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Envy of Innovation

NAFFS Staff Report

Andy Del Rosal, vice president and managing director of Bacardi and West Henderson, co-founder & chief innovation officer of Louisville Distilling Co. and Angel’s Envy Bourbon spoke to attendees of the 100th Annual NAFFS Convention about innovation and trends in alcoholic beverages.

Del Rosal said it’s important to build a culture of innovation. “When you see how other people do things, it gives you insights you didn’t have. “If you’re working in a building surrounded by creative people, it lends itself to creativity. There’s a playful element in being creative so it helps to have your corporate culture adopt that mindset.

“When you’re faced with a problem and your solution doesn’t work, your brain starts to put together things that don’t commonly go together,” Del Rosal added. “When you’re putting together things that don’t normally go together, you shouldn’t be judged for that, which is why I emphasized the need for a fun working environment. The more you fail, the more your brain starts to go into overdrive. And you are able to put more and more pieces together until you finally get something.”

A company can’t innovate without knowing its consumer, Del Rosal said. “So whether your target audience is a Millennial or Generation Z, you need to know what their interests are. You need to know where your consumers came from because that will give you insight as to where they are going to go,” he said. He cited boxed wine as an example. “For Baby Boomers that didn’t work. They weren’t going to drink wine out of a box. But Millennials – the juice box generation – it was a fit. These are things they grew up with,” Del Rosal said.

There are exceptions to stereotypes in all generations, Del Rosal said, but examining various generations and what they’ve experienced is critical. “When you look at Millennials as a generation, they were growing up pre 9/11 and then they are faced with a war. So they’ve gone from knowing the economy was booming to suddenly everything has changed and there is a war. They graduate from college and can’t find a job. They’ve gone from this beautiful innocent life when they were a child to graduating and seeing that life isn’t so great. They start to see things from a different perspective. Instead of having a mid-life crisis, they’re having one in their 20s,” he said. “The Boomers were the first “me” generation. And these are the kids of the Boomers so how do you think they are going to be? They’re the ‘everybody gets a trophy’ generation. Not that that’s bad. This is the generation that has driven the apps that are developed for feedback.”

The early range of Generation Z turns 21 next year. This generation, Del Rosal said, is different. They’ve seen what Millennials have gone through. Many have older brothers or sisters. They’ve seen the rise of Facebook and other social media. They’ve seen people posting inappropriate things on social media which prevented them from getting a job. So this generation uses things like Snapchat. They post and then it’s gone. They use Whisper. They are focused on privacy. Looking back at Millennials, they started their careers about 10 years later than any other generation. “Generation Z has seen the Millennials waiting and waiting and waiting for the perfect job. So Generation Z is willing to do the grunt work until a better opportunity comes along. They’ll work at McDonalds or for a minimum-wage job. They understand that it’s a stepping stone and it’s not beneath them which is very different than the stereotypical Millennial. We all know you’ve got to work hard and pay your dues and that’s just life. This generation gets that.”

Millennials, Del Rosal, said have developed somewhat of an anti-corporate sentiment because they’ve seen their parents fired and pension plans disappear. That makes that generation perfect for craft products of all sorts. “It’s small batch – not mass produced. It’s local. It has nostalgia and a retro, authentic feel. And it’s not big corporate. It doesn’t represent the corporate world that ruined their parents’ pensions or jobs.”

Millennials like the craft segment, he said, because it’s new and there’s a little bit of the element of surprise and discovery. With so much information available on the Internet, the hidden knowledge that comes from gravitating toward craft products helps them to feel they are standing out from the crowd. “You can’t experience it on the Internet; you have to go to this place and find out for yourself what craft is all about. And you often get to meet with the craft brand owners so you get a personal contact that cell phones and social media just don’t provide. When you think about all movies and shows targeted to Millennials, it’s all gloom and doom and end of the world stuff. Craft provides the opposite of that. Craft represents a rediscovery where someone goes back and learns how to make rum. And the consumer is going through that process with them learning how to make rum.”

Those launching new products and brands continuously monitor trends, Del Rosal said, using Pinnacle Whipped Vodka as an example. “It was in the day of ‘Cupcake Wars,’ ‘Cake Boss’ and assorted baking shows where sweet treats were on everyone’s radar. Hence, adding whipped cream flavor to alcohol made perfect sense.

“In 2007 when news was all over about colony collapse disorder affecting bees and pollination, people started to think they wanted to eat honey. Next, you start seeing people selling local honey and the interest in honey products growing. By 2009 Chilis’ hottest launch was its Honey Chipotle Wings. And they had other iterations, like honey barbeque, etc.”

Innovation often requires taking a closer look at things you may have thought had no impact on your products. “Food trucks. We sat down and asked ourselves ‘how does that play into our industry’ because we could see the whole truck concept was spreading out to other things.” For Baccardi, that led to a game on social media. “It’s not necessarily like that today,” he said. “But for us it became a pop-up. So the insights that went into the food truck – the “discoverable” trend – led us to a pop-up party. It’s all about an experience – perhaps a-once-in-a-lifetime thing. And when you look at craft, it’s a once-in-a-lifetime product. So this is one example of how you can look at a craze and figure out how you can play in that space. “

Innovation can come via more-obvious channels as well. Henderson said his father was a master distiller at Brown Forman for about 40 years, so Henderson grew up in the industry.

“There are so few families who make the majority of the bourbon in the world,” Henderson said. “And we had a place at that table through my dad.” Henderson said he was thinking about the family’s legacy and how it would be a shame to lose a place at the table. So one day he approached his father and asked what he thought about doing a bourbon as a family. Without hesitation his father agreed. They had the production knowledge of how to do it but didn’t have the funding or packaging knowledge. It was a leap of faith, he said, but he moved Florida back to Kentucky to start the new brand. They put some people together – someone on the marketing side, someone on the finance side and someone on the sales side – and made them partners. So they had a good group of people who had experience throughout the industry so they could bring the brand to market.

One of the first discussions was about what the brand name would be. He explained to the audience that some of the product evaporates during production. “So we lose 3 to 5 percent a year to evaporation and that’s the angel’s share,” Henderson said. “What’s left in the barrel is the angel’s envy. It’s what they don’t get. Everyone knows you have to give to get. We had to give bourbon to get bourbon so that’s where the name came from.”

Henderson said he at first did not embrace the idea to shape the bottle to appear it had wings but he now considers it one of the brand’s strongest points because it’s different than anything else on the market. “So once we got away from the conventionality of bourbon needing to be a square, manly bottle and embraced the new image, we took off.”

Henderson asked his father to think about things he did at Brown Forman that for one reason or another, didn’t make it to market. “It seems like a lot of that was just because it wasn’t the right time for those innovations,” he said, “but we kept coming back to one thing. Something that’s prevalent in single-malt scotches is second-barrel finishes. They age the scotch in its original barrel and then put it in another barrel for the finishing process. So we came up with a Kentucky straight bourbon whiskey and decided to finish it in a port wine cask.”

Port wine, he explained, is a fortified wine. He said they experimented with several fortified wines and settled on the port wine barrel finish. He said it’s one of the highest-rated bourbons in the country. “So when you drink bourbon, bring it to you nose with your mouth open. That will vent out some of those alcohols,” said Henderson. Asking the audience what they smelled, the responses included vanilla, honey and cherry. There are more than 300 aroma components in bourbon, Henderson said. Asking what kind of taste notes attendees got, people gave replies such as tobacco, caramel, licorice, maple, chocolate and banana. When asked about the mouth feel, the consensus was the viscosity was creamy and it coats the palate. “One thing we didn’t count on is the microscopic particles of grape from the port wine barrel finish. It helped create the mouth feel and was very well received,” Henderson said.

While the port wine barrel finish was very subtle, that wasn’t the case with the subsequent tasting of rye whiskey finished in a rum barrel. “That’s where you get on your nose the amazing explosion of molasses, caramel, butterscotch and crème brulee. While my father was a fan of subtle flavors, my generation and the younger generations really like bolder flavors. They like them in food and they like them in drinks as well.”

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