Build The Category, Not Just The Brand | Marcus Pedersen | Anora | Bottom-Up Cut #009
This part of the episode is mainly about hunting. The beginning of the journey for drinks brands in the market. How do you create demand and how do you sell a first bottle? We both share a common history in the beer world. And now that you are in the spirits world, what do you think is the main difference after working with beer?
Marcus Pedersen:After working with beer, where you calculate more hectoliters rather than cases, bottles, drinks, or sometimes nine litre cases. It's quite a huge difference. And also here that going from bar to bar, how it's key to be on the menu, to have a bartender, a bar team, restaurant owner or a service person to actually talk about your brand and for it to be visible. Because you are on the back bar, you might be in a menu or not. With beer, you were front of house, so to speak, because you were lit up straight in your face as a customer.
Marcus Pedersen:It's very different.
Chris Maffeo:Do you also see this difference from my perspective, the focus on the rotation in beer, there's much more focus on the rotation of the product. The spirits category, some of the spirits categories are more fast moving like gin. But when you go into very premium products like an aged whiskey or an aged rum, the rotation is much slower and it makes a difference in mindset when you are there to sell it and to talk about it.
Marcus Pedersen:Definitely. But the rotation is not the same as in beer. Some products might have the only visibility to be on shelf, not to rotate. That is very unfortunate in how to get it to rotate, even if you have one bottle on shelf or maybe you have six or seven bottles on shelf just to get the shelf space. There you have the brand visible.
Marcus Pedersen:It's getting the rotation is also key.
Chris Maffeo:You've been working for experienced brands, but also behind the box, brand ambassador role, brand manager role. You built your career from the bottom up. How do you create demand for your brand? Because Aquavit is a very specific category, which is very interesting because it's very known in the Nordic countries. Then when you go outside the Nordic camp, but he has heard about it, visiting the Nordics, but it's not really something that they can connect directly to a consumption occasion.
Chris Maffeo:Do you talk about your brand or do you talk about your category or do you tap on a wider category?
Marcus Pedersen:We need to build the category. The international is quite niched and unknown in certain countries around the globe. So we don't go brand specific. We build the category, talking about the brand stories and retentions first. But there are specific moments with Acquabilt where you have this togetherness.
Marcus Pedersen:You have the traditional serves, which are normally short location paired with food for around Christmas, mid summer solstice and Easter. And then you have the modern moments where you also can use it as an ingredient in cocktails. We also see an extended usage where we currently are tapping into trends, as in low APV, for instance. We cannot say Aquavit since it's below 37.5 APV. However, it's a snaps, as we call it.
Marcus Pedersen:And also three, four main locations where you can build the category, not the brand specific.
Chris Maffeo:That's very interesting because it's similar to what I see on other categories in which the demand was not that established, at least in the beginning, and now they are becoming more known. And you mentioned the target occasion, which is very interesting for me. A clear moment that is top of mind in terms of deciding what to have. So you can have a Prosecco, you can have an Aperitivo, you can have something different. And then for Aquavit, it sounds like the snaps and the togetherness on this Christmas and the Danish way and Norwegian way.
Chris Maffeo:Who are you competing with? Are you competing with other shots or more white spirits overall in Temmiborn and also for our readers because they may not be that familiar with AquaBelt.
Marcus Pedersen:That's very interesting, Chris. And yes, we are having multiple composites other aqua belts in the region. And then when you go internationally, we lose market share because the aqua build with a heavy user is quite old. So we need to modernize and premiumize the category, not the brands itself, but also to have a wider audience.
Chris Maffeo:It sounds very similar to me as an Italian, what you're saying on what has happened with Amaro and the bitters category in Italy and all around the world. There's always this traditional consumption occasion and modern. The way you said it's very much in line with my thinking that there's always some traditional way of drinking a product that goes back to the roots of the product. Similarly, for example, in Amaro as a digestive to have after dinner. But then also the modern way, and you can tap onto these cocktails, like modern cocktail that you may not think of having with Aquavit, but then you actually can.
Chris Maffeo:And you can use it as like the mezcal of the Nordics. I love that. I will write this down. You can make a twist, for example, on a Negroni, like a Nordic Negroni or as Swedish Negroni. And you also need to rejuvenate the category.
Chris Maffeo:Part of that success for the Amaro category has been engaging with bartenders all around the world. So how are you doing or do you see a trend in that happening? Tell me about how do you think this can work in the global sphere?
Marcus Pedersen:Yeah, it's a battlefield out there. And yes, we are using Brand Ambassadors. We need to have relationships continuously in order to be top of mind for bartenders or for our owners, for our managers, but also for the product itself. It's very versatile but also how to use it in cocktails and also talk about the heritage so they know about the ancient history, how it was from the beginning.
Chris Maffeo:How do you select the bars in which you want to go in which you would like to be sold? And how do you explain to your importers, distributors, the ecosystem that you interact with daily?
Marcus Pedersen:So I think we will have our goal where we want to be and what we want to achieve. If we take out the Nordics where the awareness is high and it's a must stop, even if you don't keep it on the back bar, You have it somewhere in the fridge or freezer as it's normally consumed and it's sold in that from way back that it should be served cold as a shot. So nowadays when we are selecting our borough areas, cities, we are targeting quite high end bars in order to be featured, of course, what we want in the menu at some point of time during a specific period. We're always we start out with one period to sell one drink at a time.
Chris Maffeo:How is the trade reacting to this in terms of I think, really like something that I always talk about on LinkedIn or in other episodes of the Maffeo Drinks Podcast. Category is a broad term, so you can make it very niche and specific or you can widen it. You can plug and play with how big you want it to be. So how do you explain it to, for example, a bartender or, you know, your brand ambassadors? How do they do it?
Chris Maffeo:I can imagine like going into a bar in Milan, people would say, actually, I don't need an aquavit. I know that aquavit is a category, but it's not really a category for Milan.
Marcus Pedersen:No, and they haven't tried the actual product. It's a niche product. So it is a fantastic liquid and it's very spicy and fruitful. But when you get it into a drink, when you get the bartenders to actually work with the product, you find this symbios and great taste and flavours within it. So most of the bartenders, as they now currently, we have a gin trend, we have this tequila mezcal trend.
Marcus Pedersen:Here when you have something new internationally and if you go wide, this is very interesting and exciting for them to use. So we use Brand Ambassadors to walk into bars to have these master classes, trainings, and so forth.
Chris Maffeo:Do you use other categories to help you explain what it is? Do you use, for example, gin and mascara to explain it to somebody that hasn't actually tasted it yet? Like you are tapping on other categories to build your own categories, if I understand what you're saying.
Marcus Pedersen:Yes, that is correct. So it's easier explained that way and also not to create too many new cocktails. You're tapping into already worldwide cocktails, let's say the margarita, you do the Swedish margarita or the Norwegian margarita. Just tapping into this knowledge of cocktail, but it's more category specific rather than brand specific.
Chris Maffeo:I like that approach that basically you're not reinventing the wheel because what I see a lot of brands doing wrong is that they come up with a signature cocktail top down, like it's usually in an advertising agency rather than from actual bartenders and actual bar people. And it becomes a little bit of a, okay, you have to push this and they give a toolkit from the brand team is given a toolkit to the trade marketing and to the brand ambassador and the sales guys. And it becomes a bit of a because it just, you know, can you please put this on demand? But if you make it effortless for them to actually say, you just have to switch gin or you just have to switch mezcal or tequila or whatever from that current drink, then it makes the foot in the door much easier. It reminds me when we used to sell pepperoni together and it was much easier to put the bottle of pepperoni into a bar because maybe it was not available on keg.
Chris Maffeo:But then a bottle, nobody was saying no to a bottle because it was effortless for them because we were not asking them to remove a tap of a competitor and putting our bottle in. That's a very interesting way of doing this. And how do you work? Like, you mentioned like cities and the approach. Let's say you're not in a stage in which you are national distribution in the countries where you're not in focus, right?
Chris Maffeo:So how do you build distribution from when you enter a country?
Marcus Pedersen:So what we do is we apply this what we call a local bigness area. So we choose a city or we choose an area of the city. So you can have a small area where you want your audience and you know where they actually go and you build it from there. Again, bottle by bottle.
Chris Maffeo:Based on my experience in The Nordics, on trade plays a huge role in terms of brand building. Do you see that everywhere or do you see that, let's say, it's much more important in the Nordic countries, for example, being a dark market than Italy or Spain or Germany or any other market where you may sell to?
Marcus Pedersen:So you mentioned dark markets as a monopoly market in The Nordics. It's very different from open markets. You could just head to Denmark, for instance, where you have an open market. But the entrees place a key because in monopoly markets, dark markets, you cannot operate with any ATL or anything like that. What you actually bring to the table in an outlet, in a restaurant, in a bar, that's where you build your brands.
Marcus Pedersen:So it's very important. If you move outside of here, let's say you have the ratio of eightytwenty monopolated on trade 20% in volume, not value. And then you operate in Italy, where we with some other brands or in The Middle East where on trade is like eighty-ninety percent. So it's totally reversed and off trade is basically zero. I was working at one point in The Middle East and that was a total turning point in my head.
Marcus Pedersen:Yeah, on trade is important for every market, however, for different reasons.
Chris Maffeo:You're living in Malmo across the bridge from Copenhagen. You're experiencing a dark market and a non dark market, a train trip over a bridge on the sea. And so you see, you can confirm that you see the same level of importance in terms of because I get challenged a lot by people who don't know the on trade and are not on trade driven like me or probably you, in terms of what is the actual importance of on trade while building brands. There's a lot of people that can say the job that the on trade does is not crucial in terms of building a brand. And they always refer to Nordic markets as an example, it's a dark market, then on trade is much more important, but not really when you go out south of those dark markets.
Marcus Pedersen:I would say on trade is still key. As you said, I'm based in Malmo. It's twenty minutes from door to door to a new country. But also there you have promo. So in Denmark, the consumers buy their alcohol during promo periods, more or less.
Marcus Pedersen:So I don't know exactly the ratio, forgive me Denmark, but 70% of all spirits in off trade is through promo. But also hence the more importance in the on trade where you actually can talk about the products. You have the more premiumised Cavist stores. So consumers are there, they are in their on trade. They need to be educated, trained, not only the bars, but the consumers that visits the bars and everybody else does.
Chris Maffeo:Building on what you're saying about the consumer, what do you think about Target Consumer and Target? Okay, When I grew up in the marketing world, I was used to think in terms of consumer. You have a target consumer, you have a demographic or legal drinking age to 36 or 40 50, male, female income, Growing and developing my career and my understanding of the DRINKS world, I faded away from that thinking in terms of consumer and the target occasion. For me, it doesn't really matter how old you are or who you are. It's all about the occasion.
Chris Maffeo:And there are certain occasions that may be more skewed towards party, high energy, low energy, having like a calmer night or like a romantic night or a date or a group of friends kind of thing. For me, I could actually remove almost totally the target consumer. I'm stretching it now. And we focus on the target occasion. What's your take on this?
Marcus Pedersen:I think it's interesting if you take the academic category, for instance. In Sweden, it's the message that all the universities have these dinner parties, where they usually in the past had an affidavit for cheering, which is the tequila occasion in the shop. That still remains. However, what we now see is that the target audience or the younger group, the aspirational audience, they still shot during these fraternity dinners, but they shot in a different way and they also go low no. Location is still there, however the liquid and the ABV amount is different.
Chris Maffeo:Which is interesting to see like a no alcohol shot. That is a bit of a challenge to think about it, but from that's what happens.
Marcus Pedersen:Yeah, you're right. Not only no alcohol, but also low. So they go to different categories. So they started out having these activates and then now moving to liquors because they want to have a fruity notes, still low ABV. They might have one or they might have two, but they want to experience something else in their taste buds, to speak, some apple notes or ellaflower notes or whatnot.
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