The ad agency-marketer client relationship is like a marriage—some are lifelong love affairs while others are more Kardashianesque. And like marriage, agencies and clients have long been evaluating what works and what doesn’t. Along those lines the Hive, a small Toronto agency, tweaked its business model to fundamentally change how big U.S. booze brands, like Jack Daniel’s and Southern Comfort, are bought and sold in Canada.
Traditionally, foreign brands find distributors in Canada to handle their sales here, but many distributors are loaded up with hundreds of different brands. “There are great brands in Canada and around North America that are frustrated and languishing because they haven’t been getting the proper attention,” says Rick Shaver, vice-president of the Hive, which was behind the recent launch of Collingwood whisky. “How can you expect the same kind of attention and focus? The consolidation of distributors in North America has reached a breaking point and I think there are plenty of people in beverage alcohol looking for other options.”
In 2010, Brown-Forman, the 142-year-old Kentucky-based firm behind Jack Daniel’s, Finlandia Vodka, Southern Comfort along with 22 other wine and spirit brands, was one of those companies. “We had some options and didn’t quite find what we were looking for and the Hive started waving their hand in the air,” says Brad Fletcher, managing director of Brown-Forman Canada. “We do have business with these guys but on a totally different front, primarily down in the U.S. And here they came with this novel idea of handling the business up here.”
The Hive and Brown-Forman created a new entity called BF Canada Powered by The Hive. The new approach made the Hive the Canadian sales force and distributor for Brown-Forman. BF Canada lives in the Hive’s agency’s Toronto office and was up and running in two months. They haven’t looked back. “The numbers are the proof,” says Fletcher. “For the two years we’ve been in this arrangement, sales have grown by mid- to high double digits. It’s something we’ve never seen.”
The Hive made its name among American booze brands in the 1990s for its live event marketing chops, putting on parties like the Molson Ice Polar Beach Party with Metallica. In 1997, Brown-Forman brought them in to connect the dots between advertising, sales promotion, PR, media planning and buying in the U.S. Today, the Hive has about 65 people across the States doing field marketing, as well as full sales responsibility in a number of markets, including California. Even with that experience, it was a big step to take on all of Canada. “It was a leap of faith,” says Fletcher. “There was no infrastructure in Canada to pull it off, no offices across the provinces or staff across the country. It was really a start-up enterprise.”
Shaver says the most important ingredient is the ability to focus on a select number of brands at a time. “We have a selling system that’s 100% dedicated to Brown-Forman’s portfolio,” he says. “The strategy goes beyond retail shelves and into events, festivals, social media, new brand launches like Jack Daniel’s Honey and Collingwood rye whisky.”
Brown-Forman’s North American president Mike Keyes says the success of the Canadian partnership illustrates the need for companies to actively look for, and be open to, opportunities to adapt. “Very rarely does a company move beyond their comfort zone and theirs at the time was advertising and promotions,” he says. “But as we needed other things, they went out on a limb to see if they could do it for us. There’s a lesson there for other companies. Business changes and the world keeps turning, and if you can’t keep up you’re going to fall off.”