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Interview with Boston Beer

I was geeking out a bit on this one.  Truth be told, I was jazzed to talk to John Geist – an old friend and a current VP Sales at Boston Beer Company. Although he’s been on the West Coast for many years, he’s still a Chicagoan at heart.  And a CUBS fan – which means he’s on my good side!  Mostly, though, I was excited to learn what the supplier of so many fantastic brands does to help it’s people sell, lead and achieve.  Without that, you might as well go home!   Enjoy…

Darryl:            Are you in your planning now?

John:               Yeah. We’re planning. We should be final within the next, I would think the next month. But we have a pretty good idea of where we’re going and what we want to focus on and anything new we might be testing. Yeah. We have a pretty good idea of where we’re going right now.  2015 is going to be a fantastic year.

Darryl:            So my goal with these interviews is kind of to highlight the side of the equation that you don’t normally see in the trade press or just in general. You know, we talk a lot about brands. We talk a lot about depletions and innovation obviously that’s all very important but what I focus on is the other side which can be summed up in 3 words: selling, leading and achieving.

Darryl:           You’ve had such explosive growth and there often can be operational challenges that tax the sales and management structure.  Your sales professionals, your distributors love the brand obviously and the profits that the brand generates but I know that they grow weary of disruptions in a general sense. How do you help your people from a communications standpoint, to handle disruptions and adversity?

John:               We have had some challenges. I guess we look at it as an unhappy customer is an unhappy customer no matter at what level. We treat our wholesalers as our customers. They’re the most important customers we have. If one of our customers isn’t getting product. The right product at the right time or when they’re expected to get it, it’s our responsibility, either sales or operations, to identify the problem and to respond back with the proper answer.

Now, it sounds easy but it’s not because a person managing a wholesaler in some part of the United States is not going to have access to, you know, where their truck is or where their product is. We’ve have to ask the right questions, come back and provide a solution.

We’ve had some challenges. But it’s no different then if you call up a retailer and they didn’t have the right point of sale or unhappy about where their display was, how you built the display. You’ve have to respond to the customer with the right answers.

We have a couple of training programs and we’re very proud of them at Boston Beer. We spend a lot of time on group communication as far as how to communicate properly to large groups and to your wholesalers.

But I think we keep that customer first attitude with responding properly.

Darryl:            Would you say that the number one area, just in terms of getting your sales pros acclimated is that communication with the wholesaler tier?

John:               Absolutely. If we have that mentality. Continue to keep that mentality, that our wholesaler is our number one customer and we keep them first in mind, we’ll be okay. Now, we can’t brew beer for them.

I mean, if they don’t have inventory, our sales people can’t brew the beer for them. But we can at least get back to them with a response of where their beer may be so they can overcome their challenges they have.

Retailers are your end customer. How do you ensure that your sales pros are reading retailer needs instead of just communicating with the wholesaler?

John:               We listen to the retailer customer, also. We have our national account team that calls them. We talk to them but when it comes to inventory problems or out-of-stocks, that’s a problem between us, the supplier and wholesaler that we have to correct.

If it’s a problem with delivery or poor service from wholesaler to retailer, we can get involved. The only way we get involved, we’ll communicate the opportunity back to our wholesaler. But yeah, we call them out and we keep them up to date.

Many big retailers now manage their inventories and their out-of-stocks so closely. They evaluate their cooler sets by the hour. Walmart is one of them. We need to ensure that we have the right inventories and that the wholesalers are providing the proper merchandising.

Hopefully, it turns some of these out-of-stocks into display opportunities.

Darryl:            So from a service standpoint to the third tier. What would you say is the most critical element, again concentrating on the people that are actually out there whether it’s your sales force or your national account team, what would you say is the most critical element of managing the interaction with the retail tier?

John:               How they make their decisions. I mean, some of the chains are really big and try to control all display activities and all inventories at a very big, high level. That’s a challenge. You can find out once you start asking the right questions, you could identify that the store manager has options, maybe it’s the zone manager, but there’s ways that you can ensure that you’re not running out of stock.

That’s one of our responsibilities. You have to ask questions. You have to ask the right questions and find out if there’s a certain chain out there that you believe can only take a certain amount of inventory? They can take more.

The chains don’t want to run out of stock. They may have strict guidelines on what they’re going to display and what they’re going to buy but the last thing they want to do is run out of stock. It’s all about identifying how they make their decisions and what can and cannot be done in the stores.

Darryl:            Would you say that there’s more interaction from the supplier tier to the retailer tier now or was there more interaction five-ten years ago?

John:               I still think there’s a lot of interaction for us. Even though we look at our wholesalers as the number one customer, we want to have strong relationships with those retailers. I mean, we want to be looked at as not just another vendor but as the key vendor.

The most important vendor. The preferred vendor and hopefully even position ourselves into a consultant role where we could provide that retail account direction on what they should do with their entire beer category, you know? Not just Sam Adams or anything in the Boston Beer portfolio. It hasn’t really changed for us.

I know we’ve added a lot of people in the national account team so if anything it’s probably more important for us to stay out in front of our retailers because the wholesaler’s portfolios are so big now.

Darryl:            How would you react if a wholesaler said, “you know, we’d rather you not communicate with this account.”?

John:               We’d ask why. Because you know, I always look at the industry if – it’s a big if – if it was so simple. I mean, all we do is we brew beer. We brew beer. We ship it to the wholesalers and the wholesalers are to execute the distribution and visibility programs to build the brand.

But we all know it’s not that simple. We have a sales organization, a large sales organization, that’s out there working with wholesaler and retailers to ensure that our programs are in place. We don’t have many markets …. Maybe one in general that they feel that they can handle it on their own. It’s much different with spirits and wine.

I think spirits and wine, wholesalers might take a bigger positioning when it comes to calling on the chain accounts? But for us, we’ll probably have one market where the wholesaler prefers to do it but we get involved in ensuring that they’re well trained and coached and can present the brand equally as we presented it.

Darryl:            You’ve had this string of successes, right? Of all these great brands and what I want to know is how do you motivate a sales organization, whether it’s at the wholesaler tier or even in your own company, how do you motivate them to care about the mature brands? The stuff that’s obviously paying the bills when it’s exciting and maybe easier to sell the new, hip stuff?

John:               We’ve have to educate ourselves and this might take a lot of time, Darryl, in portfolio selling and portfolio management. We grow up here at Boston Beer company by leading with Boston Lager. That’s what’s most important to us and it’s probably the first line item you look at when you look at your sales reports.

How’s lager doing? How’s lager drafting? Our wholesalers understand that. I think we’ve done a very good job just keeping focused on Lager, providing new programs, new ideas, celebrating milestones to where Lager gets the attention it should get.

To date were showing growth on Boston Lager as we continue to roll out Angry Orchard, as we continue to Build Twisted Tea. Our seasonal business is healthy, so I think it says a lot for our wholesaler network and for our people that they could grow Boston Lager and do all these other things. I mean, that’s thirty years of training. We didn’t want to take our eye off the ball and that big ball was Boston Lager.

Darryl:            How do you manage expectations with so much cool stuff? I mean, how do you manage expectations within your company and at the wholesale tier?

John:               The expectation is to show growth on Boston Lager. So if it’s one more case, there are how many more cases? We would like to roll or index with the categories growing. The wholesalers appreciate that we’re paying attention to it. That’s the key part.

We’re programming it. We pitch it first. We are always talking about it. We get new programs for it. We don’t just turn out back to it. What we will always refer to with Boston Beer is we don’t want to have Boston Lager be the next Pete’s.

You know, for those who remember Pete’s Wicked. Pete’s Wicked was the brand but then Pete’s became the flavor of the month and they start to play with their seasonals and prioritizing seasonals and Pete’s Wicked went away and then Pete’s went away.

We look at it, even though that’s a very old comparison now, we want to make sure Boston Lager stays healthy and we need to continue to focus on it. Our sales forces, they have objectives against it on a monthly basis.

Wholesalers have programs against it on an annual basis. I think we do a pretty good job keeping that at the forefront for a brand that’s thirty years old.

Darryl:            In terms of people management within the company, what does Boston do better than some of the other national companies?

John:               With people management?

Darryl:            Yes.

John:               We try to push the decision making process as close to that decision as possible. We look at that. We pride ourselves on ensuring that we are always adding value to the retailer and we want to make sure that we’re asking the right questions.

If that decision making process, whatever that may be -small or big – we’re asking the right questions and offering them the right programs to grow the business. I think that’s important.

We take a lot of pride in that and we train our people to probe and ask questions and what the retailer wants and what they may need. How they make their decisions and what they’re going to do. It seems to have worked so far.

Darryl:            What’s one decision or one act or one occurrence from your long career in this industry that you would take back?

John:               Only one, huh? The biggest thing is you know what? Make sure you “voice your opinion”. Just don’t agree with all the goals that are going to be thrown to you because there’s going to be so many goals and objectives you receive.

But do it professionally.

We expect our people to push back. Make those decisions at a local level.

Make those decisions at the early level, at the account level because you’re going to know it a heck of a lot better than I’m going to know it three thousand miles away.

Darryl:            I’m a new guy in your company right? Put your hand on my shoulder and you’re going to tell me one thing that will help me be successful and achieve everything I could achieve. What’s that one teaching moment on my first day?

John:               Think about how you could add value to the customer. We look at it and it’s not supposed to sound morbid but if Boston Beer company wasn’t here tomorrow, the retailers are still open. The wholesalers are still going to be in existence.

They’re going to find a substitute for us. It’s not a problem. There’s other brands that they could sell. So how as a representative, as a new person can you add value to the retailer to the route rep that you’re going to be working with at the wholesaler to the wholesaler in general.

How do you add value? You’ve have take that to heart. You’re not just going in and begging for a draft handle or begging for a display but you have to ask the right questions to figure out that our brands can add value to that customer.

Darryl:            Right on.

John:               Secondly, I would probably say don’t over-commit and under-deliver. Which is in my opinion is probably the biggest law on the supplier side.

Darryl:            If we were riding together and making calls together and I’m a young guy and I stand up. You say, “well how do you think we’re going to do in here?” I give you some response, some reply that implicates that I don’t believe we’re going to make the sale. Would that be something that would trouble you as my superior?

John:               Oh, absolutely. I mean, you want to go into that account thinking that we’re going to identify how they make their decisions, identify what they’re looking for and what we have that can add value to their portfolio of beers and but you need to have that positive thought process before you walk into that account.

Darryl:            How would that manifest itself in your eyes if that lack of confidence. I call that “embracing the race”, just in terms of like, sometimes you’ve just got to toe the ling and get going and do it.

John:  We look at it. I mean, we have a core conference that we look at, it’s called commitment to task. We look at that task like, do you embrace those tasks? You have a lot of different goals and objectives.

You have an opportunity to close these tasks. Are you prepared for it? Do you have the right plan in place? Do you have the right questions ready to ask? Are you going to attack this and then finish it? Or are you going to be satisfied when you make it to fifty percent or seventy percent? Or are you going to work it for a full one hundred percent?

We also understand that we’re not going to close every account. But the world is big enough that you can identify the right account through proper planning, and through a proper probing that you’ll be able to meet your objectives.

But it’s a challenge for the team leaders, our supervisors, to continue to keep the team motivated. Are brewery reps motivated so they see that there are these opportunities and they can close these accounts. If it’s new business or current business.

Darryl:            Last question. What’s one thing you wish your sales team did more of?

John:               That’s a good one. One thing that sales …. Let’s see. There’s always looking for new business. For us, we’ve seen such a shift there over the last whatever it is, probably ten years really now, of the industry changing and drinking better beers. More craft beer and the trade up in happening. Domestic light beers are soft.

Making that cold call is never easy. Looking at that pizza joint that used to just sell nothing but domestic beers. Making that cold call and identifying that you know what, everyone no matter where you are, they’re trading up to better beers.

They’re trading up to the national brands. They’re trading up to some of the strong locals that are out there. Don’t give up. There’s a lot of new business out there that someone’s going to grab. If it’s not Boston Beer with Sam Adams or Angry Orchard or Twisted Tea, someone’s going to grab it.

For the beer world, it’s maybe in a slow transition in the trade up process. But what we saw happen with spirits, we saw it happen with wine. It’s happening with beer. Continue knocking on as many doors as possible.

Darryl:            If you don’t approach that customer/prospect, somebody else will. Right?

John:               You’re damn straight. Right.

Darryl:            Well, John, thank you so much.

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