Impact Seminar: Diageo, Pernod, Southern Glazer’s Look To Shape The Future MarketMarch 13, 2017
Among the industry voices taking the podium at last week’s 41st Annual Impact Marketing Seminar were top executives from the world’s two largest spirits suppliers, Diageo and Pernod Ricard, and the U.S. market’s biggest wine and spirits wholesaler, Southern Glazer’s. All spoke about the dominant trends shaping the U.S. drinks market, and their plans for leveraging those trends to achieve growth.
Paul Duffy, chairman and CEO of Pernod Ricard North America, speaking on “Spirits Trends In the U.S. Market,” identified three key drivers influencing spirits market dynamics. Addressing the rise of the craft movement, Duffy noted that craft spirits as defined by the American Craft Spirits Association account for only 2% of the overall market. He pushed back on the idea that only small labels can be identified as craft, instead suggesting that any brand that’s “unique, authentic and transparent” is an artisanal, crafted product regardless of size.
Jameson’s Caskmates, a product made with Jameson swapping casks with craft brewers to create unique expressions, is one example of a major brand that shares all of those key craft attributes, Duffy said. He also asserted that in today’s market, brands must “stand for something,” noting the five-year partnership between Absolut Elyx and Water For People, an initiative that seeks to provide safe drinking water to 100,000. The third key trend, in Duffy’s view, is the move toward “hometainment,” which Pernod is attacking by testing a new “connected cocktail library” that guides users through customized recipes.
Diageo North America chief marketing and innovation officer James Thompson’s speech was entitled “Marketing to Millennials.” In his presentation, Thompson warned against approaching the millennial demographic as a monolith, explaining that this 85-million-strong group is more politically, economically and racially diverse than often thought.
Instead, brand stewards must use “extreme contextual relevance” to cut through the clutter, Thompson said, citing localized Johnnie Walker marketing and personalized Smirnoff bottles for weddings as examples. He also echoed Duffy’s call for authenticity and social consciousness in brand-building, and highlighted recent efforts on Buchanan’s, Smirnoff, Captain Morgan and Crown Royal that have succeeded in bringing those brands into focus for the younger generation.
Southern Glazer’s CEO Wayne Chaplin discussed the topic “Transforming Distribution In North America.” Since last year’s blockbuster combination of Southern and Glazer’s, the merged company has created a new national structure comprised of four distinct regions. The move has resulted in a “flatter, tighter model,” Chaplin said, which has freed up state-level managers to focus on sales execution and also created advantages for the company in logistics and data insights compared with the old approach. Detailing how Southern Glazer’s is leveraging synergies from the merger to reinvest in growth, Chaplin explained that he sees the company’s size “as an enabler, not an inhibitor,” which will result in a new level of synchronicity between the distributor and its national partners in the years ahead. —Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.