Fever Tree: US Distribution | In Practise

Fever Tree: US Distribution

Current Executive Vice President at Southern Glazer's Wine & Spirits

Learning outcomes

  • Southern Glazer's strategy of pitching Fever Tree to on-premise accounts
  • How bartenders view Fever Tree and buy mixers
  • Advantage of Southern Glazer's versus Schweppes distribution
  • Fever Tree's structure of co-merchandising with spirits brands and Southern Glazer's
  • How the change in pricing of Fever Tree could impact volume

Expert profile

Scott Westerman

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 more

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.

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Audio

Fever Tree: US Distribution

May 27, 2020

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