Caring for the Customer

The theme of this year’s NABCA Annual Conference, held at the Arizona Biltmore in Phoenix, was “Caring for the Customer.” Chosen by NABCA Chairman and Idaho State Liquor Division Director Jeff Anderson, the theme was two-fold: it represented control states’ dedication to serving the needs of licensees, as well as consumers.

Following the event, the role of Chairman passed to Stephen Larson, the Administrator of the Iowa Alcoholic Beverages Division. He’s chosen “Collaboration Creates Opportunity” as next year’s theme, which builds on the work he’s done in Iowa.

Stephanie O’Brien, the Chair of the Vermont Department of Liquor Control, was chosen as Chairman Elect, and will take over for Larson next May during the 2016 NABCA Conference in Orlando.

This year’s event included a number of interesting sessions, bringing together members of the control state industry, beverage alcohol trade groups and supplier companies.


Is Loyalty Dead?

A panel discussion on brand loyalty included co-moderators Anderson and Larson, along with Beam Suntory NA President Tim Hassett, Proximo President Mark Teasdale, E & J Gallo’s Ernest Gallo and Sazerac President Mark Brown.


“Loyalty was easy when Cuervo equaled tequila in consumers’ minds, but now we need to create an emotional connection and engage with consumers,” Teasdale said. “The problem is that there’s a plethora of consumer options available from around the world.”

Gallo added that another difficulty with branding in today’s market is consumers confusing categories and brands. “We faced that in the wine industry with Chardonnay being considered a brand,” he said. “Now Bourbon is a brand and Rye is a brand; it’s easy for consumers to experiment within the category when they’re not thinking of specific brands.”

The panelists also discussed the rise of craft products, with Brown offering his take on craft beers versus craft spirits. “What’s driving craft beer and craft spirits are different,” he said. “Consumers felt big brewers were generic and wanted more flavorful beers. That’s not the case in spirits, where the big distillers have plenty of niche products. It’s being driven by local producers, which consumers find attractive.”

As competition heats up within a single category, overall consumer tastes are also changing. “The issue is less around category disloyalty than it is category blurring,” Hassett said. “Spirits are going after occasions that were traditionally the domain or beer or wine. In the past we defaulted to the 
assumption that certain domains belonged to certain categories or brands, but we’re changing that paradigm.”

Ultimately, the three-tier system allows constant change to occur within beverage alcohol. “The barrier to entry for new brands is very low in our industry,” Brown said. “The three-tier system lends itself to new brands, allowing for the proliferation that we’re seeing.”


Weed and Whiskey

One well-attended session at the event was a discussion about marijuana’s impact on the control states. Oregon Liquor Control Commission Chair Rob Patridge has become an expert on the subject as his state is navigating the legalization and regulation of the drug. Patridge moderated the panel, which included DISCUS President Peter Cressy, Stanford Professor Robert Maccoun and WSWA President Craig Wolf.

Both DISCUS and WSWA have officially taken a neutral stance on the legalization of marijuana. However, Wolf said, “You don’t have to look far for a system to handle legislative and regulatory issues. Just look to the regulations and responsibility within the alcohol industry for a model.”

Cressy added that the alcohol industry should argue for tough regulations for marijuana. “There’s a lot we don’t know a lot about,” he said. “We need to move carefully, and a lot will depend on the next generation of users.”

“At the very least, whatever regulations apply to alcohol should apply to marijuana as well,” Wolf added. “That includes labeling, age restrictions and driving laws. What’s lacking in that industry compared to alcohol is the amount of research and education.”


are on 
the Labels

A panel discussion about how important authenticity and heritage are when a CEO’s family name graces the company’s product featured a number of recognizable industry stalwarts.

Wente Family Estates CEO Carolyn Wente discussed the challenges of passing the company from the fourth generation to the upcoming fifth generation of owners. The family holds regular meetings to discuss the direction of the brand, and no family member is guaranteed a job at the business.

Bacardi Limited Chairman Facundo Bacardi provided a history of his family’s struggle over many generations, from their start in Spain to founding the company in Cuba to the present in Puerto Rico.

Tito’s President Bert “Tito” Beveridge looked at his fellow panelists in awe, saying “I’m just happy to be here.” He emphasized the importance of taking a craft or trade you love and finding a way to marry that with what you’re good at. In his case, building a hand-crafted vodka brand checked both boxes.

Prichards’ Distillery President Philip Prichard said some people call his company, which includes 18 brands, “the Diageo of craft distilling.” He spoke at length about the difficulty of creating a brand from scratch, but added how fulfilling and enjoyable the journey has been.

The panelists all agreed on one thing: family businesses look for long-term financial and environmental sustainability, since they don’t have shareholders and quarterly expectations to meet at all costs.


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