Spirited Conversation

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Filtering by Tag: whisky

The Journey to Excellence: A Spirited Conversation with Dennis Carr, President and CEO, Anchor Distilling Company

The burgeoning spirit business has seen a host of small and large labels eagerly seeking new ways to reach consumers. The Anchor Distilling Company has secured a unique place in the category by offering a broad collection in a variety of spirit categories (and you thought they just had great beer!), with an emphasis on consumer education. The more people know, the better they can assess their choices. I was very excited to get a chance to speak with Anchor Distilling Company President and CEO Dennis Carr to learn more about his thoughts on the vision and direction for the market.

Q: How did you get your start?

A: I grew up in the Northern California wine country. After I got my degree in business I started looking for a job. Gallo Wines had a sales training program so I joined them. The experience gave me a deeper appreciation for wine and was the foundation for why I value the education piece of this business so strongly. Eventually, I expanded from wine to beer and then spirits.

Q: Why did you join the Anchor Distilling Company?

A: In 2011, craft spirits were starting to move but were not yet well understood. I was seeing it develop and I felt it was a good trend. I have seen my share of trends in the beverage industry and, often, it’s a generational thing. Typically, it doesn’t happen with mass produced brands. Take craft beer – the focus is on smaller production brands and the business model continues to be incredibly successful. I saw the same opportunity with spirits and wanted to get involved.  Anchor already had a rich history with a strong brand, and they wanted to create a platform that would sit somewhere between the small producer and large producer; serving the market in a way nobody else was doing. That was very exciting and a key factor in my decision.

Q: What challenges did you face in building the platform?

A: Many small and/or independents don’t have the resources to build a national brand. They move slowly...one state at a time. On the other side of the spectrum, huge suppliers often can’t or won't focus on small brands. We occupy the space in between to build the platform to meet that need showcasing small/niche markets from all over the world.

The first major challenge was that nobody (wholesalers and retailers) knew what to make of the emerging craft spirits category. We decided to come up with a one-stop shopping concept and go to wholesalers and explain to them how they could manage both inventory and operations effectively.  Building the portfolio was one thing but, to get traction, we had to bring in experts to work with sales teams, re-think traditional distribution channels, and educate the producers themselves to create a price program and build a brand within an existing infrastructure about a category they were not necessarily comfortable with.    

We got the support and attention of larger wholesalers early on and have helped them develop their craft spirits divisions. There wasn’t much money in the beginning; nice margins but not enough volume to put lots of resources against.   The education piece came up again in a big way and eventually the model made more sense to people and is now the default go-to-market strategy.

Q: Education continues to be a theme – why is it so critical for spirits?
 
Alcohol and beverages go back centuries and come from cultures all over the world. With whisky there is a lot of narrative that you can share with others.  Drinking is about learning stories of communities, cultures, and how families have made their product for years. Consumers want to know what goes into the bottle not just the alcohol but who made it, where, why, etc.. They want to connect the passion to the product and marry that with quality.

Education is an important aspect of our industry, and we need to learn more about other people in the industry who want to protect this business and have something to give. The keys are responsibility and authenticity.   Bartenders too – they take it seriously and they are all about education and teaching people about the spirits that make them passionate. Today it’s OK to ask your bartender questions and get to know brands and tastes. I can walk into any bar and ask about spirits in a much more relaxed way; but it is every bit the same kind of education as we associate with wine. You merge the environment with the ease of learning, you feel comfortable and you can explore much more and be much more excited about the cocktail or spirit you’re consuming. 

Q: Do you think the increase of small US craft distillers and the expansion of world whiskies is related?

A: Absolutely they are related. The common thread is that the consumers are looking for better quality and more information. Twenty years ago Anchor focused on that thinking – first with Old Potrero and with Juniper gin. It was not about mass appeal; it was about quality. And that attitude is what has driven and continues to drive the industry.

It’s a matter of people wanting the best whisky they can find. It doesn’t need to be from Kentucky where you get the best quality; you can get it from many other parts of the world. For example, we introduced Nikka from Japan.  That product, along with the information and education we put behind it, drove consumer interest in Japanese whiskies and opened our eyes to the capacity for quality outside of Scotland or the US. Another perfect example of this is Kavalan from Taiwan.

Taiwan is not Scotland – it’s the complete opposite: hot, humid and pretty terrible conditions for making whisky. But they figured it out.  Start with a great distillate that is ready to accept the wood and, once barreled, store it properly, extract the flavor more quickly and you have a flavorful single malt in 3-4 years; not 20.   

Q: Kavalan is an example of a non-age statement whisky. Many producers are addressing demand with non-age statement releases. Do you feel this is necessary or is it a marketing gimmick that could harm consumer understanding and receptivity to the spirit market?

A. We present a single malt scotch called The Glenrothes. It was ahead of its time with the non-age statement process. The producers felt a whisky matures in barrels differently and that bottling should occur at the optimum time for the whisky to be good not because it reached a specific year stamp like 12 or 15 years. So they took age statements off and use vintage dates instead.  

People are learning that an age statement is just that – a statement– versus a number. It has more to do with whisky itself and how long it should be aged. For instance, you can’t age Kavalan for 12 years because the climate would ruin the whisky. There is no 12-year-old Taiwanese whisky because they have to get it out of barrel quickly before the whisky passes its peak. Producers understand the practicality that removing the age statement provides flexibility and the option to blend different years.

The industry, in general, will go in this direction for two reasons: the rarity of aged whiskies and the desire to focus on quality and not get trapped by marketing.  Defining the age of whiskies is the real marketing. Consumers have been taught to look at age alone to determine quality; the myth is that the older the whisky, the more expensive product. But it's not always better. You might find a 15-year-old whisky is not as good as a 12 and that could be due to the whisky staying in the barrel too long because marketing wanted to have a 15-year age stamp on the bottle.   

Q: Knowing the current and forecasted supply and demand issues with the whisky market, would you be more prone to starting a distillery or a tech company?

A: The discovery period around whisky has not completed its journey. One thing driving innovation and creativity in this category is that it has challenged people to be more imaginative across the board - wine barrel finishes, wine barrels aging in different climates, etc. The key is not to sacrifice quality because consumers won’t allow or accept any compromise.  They are good at researching and communicating. You share the story of a great experience you had and the brand gets known and built. But, if you have a bad experience, you will share that experience and steer your friends away from the brand because of your quality expectations.

Quality is what governs the category. It challenges us to adapt and find ways to make great whisky. It keeps us real and very grounded. That being said, I know many small producers are popping up, and similar to start-up tech companies, they want to get to a point and position themselves for a big exit from a larger producer. I’m not sure that’s the best strategy and I imagine many tech companies don’t operate that way. Bottom line either industry requires a ton of work, focus and passion.  But if I had to choose, and I’m biased, I’d place my bet on spirits.

Q: What other changes are you anticipating in the category?

A:  We will see an influx of new brands and more localization. We are, in many ways, already there with the craft movement. The idea that my local town whisky is my favorite, versus another country's product, is increasing. When we see such excitement about a category the product sensitivity rises. If producers try to cut corners and impact quality, the consumer will be turned off. Many players will try to get in quickly during this period but, ultimately, the consumer will shake things out and many new labels won’t last. Besides that, too many choices could lead to consumer fatigue.  If that happens, people will just go back to the brand they like. Even with new experimental products, the consumer will qualify which ones deliver the best value expectations for what they are willing to spend.

Q: Final question – if you could have a drink with anyone who would it be and why?

A: I would love to have a drink with George Washington. He was one of our country’s original whisky producers. I would like to know why he felt whisky was so important. I also want to know what was happening in his time that included the whisky. Did he, like many of us do today, enjoy a whisky at end of day? Has it really changed that much since his time or is it still the same basic enjoyment?

***

Anchor continues to grow its portfolio and influence in the spirits category.  Education doesn't apply solely to the end-user; they continue to learn more about consumer choices and connect that to product improvements, and business requirements.  You don't get this kind of knowledge sitting behind a desk.  The Anchor team is out there speaking to the people, learning from competitors and implementing common sense.  It's what makes their curated portfolio stand out in the field.  The pioneering spirit of Fritz Maytag is deeply woven through Anchor Distilling Company. There is no doubt, with Dennis at the helm, Anchor will continue that spirit in defining new categories and markets.

2016 WhiskyFest San Francisco

WhiskyFest is coming to town September 23 and the team at Spirited Conversation could not be more excited!  Spirited Conversation was founded because we saw the parallels between building a great company and the crafting of fine spirits.  

WhiskyFest is the longest-running and best-attended whisky festival in the U.S. It is unique, offering the finest whiskies from all over the world, poured by the people — the very living legends — who make them. It was created by Whisky Advocate (WA) magazine, the country’s leading whisky publication.

We contacted WA to find out how WF came to be. Amy Westlake, Sr, Vice President of Advertising and Events at WA was kind enough to give us the back story.

WhiskyFest was the brainstorm of Amy’s husband, John Hansel. This is how it emerged. He woke up one day back in 1998 and said he dreamt that he was in a grand ballroom; when he asked for a whisky, the manager handed it to him and told him how it was made. And it was then that he decided to create WhiskyFest.

Nobody had ever done an event like this before with the focus on the creators of the spirits. Meet the Makers became the theme and in addition to the tasting, they offered seminar times for distillery managers and master blenders. This was before the idea of “brand ambassadors.”

John and Amy met with the Marriott Marquis in Times Square, rented a ballroom and pitched their idea to the whisky companies. Some embraced the idea immediately while others wanted to know who else had signed up. In the end, they had about forty different companies pouring whiskies from Scotland, Ireland, Canada and the United States. They sold out of tickets a month before the event. 

And since then the journey has seen more venues, more producers, and more sold out venues. The 2016 San Francisco event is no different so grab your tasting glasses and enjoy!

Check out the San Francisco WhiskyFest venue

Looking Fabulous!: A Spirited Conversation with Fashion Designer, Rubin Singer

My introduction to Rubin Singer came through my Chief Communication Officer, and business partner, Roxanne. She met Rubin at a Neiman Marcus annual meeting in Dallas. She saw his collection and was instantly hooked. Roxanne set out to get his collection into Neiman Marcus and, with the help of a grassroots campaign to present him to decision-makers, as well as her own massively successful Rubin Singer trunk show, Neiman Marcus expanded their buy significantly and rolled his line out to several new doors the following season. 

Fast forward to a dinner with Rubin and Roxanne at the beautiful Rosewood in Palo Alto, California.  I couldn’t believe the story Rubin laid out. A family history that stretched back to World War II Russia, people determined to provide a better life for their family, and a journey that brought the family name to New York. Rubin was born into and raised in the fashion business; he was destined to make his own mark on the world. 

So I was ecstatic that Rubin gave me a few moments for a fascinating tête-à-tête and to share a special spirit at Wingtip in San Francisco. I was eager to pick up where we had left off at Rosewood, and to ask him a few questions about his meteoric success - not just as a designer but as the head of a major design house.

To kick things off, I paired Rubin with a 17-yr Nikka Taketsuru Japanese whisky. I chose the Nikka because of the unique story of Masataka Taketsuru – a man who came from a rich tradition of sake makers but who loved whisky and wanted to craft a traditional Scottish blend out of Japan.   The determination to craft something perfect, well-balanced, and elegant is a direct reflection of Rubin’s approach to design, family history and power.  The sip was incredible; you get a well-balanced feel highlighted with plum notes but not overpowering on the sweet. Extremely tight and well structured. Click here for more tasting notes from the Whisky Shop.

Rubin’s growth strategy, like many start-ups, was built on sacrifice. He not only has to come up with new designs four times a year to meet the rigorous and competitive fashion industry deadlines; he also had to learn how to scale a business. Rubin has had his challenges and after lots of preparation and several setbacks, he got his big break with the 2013 Superbowl halftime show highlighted by Beyoncé. Rubin styled her, and the entire entourage, with a result of never-before-seen success. Check out the show here.   

When you experience a massive shift in your business comparable to Rubin's, knowing how to handle the new paradigm of normal can be overwhelming. Yes, there were orders from major luxury retailers, but the Beyoncé effect turned his world upside down overnight. Not only did he have to re-think his operations model, but he had to quickly make some hard decisions as he experienced this huge growth phase in his business.

Rubin continues to introduce bold designs and differentiate himself from the competition. Rubin has definitely exercised his business muscle while maintaining his creative prowess.  He is a fantastic example of how form combines with fashion to craft a successful business and unique customer experience. 

Watch my full interview with Rubin Singer below.