New brand development and corporate culture

Talking at the World Whiskies Conference in Glasgow, James Espey, a 40-year veteran of the liquor industry gave delegates his personal insight into what can determine a brand's success or failure

James Espey The Last Drop Distillers

Talking at the World Whisky Conference in Glasgow last month (April 21), James Espey, a 40-year veteran of the liquor industry gave delegates his personal insight into what can determine success or failure when building a brand. Felicity Murray reports

James Espey has spent many years creating and building some of the world’s greatest brands including Baileys, Johnnie Walker Blue Label, the Classic Malts and Chivas Regal 18. He is now chairman of The Last Drop Distillers, a boutique marketing company for very rare and old limited edition whiskies, which he created with two friends and ex-colleagues, Tom Jago and Peter Fleck, in 2008.
He admits that although he’d had some great successes, he has also made very many mistakes along the way. It is OK to fail, he says. And it’s important to work for a company that accepts failure as part of the creative process.

Courage a must
“The first and most fundamental point is that new brand development is not for the faint-hearted,” he began. “It’s not a short term game – it’s about courage, tenacity and being prepared to set sail from the shore – if you don’t leave the shore you’ll never get to the other side.”
As an example, he described the extraordinary pan-Europe journey he had taken to fulfill a commitment while all airlines where grounded due to the Icelandic volcanic eruption. “You’ve got to be prepared to think out of the box,” he said, “and go the extra mile instead of sitting in a corner crying ‘why isn’t the plane on time, why is the volcanic ash disrupting my plans’. In corporate life volcanic ash is everywhere. Trust me. Why do 90% of all new brands fail?”
He went on to question corporate culture. If you are working for a company with a short-term ethos then you’re doomed, he said. To build a great brand takes time. It is about the future.  He talked of the difficulties in marketing a brand around the world and the inevitability of being told, “you don’t understand – things are different here”.

NPD
“Things are always different everywhere,” he said, and emphasized the importance of taking a multi-cultural, adaptable approach that recognized local nuances. You need to find what is common and balance the global strategy with the local issues and not to let one override the other, he said.
Another important point he made was that you should never have ‘a new product committee’. Remember the old adage: a camel is a racehorse designed by committee. The camel will survive but it will never be a racehorse.
He emphasized: “A committee is a collection of individuals who, as individuals, do not like to make individual decisions but are collectively able to make a decision that no decision should be taken. Corporate life is full of these people because by not taking a decision they avoid the bullets.”
He suggested forming a new product council of like-minded people who can genuinely help you think about these brands - and to have a “resident madman” that comes up with wild and whacky ideas. “The problem with creativity is that 90% of ideas are crap – but that doesn’t matter – you’ve got to encourage people to be outspoken, to get past the bureaucratic Dr Nos and fight to express individual views.”
Ideas are plentiful but commercially viable ideas are not. So it’s important to make sure it’s viable from day one allowing even for the most pessimistic financial forecast, he advised, adding that its important to remember the difference between a product and a brand. It is really quite elementary: tobacco and whisky are products – what we do is create a brand and an image, he explained. Take perfume, for example; if you buy Chanel you do not expect to buy it at Woolworths (as was) because the image is about how you buy it, where you buy it, and how it is packaged. He quoted Coco Chanel, one of the greatest marketers of all time: “Fashion goes but style stays for ever.” The greatest brands are those that take their time to build enduring style, he said.

Beware research
Research is essential but it is an aid to judgment, a substitute for judgment. Research cannot tell you if an idea will work or not. It will point out the failures. And the bigger the corporation the more is spent on research. Espey’s view is that you can’t beat ‘gut feeling’ – understanding built through experience and worn shoe leather. Big brands – and he named Ketel One, Grey Goose and Skyy as examples – are not usually built by big corporations (they are bought by them) but by entrepreneurs who have the courage to go out and do things based on a ‘gut feeling’.
Large companies spend too much time and rely too heavily on research. He said. For example, Baileys, the greatest liqueur in the world, failed in research because it was an alien taste. But it was launched anyway (in 1974) because the creator, Tom Jago, believed in it and he suppressed the research. On the other hand, Greensleeves - a green version of Baileys –, which he and Tom thought was a great product and that research indicated would be a great success, failed. Its mistake was the colour green.
Espey talked about when he came to England from South Africa in 1977, at a time when wine drinking was in its infancy with people – if drinking wine at all – drinking Mateus Rose, Hirondelle and Black Tower, while the rich and famous were drinking fine Claret. He talked about the launch of Pernod Ricard’s slightly dryer white wine and soft, non-tannic red wine called Plat d’Or, and the battle to not call it a Vin de Pays or Table Wine. Helped by a Rory Bremner BBC sit-com take on the Plat d’Or TV commercial, sales of the new wine brand rocketed – even in France.
“A global brand is nothing more than a local brand replicated many, many times. My advice is: do not rush to enter too many countries too quickly. Take your time, learn from your mistakes and modify your approach as appropriate. Keep your core strategy but think about what you are learning from your marketing - that is living research. Don’t think ‘I am going to build a global brand’ - you start by building a brand in a country and it spreads from there. And you adapt. Think global and act local. Respect local opinions but don’t let them override you – keep to your core strategy.”

The 10-year rule
“There’s never been a serious whisky brand built in less than 10 years,” he said. “You must plant your bricks on cement not on sand. If your sales take off too quickly be very, very wary. From acorns you grow trees. In 1993, wearing a kilt, I launched Chivas Regal when I was chairman of Chivas, on television in China and said “drinks less, drink better”. Eighteen years later it is the brand leader by far. At one stage Johnny Walker pulled out of China then went back in.  It takes time and it takes tenacity, shoe leather, PR, discovery and relationship building – you need to sell through not just to – so motivate the local rep to do wonderful things.”
He added that if a brand grows too quickly, it dies quickly and discussed the difficulties and wrong decisions made during the rise and fall of alcopops, Smirnoff Ice and Magners Cider.
“Remember, there are very few ‘flooks’ like Baileys,” he said. “Ninety per cent of all new products fail. It usually takes twice as long and twice as much cash as you had ever thought to break even and, finally, there is no straight line forecast . . . it is usually a hockey stick.”
Espey concluded with a number of NPD case studies including the ups and (surprising number of downs) in the creation and marketing of Baileys Irish Cream, Malibu, Johnnie Walker Blue Label, The Classic Malts and Chivas Regal 18.

1 April 2010