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Exclusive: Bacardi’s Pete Carr On The New Alliance With Southern Glazer’s

January 12, 2016

Editor’s Note: In this exclusive interview, Pete Carr, regional president of Bacardi North America, spoke with Marvin R. Shanken, chairman of M. Shanken Communications, about his company’s new alliance with Southern Glazer’s and what it signifies for the future.

Shanken: Why did you put out your Request for Proposal (RFP) to the distributors? And what was it about the Southern and Glazer’s plan that attracted you most?

Carr: Our aim in putting out the RFP was to reignite top-line growth for Bacardi. We wanted to get the best thinking and ideas from distributors throughout North America. As we went through that process, the prospect of a national selling organization became very intriguing. We could go from over 30 distributors to just one, excepting the franchise states. We could have dedicated resources, as well as a shared financial investment to be reinjected into the brands and markets. And we could have integration and cross-pollenization of talent.

Shanken: Was the Southern and Glazer’s plan much more attractive financially?

Carr: No. It was about a new way of thinking, and the improved execution with a North American footprint. We now have just one distributor nationally, and that’s a major competitive advantage.

Shanken: You talked about reigniting top-line growth. How will progress now be greater than if you had stayed with your former distributor network?

Carr: With this agreement, we can align across national accounts and be more successful in programming and investing in our brands. We’re now able to use our resources freely across North America. If the market in California is struggling and we’ve got a major initiative in New York City, for example, we can easily move dollars and people where we see fit. This market is highly competitive, and major suppliers who’ve gotten investments from distributors have been reinvesting in their brands and people. This deal also gives us the chance to do that.

Shanken: So your coverage of national accounts will change significantly.

Carr: It will be much deeper across all markets. Previously, we needed to cross multiple distributors to work on programming, execution and follow-up with players like Walmart or Target. Now, if a buyer has an issue in a particular market, we can seamlessly align our programming. Our national accounts team will match up with the Southern and Glazer’s team, and the buyer will be dealing with one person. And the mom-and-pop stores are just as important in all of this. This deal will create more effective ways of programming with them as well.

Shanken: So you’ll improve your distribution, but I’m also hearing you say that you’ll have more to invest in consumer spending, which will pull the brands through the market. Is that correct?

Carr: Yes.

Shanken: What about competing brands? Southern handles Pernod Ricard, which owns Absolut, and you have Grey Goose. Are you concerned about that?

Carr: At Charmer we were with Diageo, and at RNDC we were with Pernod Ricard. The distributors do an excellent job of managing different sales divisions. It really comes down to who’s got the best advertising and the best consumer pull—all the above-the-line activity.

Shanken: What do you think might now take place in terms of other distributor alignments?

Carr: I can’t speak to that. Each distributor needs to do what’s right for them. But I can emphasize that the supplier-distributor relationship must change, and become more of a partnership executing against the business. Suppliers typically don’t want to hear what’s wrong with their brand, and sometimes they force distributors to do things that aren’t healthy. We’re determined to do what’s right for Bacardi long-term. This new North American footprint will drive growth and consistency. It will make us more effective for years to come.

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