123 | When The On-Trade Toy Breaks: Listing Fees, Distillery Trips and the Pay-To-Play Trap with Chris Maffeo at BCB
Thanks a lot for being here. It's an honor. I see many familiar faces. The so called playbook of on trade. No?
Chris Maffeo:And it's very tough to say playbook because, obviously, there's no such thing as a playbook. You cannot really copy paste things. What I want to talk about is how do we move from transactional to really, you know, from transactional relations to a real partnership. And we are here. We entered BCB probably.
Chris Maffeo:We are hugging each other. We are bumping to people, friends, new friends, old friends. But it's very often by working in the industry, we realize that there are two sides of the same coin, the drinks industry and the hospitality industry. And sometimes these two worlds, despite being on the same metal, they don't speak the same language. So how do we actually manage to really say, okay, what does it mean to be a genuine partnership?
Chris Maffeo:Because sometimes it almost ends up as a kind of like empty word. Everybody's talking about we are partners, I love my customers, we have friends, we have family, but actually how do we make this happen? From what I understood, I think the majority here are working for brands, for spirit brands or other categories. We have customers, bars, bartenders, bar managers, and all the layers of the bars ecosystem, the hospitality ecosystem. Distributors, because let's not forget distributors, because distributors, importers, wholesalers, they are the enabler, they are the owner of the last mile, and if we don't include them, it's very tough to actually make anything happen because we also we almost talk always about brands and bars, but actually there is someone in between which is crucially important.
Chris Maffeo:And then obviously consumers, because very often again we talk directly to consumers. We have our Instagram pages for consumers, We have our ATL advertising, TV ads, wherever it's legal, billboards for consumers. But actually, it's not only about consumers. It's all these players, how they work together, and how I like to call it the DRINKS ecosystem because we are an ecosystem and we need to understand how we cohabit in the same habitat. Disclaimer here, I'm going to talk about investment and trade investment.
Chris Maffeo:Bear in mind that in some of the countries where you are residing, the investment to bars may be illegal, so I want to flag this that it may be applicable more in some markets than in others. There is a lot of investment that go into trade from a brand perspective into bars. So you can talk about guest shifts, the brands are usually the enablers of guest shifts. Listing fees, you know, that's the sad truth of entering cocktail menu, that everybody knows that cocktail menus are the big driver of rate of sale, velocity, however you call it, but very often for small brands it's very difficult to get in a bar because there is some investment required. Distillery trips, all the so called advocacy ecosystem, advocacy trips, distillery trips, master classes, training programs and so on.
Chris Maffeo:Competitions, sometimes it feels like that there's a little bit too many competitions out there. You know, activations and so on. And everything altogether belongs to what we can call the trade investment reality. There is always very genuine reasons why we do this, but sometimes, especially when I work with bars and brands and I'm sometimes a little bit in the in between, it feels very messy. Bartenders are jumping on competition left and right.
Chris Maffeo:They want to do one competition with one brand, another day with another brand, then they have a post on Instagram on another brand, then they do a guest shift sponsored by another brand, then they do a talk on behalf of their bar. It becomes very messy. And why is that? I've been working in corporate for many years before starting my own company, and one of the big reason is that everybody gets on trade, on premise, HORICA, however we wanna call it, on PowerPoints, you know. But then in reality, it's very few people that really understand exactly what it means to work with bars, work with hospitality, work and and from the hospitality perspective, to work with brands at the same time.
Chris Maffeo:So there is too much theory. There is too much boardroom or meeting room discussions, focus groups, talks about reading PowerPoints, PDFs, and very little in going to the bar. I remember when I was in my previous job, sometimes the marketing team would say, our sales never invites me to the trade, so I never go to bars. It's like, come on, you know, you don't go to bars in on in your free time. Just go out there and be curious.
Chris Maffeo:Be obsessed with back bars, menus, why a bartender is recommending a certain thing, why not, and so on. So on the way to execution, things get wrong because whenever I'm speaking to people, I have my own podcast. Whenever I bump into people, everybody agrees with what I'm saying. But then in practice, very often I know that the same two people that agreed with me, they had a fight in the morning. So where do things go wrong if you agree and then you disagree?
Chris Maffeo:It's important to bring people with you on board, and this one is important whether it's you as an employee in a company talking to the management, whether it's about talking to stakeholders in general, it can be brands to sales, sales to brands, logistics, finance, getting an investment. You should take probably the finance manager with you in a bar to really explain why certain things happen. And what the brand's relationship very often means, because as Nicolas was saying, the ROI is very often misunderstood, the return on investment. Either a purist of Excel, finance type of person will just judge on how much am I giving you, how much am I getting back. But very often, from a brand perspective, we are often very fluffy.
Chris Maffeo:It's like, no, it will pay back long term. This is about brand building. This is about brand awareness. We're building awareness. Who hasn't said that in a meeting or in a discussion with people?
Chris Maffeo:So nobody's gonna do it for you. You have to do it. You cannot just complain. And I say this to you, but I say to first to myself in the mirror every day. You cannot just complain.
Chris Maffeo:You have to be accountable for why doesn't he get it? Why doesn't she get it? Because you have to explain it. And regardless how busy we are, we have to be accountable. And if you have done everything, all the homework that you could do to make them understand, then you will make ultimately your life easier.
Chris Maffeo:There is one thing in general that has shifted in this industry. You know, the industry has always been quite it hasn't evolved that much, you know. Ultimately, it's it's still about moving cases from a distillery to a warehouse, to a bar, to a supermarket chain. But what has changed is that now there's a myriad of brands that were not there ten, twenty, thirty years ago. So things have dramatically changed in that side.
Chris Maffeo:And from a big brand point of view, whether you work for big brands or for smaller brands, brands cannot really own bars anymore. And I say with cats because it's like you used to walk into a bar and you could see, you know, who was the main company that they were working with. Now, it doesn't work like this anymore. You go into a bar and you cannot dissect what that back bar looks like because there are some myriad of brands, small players, bigger players, different distributors, different wholesalers that bring them bottles. So there is a pressure from that small guy over there.
Chris Maffeo:It's a bartender, it's a bar manager, it's a distributor, it's all of us working ecosystem that are pushed by brand one, two, three, four to say, sell my brand, sell my brand, sell more of my brand. And it's very difficult to actually understand that people have to work with many brands because it's about their credibility. If that person over there is a bartender, the bartender must be able to talk, to work, and to sell many different bottles from many different players. They cannot sell one portfolio from one company because then they will lose their credibility. So it's important to put ourselves in their shoes as brand owners, but at the same time, from a bar perspective, bartender, bar manager perspective, to put ourselves into the brand owner or the distributor's shoes to really say, okay, I want to work with different brands, but how much is too much kind of thing, you know?
Chris Maffeo:Because when I see bartenders working for different companies and I love it, then all of a sudden I see their Instagram and they are saying that this gin is the best gin and then the second day, the second gin is the best gin. So how do we do it in a credible way so that we can keep the relationship with everybody and avoid these kind of arguments between, oh, I saw that I thought you were working with us and now you're working with the others. So how do we make this happen? So choosing the right brand from your for your bar is crucially important. As bartender, because I discussed this with many bartenders, with many bar managers, very often it's about, you know, I'm doing a menu and where it's, again, legal to be supported by brands on cocktail menus, they tend to default to a brand that may not actually match their values, but match their budgets, which is the hard reality sometimes that, you know, you may go with the person that actually has more money than another person, another sales rep, just because that sales rep has money.
Chris Maffeo:And my question, and I throw it out there, is how sustainable is actually that? You know, like how can we do it in a way that we align in more with brand values and obviously, hopefully, also with budgets because bars are businesses as we were talking before. We need to make money, and we all need to make money. But how do we do it without kinda like jumping left and right and jumping on, oh, sorry, that that was last year, but this year, these other brands stepped in and they gave me this much money. So sorry, your gin, your vodka, your tequila is out of the menu because of how we work with those guys.
Chris Maffeo:At the same time, there is another issue that I see traveling mainly Europe these days is when there is this relationship between brands and bars, it's very important to understand what's the thin line in between too much and good enough. So brands want to work with outlets that can deliver value, can deliver ROI, and can enable those kind of conversation that are uncomfortable conversation that I often have in offices with finance directors. Because all of a sudden, when I am the one paying for a guest shift on behalf of some brands, I'm the one who gets, I don't want to swear, but, you know, issues on why are we sponsored this thing. It almost looks like a conflict of interest. It's like, why did you give that money to that bar?
Chris Maffeo:And I cannot explain it in a way that, oh, because long term is very good for brand building in city x y z. You know, lists, accolades, competition, victories should be the byproduct of everything we do correctly, whether we are bartenders, whether we are brand owners, whether we are whatever we are in the drinks ecosystem, best distributor of the year or whatever, we need to be able to do that in a sense, by the way, I won. Thank you, guys. But very often I see bars focusing too much on getting on a list. We want to do guest shifts because we want to get on the list, so that's why we're asking for listing fees.
Chris Maffeo:And it's like, not your ultimate thing is about doing good hospitality, enhanced hospitality, rather than being on the list. That's that's not the end goal. That's the byproduct of doing everything well. And at the same time, I throw it out there to bartenders. I'm not bartender, but, you know, all these things about distillery visits, guest shifts, sponsorships, traveling, sometimes it gets very transactional.
Chris Maffeo:I work with this brand because they make me travel the world, because they send me to Australia, they send me to Hong Kong, they send me to Singapore, they send me to London, they send me to Sydney. It's not about that. How about those values? Do they align with you? What are you doing for that brand, and what are you actually giving back to that brand?
Chris Maffeo:How do we all get money from it so that the brand owner can choose the right bar for the right investment? Because especially in a very capital challenged time like we are living now, there's not unlimited money here from brands to sponsor this game of guest shifts and investments and distillery trips and voyages and so on. So is it sustainable when you, as a bartender, for example, you travel on brand's money, but actually you're focusing primarily on your personal brand rather than on giving back to the brand that enabled that trip? From a bar perspective, you charge a listing fee and maybe sometimes there's not even a mention of the brand name. There is gin instead of calling it my gin.
Chris Maffeo:Is that sustainable when I gave you €2,000 and I bring the managing director of the company, and I have this cocktail, it's with our gin. It's like, yeah, but I see gin. Yeah, know, but it's our gin. Don't worry. Trust me.
Chris Maffeo:They told me it's my gin. The same time, from a brand perspective, you fund programs, you fund guest shifts, you fund trips, and sometimes you don't even show up. I've been to guest shifts where I was the only one from a brand, and the brand manager that it's actually signing off the invoice for that trip, for that guest shift, doesn't even show up and doesn't even see, doesn't even shake hands with that bartender that they have enabled with their budgets. You know, how short circuited is that? And at the same time, from both a bus and brands perspective, it's about wholesalers, distributors.
Chris Maffeo:Let's not forget who's bringing the actual bottle. Because when you end up out of stock because there is not enough bottles of that brand that was doing the gas shift, it's because you didn't tell the sales rep and you didn't order those bottles because those people were out of stock and they didn't know that there was an activation happening in the trade. So, you know, like, it's it's about so many moving parts and how do we do, let's say, less but better to actually making a relationship sustainable for real? So how about if a brand pays 2 k? Okay.
Chris Maffeo:The bar trains the stuff, explains what it is. Let's track the sales velocity. Give me some numbers that I can sell back to my internal stakeholders, finance director, sales director, and so on. If a brand funds a trip, you know, have the bartender showcasing really the partnership. Let's commit to something.
Chris Maffeo:Okay. I'm gonna sell this much for you. Always bearing in mind the legal implication of this, like, let's not get me wrong. At the same time, like, let's reinvest, you know, like, I I was recently in a guest shift and it was a best practice for me that a brand has had paid to get in, and then at the end of the year of the contract, had actually a call from the bar manager saying, hey, there's still some money here that we haven't used. How about we do something together?
Chris Maffeo:I call it a best practice because it's really about not milking the money of the brand that nobody in this messy situation, nobody would have noticed that those money were missing. But in a honest partnership and relationship, that guy called and said, let's do it together. You know? And then, that brings some real value next year relationship because then I really want to partner with these guys. They're really walking the talk.
Chris Maffeo:And again, from a distributor perspective, if you get as a distributor some support to actually work with the brand, you know, make sure that the sales team has got KPIs that go back to the strategy, that go back to the target that we've actually set with that brand. You know, my father always used to go, you know, virtualize in the middle. And, you know, it's a balance about the ecosystem. Here are, you know, all the players, and ultimately, we focus very often too much on sell in and too little on sell out. You know, we push the brand instead of having a brand pulled by the market.
Chris Maffeo:So ultimately, let's not forget that if there are no sales and if consumers are not ordering, no matter how much we've paid, no matter how many cocktails we've put on the menu, if nobody's buying those cocktails, there's no money to re feed into the system, and then the the toy breaks. So let's always remember that ultimately, despite all the relationship and how great this industry is and we are witnesses here in in Barconvent, it's about how to make it happen in a sustainable way so that it repeats itself over and over again, so that actually we can have a sustainable businesses for brands, bars, distributors, and ultimately consumers enjoying our products. Thank you.
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