Current Executive Vice President at Southern Glazer's Wine & Spirits
Scott has 35 years experience distributing spirits and wine across the US. He is the Current Executive Vice President of Southern Glazer’s Wine and Spirits, the largest spirits distributor in the US, where he is responsible for distributing the portfolio of spirit brands and Fever Tree across all Central US states. Southern Glazer’s distributes the major global spirit brands in both on-premise and off-premise accounts across the United States. Read moreView Profile Page
A pleasure to have you with us, Scott. Can you take us back to the moment when you first started distributing Fever-Tree at Southern Glazer’s? Maybe you can share a bit of context to the agreement and set up that you have with the brand?
I started representing Fever-Tree in 2016 and that coincided with the time that Southern and Glazer’s merged and also the time that we did the new agreement with Fever-Tree. Basically, it was July 2016 and that when I picked up my first experience with Fever-Tree, right at the outset of our company’s merger and the injection of Fever-Tree into our relationship.
This is an on-prem distribution agreement, between Southern and Fever-Tree?
On-premise is a big driver, but we also represent the brand in the off-premise, as well. Not exclusively, in the off-premise, but we represent it in any of the off-premise accounts, where we sell the brand and that we also sell spirits.
When these distribution agreements are signed, is there any exclusivity with the brand? What are the responsibilities and terms that Southern has with a brand like Fever-Tree?
Because of the dynamics of the US market, every state is a little bit different, with regard to how spirits are sold. But as far as the Fever-Tree brand is concerned, we do have the exclusivity in the on-premise arena, for any licensed accounts for spirits. Typically, in the majority of states, we have that same agreement if, in the off-premise, those accounts are licensed for spirits, then we have that exclusivity. It does change a little bit as you get into these larger, national chains, such as things like Walmart, Kroger, large grocery channels. At some point in time, those chains determine that they want to buy direct from the supplier, on a non-alcoholic product. In that kind of situation, the business would migrate from Southern Glazer’s to a direct relationship between that chain and Fever-Tree.
But you wouldn’t take another mixer, in your portfolio, now you have Fever-Tree? Are you bound by exclusivity to take another premium mixer?
Prior to taking on Fever-Tree, we really didn’t have any kind of consistency across our markets of the brands that we represented. It was a locally-driven decision that people would pick up different mixers that made sense for their particular market. We were not required to divest any of the mixers but from a corporate direction our priority, particularly in the premium mixer category, is exclusively on Fever-Tree. When my boss, when our company, are asking what’s going on, we have specific goals that we’re tasked with, for Fever-Tree and that’s not the case with other brands that we don’t a national alignment with.
We don’t look for additional brands, because we feel that Fever-Tree is the right fit for us and the right category for us. We’re not entertaining looking at, as an example, to take on distribution of Q.
How do you look at Fever-Tree, as a part of your portfolio, with the spirits that you have?
Fever-Tree is a complementary item to our core business. Our core business is the distribution of wine and spirits. Obviously, Fever-Tree is a non-alcoholic item that is consumed, almost exclusively, with spirits, in a cocktail. It’s tremendous, very profitable; it’s an add-on for us. It’s something that helps with our teams and our sales consultants, calling on accounts, to develop drink menus with high-quality products. The beauty of Fever-Tree is that it aligns with all of our spirit brands. Regardless of whether we’re pitching an account on Tito’s Vodka or we’re pitching an account on Tanqueray gin or an account on Absolut vodka, we can align Fever-Tree with any of our supplier partners, in the spirits world.
Would you say it increases the amount of spirits that you sell?
For us, it helps us, as far as building a more important relationship with the customer, because we have the spirit business with them. If we represent Tito’s and that customer wants Tito’s, they have to get Tito’s from us. But if we’re able to provide them with an answer for a high-quality mixer product that their consumers are going to love, then that just makes us more important for their overall business. It does provide an opportunity where we can use Fever-Tree. If they’ve got a core list of drinks, where they have 10 drinks on that menu, and maybe six of those drinks use our spirit brands and the other four are with our competition, but we can still secure Fever-Tree in those cocktails, with our competitive brands. That does give us an opportunity, as we continue to build that relationship that maybe we can knock off a couple of those competitive brands, with brands of our own.
Can we just walk through the process of distributing a product, like Fever-Tree, with the other spirits that you have, in your portfolio, to on-prem accounts. If you could talk about different approaches that you have to restaurants and bars or whether you group them as the same and then what that strategy would be?
First and foremost is to educate and train our sales force on the Fever-Tree portfolio, so that they know everything about the product. How the product is made, the attributes of the product, the taste of the product, so that they are very knowledgeable about Fever-Tree. They already have the knowledge on the spirit brands, and we continue to upgrade that knowledge, as well. But it’s critical for them to understand the Fever-Tree portfolio. Once we have that knowledge and they’re calling on the gatekeepers, the buyers, in the on-premise accounts, they’re working to develop cocktails and utilizing the Fever-Tree products, along with our spirit brands.
Particularly in the on-premise world, despite the fact that you do have national chains, you have a high percentage of independent accounts. It’s a sales tactic for each individual account, where you’re having to make this presentation, show the features and benefits of using Fever-Tree and then to drive that customer to be a Fever-Tree commit. You get a commitment from them and utilize that portfolio. It’s all done at the account level, with our sales consultants driving that distribution.
So your sales guys will know the drinks that that account would normally have on the menu and then the sales guys would come in and say, right, you can use Fever-Tree in this manner or this part of the portfolio here and there, in this drink and then upsell Fever-Tree to the account?
Correct. As an example, what you’re doing is, you’re trying to find the target you need, at first. Initially, for us, with Fever-Tree, we were targeting exclusively the premium end of the on-premise accounts. Because, certainly, the price of the product is considerably higher than Schweppes, as an example, which is predominantly used. In this day and age, with the newer consumers coming into the market, they are a lot more concerned with the overall drink experience and not just the quantity of drinks or how cheap the drink is and how many they can buy. They’re going to drink a little bit less, but they tend to drink better.
When I grew up, you were ordering a gin and tonic or a vodka and tonic and you’d utilize the well brand. Now, people are requesting their favorite brand, whether it be Absolut or Grey Goose or Tito’s, along with the tonic. With this premiumization of spirits, it really didn’t follow in the mixer category. Now we’re finally seeing that people are looking for a higher-quality mixer, something that is perceived as very natural and high quality, in taste. That’s an opportunity to upsell to the customer, so rather than selling the well drink, for a cocktail, they can sell a premium drink, off their cocktail menu. Obviously, the cost of the ingredients is higher, but the financial return for that customer is higher, as well, because the price of the drink that they are selling is significantly higher.