Speaking Truth to Power w/ James Pannett of William Grant & Sons

Hello, my name's Adam Durrell and I'm the host of the Account Experience podcast. You know where we sit, we're in the aisle of B2B account management and the gondola of Voice of Customer. That's why we call it Account Experience. And every week I get to talk to an industry leader to share best practices and tips to help you develop your own program. So this week I'm really delighted to talk to a leader in the beverage business. I'm going to introduce to you James Panett, the commerc director of William Grant and Sons. You know, you'll know the brands, the whiskies that they sell, that's the Glenfiddich and the Balvini. And today I've got a very nice Hendrix that I'm hear the ice clinking there and my bottle of Hendrix by the side of me. I don't normally get to do day drinking, but this was a special occasion. Welcome James, to the Account Experience podcast. Cheers.

Cheers. Thanks.

What are you drinking today?

I've got a Balinese here actually. So it's a 14 year old Caribbean cask, Balvenie whiskey, which is very, very nice. One of my favorite.

Okay, well maybe we can get to talk about a little bit of the brands a bit later on, but why don't you. Let's zoom back a bit. Tell us about the company you work for, about William Grant, introduce it to everybody at Sydney.

Sure. So yeah, William Grant is a family owned business still owned by generations of the family who passed down. So we're a luxury spirits business. As you've talked about. We produce some of the best whiskies in the world. The likes of Glenfiddich, the Balvenie, Tullamore, Jukes, Elsa Bay, many others as well as obviously some fantastic gins, rums and vodkas. So yeah, across the board it's a luxury spirits business and a great category and a great business to work in.

And give me a sense of how big some of these brands are, I think. Isn't the Glenfiddick one of the best selling whiskies in the world?

It's the most awarded whisky in the world. Yes. These are global brands and superb quality liquids and yeah, very, very enjoyable to work on.

And tell us. Why don't you tell us a little bit about your personal journey, about how you got to got there. Because you've not been working with William Grant all your life, have you?

I haven't, I haven't, no. So I spent 10 years, just under 10 years working across the Mars group of businesses. I worked in confectionery, ice cream, pet food and many others. And then brief stints working for Beiersdorf selling skincare to Boots, which is always good for the complexion. And then finally moved on to the alcohol world. So just came out of nine, nearly 10 years working for Molson Cause and then laterally sort of last two and a half, three years with William Krantz.

That is quite a journey. So you've really been around the CPG business quite a lot and I have to say your skin is looking beautiful.

Thank you. Thank you for that, Adam. Yeah, I've worked hard on that. So is the Nivea Q10 still working its magic? But yes, yeah, yeah, over 20 years, I guess, working in CPG. So yeah, definitely a place where I feel comfortable.

Can you draw a thread between the companies is the things that they have together, especially when they think about how they. How they think about customers.

Yeah, definitely. Actually, yeah. I think, I mean Mars is obviously a great business for sort of standard FMCG training. So it really sort of brings you into the world of fmg, teaches you how to do it properly. So great training bed. Really love the business and very people cultural. So I found the people culture at Mars was what's. What led me to all the other businesses I've gone to actually. So that focus on people learning and development, that culture of collaboration, I think those are probably traits I would say are consistent across all of the business I've worked in.

I mean it is interesting to see this great spread of brands that you've been in. I also really have the utmost respect for Mars. When I was growing up, that was the place to go to if you were going to refmcg, as it was called then. Training.

Yeah, yeah, a fantastic business. I've still got a lot of friends from my time at Mars, met my wife there. So yes, it's done a lot for me personally and professionally.

So let's bring, let's come sort of up to date. One of the reasons I was recommended to speak to you was multiple sources actually said, got to speak to James. He is the best person we know that speaks truth to power. So I wanted to try and unpick that a bit and really understand what that meant. So I'm going to start a bit lower down and then talk about something closer to the average retailer or independent trades are, that is about joint business plans. So that's really what I want to dig into.

Okay.

I'd like to start. Tell me about how you View putting together a joint business plan and is it something that really should exist as a live topic or is it a nice fiction for partners to have between each other? Tell me more about how that works.

I think the first question to ask with Joy business plans is does it work for both you and the customer? I think Joy business plans, lovely. A lovely thing to have a feather in your cap as account director, account manager, commercial director. However, if they don't mean anything to you and they don't mean anything to the customer and no one lives by them, I think they are, to your point, just a piece of paper and a fairly pointless one at that. I think what you really or what I've always endeavored to do is drive my teams to really ask the question of is that something that is going to grow the business for both us and the customer? Is is there joint value creation there? Is there something that we both want to work towards? And if there is, I think you can build your joint business plan around that and you can, you can work together to, to look for that greater gain.

So I mean I've also been involved in business plans and they start out great, sure. But I mean as things go along, as you start to diverge or people are not sticking to the rules, how what have you been able to do to keep people honest on these things as they go through?

I think exactly that. Keep people honest. I think I am a great believer. I mean obviously business has come on a huge amount in the 20 odd years that I've worked in here. So data has become far more centric. People can make life decisions using agile data, dynamic data. So talking to the data and talking to objective facts rather than views and hunches I think is really important to keep everyone honest in a relationship, I think. But it's also checking in along the way. So I talked about it needs to add value to both parties. I think it's having those quarterly reviews with customers to say is it working for you? What are your metrics telling you? Margin growth, customers coming across the threshold, all the things that they want to know are happening. Is the joint business plan helping them to do that or is it actually just more admin for them? Is it just more meetings, things that are taking up time? So I think provided it's working for both businesses and their KPIs are moving in the right direction and you're keeping people honest to those, those numbers, then that's the key thing.

Yeah, and but I mean I want to drill down specifically on this because if you Think about what's been happening in the last couple of years. I mean, there's been so much turmoil in the business world and especially in the CPG world, you know, shortages or whatever, energy prices going up. And I'm guessing, you know, we're all putting our prices up. So how can you. How are you. How have you been able to keep people honest on that plan? How, you know, how much flex do you do that? I'd love to know what your tips are sort of navigating. Navigating through that.

Yeah. Look, it's a. It's a hugely dynamic and unprecedented time for us all. I mean, the costs in our cost base are going up significantly, as they are in all CPG businesses, I believe. However, we know our customers costs are going up in terms of servicing their stores, staffing their stores. So all of that is going on. So I guess in terms of that honesty, then, you know, we need to front up two conversations, tough conversations we need to have with customers in terms of the cost of our products into their businesses. But then equally we have to share with them models of how we believe that can work for both businesses in terms of, you know, whether that's the elasticity of the pricing, whether that can be passed on to consumers, but then also understand what are the pressures that they're under. So if they're competing with discounters or they're competing with, you know, competitors across the way that are pricing their products incredibly competitively, which they will be, then how does that value creation work for both parties? So can we all sell more? Can we make more money or. Or do we accept that there'll be a volume drop off, but we're going to make a higher absolute margin through higher margins across both businesses. So I think it's having those tough conversations. We need to have them. Adam, is probably the key thing and being prepared to flex a plan when a plan isn't working. So, yeah, course. Correct.

I guess I'm guessing because of the luxury brands you've got, probably the last thing you want to do is flex the price because you want to keep the value high out there. Although I have to say, and I bought my Hendrix today, which I bought in the Albert Hein, a local Dutch chain here, I was able to get a discount. So, you know, it was like because of a member there and I was quite surprised. I've not often seen your brands discounted, so I'm guessing there's some promotion goes on behind the scene to allow that to happen. That also worked very well for me. We stocked up. So that's one lever you can pull. What about when we think about other levers like experience? Because, you know, this is particularly my bag. Are you, are you able to make allowances in that or can you trade experience for price space? I'd love to dig into that a little bit, James. Yeah, we.

So our actual commercial vision is about driving premium brand experiences and driving and executing disruptive brand experiences. And that's because you need to understand the business you work for. Right, So I don't work. There's huge spirit companies out there like Diageo who are significantly larger than William Grant. And therefore if we just try and do what they do, then that doesn't bring anything differentiated. There's nothing new to that for the, for the customers that we serve. So we're very much about those disruptive brand experiences. And to bring that to life for you, we did some work with one of our customers over Christmas, which was a whole front of store display where we weren't investing necessarily in promotional prices, although there was some promotional price investment in that, but it was more around how do you bring to life for you, for I, for consumers? How do I make mojito over Christmas? How do I make a Hendrix cocktail or a Glenford egg and old fashioned? So people need to be educated, they need to be inspired. And that inspiration and that education, particularly for a category like us, which is a discretionary purchase, at the end of the day, we need to inspire people to buy. And whether that's online, in store, bricks and mortar, whether that's in a pub or a restaurant, all of those apply.

Yeah. And I think you, I mean my sense also as a marketer is that because it's a luxury brand, this is something that people might treat themselves. So and in that sense of having a luxury brand, you don't want to go for the, you know, the Tesco's Basic whiskey. I didn't mean to insult Tesco's Basic there, but you know what I mean? You know, on a non premium brand that it doesn't feel like the same reward, does it?

No. And I think what we're finding with the global recession is people will always treat themselves. So the last recession we went through, we talked about this barbell effect where people went up or down. So people did shop at the discounters, but then they continued to treat themselves. And one of the trends we're seeing currently is people are maybe not buying as much volume as they were previously of premium spirits, but they are prepared to trade up and treat themselves. So if they're going out less frequently to pubs, they're spending more when they're there because it's a special occasion. So therefore we play into those special occasions and giving people those treats in.

Home or out of home, that's a really nice way of thinking about that. Let me move further and say when you're dealing with retail change, modern retailers must be quite a challenge. How do you personally do that? Are you able to put yourself in the shoes of the retailer? And if so, how does that affect the way that you, you think about doing a deal with people?

Yeah, I like to, I remember doing some work, slightly off topic, but doing some work on Stephen Kobe many years ago, the seven habits of highly Successful People. And he talks about, talks a lot about seek to understand and then to be understood. And I think with, with customers, you know, if, if you or I step into a greengrocers, then we want them to treat us as a customer. We want them to know that we're making a roast that day. So what vegetables would go with that roast? And I think the same applies if you're talking to a big retailer is you need to understand what metrics are important to them. So what might work for some of our discounters might be very different from what works from some of our top end retailers. So I really strive to think like the retailer in the first instance.

And how does that help? I mean again, are you able to sort of visualize what metrics they've got? I mean they've got certain buyer matrixes. How do you, how do you figure out that win win situation that works? I'm guessing, you know, my experience has also been they're really tough negotiators.

I think they're tough negotiators but I think they're keen to grow their businesses. And I think I heard your previous podcast with Nigel and I worked with Nigel for a long time. And also Nigel talks a lot about a good buyer will always want to grow their business and bad buyers will see negotiations as very, you know, it's them or us. Win, lose, lose, win. I think if you can really see past that and think about the win win. And you know, I like to think of it as almost a customer engagement for me is almost a pyramid of levels and the bottom level of that is don't make me look bad. So the buyer, the buyer does not want you to make him look bad. He or she does not want you to make her look bad. You know, so don't not deliver me stock and leave Me gaps on my shelves do not mean that I'm uncompetitive versus my retailers down the road. So ultimately don't deliver those brilliant basics. And that's the level one. I think the second level is make yourself look good. So grow your brand. So at least they don' have a problem with your brands. And your brands at least are the growth ones within their portfolio. The next level up for me then is grow my category. So actually not only grow your business, but grow my overall category, my spirits business. So bring that inspiration, bring that thinking, drive people into Tesco's. If it was Tesco's or Sainsbury's or Asda, drive them into the category. And then the top level, which I think is really interesting, is make my business, you know, make me look great by growing my business. So actually, how can a spirit supplier actually drive people into the whole of their store and drive footfall which will then increase the basket overall and then, you know, you're making them look like a hero in their business. So I think if you try and look down those levels, then they are interestingly built like a pyramid. Because what I have found is you could be having a fantastic relationship with a customer, working on some inspirational displays, but if you stop delivering the basics, it'll all tumble down. So being razor focused on those basics is key as well.

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By the way, I've got on my desk at the moment a book I've just finished called the Jolt Effect. And I'm not pronouncing it for any particular reason, but it talks about the thing, the very thing you're talking about. That bottom level is not so much the fear of missing out, which is a traditional way of selling it really. It talks about how buyers have got too much choice these days and they're actually more worried about the fear of messing up, which is exactly your point about that bottom level. Don't make me look bad. Yeah, you have to get through. You know, that's. If you start at the top with that, you're gonna look great. It's one way of selling, but you really have to get the base level done. So. Really interesting. I recommend the book actually. It's.

Yeah, the Jolts Effect. I will have a read. I will have a read.

But it really is interesting. I love that pyramid, by the way. I must get a copy of that from you. So let's now switch the focus a little bit from a modern trade, highly organized, lots of data at the center of it. And let's flip it to your other market, which is pubs, bars, that sort of thing. So first of all, maybe you can characterize about how you see the different buying patterns on about what the experience is like for buyers in that area.

Yeah, it's obviously a far more fragmented part of the marketplace. So you don't have, I mean, you've obviously got some big pub groups in there, bungay, Michelin butlers, to name a few. And they clearly, they have more complex buying structures and more brands, et cetera, within their portfolios. However, you've also got a huge lease and tenanted sector. You've got a huge independent free trade sector. And I think what you find with these guys is a lot of them are they maybe run one pub, manage one pub, own one pub, they maybe run two or three. Maybe they're a small pub group in a region, or maybe they are a national operator like the ones I just mentioned. So they will all again have different needs and different burning platforms. So, you know, in the current economy, some of these independent pub owners are probably cash strapped from a day to day. So even little behaviors like can they afford to go to their wholesaler and get a delivery versus up to the cash and carry, because actually it's less of a cash outlay. So I think really thinking about how their, how their economy is hitting them personally and what pressures we can help them take away, because staffing is another huge issue. Yeah.

And I was just listening to something the other day about the number of pubs that are closing. It's a really tough time for the sector, isn't it?

It is incredibly tough. And you know, whether it's Brexit, whether it's these other things that are driving some of the staff challenges, I think, you know, staff training is important and particularly in an industry like ours and in a category like ours where we're so dependent on the perfect serve of our products. So if we want. You're drinking a Hendrix and tonic now, you know, we want to make sure that's being delivered in the right way with the right mix of Hendrix and tonic with cucumber.

That's right.

And I say, you know, those small things are really important in terms of the delivery to the consumer. And we talk about a triple win. So what works for the brand, what works for the customer and what works for the consumer. And ultimately that consumer element is really important. But if we want our customers to do that, then we need to invest in them to give them the tools to deliver that. So if I'm a small business owner, help me with the garnishes, help me with the training of my staff so that they know how to mix these cocktails, help me with the glassware or the pos. And so all of those things become important when we're talking to traditional training.

Yeah, I love that. I also want to relate a great story. I heard from Heineken when they were on stage a few months ago. They said that trust is so important because, you know, in many cases the guy that delivers the beer is. Has to be trusted almost with the keys to the. To the bar. They let themselves in in the morning, fill it up and, you know, I mean, if you're interesting in trusting your. Or something like that, that really shows that brand loyalty. I know you're not quite in that same rapid delivery business, but it's. There is something there. You are a trusted partner. Those brands are why the people come into the pub in the first place.

And I think Heineken, whilst we're talking Heineken. Heineken did a great job with their smart dispenser system because it was something that they brought about really ultimately to deliver a better quality of beer to the end consumer. But also it helps the operator or the owner of the pub because they don't then have to necessarily clean their lines or they can rely on other people with more, more skills to do that for them. So they can ensure it's the quality of product and they can also ensure that all of that helps. So that. That for me is a great example of that triple win of brand, consumer and customer, because everyone's winning in that and ultimately it should sell more. Bit.

Yeah, that's a. We also have one downstairs in the office here. It's really nice innovation. I think that shows they listen to the customer and innovate as a result of that. One of the things that, you know, when you and I spoke before we spoke for a few minutes, you presented a word that had not heard before, which was cordage. I even blogged about it.

I'm just.

I wonder if you can define it because I couldn't really find. It's very difficult for me to find another definition. And I wonder if this is a proprietary word for your business, but I.

Don'T know whether it is. Then we are focused on our route to consumer. So our root consumer model is about making sure we target the right brands into the right outlets across our business and across the globe, actually. So. And part of doing that is setting the right standards, so those brilliant basics, but also then making sure that we have the right callage patterns. So by that we just mean which outlets do we want to call on in order to ensure that we're supporting them in the right way to hit those standards? So it's really what percentage of the outlets that we're targeting, are we actually sending someone across the door to ensure that they're working with our partners?

And how has that changed over the years? I mean, you know, we see a lot of people in the beverage business moving to electronic ordering models. How do you find that? Is that complementing the work you're doing or substitution? Can you, can you tell us a little bit about your approach to customers in that sense?

Do you mean EDI when you say electronic ordering?

It's even more than that. I mean, for the smaller outlets, they might be ordering through a portal or electronically. I just wonder if that's the, you know, I think EDI is more, more for the, the modern trade, perhaps.

Yeah. And I think B2B. So business to business platforms, I think for ordering, I think are clearly again, beneficial in terms of if it takes time out for the traditional trade for them just to press a button to say, right, I'll have the same order as last week, so please deliver on the following day, then obviously that's great for them. Clearly it's beneficial for everyone in terms of efficiency and cost out. So I think that works both parties. I think that's something. Business to business, business to consumer. E commerce and Omnichannel is something that we've talked about a lot in the business. So if someone wants to bump into Hendrix across their path to purchase wherever they are, whether they're online, in store, in outlet, we need to make sure we're turning up consistently. And I think that that is super important. And in today's world, online is playing an ever more important part of our business.

So I'd like to sort of start, I think, looking into the crystal ball a bit as 2023 develops. You know, still unsure how the macroeconomic environment is working out. So how are you looking forward in your business to specific things that you're helping the trade with?

Yeah, so I think I've talked about staff training. I think we'd like to make sure that we're continuing to offer inspirational cocktail. So we continue to work. We have a job in our business which is a great job run by a great guy which is essentially drinks development experts. So his job is to take our brands and really bring them to life in the best possible way. So we had a Hendrix NEP Junior we launched last year, which is all about the sea and the botanicals of the sea up in Girvan. And he's created some fantastic cocktails with a mermaid tail coming up the top of them. We had one customer aging the product under the sea for a period of time. So we've had some really exciting stuff and that type of inspirational content because it's so bloggable and it's so socially hot that it just enables us to drive us and the customer to drive trade through excitement and inspiration. So we'll continue to focus on that. We'd like to continue to offer. We have some fantastic brand ambassadors that go out and work with our customers on incentives. They'll take them off to some of our distilleries and immerse them in our brands and allow them to then immerse their consumers in our brands. So we'll continue to focus on that. And then, yeah, with our big retail partners, we'll continue to focus on ensuring we now have those brilliant basics, as I've talked about, but then we continue to look further up that pyramid. So what are the exciting things we can do in 2020?

I love the idea of the brilliant basics and, you know, let's talk about some of the exciting brands that you've got. You spoke before about something which is about using waste in a very creative way.

Yeah. So we have a brand called Discarded, which is a fantastic brand. So tell us about that. Yeah, Discarded. The tagline is it make discarded makes waste taste great. And we've essentially taken the offshoots of a number of different industries. So, for example, throwing away banana skins is turned into, through the distillery processes, is used to turn it into an absolutely delicious rum. So discarded banana peel rum. We also have a grape skin Chardonnay vodka. So these products are available now in some of our major retail partners and they're just a way of really creating that sustainable economy, regenerative economy, where we're using everything we possibly can again to create some fantastic products.

I'm guessing it's also a really good story that you can talk about because it just ties everything together. It's a story about the brand and about your heritage, but also it's a sustainability story that must be also 100%.

And it's right bang in the space of where consumers and customers are. They want to be seen to be doing the right thing. You know, you only have to talk to any of the major retailers about their scope 1 scope 2 scope 3 CSR objectives, which is not just about them delivering net zero, it's about their suppliers delivering net zero and then their consumers delivering net zero. So that's a huge task for them and we need to be seen to be supporting that. And things like the discarded brand are just a Great story for us to play into in that space. And it's more than a story, it's a genuine. If you speak to any of the owners of the business, if you talk to the brand team, so passionate about, you know, doing the right thing and looking at every possible way we can take waste out of society, including clearing up the streets of London. And at one point we did an activation which was picking up old umbrellas from tubes on the, on the trains in London and then turning it into a massive canopy down one of the streets in London, which was beautiful. So yeah, really using some fantastic activation for a moment.

Then I thought you were saying you were going to convert the old umbrellas into a drink, which I was thinking was really creative.

Well, that's one for 20, 25. Maybe.

I'll have a look at that one before we go. James, one of the as this theme is all about speaking truth to power. So if there's one thing you can leave us with which is like, and I'm going to phrase this, frame this really nicely because I think that your delivery is very much fact based. You know, you seem to be a man of quite economy of words, which I love really. But you speak to some, some of the biggest retailers out there and you have to look them in the eye and say, look, that's not going to happen. So is there any tips you can pass on about how people could be more successful about speaking truth too?

Yeah, I always say to my team, if you can look yourself in the mirror and you believe what you're saying and you can validate what you're saying, then there's no reason to hide behind anything. Just go and have that conversation. These guys are big retailers but they're also human beings and they want to make their businesses grow. So I don't think people should be afraid of the truth. I think they should just ensure that's exactly what they're saying is the truth and they can stand behind it. And I think provided we're all having honest, adult conversations, I believe we can, we can grow each other's businesses. So yeah, probably, yeah. Believe in yourself and validate your thoughts.

Again, it comes up in that book, I just read it. Radical candor is the word that they use, which is about really just being honest about stuff. I just don't want to work. Just tell them, James, I've had a fantastic time to speak with you. It's also great to talk about your brand and even enjoy them. I'm going to try and do this more often where we I speak to more brewers, I think.

Yeah, I would do if I was in your position.

Well, thank you so much for being on the Account Experience podcast, and I wish you all the best for this year, especially as you navigate the tricky macroeconomic environment.

No problem. Thanks for your time. Really enjoyed it.