Rodney Williams – President & CEO of Belvedere Vodka
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Transcript
Kara Goldin: Hi everyone, it’s Kara Goldin from the Kara Golden show. I’m so excited to have my next guest here, Rodney Williams. Welcome.
Rodney Williams: Thank you. Great to be here with you Kara.
Kara Goldin: Super excited to have you here. Rodney is the president and CEO of Belvedere Vodka. Very, very excited, I bet a few people on this crazy week, election week are enjoying some Belvedere Vodka out there, hopefully with hint right.
Rodney Williams: [inaudible 00:00:36]
Kara Goldin: Exactly. Rodney is just an amazing, amazing leader. So excited. To talk just a little bit about his journey and just overall, what are you seeing and building a brand during this time, continuing to build a brand and operate a brand. Your last journey was CMO of Moet Hennessy. Which, is also a kind of an iconic luxury brand too. We’ll talk a little bit more about that, you’ve been in the wine and spirits business for a long, long time and are just a legend in your own rights are very, very excited.
Rodney Williams: [inaudible 00:01:29] More often.
Kara Goldin: I know right? But I mean that sincerely, I mean, you really have had just this amazing, amazing journey. Take us back, how did you find yourself in the wine and spirits business?
Rodney Williams: Well, I came out to the San Francisco Bay Area or a.com that turned into a dot bomb.
Kara Goldin: Oh.
Rodney Williams: But it got me in California.
Kara Goldin: Which one was that? What, I’m curious.
Rodney Williams: Well, you all know the startup coaching Gary, it was the suite of services for marketers. We started the business in 2000, January. The market crash in April, but by October we close the series, they have 21 million. But long story short, we totally over engineered the solution, needed a PhD to be able to use our user interface, so it didn’t go anywhere. But it happened that Robert Mondavi was looking for someone who had classic brand management background, like I did from Procter and gamble and Johnson Johnson. They brought me over because they said, we’ve got a classic sort of brand challenge here. We haven’t been growing in the last three or four years and our lifestyle brands of brands between 10 and 25 dollars. That’s really where the volume is and where the profits are. That’s how I got into the wine business.
Kara Goldin: That’s amazing. Then after that you end up…
Rodney Williams: Yeah, we turned things around, we had a great team and of course, phenomenal wine makers. We ended up being bought by constellation brands. Who’ve, been great stewards to the Robert Moldavian legend. Then I got hired away to work at Jackson Family Wines, another big family owned company to drive growth in Kendall Jackson. It was just Jackson, was a legend in the industry. He really never took no for an answer. We said, Jess is number one, selling Chardonnay over $10. “Congratulations” He said, I want growth. I want to see your plan within three months, blah, blah, blah. We ended up launching something that was like the diametric opposite of Kendall Jackson. [inaudible 00:03:52] and creamy, a Chardonnay that just was aged and still called a bond. Jackson about it took off a hundred 1000 cases first year.
The Moet Hennessy hired me to work on a Hennessy business and joined a team there. Hennessy wasn’t grown and really needed to be sort of re-introduce coming out of the O-eight recession after four years of no growth to a new audience. We worked hard, came up with a different sort of campaign. It was really about values that were shared by the core audience around pushing the limits of one’s potential. The whole never stop, never settle campaign, it’s gone gangbusters. The business has now doubled in size and profits. Hennessy just as here, the first time, second spirits brand to ever make the Forbes 100 list of 100 best brands. [Crosstalk 00:04:51] Yeah.
Kara Goldin: It’s interesting that you say that, I loved hearing your energy on that when you, even years later, you’re still rooting for the brand right?. [inaudible 00:05:03] I always say that, there’s definitely some people that decide that they’re going to go and compete against what they’ve built, I guess. But that for me has always been, not necessarily the right thing to do. Why would I want to destroy something that I had worked so hard on, Right?
Rodney Williams: Exactly.
Kara Goldin: I think it’s awesome to hear you, think the same way about these brands, you’re proud of what you feel.
Rodney Williams: So much.
Kara Goldin: Then yeah you move on and you go and do other things and it doesn’t mean that you want them to fail just because left.
Rodney Williams: No.
Kara Goldin: Which I think is…
Rodney Williams: Rolling. Keep going.
Kara Goldin: Yeah.
Rodney Williams: When I was hired by Hennessy my boss said to me at the time you are the caregiver of Hennessy. I feel that I were caretaker rather, it’s almost like running a marathon, you have the tag and now you handed off to the next person, the next team after you leave. But you want them to keep winning the races.
Kara Goldin: Yeah.
Rodney Williams: You’re still in front of all the way.
Kara Goldin: No I love it. Even when you talked about the dot bomb that you were a part of, I mean, it’s just like, I also love that I run into so many people today who almost apologize for working for things that didn’t work out. They’re like, let me talk about something for about 15 seconds, then I won’t talk about it anymore. I’m like no, what did you learn? What did you do wrong? I, just came out with a book two weeks ago, actually that…
Rodney Williams: Congratulation
Kara Goldin: Yeah, it’s very, very exciting. First-time author. I just got the wall street journal best business book. Just a couple of weeks ago just came out. But one of the, it’s called the Undaunted Overcoming Doubts and Doubters. One of the things that I talk about is a story that we had with Starbucks I had it all figured out. It was a great day when we got in there, we’re in 11,000 locations. Then senior management decided after a year and a half that they were going to go in another direction, they wanted to put food in the case.
I sort of understood, that they had a business decision to make it didn’t do anything for my business. I was about to lose millions of dollars worth of business. After I sort of came to terms with it, what I realized that the reason why it was so important to me is it 40% of my business was in Starbucks hands. I had nothing to do with Starbucks, right? It’s like an account it Belvedere, if 40% of your business could go away tomorrow as a leader, shame on you for allowing that to be that important to you. I talk about it in the book that, what I learned from that experience was sure it was bad. I don’t cry very often. I had a few tears. I was going to have to destroy product in the warehouse, there were just a lot of pain points, but I went back and I said, I will never put that much in one basket. I’m sure, you have stories like that as well. Where are you learning hard lessons and actually it will teach you better.
Rodney Williams: Right now, we’re dealing with something quite similar with the pandemic because restaurant, bars and nightclubs represent not quite that much, but, that far globally for Belvedere. We’ve long been a staple of the nightlife and the pandemic…
Kara Goldin: Sure.
Rodney Williams: Put down everything. We’re one of the featured brands at, in a [inaudible 00:08:50] , which is regarded as the greatest nightclub.
Kara Goldin: I have actually been there, as shocking As that you may not imagine [inaudible 00:09:04]it was a long time ago when I was a lot of more fun but I have been there.
Rodney Williams: Well, the owners called us up, late March and said, yeah this is looking bad. What are you thinking we opened in the fall or they said, no, no, we’re done for the year. We’re not reopening in 2020. I’m shocked, when the biggest nightclub operators in the world. Now that the reality of the pandemic is settled with all of us involved. We’ve all been making our shifts. It seems less stunning, but I’m sure we’re going to look back at this moment. As you look back at your Starbucks experience and say, wow, that was really something to experience and whether…
Kara Goldin: Well, the fact that you’re actually even talking about it right now, because I think so many people, they, I talk about it a lot to entrepreneurs. I say, what did I learn from that? Not to have 40% of my business, one person’s hands outside of my own. The other thing that I have to diversify my business. It’s still the thing that I say today to accounts. I’m like, they’re like, we’re, very important partner. I’m like, you can still be an important partner and I can have other important partners because if you decide for whatever reason that something’s going to happen or a pandemic kits or whatever, and I’m sitting there trying to figure out. How do I recover? That’s not good right? It’s not good, I’ve had more people in the last two weeks who have read this book who have said, that is one of the chapters.
There’s a few of them in there, that’s one of the chapters where, I talk a lot in the book too about fear and how that sometimes you don’t know what you’re afraid of, but when something like this hits, then suddenly you’re scared, right?. You’re really, really scared. Then you sit there and think about, okay, well, how can I never let this happen again right? You do what you can to prepare and go through this process. But anyway, I just say, I think it’s a lot of, it, especially being a leader, and when you run into these hard times, it’s like, how you can do is look forward and say, I’m not going to allow that to happen again. I’m going to be better prepared and you still may be surprised along the way…
Rodney Williams: Yeah.
Kara Goldin: But I learned.
Rodney Williams: Very much, one of the things that help me is I may just be pretty good about is having all of the business each year to force rankings of risk factors. You’re constantly thinking about what could go wrong? What could be catastrophic? What could be reached on?. But I don’t think we had pandemic on the list. It’s really, really been an opportunity for us to sort of pivot and change. Now with these challenges, I’ll say also come some great opportunities. We had developed a new communication platform about Belvedere, really highlighting the fact that we’re all natural. Our initial reaction was, well, we’re not going to be able to do much with this, with the pandemic, but because people have been at home and people are confronted with, the power of nature, both with the pandemic and certainly with the fires in California, the hurricanes, in the Southeast people care more about what they’re putting in their bodies. What the ingredients are and that they’re recognizable high quality.
We’ve rolled up our sleeves and figured out a different way to begin to express the fact that were made with nature [inaudible 00:13:08].
Kara Goldin: That’s awesome. How is the campaign going?
Rodney Williams: Well, it’s early days yet, but what we found was this, there is a need to really tell a story. As I said, we spent a lot of time in nightclubs, very high energy settings, but probably not as much time over the years really telling the story of craft. Poland is the first country to accolade vodka, the way France, Italy, or US accolades wine, such that you can’t put any additives in the vodka. So Belvedere is maintenance, just water for Myra [inaudible 00:13:58] people are surprised. There’s no sugar, there’s no emulsifiers. There’s no additives that can be included in.
I think the other of the surprise people tell us is that even though it’s [inaudible 00:14:12] , it’s gluten free. Gluten is a really big model and it’s captured in the first pass of distillation. Belvedere is distilled four times, but any, corn or rice based distilled spirit is gluten free, but a lot of people buy certain brands because they say it on the label of we’re global brand in, you can’t do that. Saying Vodka gluten-free is on the label. It’s like saying water is cholesterol free. I mean, it’s just, but we didn’t know this. Yeah, we’re really on a platform where what to inform people of the natural properties. The response so far has really been great for the brand, we’re over-performing any expectation that we had a retail and online E-commerce sales are up a few 100% versus a year ago as a result of the pandemic. That’s clarifying.
Kara Goldin: That’s great. Your E-commerce, could you guys do se-commerce as a spirits business? Because I know there were some laws about shipping, I’ve talked to some local craft people in the Bay area, for example, who have shared that, that whole business opened up for them. Were you guys in the same situation or.
Rodney Williams: Same situation. We have to go through a third party through a distributor. They’re behind the scenes in terms of distributing the product, but having the sort of online partners to enable the sale was, was the tricky part. You got to be compliant with all the state laws, but there are services that, have been around for a while, they’re now looming as a result of the pandemic. We’ve been fortunate that they’ve been quite supportive of ability.
Kara Goldin: That’s awesome. Well, I could see actually I’m thinking as you’re, talking about this, but it’s like, I remember when we were starting hint way back when we were, I thought it was as easy as putting fruit and water and getting it on the shelf. Then when I realized is that we were actually not just starting a new product, but we were starting a new category. The biggest challenge of starting a new category, which was unsweetened flavored water, was actually sharing with people why it was important.
We did a lot of education, we haven’t stopped educating. Part of the challenge for us as a brand early on was no one else felt that it was important to educate. Everybody is like, well, if it was so important, then why isn’t Coke and Pepsi talking about unsweetened flavored water?. I’m like, okay, well, let’s think about this. What’s on the door, sweetened products, we’re just talking about the consumer, health and what they’re focused on. We’ve learned a lot on, that front frankly, we have a lot of people that also use Belvedere when they’re not every day.
Rodney Williams: [inaudible 00:17:36]
Kara Goldin: But I think they talk about that too, because they are really focused on, not having the additives and not having the sweeteners. It’s yeah, it’s, super interesting to me. I think it makes a lot of sense, but not a lot of people are doing what you’re doing, right? There’s no, the brand, you shouldn’t, you don’t have to know what the ingredients are. I think people do care.
Rodney Williams: Yeah, they do care. What’s funny about Vodka in particular, is that consumers for so long, have had this impression that it has no taste, it’s neutral spirit. You just mix it with something else to drink. I remember when I first told a relative, who’s the big Vodka drinker that I was moving over to Belvedere. She said, well, I’m going to have to switch from, from grey goose. I told her all the reasons why we’re all natural, her response was well, but isn’t the whole point of Vodka [inaudible 00:18:35] it has no taste. This is the loyal consumer speaking. I was explained to know in fact, great vodka does impact taste and character and rye because Belvedere is mainly rye enables us to really to have a flavor I think is a bit distinct from some the other sources of Vodka in that if you had a sandwich made with rye bread versus white bread or wheat bread, it’s the rye that really impacts the flavor, but that the real telltale sign and we’re on the right path.
It makes them think of your hints story. Sometimes the world comes to you versus you’re having to go to it. Is that two years ago we launched a single estate boxes to two bottles. We took the same Dan Casey, grain of rye planted it in an state near the Baltic in the North of Poland and another in the West of Poland where the weather current in the winter is much more continental over here. It’s less severe than the Baltic. The rye is more Hardy. If you’ve never had vodka in your entire life, you can taste the difference between two single states.
Kara Goldin: That’s more interesting.
Rodney Williams: Yeah. They’ve been warmly received by the critics in terms of their ratings and scores. But what was interesting is about a year after Entrenchment, we got a letter from the TTB, the governing authority in the US for spirits of labeling. They said, we need you to voluntarily give up the approval we gave you and your back labels of your single state. because we noticed that you talk about tastes and vodka is as the fine, going back to the prohibition has no taste. We said, no, we won’t give it up in. The next step is to have public hearings. We said, we would welcome public hearings. We’ll even do public tastings, but we would welcome that challenge. We didn’t hear back from them, then just before the pandemic started, I think in late January, early February, they issued new guidance saying that they have modernized their definitions of vodka and it can have taste. It can have a [inaudible 00:21:09] it can have character. We’re taking that as a personal victory for both.
Kara Goldin: I love it. Well, I think what’s so great too, as you’re taking an old, iconic, nostalgic brand.you’re basically, invigorating, it by paying close attention to your customer. There’re some customers that will not care, right? I mean, there are some customers that get our product at Google and they’re like, I don’t know, it just tastes good and I drink it all the time.
I don’t care about, anything else about it other than the fact that it tastes great. But then we have others that are so passionate, they’ll write to us. I share often with entrepreneurs, want to be entrepreneurs, that the greatest thing is actually getting, this customer feedback that actually, speaks to you and really talks about, I mean, for us, they talk about health, they talk about, I have a customer that just wrote me this morning, talking to me about getting through breast cancer and how, just drinking hint actually helped them to get through the chemo because the metallic taste that was in their mouth. People are like, thank goodness that I found this product. When you get that kind of dialogue going with customers, I think it’s such a powerful thing from a leadership. Yeah, do you feel the same way? I’m sure.
Rodney Williams: Yeah, very much. We launched a new vodka as well earlier this year. Part of the gestalt behind it was that who want to be true to who we are and that we’re all natural, but our distillery has been operating for 110 years. It’s one of the world’s oldest, continuously operating Vodka stores. The guys are incredibly talented, a lot of people don’t realize the first written record of vodka is from Poland from 1405. The Russians claim, they’ve been at vodka but first written record. Well, but we know from research a number of consumers that said, vodka is the first thing I drank in high school, maybe before high school. I would just mix it with something and I had not so great experiences, as I got older, I wouldn’t more craft spirits or wine.
I don’t want to go back to those sorts of experiences. But when we tell them that there’s an opportunity to really have a craft experience within vodka, through Belvedere, people are intrigued. What we launched this year is something called heritage 176. Where we went back through the archives, we discovered that up until like the late 18 hundreds, early 19 hundreds rye vodka was molted in order to separate the starch from juice. They, as modern distillation columns were developing, they no longer needed to do the malting process. They were, the five can make us, we’re happy to leave that because it did give them more neutrality, less taste. We’ve always been about tasting, after taste. We went back to this old process to create all natural multiple right vodka. It actually has really distinct character taste of me.
You can put a big piece of ice and drink it almost like as a light sipping whiskey, if you want, but, but it’s fact, [inaudible 00:25:00] We call it heritage 176 because 176 is the temperature in Fahrenheit where rye actually begins to malt. So far the reception has been wonderful. What’s also fascinating is that we did research behind this in five different countries on three different continents. We did not expect consumers to have the same sort of uniform interest in things that are natural. But it’s really, really consistent, this is pre pandemic. We think the pandemic may have only just…
Kara Goldin: Males, females, would you say it’s both.
Rodney Williams: Male and females, it’s both.
Kara Goldin: Its interesting
Rodney Williams: But what’s true about millennials and the younger adult consumers is that it’s a big purchase driver where I think for gen X boomers, we’re hearing yes, it’s important. What I really care about the taste. I really care about sort of having a relationship with the brand where millennials are Raymond st. Front center. Simple ingredients being natural is the really beginning point and deal breaker for some of them. It’s quite hardening.
Kara Goldin: Would you say that’s global? I mean, because obviously you’re a global brand, would you think, do you think it’s pretty consistent throughout the global?
Rodney Williams: Yeah, We are in 120 countries. We did formal, qualitative, quantitative research in, in Germany, France, UK, US and Australia, but we also done other more informal expiration’s in many other parts of the world. We consistently are hearing the same things. I mean, part of it is because of social media that people are able to get and share ideas from all over, that the sense of values around environment for young people, is super important. I think, concerned about climate change and what’s happening only heightens that in terms of food stuffs and what they’re consuming and how they’re consuming.
Kara Goldin: That’s awesome. Managing during the pandemic, your leadership philosophy, I mean, you’ve never managed during a pandemic, I would assume just maybe what would you say is the key thing that you’ve tried to focus on, what do you think you would advise people to really think about knowing what you know.
Rodney Williams: Well, what got us through was hyper communication. I think, we have a corporate office in New York rep. It’s still right in Poland. We really needed because we weren’t physically together to begin with all the time, even though I’m in Poland, eight times a year, and the normal really needed to over communicate in terms of how we were responding, keeping people safe and providing the right sort of guidance in terms of how people were to interact and social distance at work. How would you divide up the workforce to minimize the number of people on this distillery campus, how we would interact with, with vendors themselves. It was as a leader, I think the thing that I came to value the most, and I’m still working towards being better, is listening really, really listening.
Listening input and listening to it for a really disparate quarters. We were doing, leadership means every other day, weekly, all hands meetings to really keep the team together, keep the team informed until we got to the point where we, had real confidence, that situation was managed and pull in this country to great job in terms of closing down the borders and managing the pandemic though it is spiking there as it is in much of Europe right now.
Kara Goldin: Yeah. I feel like it’s also the other piece that I really learned and over the last eight, nine months was that sometimes you just have to go one on one with some people that there’s some really interesting situations that I’m sure you tackle too, where some people were living with, elderly parents or they were, cancer survivors when I didn’t realize that they were [inaudible 00:29:59] or having kids that are homeschooled right now. I think that’s the same thing it’s, I think being be willing to go a little bit one-on-one, especially in scary situations where we’re experiencing, I think has been the biggest thing that I’ve learned during this time.
Rodney Williams: Yeah, you talk about maybe your Starbucks experience, also a sense of real agility, because we never had, big numbers of people working remotely. There were just concerns that you lose out on the water cooler discussions and the little tidbits that help people really feel motivated, but productivity isn’t that suffered. In the circumstance, businesses continued to go perk along. One person who became positive with COVID, who was on a holiday vacation, that actually got exposed that way found out before he returned. But overall, we’ve had a great track record of keeping people safe, healthy, and not to the story for one day. Everyone is very proud of that everyone’s is very proud, but it took a lot of flexibility doing things differently. Our biggest challenge in Poland was getting the laptops just didn’t have that need for all of these laptops, all of a sudden. It was, a scary time, I was saying, but one that we’re proud of how it came.
Kara Goldin: I love it. I love it. What was the best advice that you’ve ever received? What advice would you give people today? And just moving forward and with there…
Rodney Williams: I would say some of the best advice is to really hang on to optimism. It seems, a little ploy and tried to say, but it’s easy to lose that and become cynical or overwhelmed in conditions that are, really challenging from different directions. When the pandemic first started, we moved to produce high alcohol content liquid that could be used for hand sanitizers. It took us the better part of six weeks of day in, day out negotiations with the Polish government to do that because they have huge constrictions against doing things that are beyond one’s permit. In their efforts to really clamp down on illegal produce production of alcohol, high content, alcohol that’s misused, but we found the right charity in keratitis. We partnered with the unit of Michelin, which makes hand sanitizers in Poland. We’re able to get it out to first responders and hospitals it’s because the team was so optimistic. So certain that we have to do this, we have to find a way to support and make a contribution. Yeah, in the end it really felt worth it.
Kara Goldin: I love it because you’re helping people.
Rodney Williams: Yeah.
Kara Goldin: Right. People feel good about helping people. I love that.
Rodney Williams: Part of a community, we wanted to do what we can do.
Kara Goldin: I absolutely love it. Where do people reach you, Rodney? I mean, what’s the best way to get ahold of you on social and we’ll hear more about what you guys are up to at belvedere.
Rodney Williams: [inaudible 00:34:03] @belvederevodka.com You will see we’ve got over 150 recipes. We have more information than you can imagine about the health and the content of our product itself and all of the studies that prove that it’s, gluten-free and all natural. Also, we’ve done a lot of work in terms of green energy. We’ve cut CO2 emissions by 42% in 2012 to 2018. We’ve got a big grant first distillery to win a green energy grant in 29. We have a biomass capture facility coming online in first quarter of next year, such that we will have reduced CO2 emissions by 80%. The operations, the process of producing the vodka will be carbon neutral.
Kara Goldin: That’s amazing.
Rodney Williams: We’re on a path
Kara Goldin: That’s amazing. That’s so terrific. Well, great. Well, thank you so much. Everybody thanks for listening. If you liked this episode, definitely give us five stars. Rodney, thank you so much for your time and stay safe. We’ll definitely be excited to watch the made with nature campaign. It’s really awesome. You guys are great at storytelling and I love it.
Rodney Williams: I’m going to get your book. I’m [inaudible 00:35:29]
Kara Goldin: Yes, I love it. I love it. I’m excited about that and excited to hear what you think about it. honored. All right. Great. Well, thank you everybody have a great rest of the week.
