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Building Brands Through Distrbutors 2015%Annual%Spirits%Conference% “Building“Building BrandsBrands ThroughThrough Distributors”Distributors” Participant Workbook Presenters: Thomas Jensen, Founder Millstone Spirits Group & Cassell Distilling Systems http://millstonespirits.com/ Bob Brown, President Sales Systems Development, Inc. Spirits Training & Consulting Firm http://www.salessystems.net PROFILE: BOB BROWN Sales Systems Development, Inc.™ and its President, Bob Brown, have been serving clients since 1981. Bob is widely recognized as one of the leading sales training and organization development consultants in the beer, wine and spirits industries. As president of Sales Systems Development, Inc. and prior to that National Director of Sales Training for the E & J Gallo Winery, Bob has conducted over 500 seminars involving approximately 10,000 supplier and distributor sales and management personnel in Asia, Canada, Central America, Europe, India and the United States. Bob has served as selling, merchandising and sales management consultant for a significant number of leading beverage firms and consumer product manufacturers who are benchmarked for “best practices,” thus, he brings insights on the sales processes used by major consumer package goods organizations. Bob has worked with several firms such as Bacardi, Boston Beer and Constellation Brands for over 20 years as well as breweries, wineries and distilleries in the early stages of their business development. Bob has been a speaker or seminar leader at ten annual Wine & Spirits Wholesalers Association as well as over 20 National Beer Wholesalers Association conventions. Beverage Industry Clients Partial List Alaska Brewing Company L. Knife & Son Companies Alliance Beverage Distributing Co. Major Brands, Inc. Anheuser–Busch InBev. Manhattan Beer Distributors Atlas Distributing, Inc. Mesa Beverage Company, San Diego, Santa Rosa Bacardi-Martini USA, Asia Pacific and India Mission Beverage Company Ben Arnold Sunbelt Distributing Co. National Wine & Spirits Boston Beer Company New Belgium Brewing Brown–Forman Corp. Oak Beverages, Inc. Caldbecks Wine & Spirits, Ltd. Pacific Time Wine & Spirits, Inc. ! Peoples Republic of China ! Beijing, PRC ! Shanghai ! Hong Kong Pepsi Cola USA ! Taiwan Reyes Beverage Group Casa Pedro Domecq, Mexico ! Chicago Beverage Systems, L.L.C. Charmer Industries, Inc. ! Lee Distributors, L.L.C. Chateau Ste Michelle Vineyards & Estates ! Harbor Distributing, L.L.C. Churchill Distributors ! Premium Distributors of Virginia, L.L.C. Columbia Distributing, OR, WA ! Premium Distributors, Washington, DC, L.L.C. Constellation Brands – Beer & Wine Rhode Island Distributing Company Corby Distilleries Ltd., Canada Sidney Frank Importing Company Diageo Sleeman Breweries, Ltd, Canada Empire Distributors, Inc. Snapple Beverage Corp. Faust Distributing Company Snow Queen Vodka FIJI Water Star Distributors, Inc. Frederick Wildman & Sons, Ltd. The Stroh Brewery Company Grolsch Export B.V. The Netherlands Sunbelt Distributing Corporation Hood River Distillers, Inc. Union Beverage Company Herradura Tequila Company, Mexico United Liquors, Ltd. Jardine Wine & Spirits, Inc. United States Beverage, L.L.C. ! Malaysia ! Philippines. West Side Beer Distributing Co. J.J. Taylor Companies, Inc Young’s Market Company, OR, WA 2 PROFILE: THOMAS F. JENSEN A Spirits Industry President & CEO with over 30 Years of Results & Relationships Founder of Millstone Spirit Group " Millstone Spirit Group LLC, based at the New Liberty Distillery in Philadelphia, is a group of industry veterans with the capabilities to support the new generation of craft distillers. Millstone is the exclusive agent for stills custom designed for craft distillers by a craft distiller and manufactured by Specific Mechanical Systems out of Canada, a leading manufacturer of brew pub systems. Millstone also offers consulting services including master distilling, craft distillery build outs and business plans, brand plans and marketing, and a sales distribution company designed to bring the best craft spirits into distribution with major wholesalers. Highly Accomplished Chief Executive Officer " Former President and CEO of Remy Cointreau USA, a $350M premium brand focused company that owned Remy Martin Cognac, Cointreau, Mount Gay Rum, Piper-Heidsieck Champagne and Louis XIII Cognac and was the agent for numerous other brands including The Macallan Scotch, Antinori wines and Russian Standard Vodka. " Past Brand Building Successes include Maker’s Mark Whiskey, Courvoisier Cognac, Tequila Sauza, Canadian Club Whiskey, Malibu Rum, Stolichnaya Vodka, Kahlua Liqueur, Beefeater Gin, and many other major brands. Established Industry Leader & Influencer " Long Term Relationships with all major U.S. Distributors, Owners and Management Teams " Long Term Relationships with major Trade Groups (NABCA, WSWA, DISCUS, NABI) Expert in the U.S. Three Tier System " Former National Sales Manager at Allied Domecq " Former Head of On & Off Premise National Accounts, Duty Free & Military 3 “BUILDING BRANDS THROUGH DISTRIBUTORS” Focus areas… 1. Gaining Distributor Share of Mind 2. What Distributors Need from Craft Distillers 3. Five Critical Success Factors Question & Answer Forum at Conclusion Dynamic Craft Distillery Growth Craft Brewers Craft Distilleries 4 GAINING DISTRIBUTOR SHARE OF MIND 1. Positioning 2. Great _______Brands______ _ 3. Professional Relationships____________________ __ 4. Competence Distributors perform best when given… 1. Clarity of Expectations_________________ — Key Initiatives, S.M.A.R.T. objectives, mutually agreement 2. Precise ______________Direction — program execution benefits and elements (metrics) defined in detail 3. Competent ____________Support — availability, supply, marketing, selling effort, work-withs, training & education, promotion support 4. Consistent ____________________Accountability — always get “sign-off,” Business Review Meetings, recaps, benchmarking, follow-up 5 DISTILLERY COMPETENCE HIERARCHY Group Discussion Question What are the Mistakes to Avoid Working with Distributors? Four Levels of Competence Supplier% Competency% Hierarchy% Partner Consultant Team Player Attempts to Support Takes Orders 6 “CONSULTANT/PARTNER DISTINCTIONS” The “Givens” 1. Quality 2. Uniqueness 3. Financial Resources 4. Personal Commitment Five Critical Success Factors 1. Penetrates In Depth — cultivate many “______touch_____ ____ ______points_______ _” to develop the brand/portfolio ! At the Distributor: " Distributor sales teams — channels, key salespeople, , chain account, on-premise personnel, tell-sell, etc. " Warehouse, Operations " General and Administrative " Understands distributor systems — how “things get done.” " Perceived part of the “team.” ! In the Market: " Understands off-premise channels and on-premise segments and which are practical to pursue, given brands positioning and stage of development. " What drives volume in the market " Learns, understands key account goals, strategies and competitive environment. " Develops practical target account lists. " Visible and builds relationships. 7 FIVE CRITICAL SUCCESS FACTORS 2. Relevant, Realistic Annual Business Development Plans " Be prepared — entire team " Collaboration is key " It’s a “Market” plan, not a “Production” plan " Have a defined format and process Annual Plans — the Process 4. Local Market Opportunities " Distribution – on & off " Displays " Promotion " Events 3. Investment/Changes " Innovation — New Products/SKUs " Marketing " Trade Spending " Personnel 2. Trends " Categories & Segments " Brand 1. Base Volume by Brand The Key is _______KNOWING_______ _ ________WHERE_________ _ the ___________BUSINESS_________ _ is ______COMING__________ ___ ____________ FROM_______ ! 8 ANNUAL PLANS – THE FOCUS… Focus on the Factors the DRIVE volume Distribution Pricing Display On-Premise Cold Box Promotions Depletions Inventory/ Education OOS Feature Ads/TPR POS Price Support 9 MAKE THE PLAN A “LIVING DOCUMENT” DO PERIODIC BUSINESS REVIEWS The role of the Business Review with distributors is to: " Insure attention is sustained by having a serious evaluation of what has been accomplished (mutual accountability); " Review where the distributor stands on current programs, and to plan immediate corrective action if needed; " Gain mutual agreement on: ! Actions to bring results back in line with plan as well as ! Objectives and support for upcoming programs or focus periods. Effective Distributor Business Review Recommendations 1. Have a standard format " Send an agenda in advance " Review status YTD vs. Annual Plan " Review recently completed programs & status of those in process " Market Conditions — merchandising, displays, distribution " Plans and programs for upcoming period 2. Timing — consistent, same time each month or quarter 3. Be well prepared — “Last one in the market controls the meeting” Where Where we we are have been Where we are going 10 FIVE CRITICAL SUCCESS FACTORS 3. Understands and Manages Pricing Pricing is a fundamental consideration at each point in the three-tier system. Pricing is also a critical component marketing, as well as financial strategy for a brand. The pricing decisions have a significant impact on the company’s ability to achieve sales volume and profitability goals in any given period. Pricing is an art and a science. Therefore, considerable knowledge and skill is required to make the judgments necessary to successfully integrate pricing into sales and marketing strategy and tactics. Trade Pricing Guidelines 1. Always structure suggested retail price
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