Table Talk: Dan Kleinman, Senior Vice President Marketing, Deutsch Family Wine & Spirits

We are so pleased to welcome our latest Table Talk guest, Dan Kleinman, interviewed by Yuni Sameshima, Chicory’s CEO and Co-Founder. With over 24 years in the alcohol industry, Dan’s experience is invaluable to Deutsch Family Wine & Spirits as he drives their marketing efforts and leads their Public Relations, Consumer Insights, Innovation functions.

Chicory partnered with Deutsch Family Wine & Spirits earlier this year to support their brand Josh Wines, which has gotten some strong attention in pop culture lately -- but more on that later!

In this Table Talk, Dan shares his experience working in the alcohol industry, the evolution of marketing strategies specific to the category and what the future holds for alcohol ecommerce.

Tell us about your experience in the alcohol industry and how you got started at Deutsch Family Wine & Spirits.

My first experience in Beverage alcohol was actually in college as an on and off-premise promotional person for Mass Bay Brewing (Harpoon Brewery). I fell in love with the industry as a result and developed my first appreciation for the number of disciplines that are in our power to deploy to build brands as I saw the impact of 1:1 selling, experiential marketing and meeting retailer needs. It was a pretty great job to have as a college sophomore through senior. I never looked back from that experience and beverage alcohol has been my work life for over 24 years. I came to Deutsch Family Wine & Spirits from DIAGEO and I have to be honest that the reason for coming was solely based on the opportunity to work on Josh Cellars, as it was clear this brand had all of the intrinsics in its proposition to be a massive success. And let’s be honest it has become one. In the 4.5 years, I have been at DFWS, the brand has grown from 1.5MM cases to 4.2MM cases and has led the wine industry in absolute growth for the last 5 years. Since this time, I have been given the opportunity to work on a larger portion of the DFWS portfolio, including such great brands as Yellow Tail and Layer Cake. I also play a role in leading our PR, Insights and Innovation agenda, which has been a wonderful experience in terms of growing my personal skillset and curiosity within the category.

With over 20 years of experience in the alcohol industry, how have you seen category marketing strategies and tactics transform and where do you see it going?

There has been enormous evolution in the way brands are going to market in beverage alcohol. Alas, I am dating myself by saying I was there at the moment where spirits’ access to television advertising opened up, which I think was a fundamental step in driving a new level of salience for leading spirits brands and put them on equal footing with their beer counterparts. Naturally, the biggest shifts we are seeing are being driven by new generations of consumers coming into the category and wanting to define it on their own terms. To be successful, marketing in our category now must focus on how to attract a more ethnically diverse cohort, who employs a different approach to building category understanding and brand adoption versus past generations. Millennial and GenZ ‘s approach to wine and spirits education is significantly different than previous generations, as millennials are more apt to use search, digital review sites and social media as their first resource for discovering wines versus seeking out counsel from traditional industry sources of influence (trade publications, wine shop clerks, and sommeliers). Achieving consideration with this group means brands must understand how to be salient and relevant on a whole new set of platforms to effectively recruit. Our marketing plans are employing a much more diverse set of growth-driving activities to ensure we are adding value for these consumers, on their terms, as they navigate the category. I see the recruitment of these consumers requiring a much different growth model than ones deployed in the past: one that takes a new view of who and what influences these consumers' decisions and shifting our mix and messaging to take account of these new sources of influence. 

How do you see the huge pivot from food service to home consumption for alcoholic beverages playing out?  What changes do you anticipate in the next year?

I think the lasting changes from this pivot will center around how consumers discover and become educated on brands, categories, food and alcohol pairing, as well as cocktail making.

When COVID made things like on-premise discovery, education by physical gatekeepers such as sommeliers and mixologists, or trial through off-premise sampling nearly impossible, the consumer shifted to using digital to guide their discovery within the category. Even though consumers were unable to head to bars and restaurants, they still want bartender-quality cocktails and the way in which they are learning to make them is driven by digital – specifically search, video search, social video, and recipe sites. In terms of the wine category, COVID shifted the category to a much sharper and more significant focus around driving consideration for brands through digital. The role of brand affinity as a decision driver is increasing significantly in the category.

I do think the on-premise business will come back in force starting this summer as people are yearning for the communion of enjoying a night (or day) out with friends. If I were a bar owner, I would look to place primacy on that need in creating my customer experience. I’d focus on stocking quality brands that people know and trust and ensuring there is true speed to service for a well-made cocktail or mixed drink. I think consumers may be less willing to wait at the bar for 15 minutes to be dazzled by a few perfectly crafted mixologist cocktails, as that is time they’d rather be spending connecting with friends that they won’t have not seen live in a long, long time. Getting this balance right is going to be key to sustain a consistent flow of happy customers in my mind. 

As today’s shoppers increasingly digitally engage with beverage alcohol, how does this shift the role of digital shopper marketing?

We feel the role of digital shopper marketing is going to become the new “point of sale” and smart Beverage alcohol suppliers will shift their spend away from traditional in-store driving activity that is aimed more at appeasing the retailer vs influencing the shopper and really hone thor efforts on having a highly visible and personalized experience on the digital and mobile mediums that they use to plan their shopping trips. We see grocery store apps/sites, food blogs and recipe sites, Pinterest, Search, review and coupon sites as absolutely essential ways to influence what ends up in the shopper’s basket. We love Chicory for this reason as we believe that when consumers search for recipes, bloggers are one of the most credible and frequent sources of information for consumers and the ability to target our advertising with these bloggers/influencers through the Chicory platform as a first-order spend to ensure our brands get on the physical grocery list. 

What does innovation mean in alcohol and what kinds of innovations has Deutsch Family Wine & Spirits developed?

When we think about innovation in alcohol, I see it boiling down to product innovation and marketing innovation. Having said this, whether product or marketing, at its core, all innovation should be focused on meeting previously unmet consumer needs. As much of our innovation at Deutsch Family Wine in Spirits emanates from well-known brand franchises, we are focused on finding new ways, either product or marketing innovation, to unlock trial and adoption from new consumer cohorts or expanding the occasions on which consumers consider and choose our leading brand franchise. 

Fleurs De Prairie is a great example of a new-to-world product innovation that DFWS developed. Its Seeds of Beauty marketing platform is an example of how we are bringing marketing innovation to cut through by violating the established schema for the category. The brand’s name Fleurs de Prairie translates as "wildflowers," a nod to the beautiful fields of wisteria, lavender, poppy, and sunflowers that carpet the hillsides in the South of France where the wine is made. Its packaging brings through this name with power and impact. To make the brand stand out in a segment that is very focused on aspiration and status, we’ve chosen to focus our recruitment efforts on a platform called Seeds of Beauty Platform which is a platform aimed at uplifting women who are making a difference by way of their passions, whether that be through art, design, food, writing and beyond. The initiative awards women with "Seed Grants" and business mentorship to help their individual endeavors.

From a product innovation standpoint, we do see alcohol moderation as a very emergent trend among older US Gen Zs and millennials whether for health, performance and money-saving reasons. Yellow Tail Pure Bright is a new line of low-calorie and low-alcohol white wines, where innovative production methods have enabled us to make these reductions without sacrificing the taste and quality of the wine. We are just bringing this new line of wines to market this summer after a successful pilot test in select markets in 2020. We see this as a way to recruit new drinkers into Yellow Tail in a way that is additive to the occasions where they already enjoy the brand. 

Congratulations on Josh Cellars’ recent appearances on SNL and Jimmy Kimmel Live! Can you speak to the value of these major features?

These appearances or integrations into pop culture are incredible for building salience for the brand and building its credibility as a universally loved wine in ways that brand communication may not be able to achieve. These examples were great because they, in their own unique and humorous ways, touch on truths about the occasions we love to drink wine. We are equally, if not more proud of efforts when we respond to culture in a way that is true to our brand purpose. The most recent example of this is our response to the “Battle of the Joshes” (#Joshfight) which captured the country’s attention in late April. To jog memories, people named Josh gathered from across the country in Lincoln, Nebraska to fight for the honor of the ultimate “Josh,” a playful social media challenge turned viral event and charitable fundraiser.  Inspired by Josh Swain, creator of the viral #JoshFight, an estimated 1,000 attendees rallied for an epic battle of the Joshes and crowdsourced more than $14,000 via online fundraiser Mightycause.  As soon as we became aware of this, we immediately loved it because it was an ingenious idea that really focused on giving back to the community at its core. As Josh Cellars’ guiding values center on gratitude and giving back, we worked with Mr. Swain to further support the cause and the response has been hugely supportive. We plan to work with Mr. Swain in the future to help him grow the impact of this great platform.

You’ve worked with a host of alcohol brands, including Smirnoff, Captain Morgan, Josh Cellars and Yellow Tail. Do you take different approaches to marketing category leader alcohol brands compared to lesser-known ones?

Absolutely, for category-leading brands, it is absolutely essential to drive salience to continue to maintain or grow very high levels of penetration and driving strong top-of-mind awareness through communications and leading visibility at the point of purchase (displays, shelf and the digital shelf). On these brands, it is critical to have internal sales teams and wholesaler partners executing to a very high standard as much of the year as is possible. On lesser-known brands, it is about working very hard to identify the growth-driving mix that is right for the brand based on its stage of development and generating belief in the broader potential for success by spending the time to seed and nurture the brand. I am a big believer in testing approaches and being comfortable with putting many irons in the fire. If you fail, just fail fast and be confident that putting out multiple approaches into the market will ultimately lead to success that may offset all of the failures.

With unprecedented growth in alcohol ecommerce, what opportunities do you see in going online for alcohol and what challenges are there to overcome? 

Naturally, we feel that alcohol e-commerce is going to continue to grow its share of beverage alcohol share significantly as more e-commerce giants in the pure-play space (Amazon, Uber, DoorDash, GoPuff) join the brick-and-mortar stalwarts (Total Wine, Walmart and Target) in making alcohol e-commerce a much more top of mind experience for digital shoppers transacting across other categories. These players will be critical in spiking awareness that E-commerce for alcohol is possible and easy for consumers as well as providing the immediacy and product selection to satisfy the high level of impulse purchase behavior in the category 

The biggest challenges for e-commerce continue to be growing consumer awareness that 1) you can buy beverage alcohol online, 2) you can do it in many of the same digital channels where you make other e-commerce purchases to maximize convenience and 3) that a healthy portion of purchase behavior, particularly in wine and beer (which have much shorter purchase cycles than spirits), is driven by impulse purchase where e-commerce of alcohol is only just beginning to complement this behavior. Certainly in the case of #3, if Uber Eats, through its acquisition of Drizly, GoPuff and DoorDash can get you a bottle of cold wine along with your pizza order, whether hot or frozen, in the same trip in under an hour, then the need to run out to the liquor store becomes less and less of a consumer behavior. The thought of being able to have a whole holiday party from flatware to glassware to food and alcohol delivered in a day offers consumers real utility and is likely to be in our very near future.

Follow Dan and Deutsch Family Wine & Spirits on LinkedIn, and keep up with Josh Cellars Wines on Instagram!