How do you make consumers the centre of your business? Interview - Pernod Ricard global business development director Conor McQuaid
Pernod Ricard's global business development director, Conor McQuaid
Earlier this year, Pernod Ricard outlined plans to shift the "heart" of its business from its brands to its consumers. Speaking at his first of the company's annual Capital Markets Day briefings, new CEO Alex Ricard told analysts and journalists that consumers "don't think in categories" any more. But, what does this consumer-centralisation mean, and how does a company go about it? One of Pernod's executive team charged with implementing changes is global business development director Conor McQuaid. just-drinks spoke to McQuaid to get a better idea of Pernod's consumer-centric company strategy.
j-d: Tell us about the switch from a brand focus to a consumer one?
Conor McQuaid: Firstly, we’d be fearful if you thought we weren’t consumer-centric before. It's a question of emphasis. What we’re saying is that we need to be balanced and we’ve brought the consumer right back to the heart of everything we do - they will determine whether something works.
j-d: How did it come about?
CM: It largely started two years ago as we went through the consumer and the portfolio review work, which was piloted in a number of countries and then got rolled out to a broader perspective. It opened our eyes to new ways of working the portfolio, new ways of aligning the marketing structures... That was the lightbulb moment where we said 'we're on to something'.
j-d: What kind of changes have you made since you started this approach?
CM: We've done a lot of introspection - what’s really going to make the difference here? Where can we direct the team accordingly? It has been to fuse two teams – or three – the research centre with commercial and marketing teams. We had to spend some time putting them back together as an entity and understand fundamentally what we were trying to achieve, which was this closer alignment. The great thing is that there are opportunities everywhere. We've made good progress but that's the first stage of a longer journey.
j-d: Why organise your business in this way?
CM: The principle point is that consumers need to see a consistency of experience so those traditional boundaries that were between the marketing guys – the sexy above-the-line brand activation – and the sales guys that had to do a lot of the merchandising, commercial deals etc, those lines were starting to blur and, at the end of the day, the consumer experience – be it through ecommerce, digital, brand experience – we see a fusion in that world and it’s all about making sure there’s a consistent experience for the consumer.
Then there’s the operational efficiency idea - someone’s got to play traffic controller. We’ve got a lot of initiatives, a lot of things we think we should do, but we've got a relative band width and we've got to make sure the guys at executional level are focused on the right things.
j-d: How have consumer behaviour and brand perception changed since you've been in the industry?
CM: My early experience - through Jameson - is of a brand built on the mantra 'triple distilled, twice as smooth'. It has a lovely resonance, in so far as product claim. As soon as you taste it, you really get what we're saying, such a simple and saliant message over time.
Then to the more exacting standards in a digital age that you’re being asked to be held accountable to ... the bar is being raised and each time they’re asking more of brands both in a social sense and what they expect from them. We believe we’ve got a portfolio with the richness of story, the back story and also the future focus and openness to what’s going on in the outside world to take that challenge. It’s an exciting time but challenging for marketers to always stay one step ahead of the game.
j-d: You must have to anticipate what people want in 5-10 years time, especially with whisk(e)y. What do they want?
CM: We have a breakthrough innovation group and their specific role within the organisation is to be out there, to be one step ahead. They’re not embedded in the corporate structure - their job is to get out there and pioneer. The first thing to come to the table is Gutenberg - the bar of the future at home. There are a number of different projects and that’s the one we’ve made public. Sparks come from the most unusual places - like the serendipity of the two guys meeting for Jameson Caskmates. We try to innovate as much as we can and the next step is to find the nuggets that we can drive at scale.
j-d: We've talked a lot about the concept of home-trade. How will that work for Pernod? Will you look to sell directly to consumers?
CM: There are two ways - the launch in the US on a pilot basis is via a dedicated website but it is possible to do it through third parties with kits. The longer-term play is that going directly from Pernod Ricard to the consumer is genuinely a possibility. At the moment, the numbers that we’re looking at, the bigger prize commercially in the short term, is that 97% of liquor sales online go through indirect plays and that’s where we want to put the focus - knowing that we’re not yet at fair share. Fair share is the same market share downtown as online. So, whatever your market share is in a distinct market - so if it’s 15% to 18% in the broad market, have you got 18% of the ecommerce channel in your market? At the moment that’s not the case.
j-d: How can you achieve this?
CM: You need somebody who knows online retailing, somebody that knows how to commercially pull the deal out of the bag. That was the call to action: understand your environment, understand the key players in your world and resource it accordingly to get fair share online of that 97%, that we know is happening.
Then over time, we’ll be working in the background for direct retail opportunities that we’ll try and take to scale. That's not to say that they’re not ongoing at the moment, because they are happening but we still have to find a killer solution.
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