business news in context, analysis with attitude

by Kevin Coupe

Yesterday I had the opportunity to venture into what, for me, is foreign territory - Wall Street - when I attended the 2012 Goldman Sachs Consumer Products Symposium to listen to some of the presentations and attend a post-symposium reception where Boston Beer CEO Jim Koch would be serving Samuel Adams beer. I've always wanted to meet Koch, and so I hopped a train and a subway and headed down to Goldman Sachs' fabulous new building (which next door to the under-construction One World Trade Center, already New York's tallest building even though it is not all the way up yet).

To me, there were three Eye-Openers about which I would like to report:

• In a discussion about private label, Brian Sharoff of the Private Label Manufacturers Association (PLMA) made a comment that, I think, may require some reconsideration. In speaking about the benefits that private label products offer to retailers, he said that when buying Coca-Cola, one has to deal with Coca-Cola. But if one wants to purchase a private label item to sell in one's store, if one does not like the terms of the deal or the product itself, one can turn to the plethora of other manufacturers that are out there.

At the risk of disagreeing with one of the people who has helped to drive private label consciousness in the US, it seemed to me that this actually runs counter to the way people ought to be thinking about private label.

Part of the transition from "private label" to "private brand" has required defining these products as definable, distinctive, unique and providing retailers with differential advantages that cannot be acquired elsewhere. To my mind, though, if you have a manufacturer that makes a product - let's say, a private brand chocolate chip cookie - and you have problems coming to terms with that supplier, you can't just go find another supplier ... because another supplier won't make the same cookie the same way.

Now, there probably are some categories where it matters less than others. But for private brands to really continue making strides in terms of market share penetration and public consciousness, content has to be seen as being at least as important as the label. At least, IMHO.

• This may go without saying, but I also walked away from the Symposium thinking that Joe Tripodi, executive vice president and chief marketing and commercial officer at Coca-Cola, is really, really smart. The presentation that he gave about how Coke has created a holistic and integrated marketing program around the upcoming London Olympics was fascinating ... especially because he described the Olympics themselves as a tactical way to achieve a greater strategy - connecting with youth.

Tripodi also said that while most of the people in the room would think of the initials "EPS" as standing for earnings per share, these days Coca-Cola thinks of those initials as standing for the creation of Economic Shared Value, Partnership Shared Value, and Social Shared Value ... and that it is in finding and building such shared value that the company will have sustained and sustainable growth.

• Finally, I thought the way Tripodi described the Olympics as a means to an end - rather than an end themselves - was highly persuasive and sophisticated, and I love it when people make distinctions between strategy and tactics. Which is exactly what Boston Beer's Jim Koch did during the post-Symposium reception. While he was being pressed by some of the financial types in the room about short-term things he could do to generate cash or build value, Koch made it very clear that he wasn't interested. "I don't worry about quarters," he said. "I worry about where the company is going to be 10 years from now."

Koch did celebrate at the Symposium the fact that Samuel Adams has reached the point where the brand represents one percent of the total US beer market ... but he kept it in perspective. "It means that after 28 years of working my ass off ... we've gone from infinitesimal to tiny to small."

I'll drink to that.
KC's View: