Insights Can Be Hidden In Plain Sight

SOMEWHERE AROUND A decade ago, someone gave my kids an inflated, spherical object that, we were told, is called a “soccer ball.” We were in front of our home trying to figure out how the thing worked when a teenage neighbor of ours sauntered by and observed, “Your daughter has a good foot. You should sign her up in AYSO.” “What’s AYSO?” I asked. She looked at me like I had two heads:Had I never noticed the couple of hundred kids in colorful jerseys who amble past our building every weekend on the way to youth soccer games in the park right across the street? AYSO.

For someone who’s become quite the soccer enthusiast since then, I look back on that episode with amazement and not a little embarrassment. Sure enough, every fall and spring weekend, our block is invaded by soccer-ball-wielding little ninjas. How could I have ever missed it?

The answer, of course, is that you can completely miss things with no relevance to you, but the sooner you realize they’re out there the sooner you can start using them to your benefit. So keep that in mind when venturing into new beverage arenas, where your own powers of observation are likeliest to fail you, where you may find yourself unable to make crucial – if elementary – distinctions among brands because you simply haven’t seen what’s out there in plain sight.

Lately, Gatorade executives have been describing how, after talking to 10,000 consumers, they learned that athletes prefer separate formulations for before, during and after their workout. Even granting the Gatorade people an interest in concocting a good back story for their new brands, it seems a bit much for them to refer to this as a key “insight.” The evidence has been right on the shelf in nutrition stores for years (not to mention within Gatorade’s own programs for college athletes).

The same issue comes up a lot when beer guys get into craft beers or non-alcoholic beverages. They think they’re steeped in all aspects of the beverage trade as they meet with retailers, poke their heads into store coolers and read magazines like this one. Time and again, though, they reveal that they’re failing to absorb enough information, or the right information, to navigate these segments.

Take the distribution alliance that Monster Energy inked with Anheuser-Busch back in 2006. In some markets, A-B wholesalers ended up getting secondary Monster Energy brands such as Lost and Rumba, not the core green-can. I had some odd encounters at the time with old Bud hands – ones I’ve long known to be among the sharpest operators in the wholesaler network – who nevertheless sounded clueless when the discussion turned to NAs.

“We’re getting Monster,” I recall one telling me. “Well, not Monster, but Lost, which I’m sure will be good, too.” That’s like saying, “Well, not Bud Light, but Schlitz, which I’m sure will be good, too.” Once in the category, of course, it didn’t take long for them to recognize the limitations of their perceptions.

It’s a difficult problem, though there are a few things one can do. As with any new language or culture, an immersion course is never a bad idea. Put executives in a situation where they can’t afford to ignore these segments because they’ve been put at the center of their jobs. In my limited contacts with the people at Coca-Cola’s Venturing & Emerging Brands unit, I’ve been impressed at how quickly they’ve climbed the learning curve. These are folks who, judging by my initial contacts when they first came upon the scene, started out having no idea what things like yerba mate were. Within six months, they seemed already to know way more than I’ve picked up in 15 years of watching these emerging segments. (OK, that’s not saying much.)

If you’re going for a new area, make it a point to frequent other sections of the store or classes of retail than you normally would. That philosophy seems to have stood the business’ best innovators in good stead. AriZona Iced Tea’s Don Vultaggio seems to have plucked some great beverage packaging ideas out of visits to the steak sauce and salad dressing aisles. Or recall the ascent of Neville Isdell to CEO of Coke a few years ago: Many observers initially wrote him off as too much a member of the old guard to serve as an effective change agent. Isdell recognized that too – or came to recognize it soon enough. Speaking to a Wall Street Journal reporter after a year or so in the job, he described his routine this way: “I wander around places. About every couple of months I wander around the likes of Whole Foods. I’m looking at what other people are doing. I’m looking at what is new that may or may not have an attractiveness.” You can be sure that, judging by Coke’s long futility on the innovation side, not too many of its execs had prowled the likes of Whole Foods in the past.

Most of all, it’s important to learn to rely on people who’ve been there, done that. Though having served a long time as a Coke exec, in his first months as ceo of FRS, Carl Sweat seems to be on the right track by reaching out to new-age veterans for key sales posts within the maker of quercetin-based drinks and supplements. And I continue to believe that the single most important thing a beer wholesaler venturing into craft beers or NAs can do is to hire a craft or NA veteran to help assemble a portfolio that makes sense.

All these things can help polish the old specs so you begin to see more of what’s hiding out there in plain sight. Which beats getting run over by a gaggle of cleat-wearing preadolescents, any day.

Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.