncommon in distilled spirits.

“In Brockmans you get less of the pine and lavender nose as we let other tastes come to the forefront,” says Bob Fowkes, co-founder and director of Brockmans Gin. “Our floral notes are quite unique in that we use blueberries and blackberries from Northern Europe as our top notes combined with the coriander from Bulgaria and orange and lemon peel from Murcia in Spain. The coriander imparts a tangy/sage flavor whilst the citrus provides sharpness and refreshment. The overall effect is an intensely smooth gin that appeals more broadly to emerging gin consumers who may have rejected the juniper-led style of gins in the past.”

If your batteries are running low, treat yourself to a dram of artisanal Uncle Val’s Peppered Gin. The gin 
is infused with four highly distinctive botanicals—juniper berries, roasted red bell peppers, black peppercorns and pimentos, which are also referred to as cherry peppers.

The brand’s range also includes Uncle Val’s Restorative Gin, which is crafted in the same manner as American compounded gins, a traditional style of gin at the height of popularity leading up to Prohibition. The botanicals used to flavor and aromatize compounded gins are infused into neutral grain spirits after distillation, whereas with a conventional London Dry Gin, the botanicals are introduced during distillation.

The original—Uncle Val’s Botanical Gin—is a classically structured spirit with a few creative twists. Its proprietary mix includes, among others, lavender, sage, lemon peels and cucumber. Some botanicals steep longer in the alcohol than others to impart a more pronounced flavor and aroma. All told, the gin undergoes five distillations in a copper pot still.

Bulldog London Dry Gin is an ultra-premium spirit produced in small copper pot stills from English grain and a proprietary blend of 12 aromatics. In addition to juniper berries, the invigorating botanical mix includes poppies, lotus leaves, licorice, lavender and Longan, or Dragon Eye, a fruit indigenous to Southeast Asia long renown for its aphrodisiac properties. The gin is delicately filtered three times for essential purity before being bottled at 80 proof.

“We’re seeing new consumers actually moving away from the traditional brands with their standard botanicals and heavy juniper focus and moving towards more individualistic gins,” comments Rosie Lee, Bulldog’s national American brand manager. “While a traditional London Dry is distilled at 94 proof, Bulldog has dialed back the alcohol content to 80 proof, creating a much more mixable and approachable spirit. Beyond this, we’ve shifted the focus in the botanical mix from juniper and coriander to more interesting flavors like lotus leaves, dragon eye and white poppy.”

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Recent Releases

London No. 1 Gin is made by the 180-year old firm of González Byass, the renowned Spanish winery, makers of Sherries and brandies in Jerez. Few brands can claim such a lofty pedigree. Another point of distinction is the gin’s intriguing blue hue. During development, the brand team discovered that adding gardenia flower extract to the botanical mix imbued the finished gin with a turquoise hue and the enticing aroma of jasmine.

London No. 1 is produced in London under the direction of 8th 
generation Master Distiller Charles Maxwell. It is quadruple-distilled in a copper pot still with a 13 botanical mix that includes juniper berries, orange peel and bergamot.

For those who seriously appreciate the attraction of a traditional London Dry Gin, a small London micro-distillery has released Sipsmith V. J. O. P. (Very Junipery Over Proof) London Dry Gin, a 115.4-proof homage to the juniper berry. To create the gin, master distiller Jared Brown first macerates juniper berries up to 45 hours in neutral spirits. Before distillation, more juniper berries are added to the maceration to further concentrate its flavor. The final step takes place inside the still as the alcohol vapors pass through the botanical trays also containing juniper.

The finished gin is exceedingly dry with a focused juniper nose and a brilliant piney, spicy and citrus palate.

The family-owned firm of Duncan Taylor Scotch Whisky Ltd. lays down casks of single malts and single grain whiskies sourced from Scotland’s most famous distilleries. Located in the Speyside, the independent bottler oversees one of the largest collections of vintage Scotch whisky and has slowly expanded into creating other ultra-premium, small batch spirits. After years in development, the company has introduced Indian Summer Saffron Infused Gin.

This gin combines ten individually macerated botanicals, the most notable of which is saffron, the scarcest and most expensive spice in the world. The steeped spirits are then redistilled in a traditional copper pot still and bottled at 92 proof. Its elevated proof helps the aromas and flavors of the constituent botanicals to fully integrate.

“When we set out to create our saffron-infused gin, we decided to only use the finest quality spices, which was why we selected Persian saffron,” states Chairman Euan Shand. “We believe that using the highest grade of saffron, coupled with the other premium botanicals, helped us develop a unique, highly desirable gin that will be appreciated by spirit aficionados everywhere.”

Finally, it’s not how many botanicals are used to create a gin that counts, but how seamlessly those botanicals meld together. As way of proof, Death’s Door Gin is made with only three botanicals—coriander, fennel seeds and wild juniper berries. Master Distiller John Jeffery is clearly a man who subscribes to the concept that less is more. Before the third distillation, the botanicals are placed in a chamber in the neck of the distillery’s state-of-the-art still.

“Our gin is highly distinctive in its three botanical blend,” contends Brian Ellison, founder and president of Death’s Door Distillery. “Using whole botanicals and vapor extraction, we are able to produce an exceptional spirit that has bright traditional botanical notes without overpowering flavors. Wisconsin-made from locally sourced botanicals, Death’s Door is an All-American gin.”

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ROBERT PLOTKIN is a judge at the 
San Francisco World Spirits Competition 
and author of 16 books on bartending and 
beverage management including Secrets 
Revealed of America’s Greatest Cocktails. 
He can be reached at www.AmericanCocktails.com or by e-mail at robert@barmedia.com.

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Trip Report: A Week in Spain Wasn’t Long Enough

In April I spent a week traveling across Spain, visiting a number of wineries and sampling vastly different wines as I made my way from Galicia on the Atlantic coast to Tarragona and Barcelona on the Mediterranean.

All the boutique wineries I visited are part of the Ferrer Family Wines group, imported to the U.S. by Freixenet USA. Freixenet is known mostly for its cava, but the company has acquired wineries across Spain, offering consumers a full range of flavors and varietals.

The Atlantic Coast

Bodegas Vionta, located in the Rias Baixas Denomination of Origin (D.O.), produces mostly white wines made from Albariño grapes. Located directly on the coast in an area protected by barrier islands, the climate is mild and rainy, unlike most of Spain. Vionta, the winery’s estate wine, is the only offering available in the U.S. market.

Riverside on the Duero

Valdubón is located in Milagro, part of the Ribera del Duero D.O. (Rueda is further west along the Duero River). Winemaker Javier Aladro has been at Valdubón since 2004, five years after it was acquired by Freixenet.

Bodegas Valdubón uses mostly Temprañillo vines. The grapes are smaller than in nearby Rioja, the soil is drier and the altitude of 800m provides a 15-20 degree Celsius difference between daytime and nighttime highs. More than 50% of the hectares of vines managed by the winery are estate-grown.

The brand’s wines include Valdubón Temprañillo, Roble, Crianza, Reserva, X (10) and Honoris de Valdubón (aged in new casks for 24 months).

Going Back in Time

Bodegas Solar Viejo is located in the medieval town of Laguardia in Álava (part of the Rioja Alavesa sub-area). Solar Viejo produces three million bottles per year, less than 1% of the wine produced in Rioja, and 95% of its vines are Temprañillo. Its Vaza brand of wines are available in the U.S. market.

Working for the Future

At Morlanda, in the Priorat region, winemakers Maria Jose Bajon and Judit Llop are working with the University of Tarragona to study probiotics and organic farming to protect vines from pests and diseases. They’re using controlled experiments with different parts of the vineyard to test the impact of different methods on soil quality, fermentation and other factors that impact wine taste and quality. Most of the vines there are Garnacha, primarily 25 to 40 years old.

 Click here to view more photos from my trip.

Full Disclosure: Freixenet USA covered the expenses related to this trip, including lodging and transportation.

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Braai: Barbecue, Wine, and Cultural Spirituality

Ideal ingredients for a get-together: Barbecue, wine, friends and family.

The latter few — BBQ, and those closest to you — pair so naturally that South Africa has turned them into a year-round tradition known as braai (which rhymes with “eye”). Mix in wine, and you have all the makings for a memorable occasion, as I as a recent enjoyed at the home of Cape Classics President Robert Bradshaw.

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Steak braaing in the egg grill outside the home of Cape Classics President Robert Bradshaw.

In its basic form, “braai” means cooking meat over flame. The term is a synonym for “barbecue,” both as a noun and a verb, as in “the chicken is braaing.” And like its American counterpart, braai can also mean “cookout” as a social event.

But braai extends one step further. More so than the American terms, it’s culturally rooted. It transcends seasons or holidays, and is a go-to custom for any South African celebration.

Cape Classics recently released a dark red blend named Braai, intended to match the bold flavors of grilled steak, sausage or lamb. Since Cape Classics is America’s largest importer of South African wines, it makes sense that the company’s president would know a thing or two about braai. Bradshaw is a serious devotee.

The braai I attended at his home last week (as part of my forthcoming story on wine/protein pairings) contained three courses. Each of the first two included a traditional and nontraditional pairing. And none of the five wines featured topped $20 in price.

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The wine pairings for the steak course.

The first course was chicken (pictured atop). Bradshaw paired Lemon Thyme Chicken Breast with DMZ Chardonnay, and Peri Peri Chicken Thighs with Indaba Mosaic.

The lemon chicken and chardonnay shared light, pleasant flavors, a traditional match. As for the second pairing, people do not normally think of chicken and red wine together. But the peppery kick of the Peri Peri recipe was a natural partner for the black ripe fruit and similar pepper spice of the Indaba red blend.

Steak was served next. Here, we think of red wine. The Kanonkop Kadette red blend paired perfectly with the Old School Steak House Porterhouse.

But what about steak with white wine? Bradshaw served Chimichurri Flank Steak Tacos with Beyond Sauvignon Blanc. “I always say that you have to match subtle with subtle, and power with power,” he explained. And so it was that the Sauvignon Blanc rose to the occasion of matching the steak, with a pronounced minerality and strong flavors of herbs and fruit.

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Custom Made Boerewors farmers sausage, a South African favorite.

The third course was about braai tradition. A spiral of Custom Made Boerewors farmers sausage, a South African favorite, came out with a bottle of the Cape Classics Braai. (Before you think we’re mad carnivores, the dinner also included pasta and green salads.) The meat-forward flavor of the Boerewors — which traditionally contains beef, plus pork and lamb — was well met by the boldness of the red blend.

“Braai is a religion in South Africa, a spiritual experience,” Bradshaw said. It’s easy to see why. There’s something about grilled meats matched with the right wines or beverages that brings out the best in conversation and camaraderie among those souls lucky enough to be present.

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Craft Comes of Age

Ever since craft beer got a grip on the American drinker’s imagination a couple decades ago, it has commanded more than its market share’s worth of attention. Craft comprises only 11% of the U.S. beer market, yet craft breweries and beer styles dominate the coverage in the popular press, relegating news about mega brewing companies to the business section.

The Brewers Association, a trade group for the craft sector, reports that over 3,400 craft breweries operate in the United States today. Through a combination of good brewing and business savvy, 135 of these have exceeded 15,000 barrels in annual production, and are now categorized by the association as “regional” breweries. Most of these distribute in the majority of states, while some have national reach. Together, the “regional” breweries churn out nearly 80% of our craft beer.

These breweries see their beers featured in airport bars and ballparks. Their flagship brands are the reliable choice in convenience stores, a channel where craft beer sales have risen sharply in recent years. And, because success of this kind only comes with longevity, these are brands that have naturally been around for a long time: California’s Lagunitas Brewing Company, the youngest of the ten top-producing craft companies (according to the Beverage Information & Insights Group), is older than a new LDA consumer.

Is Local Better?

Although the big craft brewers have the advantage in volume, the fastest rate of growth for many years has been among the microbreweries (under 15,000 barrels annually) and brewpubs. Consumers love local, and they love what is rare, seasonal or new. That is a challenge for brewers and retailers, alike: the big flagship brands are widely available to the point of over-familiarity, dependable, and generally brewed in styles with broad appeal. The smaller brands are harder to find, often more extreme in style, and more variable in quality.

A recent Nielsen study (February, 2015) concluded that an increasing number of people say that knowing a beer is locally made is important 
to their purchasing decisions—a preference that is greater among the drinking-age Millennials.

“It’s something all the national craft breweries are facing, and it’s a very delicate balance point: how do you maintain your brand’s relevance?” asks Jeff Billingsley, director of marketing at Deschutes Brewing Co., the seventh-largest craft brewery. “In a craft market with so many new breweries, and the interest in all things locally sourced and produced, it’s not easy to go about it.”

When Deschutes enters a new market, the company makes an effort to acquaint consumers with its values and origins, and to contribute to communities in ways that are locally meaningful. That way, “we become more than just another new beer placed on the shelves,” Billingsley adds. “That approach is pretty widespread across craft. A lot of breweries our size are doing similar things.”

Sierra Nevada (number two in size) retains a local edge by producing beers that are, indeed, local—exclusive to a few limited outlets, through small-scale pilot brewhouses at both the original California brewery in Chico and the new facility in North Carolina.

“In recent years, we’ve brewed more than 100 different beers annually, though many of those don’t reach much farther than our on-site taprooms,” notes Ryan Arnold, Sierra Nevada’s communications manager. “That’s part of what makes it special; those numerous limited releases create local experiences at or immediately around our breweries. The hope is we’re covering the gamut of drinkers. We want craft beer to be inclusive, and we imagine our peers feel the same.”

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Flagships Still Strong

Retailers know that consumers still expect to find the big brewers’ brands in stock. “The bigger breweries that have been around and that are consistent and smart like Sierra Nevada, for example, or Avery, we give them displays because they will get the distributors’ backing and floor space,” says Derek Ridge, beer manager at Hazel’s Beverage World in Boulder, Colorado. “We’re pretty fortunate to have plenty of space to hold for rare and new items in addition to the flagship brands, which are usually on display and in the doors.”

Boston Beer’s Jennifer Glanville, brewer and director of brewery programs, would applaud that approach, noting, “We see that retailers most often see success when they offer a variety of craft beer, including leading brands like Samuel Adams along with regional and local brands.”

Beers from the major craft brewers can be an entry point into the craft category. “The big breweries are great!” says Nathan Robinette, president of Knoxville, Tennessee-based craft beer franchise The Casual Pint. “Without the success of the larger breweries, the smaller breweries wouldn’t have a path to follow. The bigger breweries offer a selection that appeals to the masses, so we believe in a good mix between the bigger and local breweries.”

However, Ed Mulvihill of Peco’s Liquor Store in Wilmington, Delaware, turns that logic on its head: “What we’ve seen is local beers are what get our local clientele to switch—particularly older 
clientele who have always been domestic premium drinkers. They want to support local beer, but then they kind of branch out and try some of the national 
craft brands.”

Boston Beer’s Glanville sees the power in the company’s 60-plus portfolio of Samuel Adams beers: “I like to say that we have a brew for every craft beer-lover’s palate, whether it be a hop-forward beer like Rebel Rouser Double IPA, a Belgian sour like our Kosmic Mother Funk Grand Cru, a wheat ale like Summer Ale or a balanced but complex amber lager like Boston Lager.”

Given the expanding number of retail outlets for craft, some retailers are choosing to specialize and not even try to carry every brand. Sometimes, this means not stocking the reliable flagships.

Lisa Morrison, co-owner of Belmont Station in Portland, Oregon, is guided by one rule: “The customer votes and their votes count. That means that whatever is selling is what we are offering.”

Still, as grocery stores and convenience stores expand into craft, she knows customers can find the most widely distributed beers elsewhere. “While some standard offerings from larger, regional or even national breweries are represented here at Belmont Station (including PBR, which we sell enough of to warrant a space in the coolers), others are no longer 
offered,” she says. “But we probably will bring in their seasonals 
and one-offs.”

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The Lure of Specialty Releases

This underscores a valuable point: special releases garner attention, no matter what their source. So the major craft breweries balance their portfolios—and retailers balance their shelves—between the flagship beers that pay the rent with their huge volumes, and the specialty beers that generate buzz and compete successfully with local brands.

Last year, Sierra Nevada released its first widely available mixed 12-pack. “The variety really seems to resonate with craft drinkers,” notes Ryan Arnold. “We’ve released a few more mixed packs, and along with seasonal staples like Celebration IPA. The responses continue to be exciting.”

Morrison notes, “Folks love those special seasonals and variety packs from the larger breweries. Especially the long-awaited seasonals. If it’s a customer favorite, we will start getting phone calls asking when it’s due weeks before it arrives.”

“The Casual Pint customers seek out special releases, seasonal beers and mix packs regardless of the size of the brewery,” Robinette confirms. “Special releases and seasonal beers are big sales drivers throughout the year.”

Local brewers worry that splashy releases from the big companies will take attention from their own beers, but Ridge at Hazel’s Beverage World finds the relationship is synergistic. “It doesn’t seem to hurt other brands when really unique beers are released. It’s kind of cool because it gathers excitement for other breweries to do the same—like Goose Island Bourbon County Stout.” Besides, he adds “People are loyal and they may try new stuff for a while. But they always have that favorite to fall back on.”

Despite its position as the third largest craft brewery, New Belgium, with its pioneering reputation in the emerging niche of sour beers, may have one of the edgiest lists of experimental beers of any brewery through its Lips of Faith series.

“Lips of Faith beers are known for pushing the envelope with sour, brett, fruited or spiced components. La Folie, Le Terroir, Yuzu Berlinerweiss and many others fall into this category,” explains Bryan Simpson, New Belgium’s director of public relations. “They are more challenging to the craft beer initiate drinker, yet they allow our brewers to stay innovative and playful—that’s what craft drinkers are really looking for when they seek out unique.”

Novelty vs. Size

It’s worth wondering whether the consumer’s passion is actually for local beer, or if it is at least equally a passion for what is new or rare.

As a small market, Delaware has been “last in line” at times to get some of the major craft brands, according to Peco’s Mulvihill. So when New Belgium, Lagunitas and Oskar Blues (all among the top 25 largest breweries) opened distribution there within the last two years, it was big news. “When we launched New Belgium, we sold 25 cases of Fat Tire the first night,” he says, referring to New Belgium’s very popular, but in no way palate-challenging amber ale. “That was a big deal: we had a big display and signs in the windows saying, ‘Welcome to Delaware!’”

By contrast, comparable flagship beers like Samuel Adams Boston Lager or Sierra Nevada Pale Ale have been on the Delaware market for years. “Their sales are strong, but I think the new breweries here like New Belgium and Lagunitas, that’s where the growth is coming from,” Mulvihill says. Novelty trumps size in this case.

The hunger for novelty has become a well-accepted assumption about younger consumers in particular. Brewers and retailers chase this apparently fickle audience with constant innovation. Deschutes’ Billingsley calls it “a double-edged sword”—words that brewers and retailers might take to heart.

“The looking for new experiences, for what’s new, is becoming a self-fulfilling prophecy: everybody believes that the consumer wants something different, “ he says. “So breweries are creating new and unique beers, and it’s accelerating to the point that it’s challenging to keep up with, especially when you are at the scale of a regional or national brewery.”

Maybe the lesson is that the big breweries shouldn’t—can’t—chase every new trend that comes along, nor should customers or retailers expect that of companies that have to invest six to eighteen months in the launch of a new beer, compared to the rapid turnaround possible for micros. The big brands, instead, provide quality, consistency and measured experimentation.

Listening to consumers, it’s hard not to liken their love of the small and local—and the rejection of the established and successful—to the music fan who discovers a great band in its indie days, and feels betrayed when its appeal grows beyond a small group of followers.

Peco’s pushes back strenuously against beer fans who condemn the regional brewers for their success. Boston Beer, the largest craft brewery, comes in for particular criticism from a vocal few for “selling out.” “Really?” demands Mulvihill. “They still consistently produce beers that people want. And when we get our allocation of three bottles of Utopias, those bottles come in and go out in the same day. Conveniently, when the Utopia is on the table, everyone’s a Sam Adams fan.”

 

Julie Johnson was for many years the co-owner and editor of All About Beer Magazine. She has been writing about craft beer for over twenty years. She lives in North Carolina, where she was instrumental in the Pop the Cap campaign that modernized the state’s beer laws.

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Make the Right High-Volume Merchandise Moves

Judging by the constant drumbeat of media coverage, it would be logical to assume that the most important products on wine and spirit retailer shelves these days are craft beers and spirits, or wines from recently-
discovered regions.

But retailers know the real deal: a large percentage of their sales, and an untold amount of profit, come from the best-known and leading brands in any category. Volume in retailing is almost always king, and making sure customers can easily locate their favorite beverages is something any savvy retailer values.

The steady flow of profitability from major brands is only one of the reasons that it makes sense to prominently invest floor space and energy into quality displays and other merchandising efforts around them.

“These are power brands that drive foot traffic to a store, because high-volume brands are the ones consumers are looking for,” says Mitch Cristol, director for off-premise trade marketing, Pernod Ricard. “They want to buy them, so using displays for these products to bring customers into your store is the first step in driving conversion to other products.”

In other words, there are many reasons why retailers can’t afford to neglect these brands, but first and foremost is building a steady stream of interested customers.

“Shoppers are not as loyal to a specific store as you would hope these days, so in order to encourage loyalty and stay relevant and competitive, retailers still need to provide easy access to the brands that move at pace,” says Kelly Georgetti, activation director for mixables at Beam Suntory. “Merchandising is about driving consumers to make a decision at the point of purchase, and our role as a supplier is to try to help retailers sell more.”

In order to break through the clutter and ensure merchandising pieces work the hardest for brands, retailers should embrace tactics that help the shopper make a buying decision, Georgetti says. “Whether it is understanding what the product is, how to use the product or what occasion it’s targeted for, merchandising tools should help shoppers navigate and select. Therefore, it’s crucial to delineate the roles different merchandising tactics play.”

The more compelling the brand in terms of story, heritage, volume and seasonality (among other issues), the easier it is for a retailer to justify committing the space in today’s clean store environment. Seen as a form of retail theatre, well-selected displays can enhance the store, establish its reputation, encourage the customer and drive incremental sales.

In the last few years, the particulars of retail merchandising have evolved and expanded. New, modern stores are more geared to digital merchandising, a “clean store” policy that limits supplier displays and creates a preference for store-created presentations. Large grocery and chain retailers look for bespoke displays, expecting broad input into what suppliers offer. Smaller, niche stores seek few supplier merchandising or POS in order to accentuate the personal connection to shoppers. All of this makes it more complex to create incendiary merchandising tools, and suppliers are sometimes shying away from one-size-fits-all strategies.

“Ten or twenty years ago, displays were everywhere; now everything is mandated by national buyers who are really savvy about what works and what doesn’t,” says Wendy Nyberg, VP of marketing for Trinchero Family Wines. “Now we have to execute knowing we might have to share a display with a competitor.”

Pick the Right One

When deciding what sort of merchandising displays to adopt, retailers should look for things that suit their target customers. “Consumers come into a retailer’s business looking for certain things,” says Steve Wallett, VP of category development and strategic accounts marketing for Diageo. “They may see the big national brands promoted outside the store and they want to be able to find them easily, but they also get frustrated easily.”

Big brand displays should be used as a way to help customers navigate a store, he says, as customers locate themselves in a store using brands like Smirnoff as a landmark for a category, starting with a trusted brand and then looking for the flavors, sizes, other brands or extensions within the category afterwards.

Wallett says research shows about a third of consumers will leave a store if they can’t find the product they want quickly, while the other two-thirds might buy another brand but may not return to the same store the next time, especially given the growth of beverage alcohol competition today.

While many stores like to cooperate on merchandising plans, others limit what they use. At Total Wine and Spirits, the 110+ unit big box chain, shelf space is entirely programmed alphabetically in-house, says Melissa Devore, VP of wine buying, Total Wine & More. “The number of facings given are in direct correlation to each wine’s volume, and so the larger national brands get the appropriate facings based on that.” And that can change store to store – if a wine sells better in one market, the store adjusts correspondingly.

Total Wine doesn’t take on a lot of wine supplier merchandising, given its large private label business, though in spirits displays suppliers are welcomed, she says. “The key on the supplier side is providing great POS so customers are engaged with things that make it different for them; that’s what we rely on suppliers for – to get their brand message across through things like bottle neckers or shelf talkers.”

POS can still be an effective way to promote the brand, but with the prevalence of clean store policies, suppliers need to be creative in their approach, Georgetti says. “Because of this, we are seeing a shift from traditional print POS to signature, iconic display items (i.e. Jim Beam Pot Still) and more engaging tactics to leverage the shopper’s interest, provide education and engage with the consumer before they enter the store.”

In general, Total Wine’s merchandising space is based on seasonality, with easy-drinking wine getting summer preference and more expensive, gift-giving brands featured later in the year. To keep supply steady, the stores order multiple times weekly during year-end holidays, and have case stacks available of popular items in storage so that associates can provide them quickly for those customers buying in quantity for entertaining.

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Big Beer Brews Sales

Given the size of purchase and display space required, beer retailers have long had a love/hate relationship with merchandising. But doing it right is even more crucial during a time of such volatile consumer behavior. Says Tim Gossett, VP of category leadership, national retail sales, Anheuser-Busch, “We believe a balanced approach to the beer category is necessary and the data proves it. Retailers that focus on one beer segment at 
the expense of another grow slower than the market average. Retailers that apply a balanced approach between segments, however, are growing faster than the market average, due to the fact that even loyal shoppers spend dollars on beer outside their favorite segment.”

He cites InfoScout research data that shows premium/value shoppers spend 27 percent of their beer dollars on other segments, while the high end (craft/import) shopper spends 43 percent of their total beer dollars on the premium/value segments. Premium beer, with the highest penetration, drives traffic to and represents the majority of retail dollars spent on beer, while the Value segment has the highest shopper loyalty, with those shoppers highly responsive to merchandising features and displays.

According to beer consultant for Florida’s ABC Fine Wine & Spirits, Josh Beerman, markets like his rely on major suppliers for displays and sales, despite a growing craft brew business. In May, he had success with a Corona Cinco de Mayo display including piñatas and other paraphernalia set up about two weeks in advance, while in the fall, about a dozen much-sought after pumpkin beers are gathered in their own display.

“We’re fairly strong with the national beers. With the tourist economy and the hot weather, people going to the beach after arriving from different parts of the country. Having major brands handy is important. For the older customers who know what they want and aren’t going to change, it makes sense too,” he says. Large stackers of Miller Lite, Budweiser and Yuengling “seem to work like crazy for us,” he adds. “Especially on weekends.”

According to Gossett, while about 80 percent of beer shopping trips are planned, even the 20 percent of unplanned purchases are important. “Displays are an opportunity to remind those shoppers about needs they may have forgotten to think about for their shopping trip,” he says.

Displays also give retailers an opportunity for cross-merchandising, to sell shoppers multiples of products in multiple categories and create occasions. For example, displays can help sell a “plus one,” such as a 12-pack plus a different six-pack or a 12-pack plus snacks. Wallett points out that consumers tend to look at most displays and even if they don’t buy right away, they are more likely to take a display product off the shelf later if it provides awareness and interrupts their trip.

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Building a Bigger Purchase

Making it easier for customers shopping for their necessities is the main reason for significant high volume displays, but there’s also building incremental sales. It’s something the Sutter Home “Build a Better Burger” campaign has been doing for 25 years. But recently the approach changed, according to Nyberg of Trinchero Family Wines.

Perhaps the longest-running retail program in the wine industry, the burger promo’s relevance needed adjusting to market and merchandising realities. Offering $100,000 for the award-winning recipe might have spurred 
awareness of Sutter Home, but did it actually attract customers 
to buy the wine and other burger-making items?

“It’s been super successful and retailers look for it in May and June, but the question was, ‘Is the consumer looking to enter a recipe contest or looking for a solution? What’s the hierarchy of messaging?’” Nyberg says. “For the first time we didn’t lead with the contest, but instead promoted 25 years with 25 recipes customers can achieve in 25 minutes or less (and by the way, here’s the recipe contest). This is more attractive to retailers because it communicates with more people in the store.”

Retailers often want merchandising that sells more than one item, especially given the contemporary clean store approach, she says. More importantly, merchandising that sells rather than amuses is far more important on the store floor.

“We all as marketing folks want to find the big idea, but a lot of times you come up with the most creative idea, forgetting the thing you’re trying to do in the store, which is hitting the customer with the right message and a solution quickly. What does the customer want when they walk in the store and what is the solution you’re giving them? A lot of promotions might be clever but they need to resonate with a customer going into a store who has 20 minutes to shop.”

Specific marketing periods are great times to take on innovative merchandising. Says Mike Maihen, director of retail field sales for Jack Daniel’s, “Retailers are continuously pushed to carrying too much inventory, but also tasked to grow dollar share in their category. We have taken a portfolio approach to try and help drive higher basket ring – one example of this was with our Spirit of the Cup program last year that was well-merchandised with a variety of brands in our portfolio that tied to the World Cup.”

He says higher volume item displays also should offer the “wow factor” that will drive shopper basket ring (for example, their “Grill Out” program with offers on meats, sauces, and more).

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Occasion-Based Shopping

Especially in spirits and higher-end products, the year-end holidays offer great opportunities, but shorter periods throughout the year are likewise important. A comprehensive approach works best, say most suppliers.

“Occasions offer an opportunity to provide gifting solution, with things like gift tins, engraved bottles and other special merchandising tools that can specialize a brand and draw gift buyers, Wallett says. For holidays like Memorial Day or Thanksgiving that call for more entertaining, providing shopping solutions – recipes, meal suggestions, product usage for group service – is extremely helpful.

Encouraging and reassuring customers to take a chance is the goal of many holiday displays. “Getting something that puts people in a buying mood and not thinking about what they’re spending, but instead gets them wrapped up in the excitement of the holiday, frees them up to spend a little more,” Cristol says.

“Shoppers are looking for impactful, inspiring displays that catch their attention and get them excited to celebrate the holiday,” Gossett says. He suggests creating stories about how consumers can interact with a product, like creating an attractive cook-out theme. “Planning deliberate and thoughtful cross-promotional efforts throughout the store can heighten shoppers’ interactions with other categories, which means higher basket rings,” he adds.

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Retail Service: Now is a Good Time to Be an Independent Retailer

I get emails all the time from retailers who are beside themselves over the big box movement. I also get calls from frantic retailers who think that grocery stores are taking over the U.S., and if grocery stores can sell wine on Sunday then they might as well close their doors.

As the great poet of the NFL, Aaron Rodgers, once said in a moment of 
clarity, RELAX!

While I am no poet, I can share the same comment. Off-premise retail will be just fine — it will just take some effort. There are no accidents, just planned results.

There is a movement in this country that started in California and is now sweeping east. The Anti-Chain Movement is a group of Americans that refuse to buy and sell into chain stores. But, as fate would have it, this is not some hippie from Cal/Irvine, this is mainstream Americans.

While our landscape is littered with large retailers, there are folks who want to support the small business and help the little retailer. That is you. But they need a compelling reason to shop you. You need to provide a reason that is not price. In 2015, we must accept the fact that Costco, WalMart and the like are impossible to compete against when using price as 
the lever. We need to provide service or selection or knowledge as the driving principles of competition.

When Rosen Retail surveyed 1,000 shoppers in 2014, we learned that price was number six on the decision list. Service and selection were first and second, respectively.

 

Same Story on the Supply Side

Suppliers more and more are looking for different outlets to sell their wares. There is no question that being on the shelf of Total Wine is great, but the reality is that being on that same shelf 
can kill your business. Their sheer size and SKU set of control labels make 
your brand a third-tier choice for their sales teams.

That same scenario plays out at regional players. When you enter distribution and the goal is to be in the shelf at “Mega” Liquors, you are sharing Lozier racking with 1,000 other spirits and 5,000 other wines. The nature of “Mega” Liquors is to have heavy selection and light sales help. Your brand will die there.

Suppliers are searching out small distribution channels and regional and small off-premise retailers to champion their brands. It has become an “us against them” reality in the three-tier system.

 

Recommendations

If you are an independent retailer, invest time and effort in learning small supplier brands. We would also recommend starting to acquire SKU’s that are from small distributors. When a brand and a supplier get behind a retailer, good things happen. Ketel One may not come and support at your store, but “independent vodka” will.

As a retailer, it is nice to have small brands and hungry brands and distributors that come and sell and promote. Ketel One does not need you; independent vodka does, and that little attention reciprocated will sell more goods.

That is why the independent is 
not dead. Small brands and small 
distributors need to rally together and work towards providing service, selection and knowledge. Small means nimble, and nimble is a good place to be in today’s marketplace.

 

Brian Rosen is operating partner of Evolution Wine & Spirits, in Chicago, and is available through Evolution Speaking and Consulting. He can be reached at brian@evolutionwines.com.

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