Don’t Bounce on Store Checks

1 (4)

For nearly a century now, music lovers have been able to get their fill of jazz at a subterranean haunt in Greenwich Village called 55 Bar. The Christmas lights strung around the joint don’t do much to dispel the notion that it’s basically a dive, and its beer list is nothing to write home about, though they do pour a careful Guinness. There’s no food, and the cramped space requires you to squeeze past (and occasionally jostle) the musicians if you need to make a bathroom run.

So 55 Bar is nobody’s idea of a romantic date spot. But the cover charges, if any, are usually nominal, and early sets often are all-ages, meaning I could drag my kids down there once in a while. Aside from a few “names” among the regular acts (like the guitarist’s guitarist Mike Stern), the performers generally carry low brand awareness. But they almost always bring a degree of passion and musicianship way beyond what their modest reputations and careers might suggest.

It was one such combo, led by saxophonist Donny McCaslin, that David Bowie encountered when he stopped in a couple of years ago at the suggestion of a musician friend. Turns out Bowie had always wanted to cut a jazz record and, as he approached the close of his career, decided that this was the time to do it, and this wailing combo in front of him would be his band. Soon, these new collaborators were in a studio together cutting Blackstar, which debuted to ecstatic reviews, sent McCaslin and his doughty sidemen hurtling toward broader recognition, and recently collected several Grammys.

Though I love 55 Bar, I’ll admit that it sometimes takes extra motivation to make the trip down, given the lack of creature comforts and sometimes stifling crowd. But I muster the energy after reminding myself of the great discoveries I’ve made there in the past. Which brings me to … store checks. It takes a similar degree of commitment to regularly walk into unprepossessing retail accounts like bodegas, Asian grocers, gyms or health food stores, but the reward is spotting an intriguing new beverage, ingredient or trend that can turn around your business. So count this column as a salute to that most mundane activity. Just as with Bowie descending into the darkness of 55 Bar, there is never any telling what insight you may leave with: a new brand worth carrying or investing in, a subtle repositioning of a competitor, the opening salvo of a looming price war.

This might seem to be an observation that’s so self-evident as not to be worth wasting any words on. But let’s face it: we’re all busy people, over-scheduled and scrambling to knock off our daily agenda items before racing home to catch a few hours of family time. Store checks can always be put off for another day, or week, or month. But they shouldn’t be. They’re a crucial way of keeping one’s antennae up, of encouraging the chance encounters with brands that can yield crucial insights. Indeed, we beverage people are lucky to operate in a business where there is so much valuable information for us to glean right in the neighborhood, for free. It seems foolish not to often avail ourselves of that opportunity. Yet particularly in larger companies, it’s easy to get disconnected from that basic activity. I can recall a Wall Street Journal front-page feature around a decade ago where Coca-Cola CEO Neville Isdell, feeling the winds of change blowing into the soft drink business, noted that he’d taken to popping into Whole Foods every couple of months to observe the beverage selection there. I remember thinking it was an admirable habit to cultivate, but also wondering why it had taken him a year or two into his tenure to adopt it. Easy for me to say: my wife will attest that I’m the kind of guy who will run out to buy a loaf of bread around the corner and not return home for an hour. But for an executive like Isdell encumbered with so much responsibility, maybe it was not so obvious.

Certainly, quite a few of my business heroes spend quality time in stores. AriZona cofounder Don Vultaggio has readily acknowledged over the years that he’s gotten some of his best packaging ideas cruising grocery aisles – and not just the beverage sections. Early in the company’s history, when AriZona found itself squeezed out of its distinctive big cans by an iced tea rival, he found the inspiration to add a long-neck glass bottle from the salad dressing aisle. Or take Sam Adams creator Jim Koch. I can remember once meeting up with him on a weekday morning to hit a bunch of Manhattan retailers: on our very first stop, a grocery store, we were unceremoniously thrown out by an angry store manager who caught us pasting up decals in the beer cooler. As we dusted ourselves off, I couldn’t help asking Koch: Why would a man of his stature and wealth willingly risk humiliations like this several days a month? His answer was pragmatic and convincing: it’s the only way to know what’s truly going on in the market, and to understand what your sales force is up against (while also inoculating yourself as CEO against the excuses and misinformation they might send your way when things aren’t going according to plan).

2 (1)

In my own beverage circle, the king of store checks is Ken Sadowsky, who’s enjoyed a distinguished career as a distributor, investor, board member and brand scout for investment firm Verlinvest, involved with brands like Red Bull, Vitaminwater, Vita Coco and Bai. Ken is ruthless in his discipline about popping into stores to see what’s going on, no matter the time, location or degree of prior alcohol consumption. I’m still embarrassed to recall my wavering commitment one time, as the hour got late, that we passed a dingy grocery store while working our way through the enticements of San Francisco’s Haight Street. “Store check!” Sadowsky declared. “Kenny, please, do we have to?” I pleaded. “Of course!”

I recently asked Ken what role store checks have played in his career. “Decisive” would be the short answer. As a Massachusetts distributor who was struggling to keep his non-alcoholic beverage division afloat in the late 1980s or early 1990s, it was inspections of Store 24 convenience outlets that inspired the pickup of Snapple, which quickly righted the ship. In San Francisco some years later, visits to local stores put a new energy brand called Red Bull on his radar; it proved a massive addition to his house’s portfolio. Another time, returning from a board meeting of Vitaminwater marketer Glaceau, Sadowsky and a colleague from Verlinvest stopped into a New York store that turned out to be an early seller of Vita Coco. Sadowsky already was aware of the brand, but this was a chance to press one into his colleague’s hands and urge him to vet it as a potential investment. Of course, it’s proved a very successful bet.

As for Bowie and 55 Bar, there’s a bittersweet ending that you’ve probably heard. Though he kept it a secret not just from the public but even from his band collaborators, Bowie knew at the time he cut Blackstar that he was dying. The record debuted to ecstatic reviews and he passed away two days later, leaving tracks like “Lazarus” as his haunting final testament. And though 55 Bar is not the kind of place that would make much of the history that was recently made there, it serves as a reminder of the wonders to be found in some of the most unremarkable-seeming places for those willing to venture in.