That s**t will never sell - Baileys inventor on how innovation works - David Gluckman

0:05David Gluckman, welcome to Uncensored CMO. Thank you very much. Delighted to be here. Now we sit here 50 years after the invention of Bailey's, and I found out after reading your book that Bailey's was launched two months after my birthday. Well, we knew that at the time. Yes, indeed, to celebrate my birth. There we go. The Bailey's story is fascinating, isn't it? I'd love to understand from you how you ended up working on the brand, how you invented it, and what was it like at the time? because I imagine like a cream liqueur was quite a wild idea back in the dark 1974. Well, I have a very distinct memory.

0:43I mean, the brief came in on a Friday afternoon from Tom Jago, who said, the Irish are looking for a new brand for export. The finance minister has suggested that export would receive a 10-year tax holiday. so there's an incentive to do it what sort of drink who are the people oh I don't know just get on with it so we didn't know who we were developing for we didn't know what their competences were what their preferences were we had no idea move forward two days to Monday morning I'm in the office at eight o 'clock traveling 20 miles to work my partner gets in at 20 to 10 and I'm totally pissed off.

1:33And I said, what are we going to do about this Irish brief? To which he said, what Irish brief? Because he switched it off for the weekend. And then we chatted. I had worked in the 60s on the transformation of Irish butter from a commodity with no identity to a brand called Kerrygold with an incredibly charismatic Irishman called Tony O 'Reilly, who's sadly now dead. And he imbued me with a sense of Irishness and the importance of a dairy industry in Ireland. So fast forward 10 years and I'm talking to Hugh, my partner, and I say, is there anything in my Kerrygold experience which we can bring to bear on this drink?

2:22And Hugh said rather diffidently, what happens if you mix cream and Irish whiskey? So anxious to get him active, I drag him by the ear down to international stores at the bottom of Berwick Market where we buy some cream, we buy a small bottle of Jameson, persuading I think the woman at the checkout that it was 11 o 'clock, and go back to the office and make the two. The result is awful, truly awful. Cream and whiskey, if you can imagine, are not comfortable bedfellows. But I was convinced there was something there, so we went down to the store again, bought some Cadbury drinking chocolate, powdered chocolate, added some sugar, had no idea what proportions we'd mixed.

3:16But it tasted great. and there were three of us, two of us and a secretary assistant. We all tried it. They said, terrific. So I said, I'm going to IDV to pitch it. Do you want to come to Hugh? But Hugh was an old Etonian, Oxford-educated classicist. So he said, no, I don't think my suit's here, so I'll be able to go. Jump in a cab, dreaming all the way to IDV about how we're going to position this. meet Tom, who doesn't give me a chance to make any foreplay, grabs the Screps screw-top bottle, tastes it and says, hey, this looks good, why don't we do it? And I think thereby, you know, people always talk about having an idea, making you a hero.

4:05Buying an idea, if you're in a big company where you have the responsibility for using the resources and the capital of the company is probably a more heroic gesture, particularly when it's off the wall. But Tom said yes immediately, and that was one of the great moves of my working career, I think. Somebody said, without arguing, let's do it. What an amazing moment. I guess he didn't know then that Baileys would go on to become the world's best-selling liqueur brand and however many millions... You can't know that. You can't, can you? No. So he had said yes at this point, but what happened between that yes and it actually, you know, hitting the production lines and being lost?

4:50Well, the first thing he said was, we need a brand, so we need a name. And I remember the conversation I had in a bar with O 'Reilly 10 years back. O 'Reilly said, if you ever come up with a brand where you need an Irish family name, don't use one like his, O 'Reilly's. I said, why have I not? and he said, because O 'Reilly's Irish Cream sounds whimsical, doesn't sound serious, and it stuck in my head. And the next day we moved from Dean Street, where we had offices, to Creek Street, and we were looking at a new office. And as we walked around the corner to the new office, there was a sign on a restaurant below the office called Bailey's Bistro, and it didn't have an apostrophe on the S.

5:41and I thought that's it. I don't know why but I mean sometimes there's a Croft ad that they ran about that time which said you instinctively know when something is right and I knew then Bailey's was the perfect name. So I called up Tom and said let's call it Bailey's and he agreed and the next thing was he took it up to Harlow to the R &D people and Matt McPherson, who was the guy who made the product, eventually, I said to him 10 years later, what do you think of our original sample? He said, total crap, undrinkable, but I knew what you were trying to do and that made it much easier for me. So that's what we did.

6:30So then there were six months went by while they tried to optimize the product. And again, when I asked Mac 10 years later, if where we are now is 100, where were we when we launched? 49, he said. But that's the way it went. And there were a couple of other things. We had the name. My secretary had a husband who was a designer living on a boat on the Thames at Kingston. so I briefed him on the phone and we got six designs back and we picked the one that we thought worked perfectly and that became it I mean we never did any more alternatives no names then we did a couple of focus groups but we got two responses and again this was where you threw an idea open to assessment and the loudest mouth decides what the result's going to be One guy got up and said, this is a girl's drink.

7:31I wouldn't be seen dead drinking at a pub. I drink pints and I drink vodka. But all the glasses in the room were drained. And in the women's group, one woman said it reminded her of kaolin and morphine, which is a diarrhoea remedy. But we ignored that. In fact, we got the report on the day we went to Dublin to present. And we looked at it on the plane. I said, look, they're not going to understand this. It'll do nothing but bad, so leave it. And we also put a couple of bottles into a pub off Maribyrn Road called the Allsop Arms and kept going in and nothing happened. The bottles just sat there gathering dust.

8:14And then one day we came in and there was one bottle gone. And I said, oh, what happened? They said two policemen came and consumed an entire bottle. So that was us. That was Showtime. That was... You got your evidence. We had the evidence, exactly. So I went to pitch it in Dublin. I'd never met the guys before and did the pitch. Oh, and one of the things that I felt was necessary with something as strange as a product was to actually go the whole hog and produce a bottle with a printed label on it. And I even had loads of money. so they could do that. We didn't want to go to the expense of a new bottle mould.

8:58It didn't seem necessary. We found one from Red Breast Whiskey. And the pitch was a huge success. It was great. These guys had something that they could fondle in the meeting and look at and say, this is my brand. They took the word chocolate off. We had Irish chocolate cream liqueur and they took chocolate off, which probably was sensible because it took away the mystery of the formula. And that was it. And then between November 73 and November 74, they bought the plant. There's a lot of serendipity here because IDV was owned by Grand Met and Grand Met owned dairies in Ireland, express dairies.

9:43So vertical integration was something I learned by accident, if you like. The only other funny thing, because by then I was out of the picture. You know, it was all being done now. They were producing the labels and the bottles. I had a call from David Dand, the CEO of Bailey's, and one of the great heroes of Bailey's because he gave his life to it, really. I think he died ten years after launch from the sheer effort of doing it. But David called me up in, I remember, early July. He said, we can't just call it Bailey's. we need initials. And I was looking at the sports page of The Guardian and there was something about the open being played.

10:29It had RNA rule on pin placements. So I said, let's call it RNA Bailey, two initials. And he said, why the hell not? And that's how it became RNA Bailey. But there are millions of stories. I mean, I've sat in meetings with people who claim to have invented it. I think success as Kennedy said has many many fathers. Failure as an orphan is the other option exactly so but also I mean today we'd call it bootstrapping wouldn't we would be the kind of trendy word for it but what I find fascinating about your story is that none of that sounds particularly expensive you know doing the research mocking up the bottle using you know using something off the shelf you know employing a designer a single person you're not going to a big agency You're moving quite quickly to a year from, you know, idea to launch.

11:21And I think when you're small and nimble like that, you can move so much faster and get things to life, can't you? Well, that set a template for innovation in IDV during the 36 years that I was there. And it even crept into Diageo in the sense that Ciroc and Tancred 10 were both single ideas, that they weren't based on options. And I think we saved an enormous amount of money by not testing options, never testing options. Because you think of how much money you spend in a company looking at five different pack designs and stuff like that. And it creates an economy that isn't justified. I mean, we said we're experts we know what we've done by then I'd been in well no one had a view of Bailey's except us yeah there was no objective view of what it should be because it was innovative let's move on to Purdy's and the reason I wanted to ask you about Purdy's is I've got a great connection to the brand because for three years back in about 2010 to 2012 I actually picked up ownership for it at Britvik so I was at Britvik and I was a bit lost in terms of what to do with my career and I had a real passion for innovation and particularly for the brands that have been overlooked and we had this lovely little portfolio arm a aqua libra and purdy's which i think britwick had bought from orchid brands which i think was then before that it was was grand metal but it basically been neglected the company hadn't done anything in the 10 years i've been there no promotions nothing so i i put a little business case together and said right i want to manage i want to manage purdy's myself i pulled together a few other brands like lip to nice tea and mountain dew and a few a few other things and it was absolutely wonderful i did refresh the packaging a little bit just a little bit of you know a little bit of refreshment but i was amazed that even then after all those years it was a top seller in boots it was a top seller in holland and barrett it was a top seller in uh wh smith's in food service it was often the number one line that you know um that we were selling but it had just been neglected it's one of those brands that i think despite people's best efforts you know to neglect it has astonishing value so what's the what's the backstory to how did it how did it come to life well purdy started with a new man taking over innovation in idv he was a man called tim ambler he was a brilliant guy and tim said alcohol is going to come under attack and we need to develop added value non-alcoholic drinks which can take the space.

13:59And I said, is that all? He said, yeah, you figure it out. And it was a very vague and difficult brief. And we started off with a sport to drink because quite a few of the team played games of one kind or another. Brands like Gatorade, Pocari, Sweat, and those brands were beginning to, and there was the whole revolution in the 80s. People joining sports clubs, the fitness, revolution, things like trainers becoming fashionable and stuff like that. So we started with sport. We produced a drink called Dexter's, which was, I think that came into the package that Britwick bought, although they probably didn't use it.

14:43And Dexter's was, puts back the minerals exercise takes out without the calories. So it was zero calories. And I always thought Dexter's was there's an opportunity there because I think if you walk into a pub and ask for a diet Pepsi people look across and say oh putting on weight are we whereas if you walked in and ordered Dexter's oh had a game of squash have you or something like that and I think that I don't think that particular opportunity has ever really been exploited but Dexter's in a way fell off the in terms of what the strategy for these brands became. We then moved to deciding that we were going to offer positive health.

15:32Most of the health products you see were caffeine-free, salt-free, sodium-free, da-da-da-da. We were going to add stuff. And the first one we started with was Equilibra. I read somewhere that in the Far East, diets were based on food that formed alkaline ash in the bloodstream and that our Western diets were primarily based on acid ash. So we produced an alkaline drink called Aquilibra. And Aquilibra absolutely took... I remember Tim, we said, what's the brief, Tim? So Tim said, right, imagine me in amongst six top models at the trendiest bar in town. All of us will be drinking this drink. and that became Aquilibra.

16:22And it became, I mean, we had the best piece of PR at no cost in the 80s where Princess Diana included it amongst her three favourite drinks. Wow, that's impressive. Now just describe what it looks like and what it tastes like for people because a lot of people listening won't know the brand because we've got lots of international listeners. But even people in the UK may not be familiar because I think Britovich relaunched it maybe four or five years ago into a can. It's a sort of a sparkling, flavour of sparkling water. The Voxelviva version. But the original, it was like a triangular bottle, wasn't it?

17:00Very tall. It was a pretty straightforward bottle. Yeah. It was an upright bottle, 75 centiliter and 25 centiliter. People drank it as a replacement for wine. They drank it as a normal, just a normal drink. what it had which I think would have scared off most marketing companies it had a polarizing flavor it had herbs in it I remember I got the list out of a book and said stick in aqueous infusions of this that and something else it was the color of sort of white wine and it was I think you had to acquire the taste it wasn't something that you'd immediately like and I think at the polarized opinion i remember craig brown in the spectator describing it as liquid lipstick but it was a very interesting it was an interesting product and you had to learn about it well i think what i liked about it is same for purdy's actually if you started in soft drinks yeah you would not invent this right no but if you start in alcohol and go what are the cues of a premium drink sophisticated glass bottle you know interesting flavor you discover and acquire over time beautiful serve etc etc i think it's the interesting thing about innovation is when you come from a different category and you know how do i take the knowledge from this category and what would it look like in this because like purdy's it's a it's a you know 330 mil glass bottle fully shrink wrapped you know very expensive looking you know it really doesn't make logistical or price sense does it but it works you know because it was it was a very out and it's very different trendy drink and it it i guess i mean i had this sort of theory that if you sometimes i used to go to mcdonald's and then order a glass of milk saying well i'm eating stuff that maybe isn't doing me huge amount of good but the milk is cancelling it out and aquilebra was a bit like that i think i coined the line it helps balance the foods you normally enjoy and in fact I ended up writing the first ever ad campaign for it because the agency just couldn't come up with something and we were desperate so 15 ,000 pounds went on my campaign so the next thing we went to was Purdy's and what we decided to do with Purdy's was we wanted to avoid caffeine chlorine, taurine, high sugar.

19:30And I looked for a word, but one of my major sources of words, ideas, is Roger's Thesaurus. I was looking for a word that meant energy, but didn't use the word energy, because the energy immediately said, you've got sugar and stuff. And I found the word vitality. And so that was the word I put into Purdy's. And we used herbs and vitamins that promoted vitality. And then Tim had this interesting insight. He said, let's sell it in places where people are going to buy it. Made sense. I mean, let's not put Purdy's in a supermarket. Let's put it into entertainment business. So I wanted rock stars to buy it.

20:18I wanted film crews, you know, a thousand people you see at the end of a movie. I wanted all them to be drinking it. And that would be our way in. And we did actually sell the first case to Abbey Road Studios. I'm not surprised, actually, because even when I was managing it in 2010, 2012, probably the stereotypical drinker would be somebody in London in the creative industries, like an art director. Yeah, that's exactly what we had. And that was still the case when I managed it. So the epicenter of sales would be high-end cafes, delis, convenience stores in central London. That was the typical buyer base, yeah.

20:57It's really pleasing to see that Vic have made such a good fist of it and the brand has become important in their portfolio. Yeah. I'd probably say despite, actually, because, I mean, it had a bit of a revival under me, and I think a few other people have had a go at keeping it going. But it's like all things, there's the innovators' dilemma with all big companies is that big companies tend to focus on the big brands and that's where most their growth comes from so you get these small brands within the portfolio that get overlooked yeah purdy's is a classic case and i mean in fact i was telling you before i actually put an offer in to buy purdy's yeah off britbit got accepted and then unfortunately my timing sucked because the board meeting where it was being signed off was the same time that fruit shoot had a big product recall and 30 % of the company value, a company value, well, share price basically dropped 30 % overnight.

21:48And they said my small offer to buy Burdies was off the table, unfortunately. So there was a moment in time where I might've ended up owning it. I wish I'd known you then because I mean, we had other ideas, you know, we had a brand called Fafs. I love the name. It was the Belgian goalkeeper and it was P F A F F S. What a name. His name was Jean-Marie Faf. and I just thought, let's do that. You see, ITV had guys who'd buy that kind of thing. Yeah. You know, they saw it as unusual. No one would forget it. And I wanted people to go and write on walls. Fucking fantastic. Pony's was an upper. Fafs was a deliberate downer.

22:30Yeah. You know, it helped you relax after day trading and stuff. Yeah. Yeah, I love that idea. Yeah, you can see that going into common parlance about, you know, don't faff around and all the rest of it. exactly could have done very well now talking of igv many of your ideas are in alcohol but also premium spirits and a couple that stood out well a few stood out in the book but ciroc and tanqueray what was the story behind those well we'll start with uh start with tanqueray because it's um came first in 1997 when diagio was formed and when they bought seagrams as well the mergers and acquisitions people said that they had too many gins.

23:10And I think reluctantly, the one they had to get rid of was Bombay Sapphire, which was a brand that was on the way up, was pushed by the Carolin's company in the States, who were fantastic at that kind of brand. And John McGrath, the CEO, said, well, we need another brand to occupy that space, but really quickly. And I remember we had the idea, where the idea came, we were in Landon in the distilleries outside, somewhere in Essex where Tancre was made. And we were sitting on sacks of juniper berries because they didn't have any chairs in the distillery. And we were playing around with junipers, the only way you rub them together and smell them.

23:54And I said to the guy, can you make gin out of fresh botanicals. That sounds like a good idea. And the guy said, yeah, might cost a bit, but we can do that. And my client was there and I said, well, let's do that. And then we put together this whole story that we would dial down that heavy juniper coriander flavor that signifies hardcore gins. And we would produce a fresher, fruitier gin, which would, and then we would aim vodka drinkers because you know there's a huge potential market and I think that that kind of approach comes from my P &G Unilever days in advertising which were where you were constantly looking for a product benefit and I think benefit's important I mean I've long had debates with people about benefit versus process.

24:53I don't think people give a toss about something being filtered through nuns, underpants or being distilled 25 times. But I think if you say that this thing tastes different, then you've got something going for you. But they never use that in advertising. I mean, even to this day, Tanqueray 10 has got this 60-year-old bald guy in a bar with a whole lot of good-looking women He says, I'll have a Tanqueray martini. The women all say, ooh, yes, so will we. And I've got a thing in my head, which is a kind of guide to developing brands. I'm in a bar. The guy's sitting next to me. We're having a chat.

25:37He says, would you like a drink? And I say, yeah, I'll have a Tanqueray 10. And then I imagine him saying, well, why are you having that? And I say, well, because I used to be a vodka drinker, but I got bored with it. And this is the only gin that doesn't taste. Now, I don't think that's a bad story. It's a reasonable leap as well, isn't it? Because vodka martini, gin martini, that's usually the option you get given. So get something that's a crossover between the two. You can switch people either way, really. Yeah, I'm kind of making a sales pitch to you as the guy who's just bought me the drink.

26:12And I think it's quite important. Not because such and such a person drinks it. So that's the gin story. What about the bottle, by the way? Because I think part of Tanqueray's appeal is in the beautiful design, isn't it? Well, the bottle actually has changed for the better, I think. Because we always wanted, this was incredibly difficult because this was a joint venture between a US marketing department, some guys in the UK and me, and I was always outnumbered. They were always going to put things through research, etc. etc so the first bottle I thought didn't work at all because the wrong color I wanted to be that lemony look refreshing but you know you can't win them all you do what you do and hope that it goes further vodka is quite interesting though because vodka as everybody knows is neutral it doesn't have a taste it doesn't smell of anything and it's white that's pure vodka.

27:11So somebody comes to you and says, well, Smirnoff was a great case. I'm going back before Ciroc. Smirnoff in America in 1990 was supermarket vodka. It's sitting on the gondola and price cut to hell, has no reputation at all. And the market changes, Absolute comes in as this brilliant, pristine Swedish vodka, one of the best brands. I mean, somebody said, is there any brand in the world you wish you'd invented? It was that. It was just so perfect. The name. Brilliantly done. Everything about it was fantastic. And how do you take, I mean, I said that doing a premium Smirnoff was like trying to get a Michelin star for Kentucky fried chicken.

28:01You know, it's tough. and I said the only way we can do this is if we have a better product. You can't just do a sexy pack and expect people to buy that. We have to give them something in the bottle that's better. So Mac, my friend Mac Macpherson, who's now retired, he and I went to New York and I said to him, look Mac, we're going to do blind tastings at the beginning in every focus group. He did about four groups I think, which most people would say was quantitative for us. And I want eight out of ten people to say I like our one better than absolute and to volunteer the word because it's smoother.

28:44So I said, with that brief, you have to make a smoother product. And I know what he did, and I can't tell because it would be betraying a confidence. But he produced a product where we achieved that result. And we achieved it even to the point in groups where we told people, hard-nosed American marine sergeants of 40, who are dedicated to absolute drinkers. We said, well, you know, that comes from Smirnoff. What do you think? They said, I don't believe it, but if that's true, I'd buy it. Now, that was a good story. Unfortunately for all of us, I think, Like IDV had taken over management of Smirnoff from Hubline in Hartford, Connecticut, and they had spent the previous 20 years building up the Smirnoff brand.

29:38So what chance of a UK-based idea being really made successful in the US? None. Great brand, though. Funnily enough, I know this quite well, because at the time you were doing this, I was the brand manager on Stolich Nair. and as part of my training i i did some vodka education and vodka tasting now i i wasn't a drinker before and i remember my perception my perception of vodka is it must all taste the same so and i was blown away by we did this we tried warm and cold and frozen all different you know different temperatures the difference between a kind of supermarket owned brand vodka and something like siroc or gray goose or stolich nara elite was incredible i mean as you say you're going from something that tastes like almost mouthwash through to something beautifully smooth, not challenging at all, actually, although it's 40, sometimes 45, 48%, because it's so smooth and distilled and refined, it just, you know, it's beautifully kind of slips down the throat.

30:38But this is something people don't understand about vodka is it looks the same, but it's not the same when you're drinking, you know, high quality versus low quality. And actually you want to drink it as pure as you can to get to be able to see the differences in the taste. But this was a revelation for me as a young brand manager on storage now 25 years ago. Well, for me, the breakthrough was the word smooth. Suddenly it's never been used in vodka before. And if you could deliver it, and that's my talk about benefit. It started off being pot still vodka. I thought people would be really excited by pot still vodka.

31:15But in fact, smooth vodka is what they were looking for. I mean, nobody knows what a pot still is anyway. Or maybe they distill it with marijuana, who knows. Now, Ciroc is different in the sense that, again, compete with Grey Goose. We didn't have a brand in that sector. And my theory has always been, can you come up with something different? Better is a matter of opinion, different is a matter of choice. and I had remembered that I'd been in Tbilisi in Georgia 10 years earlier going around a brandy factory. I said to a guy, what did you drink before you drank brandy? So he said, we drank vodka.

32:00I said, well, what do you make it from? Because Tbilisi is about on a latitude with Barcelona, so it's far south, doesn't have those wintry grain harvests that you get further north in Ukraine. So I said, oh, we made our vodka out of grapes. It was cha-cha. I thought, what a good idea, you know, what an interesting idea. That's going into the memory box. You know, I hope I have enough brain cells to bring it up one day. And so I said to the guys, why don't we do a grape vodka, the world's first branded grape vodka? I said, what I'd like to do is make it from California because Americans like American products and let's make it grapes.

32:48And they didn't want to do that. They said, the American client said, we'd rather develop it our way in the US. So they tested hundreds of options and spent about a million, million and a half dollars messing about trying to make decisions. And they launched it. It was moderately successful. or anything you put through the Diageo network is going to work to a point. And then to give it real momentum, they got Diddy on board. And it became then a kind of creature of Diddy's ego. I wanted to move on to talk about the principles behind innovation, the method in the madness, as you call it in the book.

33:32Looking back and, you know, over many years of successful innovation, What are some of the principles of getting it right? Because I guess, you know, you've got the sort of bootstrapped, I'm just going to go and try, and then you've got the kind of big global consultancies that sell you a two-year program, you know, of huge stage gates to jump through to get it there. So innovation can happen in, you know, many, many different extremes. But in your experience, what are the key principles to getting it right? Well, it starts with the top management, I think. To your point, to run the business, if you appoint a marketing manager, he hasn't got power.

34:07He hasn't got enough power to be able to take something to market without lots of checks and balances. So you'd pick people who were senior and who were, they had this champion system which came out of Tom Peter's book, In Search of Excellence. So we would do things for sales directors, did one for a finance director, but they all had the power. and secondly and that was that was very important secondly we didn't go down the classic marketing route you know I think I've learned having done a huge amount of research myself over the years what a terribly limited tool it was and how if you've got two people in a focus group who are wildly enthusiastic about something and the other eight who thought it was crap.