Sarah Hofstetter (2:37)

Welcome to today's episode of Creative Commerce.

Rachel Tippograph (2:40)

I'm Sarah Hofstetter and I'm Rachel Tippograph, and this is a show that talks about what's relevant in commerce for the world's biggest brands. Sarah, if I look back back at the themes that we've covered off in Brave Commerce, just off the top of my head, I feel we covered retail media at length. We probably spent a few years talking about that. And then in the last two years, I think we've also been talking about the decline in the Bev Alk category because of changing consumer taste preferences. Let's see, organizational design, different career paths. Any other themes come to mind?

Sarah Hofstetter (3:24)

I think you've covered on all of them. It's interesting what your point on Bev Alk. Just because I feel like of our first 30 guests, like 10 of them were Bev Alec, and it was just at the onset of COVID and everything was going up and to the right. And now we have some new guests that are coming up with these ideas on how we're going to turn from the downward trends back into the upward trends. So, you know, your point on Bev Elk is really well placed. We've talked about inflation and the impact of inflation. We have had lots of discussions about the role that AI plays.

Podcast Host/Interviewer (3:59)

Mm.

Rachel Tippograph (3:59)

Yes.

Sarah Hofstetter (4:00)

And we've had multiple conversations about the change in consumer behavior.

Rachel Tippograph (4:04)

Yeah. And it's interesting. You know, we get guests on the show, we start to identify these themes. And not to say that our guests don't have distinct point of views, but we start to hear the same thing over and over. What I find interesting is that we're about to get a alcohol guest onto the show. We know we've had a lot of those. But Brit is coming to the table with a perspective we have not heard yet on why he feels the Bev Alk category has fallen behind. I don't want to give too much away because I actually found his perspective so refreshing, and it's his. So we should let Britt speak to it. But without further ado, let's bring Britt onto the show.

Sarah Hofstetter (4:49)

Well, talking about commerce and with the chief commercial officer of Galawan and Spirits here today, Britt West. Brit, thank you so much for joining us. We have been waiting highly, impatiently for this moment.

Britt West (5:02)

Well, thank you, guys. I think it was going both ways, too, on the waiting.

Sarah Hofstetter (5:06)

Oh, I take plenty of accountability on this one. Scheduling with busy people is always a hard thing to do.

Britt West (5:12)

I'm happy to be here and thank you guys for inviting me.

Sarah Hofstetter (5:15)

I'd love to dig in specifically to, you know, obviously your core area of Expertise, which would be the wine category. And as an aficionado, it hurts me when I see that the category is. Is hurting. You guys are the largest wine supplier. You can't fix it alone. You need partners, you need distributors, you need retailers, you need restaurants, you need consumers. Who are you looking to as like your. Your pillars to show up differently, to get this training on a better track?

Britt West (5:52)

It is a big challenge, there is no doubt. But I would also say the reason I've been asked to work on this challenge is that it wasn't that long ago in the mid-90s, that spirits was in the exact same situation, becoming increasingly irrelevant. An aging population, lack of recruitment on, down on down the line. Right. And so there's good precedent to be optimistic. I'm a glass half full person, so I kind of believe you. Wake up and get going. Let's. Why. Why sit around, you know, to your point, and I think most of your listeners probably know, right, that beverage alcohol is a unique industry because of the high regulation and how it's segmented into the various tiers that you talked about. But I think fundamentally at the heart of it, there's a consumer issue. And so I try to work starting there and work my way backwards up the tiers of the retail, the restaurants, the bars, the distributors. Right. And work all the way through it. But I think if you were to, at 30,000ft, summarize this, you would say that the baby boomer generation was an unbelievably good wine generation. And that as premiumization was occurring, you know, kind of Starting in the late 90s, early 2000s, the wine industry looked great because everything was going up. The dollars were just going up and up and up and up, but people weren't looking at the future. And I don't think we're as concerned about recruitment and making sure that you were constantly filling the base with future consumers. And I think that's really the gap that we're trying to address right now, is the gap that was created in that period where premiumization made everything look good. But the penetration and the lack of recruitment towards legal drinking age younger people wasn't there in wine. It was being filled in craft beer, it was being filled in spirits and the cocktail renaissance and et cetera. That's not where wine was focused.

Podcast Host/Interviewer (8:01)

It's so funny, we've had so many different alcohol leaders onto the show and no one has articulated the paradigm shift in the way that you have, because what was absent from your outlook were things like GLP1 and just the pandemic and people becoming more conscious of their health. Like you're like, no, no, this is just pretty simple. Since the 90s, we haven't been recruiting new people into the category.

Britt West (8:26)

Rachel, to your point, yes, those things are out there, but I think in the grand scheme of things, they're small compared to recruitment. And I don't think wine has embraced and made itself relevant. We can talk about the different consumer segments where I think they've missed out on, but fundamentally, if we go and do our job against recruitment, those other things, the World Health Organization, like you said, GLP1s or moderation, they will take care of themselves.

Podcast Host/Interviewer (8:59)

I love when assessments come back to back to basics.

Britt West (9:04)

Yeah.

Podcast Host/Interviewer (9:05)

And so that's really what you articulated.

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Podcast Host/Interviewer (10:47)

Now what do you see as the playbook that's needed for the turnaround?

Britt West (10:52)

It sits in a couple of areas. We can talk about it. If I was to put it in three buckets, I would say approachability, affordability, and then I would say cultural relevance. The approachability part of it. To me, probably many of your listeners at some point in their life that they're honest with themselves have been there in wine. It is not great. When you do consumer research on wine and you say, if you're a beverage alcohol consumer, what's the number one reason you don't choose wine? And people say, fear of making a mistake. That's a hard dose of reality in my mind because what we did during that premiumization time was we told you that you needed to understand regions, you needed to understand sub regions, you had to know varietals and countries and years and winemakers and oh, do you know the right food and wine pairings? Right. I mean, this is an insider code that you better know or you're not invited to the club unless you someone who wants to really dig into it. That's a pretty hard way to have to come into something. And certainly I don't think it's how younger millennials and Gen Z saw wanting to appreciate beverage alcohol. So I think that's a big piece, the approachability piece we've got to fix. And there's a lot of ways to try to go about that. But I also don't think that retailers, since on your show we like to look at the full gamut here, retailers, that wine aisle is intimidating. Thousand skus sitting on a shelf in a grocery store. And you've gotta go as a consumer and decipher it all somehow. So there's, there's a great deal of work, in my opinion, around this approachability piece that needs to get done. And I can talk to you about even just from a format perspective, maybe how we're trying to solve that as well.

Sarah Hofstetter (12:46)

Can we talk about the formats? Because I'm totally with you. So I only got into wine relatively recently and then I, I got like really into wine maybe a little bit too, but that's a different conversation. But I do deeply believe that there is a massive amount of insecurity of like, am I picking the right wine? Am I going to mess it up? And, and the barrier to entry could be, you know, a price point because you don't want to buy a cheap bottle of wine. If you buy a cheap bottle of wine, it's not good. So then what becomes my, my willingness to enter the category. And you have challenged that sacred cow, the 758 milliliter, which I am big fan of, Big fan of, challenging it, because I think it brings the education and it makes it more approachable to your point, but also it lets people get to a point of trying without massive amounts of fear of wastage or whatever it is. How have you found the rest of your universe and the distributors and the retailers reacting to that when they're so reticent to change in general?

Britt West (13:51)

It's just now coming online, but the early results are excellent. What we're talking about here specifically, you know, some of your listeners may know whining cans. That's not actually what we're talking about. What we're talking about is the 200ml tetra format.

Sarah Hofstetter (14:07)

The boxes.

Britt West (14:08)

Yes, exactly.

Sarah Hofstetter (14:09)

I just want to contextualize for our listener. So tetra would be. Let's just explain what that is.

Britt West (14:15)

Sure. Your soup comes in it, right. If you buy like an organic soup or your.

Sarah Hofstetter (14:20)

Or almond milk or something like that.

Britt West (14:22)

Almond milk, exactly. Why is that format important? It's important from a trial perspective, as you said, because now, you know, I always say, you know, a consumer wants one glass of wine and we were trying to sell them four and a half. Right. And that's. And that was basically. Right. Just a complete mismatch. And when you think about it, compared to other types of beverage alcohol, distilled spirits, you could buy a 50ml, you can buy a smaller size, see if you like it. Craft beer, you can buy singles and see, oh, what kind of IPA do I like? Actually, you know, so the 200ml tetra is important because it actually, from a quality and freshness perspective, is the single best innovation you can put wine in as opposed to glass. It is better than the can format. And so from that standpoint, we are really believing that if we want everyone's first experience when they try one of our wines to be a great experience, Tetra offers the best possibility. It's interesting because then you start going down the rabbit hole on it. I mean, that's maybe thinking about it at. At retail, whether it's a weeknight or whether I'm just buying a warm meal at the grocery store. There's all kinds of applications for it. But there's also applications in restaurants and bars because not everything is a fine dining, you know, nice white tablecloth restaurant. Right. There are bars and casual places all over that didn't like carrying wine, because if a consumer walked in and asked, oh, could I have a glass of Chardonnay, they were basically, again, opening four glasses of Chardonnay and not knowing when they might have the next consumer ask for one, and there was a high perish rate. And so there was significant amount of waste that was being passed on to the consumer. I mean, most people don't know, but a rule of thumb from a restaurant and operator standpoint was I recoup the entire cost of my bottle on glass one. That's a steep price to pay. I mean, if you're a consumer, you are paying for the next three people that may, that may or may not drink that product. You know, and then when you start to go down the rabbit hole, you see festivals. There's people that don't drink beer at, you know, a music festival and are really happy, but you can't have glass at a festival. Right. And so, you know, resealability is also a very interesting one because people, you know, at music festivals or sporting events, right. It's nice to be able to reseal it. Maybe put it in my purse or put it in a pocket and like, I'll finish it when I'm ready to finish. There was just a lot there in terms of that format to like. And then, you know, Rachel, as you said, I mean about, you know, GLP1, so there are people that are looking for portion control. I mean, right. You see it across other cpg. And so, you know, this also gives that opportunity to go down there.

Podcast Host/Interviewer (17:28)

So going with your framework, approachability and affordability feels like we sort of checked at a high level. The last one you said was cultural relevance.

Britt West (17:37)

Yes.

Podcast Host/Interviewer (17:38)

And so is that where the differentiation comes in? Because everything prior, if Gallo's leading the way and it works, I assume all the other portfolios are going to follow.

Britt West (17:49)

Let me touch on one more thing on affordability, because I think it is a job to be done. Sarah said the words afraid about buying a cheap wine. We need to get back in the conversation of providing good value at different price points for different budgets. Because we will fail if wine is just for elite, college educated, six figure household income. So I mean, we have to be able to ultimately create wines that whatever price point you are drinking at, people feel good about the value that they're getting there. And I do think that, yes, that size then helps you in that regard because if you look across other types of beverage alcohol, you often see it's about the $2 a drink where people are thinking in their head. And so if I'm buying a 750 of vodka, that equates to about 250 a cocktail. If I'm buying a beer, an imported beer, it equates to about $2 a beer. So there's a magic number in that $50 to $2 range. To your point about moving on to cultural relevance, there's so many places that and spaces and consumer groups where wine just hasn't shown up to be relevant. We all know the demographics of the Hispanic population growing, particularly Mexican and Mexican American growing in the United States. And I look at the back labels of a lot of our wine brands that we're trying to speak to them and then we say things like, great with a tomato based pasta sauce. And you kind of sit there and you say, well, wait a second here. Like, is that really going to be culturally relevant to them? Sure. I'm sure a lot of Mexican Americans do eat pasta, but I mean, if we really want to talk about wine and food together, we need to be talking about all different kinds of food. And I just don't think we've done a very good job on the Hispanic consumer base of really trying to bring wine into because they're great beverage alcohol consumers. Strong in beer, strong in distilled spirits, but not wine. We have work to do there. You know, this cultural attachment piece is a lot of something. I've challenged our brands and brand teams to really, you know, go after so you can think about barefoot and the NFL. A lot of people were scratching their heads and saying, what does barefoot have to do with the NFL? Well, we needed to start somewhere and that's a pretty large audience base to start to go after. And the success we saw with the NFL, it was bringing about between two, two and a half million new consumers into wine every year. But it gave us the confidence that we could really start to look elsewhere too. Just within the past week, we've announced two deals, one which was on Mark west, which is America's number one Pinot Noir. We announced the Mark west deal with Major League Baseball. Major League Baseball is having a moment. It appeals to younger males. It appeals also touches on that Hispanic community. And then we also announced a deal with Vibe, which was a deal with the minor league baseball. So we're trying to do and lift things in ways where I would say our other competitors in beverage alcohol being beer and spirits, have shown up and wine just hasn't shown up before to give it a fresh take on it.

Sarah Hofstetter (21:21)

So what do you think the role of digital is in that regard? Because people could be searching for one, you can serve up another. The digital shelf is a great opportunity to do so. You're talking about these more and more key fish. Where the fish are. Does digital play a role here.

Britt West (21:35)

Yeah, for sure. It's interesting because wine is largely an impulse purchase. And so matching the digital space into what is largely an impulse purchase space is critical because. And I think that's when, once we can break down that barrier to trial and fear, then we start to see the role that brand plays. And certainly that brand in the digital space can really make a huge difference, because when I find something I like now, I'm that much more apt to keep it in my basket and refresh and become a repeat consumer of. And so, and we see that the data supports that a lot, is that if you can get into the basket with wine, you have a great potential of creating strong lifetime value with the consumer, which is terrific. But I think also amplifying some of these culturally relevant moments too, is part of the digital space that we need to get better at. If you close your eyes and think about what kind of wine presence and branding you see in the digital space, I don't know how your dinner parties look, but, I mean, those are pretty fancy dinner parties. There's a lot of stemware, there's a lot of meals that look like you must have slaved over it all day long. And we're trying to, in the digital space, make wine feel a lot more like, hey, this is good on a Tuesday. And it doesn't have to be in stemware and it doesn't have to be with, you know, your eight friends seated at the table, which. With the perfect flower arrangement and the perfect, I mean, you know, the stereotype I'm talking about.

Podcast Host/Interviewer (23:19)

Well, Britt, we could pick your brain all day around cultural insights that are impacting business at large, but we gotta ask you our famous last question. What's the bravest thing you've ever done?

Britt West (23:30)

I consulted my wife on this. I asked and she said, by far, marry a Brazilian. And then she said, no, seriously, you should think about it. But it was a good answer. You can find this if you dig deep enough. I left home at 14, and I had a career as a childhood actor. I did two national tours, one of Mame and one of Peter Pan. And then I was in the Broadway revival of Peter Pan. But I was thinking about your question, and I learned about all walks of life. I visited 40 states in 18 months. I saw different cities, I saw different kinds of people, how they lived. I truly believe it is what makes me so fascinated about consumers today. That kind of the passion for that really began there. But my parents still kind of scratched their head and said, I don't really understand how they agreed to this all to let me walk out the door at 14.

Sarah Hofstetter (24:30)

That's pretty extraordinary.

Podcast Host/Interviewer (24:32)

Yeah. What role were you in? Peter Pan.

Britt West (24:35)

I played John Darling in Peter Pan and I played young Patrick in Mame.

Sarah Hofstetter (24:41)

Oh, I am looking at the playbill right now. Oh, my goodness. The question really becomes, do you let us promote this when we release this episode?

Britt West (24:51)

Feel free to. I took the question seriously. I mean, so, so I really tried to think about it because I, you know, I. I remember when I left and started my own company when I left Bacardi, and I was like, but a lot of people do that. I mean, like, yeah, it was, it was a little scary. But I mean, like, I don't think it was the bravest thing I've ever done.

Podcast Host/Interviewer (25:10)

Wow, that was so unexpected, Brett. And we really appreciate you sharing. Do you still sing and dance?

Britt West (25:16)

Yeah, I keep threatening to. Now, some would say at our national sales meeting they have seen these kind of performances, but I don't know. I live in a small place and I always say that one day I'd like to return to community theater and do community theater.

Sarah Hofstetter (25:33)

Well, this seems to be working out well for you. So thank you for dropping your insights. But, you know, if you ever do want to get back in there, it's always good to have a backup plan. So thank you so much for joining us. It was worth the wait. My apologies for the delay in getting this up and running, but I know our listeners can be thrilled.

Britt West (25:52)

No, that's awesome. Thank you. And I really appreciate having you talk about this as a subject. I wake up every morning and feel it never feels like work because it's. It's a real challenge to try to go fix.

Sarah Hofstetter (26:04)

Fabulous.

Rachel Tippograph (26:08)

If you like what you heard and you want to continue thinking about cultures, meaning company cultures that foster product innovation, check out an episode we recorded last year with Proximo Spirits Lander. And again, if you like what you heard, write a review. Tell a friend.

Podcast Host/Interviewer (26:25)

Thanks for listening.

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Britt West (27:26)

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Hi, I'm Jackie Cooper, Global Chief Brand Officer at Edelman and the host of Touch of Truth, a new podcast launching on the Adweek Podcast Network. My dad gave me this incredibly smart piece of advice. Meet everyone once. As a result, I've met some of the most fascinating and inspiring people on the planet. Now on Touch of Truth, we're coming centre stage and sharing the mic to experience stories of truth, insights and and visions for the future that will challenge your way of thinking. Touch of Truth is available wherever you listen to podcasts. New episodes come out every Tuesday. I do hope to see you there.