Business Before Pleasure, Ego Before Business
Sometimes change makes people upset - especially older people. I had my 33rd birthday yesterday and I'm definitely less comfortable with change than I was last year. That being said, I've learned to reign in my temper for any discomfort that change tends to cause because what good is anger going to do? Instead of going ballistic last weekend when we got to the movie theater 45 minutes early only to find that Lincoln was already full, I didn't let it phase me. That's how it works these days. You've gotta get there hours ahead of time to hold down a seat. When I found out recently that Jack in the Box no longer sells carrot cake (and hasn't for some time, I guess), I didn't take it out on the attendant. I just said, "oh, bummer."
That's not always what happens, however. Not everyone has trained themselves to deal with change, especially booze customers. Not the guy who had been buying handles of Ballantine's from us for ten years ("I'm sorry, sir, that's not really our deal anymore"). Not the guy who's stopping in to look for Bombay Sapphire ("What the hell kind of liquor store is this that you don't have Sapphire?"). Not the guy who got the email earlier in the day, only to drive over and find it's all sold out ("But I just got that email earlier this morning!!!!"). The booze world is changing. It's always been in flux, but today's boutique market is a far cry from what most shoppers are used to seeing. Niche products, smaller producers, and online inventory with will call ordering? What the heck happened to to stopping by for a fifth of Jack?
No subject is more sensitive, however, than the Pappy Van Winkle supply. "I remember when I could just walk into K&L and get it whenever I felt like it!" Those were heady days, indeed. When those days suddenly came to an end back in 2010, things got a little tense around the store – for me included. I was so caught off guard by the reduced allocations we received for Pappy Van Winkle that year that I didn't know what to do. I was really upset. Partially because I knew my customers were going to freak out. Partially because I thought we deserved more. Partially because it was such a smaller number than it had ever been previously. In 2010, however, I had not trained myself properly for change. I still spoke with my ego first. I cared more about my needs than about K&L's business. I fired off one humdinger of an email.
As our insider email list has grown over the years I've come to realize that not everyone on it actually shops at K&L. There are plenty of industry people who have added their emails as a way to keep tabs on what we're doing. So when my ego got the best of me and I vented my frustration about the situation (I don't remember exactly what was said – something about "making me want to puke" and "looking forward to selling more Four Roses"), the dookie hit the fan. That email went viral. It circulated throughout the booze industry and it wound up in the inbox of every Buffalo Trace employee who mattered. It would become known around K&L as "The Sazerac Incident."
After a brief exchange of blows and a small attempt on their part to get me in trouble (no hard feelings, guys), I eventually apologized for my outburst. Sazerac had pushed for a public apology, but K&L ownership wasn't really all that upset. I hadn't lied about the decrease in allocations, so while my language had been colorful, the message had been all truth – we were getting less Pappy than ever. Nevertheless, I wanted to apologize because I knew deep inside that I was being a total prick. I was playing the holier-than-thou role, the way a hot-head diner blows up at the waitress for spilling a glass of water. "How dare you do this to me!" There was actually a very good reason as to why these allocation cuts happened and if I had stopped to think about this first, I might have spared everyone this hot mess.
BevMo is the largest liquor retailer in California, but they're a bulk-item store. They never really dabbled in the boutique market. When their Sazerac rep would come around every year, offering them a a few cases of Van Winkle Bourbons, they looked at both the price and the quantity and said, "Why would we want these?" As a retailer, there's not much profit in the Van Winkle portfolio. They're more of a status symbol or a way to reward loyal customers. BevMo could make more on daily sales of Gordon's gin, than in Van Winkle sales. Most of their Bourbon selections were around twenty bucks. Who in the hell was going to pay seventy? In 2010, however, with the retailer market changing and the rise of consumer interest in Bourbon, BevMo decided they wanted in on this whole Pappy thing, as did many new retailers who had for years had paid little attention to the items. That meant the unused allocations for 100+ BevMo stores plus every other Sazerac account, which previously had been given to smaller boutique retailers, was now actually going where it was supposed to go. That meant no more thirty bottle allocations of Pappy 15 for K&L. It was going to be more like six.
(CORRECTION HERE: Sazerac has been selling Pappy to BevMo for more than 10+ years, but not all accounts took their full allocation. It was a combination of this, plus other accounts, plus lower yields)
Since BevMo is clearly Sazerac's biggest account in California (remember that they also make things like Fireball Cinnamon Whiskey and Rain Vodka), it only makes sense that they should get the largest allocation. It wasn't so much the principle that made me mad as much as it was the instant change. Change was freaking me out because I had more people asking about Pappy than ever (now it seems like nothing) and I was getting fewer bottles to cover that spread. Imagine all the heat that they were getting, though. Imagine the phone calls, the pissed off vendors, the bars, the restaurants, the customers – all bitching about not getting their Pappy. What a mess! It wasn't their fault, however. It was the way the market was heading. Times were changing. More people wanted Pappy, but there weren't any more bottles being produced. We needed to understand this coming market trend and adapt to it.
In the end, a few people from Sazerac reached out to me. We made our peace. I did a podcast with master distiller Harlen Wheatley. We started a robust single barrel program. I became closer with my new rep Dennis Tobin, who I now try and bother as little as possible because I understand what he's going through. When I have customers going to Kentucky, I call Amy Preske (who is incredibly helpful and works around the clock to set up appointments for K&L shoppers) and she makes sure they're taken care of. We've got a pretty good business relationship going right now because we realized that our anger wasn't going to solve anything. In the end, we wanted to put bottles in peoples' hands and we wanted them to be happy. Having a spirits buyer with an overblown sense of entitlement wasn't going to help K&L or Buffalo Trace. Neither was getting him canned.
Doing business requires us to see beyond our anger and look at the big picture. In the case of Buffalo Trace, they're being bombarded by requests for products they don't have. They're having to spread the wealth as far as possible, which means it's being spread thinly. Unlike another company I know of, however, Sazerac has always been up front with us and answered the phone when we needed to chat. They've been adamant about keeping things positive and moving forward with our relationship. I've learned that, unless I've completely thought through every angle, I need to keep any knee-jerk reactions to a minimum. I should have called Sazerac first before sending out an email. They would have wanted to explain why this was happening and work something out.
Talking things through makes good business sense. I'm wondering why another large company won't do the same.