Blog Entries

Lights! Cameras! Beer?

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Category: General Blogs  |  Tags: distributors, distribution

Warner Morris may be  the vp of operations for the Norcross, Ga.-based beer wholesaler Eagle Rock but part of his job has been keeping up to date on the latest TV shows being filmed in Atlanta. Because in a rather unique endeavor for a beer wholesaler, Eagle Rock is taking more than half of its new 800,000 square foot warehouse and committing it to the television industry, as the soon-to-open largest-under-one-roof television production facility in the U.S., Eagle Rock Studios Atlanta.
 
Talk about business ingenuity! It means taking something that’s been right under your nose the whole time—in this case, hundreds of thousands of square feet of extra warehouse space you recently bought but didn’t have any use for— and finding a lucrative new use for it. 
 
When the company was trying to lease one of its warehouses a few years ago after consolidating into its current Norcross facility, Eagle Rock crossed paths with television industry folks who were desperately in need of a place to shoot. It just so happens that Georgia has been quite successful in wooing Hollywood over the past several years—to the tune of becoming the third largest production location after California and New York in the U.S. And what’s more, the Hunger Games movies were also filming in town, gobbling up all the available studio space, putting even more of a squeeze on local television production.
 
Eagle Rock, an A-B wholesaler (featured in our March 2015 issue beginning on page 88 for the automated system at its new facility), quickly learned that Hollywood producers were virtually biting at the bit to get into the empty warehouse it was leaving as it consolidated into one facility. But Eagle Rock’s big Hollywood moment didn’t just end there. When it moved to its new facility in Norcross—a massive 800,000 warehouse previously occupied by Kraft Foods—this beer wholesaler only had need for about 350,000 square feet of that (the refrigerated side of the facility). What to do with the other 450,000 square feet? Turns out, Hollywood could use that too—big time. “Just from the connections and the relationships they built at our previous Stone Mountain facility, we realized, well we got this big giant 450,000 square foot thing, we can film more TV shows there,” explains Morris. And thus was born Eagle Rock Studios, which the company describes as a “Separate new entity and business endeavor, with common ownership with Eagle Rock Distributing.”
 
All of this makes for a rather entertaining thought: on one side of the wall will be conveyors running thousands of cases of beverages, while on the other, actors and actresses in costumes take to sound stages to rehearse and film their TV shows. I asked Morris if his workers will ever be allowed to take a break to watch the latest show being filmed?  “I think we might get to go over occasionally if we promise to be very quiet,” he says with a laugh. “At our old facility they film the TV show Devious Maids and they have basically rebuilt houses inside of our warehouse. I mean you walk around in them and you feel like you’re in somebody’s house. So it’s pretty interesting.”  Yes, Morris and his team have become true Hollywood insiders, a pretty glamorous proposition for a wholesaler with some extra space.
 
You can check out their new studios at www.erstudiosatl.com.  BW
 

Don’t trust ‘the future’

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Category: General Blogs

Maybe it’s partly because I am writing this just after “the biggest storm in New York City’s history” never quite made it past the airports, but I have been thinking for a while now about all the predictions about the future that are supposed to be certainties. But what if they’re not quite as certain as we all think?
 
Everyone, for example, predicts that consumers are moving to digital devices—digital this, digital that. That future shopping will be via the Internet, on a mobile phone, or on a website. Or, that the way we learn about new products will also be over our mobile devices, as will be the way brands send offers to consumers. Quite frankly, with all this computer screen staring, it’s enough to give you a headache. 
 
Sometimes you really want to unplug from it all.
 
I’ve been thinking about my Kindle, for example. I’ve been reading books from a Kindle for years. So far, I’ve gone through two versions of the device. Now, my second iteration is starting to act up and seems to be dying. Is it time to just abandon what was “supposed to be the way to read in the future” and go back to what effortlessly works, is able to last for decades—or even longer—and has more charm to it that a black and white screen? A regular, printed book?
 
I love my iPad and use it for countless things. But I’ve recently realized that I also love picking up a printed magazine, holding it in my hands, feeling the texture and listening to the pages crinkle as I turn them. I have never quite taken to reading long-form articles on my iPad. It’s not as easy on the eyes, and, let’s face it, there are too many other distractions just a click away that somehow interrupt. 
 
In the cover story I wrote for this issue of Beverage World, beginning on page 36, there is a lot of talk about the future. How the millennial generation is reshaping consumption patterns and literally giving the big, iconic, venerable brands a run for their money, so to speak. They’re proving elusive to these big brands and harder to appeal too for a variety of reasons. But there are also some signs that the venerable brands are marshaling themselves to the challenge and even in some cases growing again. It may, in fact, be too soon to write them off. 
 
Even the expert consultant quoted in the story admits at one point, “It’s the future, nobody knows.”
 
Maybe all the predictions we’ve heard about the beverage industry aren’t quite set in stone. Maybe we’ll be surprised to find the categories and brands we think will grow, and the ones we think will decline, may end up surprising us.
 
I used to field phone calls almost every day from people looking for information about smoothies. This was several years ago and it was predicted to be the next big beverage category. I don’t get those calls anymore. 
 
People have moved on to the next “big thing.”  BW
 

Pander express

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Category: General Blogs

It seems at least once a day I’m getting a Google alert linking to an article or blog entry about how the millennial consumer is changing the wine business. Some wine producers, for instance, are racing to meet millennials’ demand for sweeter products. Other marketers are cobbling together folksy details about their respective wineries’ histories to satisfy Gen-Y’s supposed quest for “authenticity.” 
 
And then I read about industry studies that claim millennials like to thumb their noses at consumption conventions and will, for example, drop ice cubes in their fine Cabernets and drink their Pinot Noir out of a red Solo cup with a straw. Because they’re millennials, damn it, and they’ll do things their own way. 
 
Look, I’m all for beverage categories adapting to evolving markets. The only constant, as they say, is change, and change should be embraced. 
 
But what marketers should be cautious about is undermining whatever cachet generations before have worked hard to build for their beverages. Don’t sacrifice premium positioning in hopes of wooing a few more members of a generation not particularly known for its attention span. You’ll be working a lot harder to win over the next generations once the current one migrates away from your category. 
 
That “authenticity” component that those born, roughly, after 1981 crave so much isn’t just about how something is produced or what size company is producing it. It’s also about the classic rituals that make consuming those products enjoyable and a journey worth taking. That means keeping the theater of it all, including appropriate serving vessels, intact. It’s true that millennials rail against pretension, but there’s nothing pretentious about heightening the drinking experience to maximize enjoyment. Instead of trying to bring your beverages to millennials, try bringing millennials to your beverages.
 
Over the course of these past few paragraphs, the m-word has appeared six times, which, admittedly, makes me part of the problem. I, like the rest of the media, have bought into the concept of the “millennial” (there it is again), formulated by Ivy League marketing MBAs to paint a very diverse and individualistic group of people with extremely broad strokes. My challenge to that generation: don’t let them. Quite frankly, those of that age group within my own social circle actually loathe being labeled with the scarlet M (and they drink their wine and beer in the appropriate glassware, sans straw and sans ice). I have a sense that that may not be such a unique sentiment. Gen-Y should be speaking up and speaking for themselves and not allowing them to be pigeonholed by the establishment. 
 
And, my challenge to the market: Don’t believe the hype. Market research can be rife with overgeneralizations in its attempt to find some order in data points that are really all over the map. No one knows your consumers better than you do. And they’ve gravitated to your products for a reason. To thine own self be true.  BW
 

Bottled water as lifeline

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Category: General Blogs  |  Tags: water

Hundreds of people gathered in downtown Flint, Mich., one day late last month to pick up cases of donated bottled water. It didn’t take long for 2,000 cases to be whisked away. 
 
Flint’s water has been an issue since last year when the city started using the Flint River as its source of drinking water. The city, arguably the state’s most economically beleaguered, made the shift so that it wouldn’t have to buy treated Lake Huron water from the city of Detroit. Residents were told that the shift would be temporary, until a new pipeline to another source would come online sometime in 2016.
 
But last month the city notified customers that is was in violation of the Safe Drinking Water Act because of high levels of triholomethane, a byproduct of chlorine used to sanitize the water. City and state agencies told residents that the water was safe to drink, but by that time residents began to complain about the appearance, smell and taste of the city water.
 
On the same day as the water giveaway, the Kroger Co. said it would send truckloads of bottled water to Flint-area stores and that it would lower the price of cases of its store-brand water by $1.00 to $1.99 in response to Flint’s water problems, MLive.com reported. The price will remain in effect through the end of February, the company pledged.
 
Kroger spokesperson Ken McClure said in a news release: “Access to clean, healthy drinking water is a fundamental human right. As Americans, I believe we typically perceive the issue of access to fresh water as an issue abroad. Here is an example right in the middle of Michigan, within Kroger’s operating area. It is our obligation to help.”
 
At the same time last month, residents in Winnipeg, Canada, were under a cautionary boil-water advisory for two days after the city found coliform bacteria in water supply samples. The advisory prompted one man to take to the streets and hand out bottled water with a message wrapped around. The message reminded Winnipeg residents that the Shoal Lake 40 First Nation has been living under a boil-water advisory for 17 years. Winnipeg gets its water from Shoal Lake.
 
Flint and Winnipeg were not alone last month. There was news of water advisories in effect in other communities, and retailers in towns and cities up and down New England were having trouble keeping bottled water supplies in stock after a huge winter storm knocked out power to rural residents, which meant they couldn’t pump well water.
 
I could go on with this list of instances where access to fresh, reliable drinking water is being denied here in our developed world, sometimes temporarily (this couldn’t be more relative than when you find yourself without fresh water). The bottled water industry has taken its share of dings from activists, some of whom question its fundamental existence. They should ask residents of Flint, Winnipeg, Maine and and a bunch of other communities where bottled water has been a lifeline, even temporarily.
 
Bottled water producers should never lose sight of their responsibilities as environmental stewards. But especially during times like these bottled water producers are part of the solution, not the problem.  Bw
 

Long live the Disruptors

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Category: General Blogs

It’s way beyond cliché by now to describe the beverage world as being in a constant state of change. The business is full of new products—heck, new categories of products, all chasing consumers with changing tastes.

To describe the sweeping changes taking place in the beverage world around us, we’ve often written about it from the point of view of the companies and the products or categories of products that seem to be most in the middle of that change. But we’ve not in a comprehensive way looked at the people running those companies and marketing those products, the individuals driving that change.

The cover feature for this issue has been perhaps the most fun and yet challenging feature we’ve attempted at Beverage World in recent memory.  It’s been fun in the sense that it’s been so challenging.

We wanted to define the group of people who are shaking things up most dramatically in the beverage world.  We choose to call it Beverage Disruptors, borrowing from the concept of “disruptive innovation” that is so prevalent in current business management literature. “Disruptive innovation” in a simple sense describes an innovation that changes a product or company or market in a fundamental or unexpected way.  Therefore a disruptor is a person who innovates to the point of changing the status quo, who changes things in a fundamental way.

To understand the editorial process that went into creating Beverage Disruptors would be akin to peeking into a proverbial sausage factory—you may not want to know how the stuff was made, but you may enjoy the end product nonetheless. Suffice it to say that all of our longtime editors,  Jeff Cioletti,  Andrew Kaplan, Heather Landi and myself, created our own lists, each approaching the assignment through our own experiences in observing the beverage business.

Defining who in the business are “disruptors” is worthy of debate,  then culling the list to 50 and ranking them certainly is as well.  Why isn’t so-and-so on the list? Why is so-and-so ranked so high or so low?  Is the list too long, or too short?

That’s what makes the feature a fun and interesting read, but it’s not intended just as an entertaining exercise. The core idea is to come away with new or hidden perspectives on the beverage business. The list is incredibly diverse in terms of the beverage territory it covers—we wanted to get to the change makers in all corners of the beverage world—and in terms of the individuals and how they have impacted the business.

Some on the list have disrupted based not on creating a new product,  but changing how the product is marketed (marketing bottle water to kids, for example). Some have disrupted by pioneering an entirely new product or product category (energy drinks, coconut waters). Some have disrupted by applying technology to how the beverage is produced and packaged (lightweight containers) or by putting a product in a different style package (craft beer in cans).

The list goes on, as do the insights. Long live the Disruptors.