(From left to right) Peter Hickey, president, control states, Tex McCarthy, president, southern division, Keith Bellinger, president, northern division. (seated) Simon Cunningham, executive VP marketing ON THE MOVE Spirits NA reorganizes and puts more feet on the street.

By Kristen Wolfe • Photographs by Andrew Kist

t the end of last year, Allied Domecq Spirits NA embarked on a new strategy. "Move to Market" as it was named, represents a philosophy of A doing business, and is designed to help the North American arm of the world’s second largest and spirits company get closer to retailers.

A shift in priorities might not be what one Southern Business Unit, based in Dallas. He would expect from a company whose sales are has witnessed first hand Allied Domecq’s evo- up 3.9% this year. “It comes down to integri- lution. “Last year we had a country strategy,” ty,” explains Tom Wilen, Allied Domecq’s McCarthy says. “Recently, we took a look at U.S. president. “We don’t pump in the cases our business and realized that we needed to get and leave the retailers to find a way to sell it. closer to our customers. We needed to empow- That was the culture of this company a while er our local teams to make decisions, and work ago, but not anymore. We were a push compa- better with our distributors.” ny, but we are now a pull company and our How does one carve up the country into retailers are already seeing this.” three distinct regions? “We noted that North- Allied Domecq’s Equity and ADvantage South there is a significant break in chain store portfolios, which were created two years ago presence,” explains McCarthy. “Secondly, to enable sharper focus on the core national there is a greater Latino influence in the South; spirits brands (those with the most consumer a population expansion in the Latin communi- equity, such as Kahlúa and Sauza) and regional ty which is an incredible opportunity for us. brands (such as Ballantine’s Scotch and are also much bigger in the South. We Presidente , which became part of the look to capitalize on brand-market synergies ADvantage unit), are now combined under and retail channel synergies.” one management team. “While that was the One might imagine that in this new struc- right thing to do at the time, the addition of ture, Allied Domecq’s many smaller, regional and has created a greater brands (formerly organized under the opportunity for us to co-promote across the ADvantage division) would get lost. But Keith two portfolios,” Wilen says. “Through discus- Bellinger doesn’t think so. Previously the gen- sions with our customers and distributors, eral manager of the ADvantage Brands, there are benefits from having a simpler struc- Bellinger will now head the North, and sees ture and single point of contact.” opportunities for growth in all categories. “We The company is now composed of three use the regional products to open opportuni- decentralized, autonomous regional units; ties in certain markets and get shelf space for North, South and Control States. Tex our core brands. We can offer retailers every- McCarthy, former senior VP of sales for the thing from value to super-premium products company’s Equity Brands, is now leading the and this is important to the retailer; it’s one Tom Wilen, Allied Domecq Spirits NA, president

C o u r v o i s i e r Fashion accessory with young, adult urban t a s t e m a ke r s

“Move to Market” initiative is that it enables us to touch more of our on-premise customers.” Allied Domecq is calling this new manpower effort ‘Feet on the Street.’ Just as the name implies, this new team will focus on retail account management. “We are going to move resources from headquarters out to the field,” says Wilen. “Our overall headcount will actually increase, but we will be leaner and meaner and have broader management coverage in the field.” All of this is underscored by a firm com- mitment to the three-tiers. “I have worked in international environments where we have had the choice to go through the three-tiered sys- tem or going direct and I have always chosen stop shopping. For example, in Chili’s the three-tier system,” Wilen attests. “We need restaurants, the best-selling Margarita to focus on what we are good at, which is is the ‘Presidente’ which features brand-building and inno- Presidente brandy and also Sauza Stolichnaya vations. But the wholesaler .” Bellinger sees Allied community brings years of +11.5% Domecq’s successful line of regional experience in how to deliv- products enhancing the greater port- last er the product in the best folio and creating new drinking expe- 26 weeks way. They have their role riences for consumers. “Our line of and we have ours. I think cordials, for example, gives us a strong com- it is a very dangerous game when you start petitive advantage. Our main competition lacks telling your customers what to do. The way to a cordial line, and has to partner with somebody make it work is through partnership. I remem- else to create drinking experiences.” ber 20 years ago it was like playing poker when And the new strategy seems to be working. you met with your distributor.” "Allied Domecq has the industry's most com- A crucial ingredient in Allied Domecq’s prehensive portfolio of great spirits and wine new formula is research. The company has just brands with strong entries in every important completed the largest and most expensive category from French to premium research project in their history, entitled the tequila," says Ray Herrman, chairman of Global Segmentation Study. Over $10 million Charmer-Sunbelt Group. "It is a challenge to was spent and 33,000 customers were inter- market so many big brands effectively but Allied viewed in order to study behavior, and Domecq manages to do just that." more importantly, predict it for the future. The Control States Division is managed by “We are now focusing on people in different Peter Hickey, who most recently worked with occasions as they are consuming, and observing Jim Beam Brands. Perhaps the most diverse divi- how their behavior changes even throughout sion within the new structure, these states are in the course of a single evening,” says Simon different regions throughout the country. Cunningham, Allied Domecq’s executive VP K a h l ú a “Every control state is very different,” says marketing. “You have some people going out The world's Hickey. “You have to be involved in each mar- for a drink after work, and those same people b e s t - s e l l i n g ket and run individual marketing. We now have socializing with a large group of friends on a c o f f e e more people on the street which will help us do Saturday night. These are very different occa- l i q u e u r this. One of the most exciting things about the sions and the choice of drink will differ.” “We are now focusing on people in different occasions as they are consuming, and observing how their behavior changes even throughout the course of a single evening.”

— Simon Cunningham, Allied Domecq’s VP marketing

Not to mention facilitate streamlined executions. “When we launch a new prod- uct now, we want to clearly identify the consumer, the wants of that consumer,” Wilen says. “Instead of going into 40 cities, A very interesting discovery came from we will go into six and partner with the this research with regards to Kahlúa. An retail outlets that we feel speak directly incredibly profitable brand, Kahlúa had to that consumer. We want to help the been targeting younger consumers in its retailer get better return from their shelf. marketing and advertising. What the We benefit as part of it.” The same goes company learned, however, was that a for on-premise. “We have started major group of Kahlúa consumers focusing on one type of drink pro- were, in fact, women, 35-years old and motion from 4-6pm and then switch up. “We were doing to another drink from 6-8pm,” it in the wrong way, Wilen continues. “We find that max- at the wrong time in Sauza imizes a restaurant’s return.” the wrong places,” is fastest In an ever-changing marketplace says Cunningham. growing full of new challenges, Allied Fr u j a “All our marketing tequila Domecq’s aim is to be the “First Only dollars were going +27.4% Choice Supplier” for every retailer made from fresh, towards 21-year olds (past 6 months) and distributor. This means “not exotic fruit juices and we were becom- being the biggest, but the first and preferred ing less relevant to partner,” says McCarthy. “We want to help our core consumers.” Further, the research them build their businesses and add value as revealed that men consuming Kahlúa at a supplier.” Bellinger likes to think that the home with their partners after work were changing competitive environment has actu- making up a big part of the market. “Last ally helped Allied Domecq’s position, par- year, we were doing Kahlúa shots with con- ticularly consumer minds: “We may never sumers at 11pm at night. What we have dis- be the biggest, but we can be the best. We covered is that Kahlúa is the first and last want people to ask for us.” drink of the night. If we are going to do par- At the end of the day, the new team at ties, we now do them for happy hours.” Allied Domecq knows that a retailer’s will- “Segmentation allows us to get much ingness to do business with them all comes closer to the consumer,” Cunningham con- down to how well they are able to sell their tinues. “This will give us a real competitive products, and the quality of support they edge. We are not the same size as , receive from the supplier when doing so. “If and we don’t have the same marketing dol- you get consumers coming into stores say- M a ker's Mark lars, so we have to be smarter. This tool has ing, ‘I want this product,’ then we will have + 18% last given us a real edge and we are going to have the support of the trade,” Cunningham. 26 w eeks a lot of fun with it.” “It’s that simple.”