8. Competing Against The Big BoysCompeting Against The Big Boys
The roots of Diageo:
renegade, guerrilla, underdog marketers.
John G. Martin brought Smirnoff to the US in
the late 1950s.
Built and dominated the vodka category for
30 years.
Brought Jose Cuervo to the US in the 1970s.
Built and dominated the tequila category for
30 years.
Invented the Prepared Drinks category
prior to Prohibition*.
*Survived Prohibition with
A1 Steak Sauce.
8
9. Competing Against The Big BoysCompeting Against The Big Boys
How ‘the big boys’ think:
“When all you have is a hammer….”
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10. Competing Against The Big BoysCompeting Against The Big Boys
What they are thinking about:
The “Big Boys” Analyst Headlines:
• USA Is A Competitive, Mature Market.
• Major Brands Struggling For Growth.
• Emerging Markets Boost Growth.
• Company Reorganizes To Enhance
Emerging Market Focus.
• Major Focus On Emerging Markets
Required.
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11. Competing Against The Big BoysCompeting Against The Big Boys
Neglected brands in the portfolio…
250
50
10
250
50
25
100
25
75
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12. Competing Against The Big BoysCompeting Against The Big Boys
There are only
two basic business strategies:
Low Price
(implies low cost producer)
Differentiate
This is your only option.
But how?
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13. Competing Against The Big BoysCompeting Against The Big Boys
De-positioning Your Competitor
Using their strength against them.
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14. Competing Against The Big BoysCompeting Against The Big Boys
Own this: “Not for beginners.”
• “We’re #1”: They sell millions of cases to the
mass market.
• Craft: “We are for people who can tell the
difference between mediocre and special.”
14
De-positioning Big Brands
16. Competing Against The Big BoysCompeting Against The Big Boys
• They have a giant factory:
• You have a distillery experience:
De-positioning.
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17. Competing Against The Big BoysCompeting Against The Big Boys
De-positioning
• They have a nameless, faceless factory
manager:
• You have a master distiller:
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18. Competing Against The Big BoysCompeting Against The Big Boys
Differentiation:
Think Beyond These Entry Level Ideas:
Smooth.
# of times distilled.
Where you’re from.
The quality of your water.
“Babes”
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20. Competing Against The Big BoysCompeting Against The Big Boys
Differentiate:
Tell Your Story to Consumers.
• Stories connect us to concrete
experience rather than an abstract.
• Stories convey emotions.
• You have a good story.
– Authentic
– Underdog
• The Big Boys have a story too, but it’s
usually very tired, a fake, or boring.
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21. Competing Against The Big BoysCompeting Against The Big Boys
Digital media is the great equalizer.
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22. Competing Against The Big BoysCompeting Against The Big Boys
You can have
your own tv channel.
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23. Competing Against The Big BoysCompeting Against The Big Boys
Your story is newsworthy.
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24. Competing Against The Big BoysCompeting Against The Big Boys
A story and a personality…
without authenticity or craft.
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25. Competing Against The Big BoysCompeting Against The Big Boys
How NOT to tell your brand story.
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26. Competing Against The Big BoysCompeting Against The Big Boys
Strategic Consistency
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27. Competing Against The Big BoysCompeting Against The Big Boys
Strategic Consistency
27
28. Competing Against The Big BoysCompeting Against The Big Boys
Lack of Consistency = Chaos.
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29. Competing Against The Big BoysCompeting Against The Big Boys
God’s Incredients.
Alaska’s Spirit.
Wasilla’s Soul.
Toby’s Heart.
Consistency creates a Brand.
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30. Competing Against The Big BoysCompeting Against The Big Boys
Consistency + Integration.
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31. Competing Against The Big BoysCompeting Against The Big Boys
Publicity Trumps Advertising.
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32. Competing Against The Big BoysCompeting Against The Big Boys
32
Publicity Trumps Advertising.
33. Competing Against The Big BoysCompeting Against The Big Boys
You can afford this: $250
33
34. Competing Against The Big BoysCompeting Against The Big Boys
$2.4 billion / year
34
Digital retailing: another equalizer.
35. Competing Against The Big BoysCompeting Against The Big Boys
Geography
• The lure of NYC, LA and Chicago.
• The path of least resistance often has
a better ROI:
– Black Velvet :
• #1 whisky New York state; no NYC
• Dominated Iowa and the midwest
• 100k cases in Sacramento, Stockton
– The Lesson of Tito’s.
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36. Competing Against The Big BoysCompeting Against The Big Boys
Craft is not about price.
• Its about “adding perceived value”
and ‘convincing your target you’re
worth it.”
• Price competition is the slippery slope
to nowhere.
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37. Competing Against The Big BoysCompeting Against The Big Boys
Seek Category White Space
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38. Competing Against The Big BoysCompeting Against The Big Boys
Smirnoff
Absolut
Stoli
Smirnoff
The
Herd
The
Herd
Smirnoff
Absolut
Stoli
The
Herd
Grey
Goose
The
Herd
Grey
Goose
Absolut
Stoli
Smirnoff
CraB
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Category Evolution
70’s
Late
80’s
Late
90’s
Now
39. Competing Against The Big BoysCompeting Against The Big Boys
Category Positions
Star
Cheapest
Value
Legends
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White Space
American Rum
In 1763 there were 159 rum distilleries
in New England alone.
40
No
pirates
allowed.
41. Competing Against The Big BoysCompeting Against The Big Boys
White Space
The Aging Population Bubble.
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43. Competing Against The Big BoysCompeting Against The Big Boys
United Craft Distillers
43
A
behind-‐the-‐scenes
holding
company
that
provides
markeOng,
sales,
and
financial
experOse
to
select,
high-‐potenOal
craB
disOllers
Canadian
CraB
Brand
CraB
Tequila
44. Competing Against The Big BoysCompeting Against The Big Boys
Focus.
• Not too many markets.
• Not too many accounts.
• Not too many flavors.
• Not too many products.
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45. Competing Against The Big BoysCompeting Against The Big Boys
Recap
• Small is beautiful
• De-positioning
• Tell Your Story
• Go digital
• Consistency
• Look for the White
Space
• Stay Focused.
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46
Martin Pazzani
Founder, United Craft Distillers
martinpazzani@unitedcraftdistillers.com
860-375 0426
Twitter @mpazzani
Facebook “Martin Pazzani”
