What are your biggest business concerns surrounding COVID-19?
Our primary concern surrounding COVID-19 is keeping our people safe. Bacardi is a family-owned company that works hard to make every person feel like part of the pack—and for us, business is personal. Without our employees there wouldn’t even be a business to be concerned about. We are keeping constant communication across all teams to remind everyone that we are here for them.
We’ve been finding new ways to stay connected and communicate with each other, and not just with video meetings. We’ve had virtual lunches and, of course, happy hours so that we can catch up on what’s going on beyond the business, like how our families are doing, how teams are balancing this new work/life blend. We’ve even worked out together via virtual classes. As a leader, I want to do what I can to keep morale up and ensure that I am communicating frequently and transparently.
Bacardi Limited is comprised of more than 200 wine and spirit brands, including Grey Goose, Bacardi, and Bombay Sapphire.
What is your current business strategy for dealing with the situation?
The pandemic has had major impacts on every industry, and ours is no exception. It’s heartbreaking to see bars and restaurants turn off their lights overnight because we know that livelihoods are at stake. The bar teams impacted are an extended part of our family and have been champions of our brands and cocktails. We’ve also seen declines in travel retail, the airport and port stores, as travel is on hold.
While people no longer go to a bar or restaurant, or shop at an airport, we are seeing spikes in sales from stores as people stock up their pantries. In late March, our sales at grocery and big box retailers were an averaging an increase 30–50% and that is on top of a growth spike from the start of the month. In North America, this part of the business—buying from a retailer— represents three quarters of sales, so this behavior will help offset some, but certainly not all, of the business lost in bars and dining out.
Pessione, Italy is home to Martini, which is helping produce hand sanitizers for COVID-19 first responders (Photo courtesy Bacardi).
Additionally, we’ve seen a huge acceleration in e-commerce, and have moved advertising dollars to these platforms as a result. In mid-March, one of our e-comm partners Drizly saw a growth three-and-a-half times compared to earlier in the year. Before this moment in time, spirits had been slow to sell via e-commerce, often because people didn’t realize they could shop our products online. This new environment is shifting consumer behavior and forcing the spirits business to move more quickly in this space.
On the restaurant front, we are seeing an entrepreneurial spirit come alive as they are forced to forgo in-house dining. Adding to-go cocktails to their offerings is one way to generate additional revenue. For example, at Chili’s, which, across eight states, is now offering Mar-Go-Ritas where the margarita mix is ready for you and small Patrón bottles come with your order. Or in Texas, where Taste Bar Kitchen has a Taste Colada ready for takeout. It’s a pouch filled with mango, strawberry, and coconut juices that comes with mini Bacardi Superior bottles. Pick it up with your meal and you can easily make the cocktail at home. These to-go concepts would have taken so much longer to implement, but now, because restaurants are trying to protect jobs, we are seeing them rise to the occasion and think outside the (to go) box.
To help our industry prepare now, Bacardi launched #RaiseYourSpirits, an initiative to provide relief to bars and restaurants debilitated by COVID-19 shutdowns.
How do you think things will look in your industry a year from now?
While we can’t predict the duration or extent COVID-19’s impact, we know that our longtime partners in the hospitality industry will be devastated. Small businesses and hard workers have lost their livelihoods virtually overnight as dining out, nightlife, and entertainment have been put on pause around the world. While few businesses have been fortunate enough to stay open for takeout and delivery, without consistent cashflow, that economic model won’t last long.
To help our industry prepare now, Bacardi launched #RaiseYourSpirits, an initiative to provide relief to bars and restaurants debilitated by COVID-19 shutdowns. So far, Bacardi and its brands have pledged $4M in financial aid and other support to help the people on the frontlines of our industry through this crisis. And this is just the start: our local teams, brands, and employees are committed to finding even more ways we can lend a hand as this hardship continues to unfold.
The Bacardi factory in Puerto Rico provides raw materials for hand sanitizers (Photo courtesy Bacardi).
Regarding our day-to-day business routines, I think this new comfort level with virtual meetings and work from home will be more embraced by the industry. Building relationships is so important to us and, generally, we always want to do it in person. I think people are finding that you can be personal via video meetings. I was definitely a cynic at first but have had fun using Microsoft Teams to “visit” people at home, get to virtually meet their kids, and see pets who are loving the video attention. Seeing people in their own home environment has created a different level of connection. This new “norm” may shape travel budgets and e-learning for the future. Later this month, I’m replacing a townhall—usually hosted in our office with 300 people —with a virtual meeting. I didn’t want to stop our communication, so we are just adapting the format.
What have you learned from other difficult times in the past?
Bacardi has been around for 158 years. We’ve been through wars, depression, recessions, and Prohibition, and our business model is all the more resilient because of it. As a private, family-owned company, we remain confident in our business, and are fortunate that we can focus on long-term strategies versus quarter-to-quarter sales.
Hand sanitizers made with help from Bacardi in Puerto Rico (Photo courtesy Bacardi).
Bacardi has always shown up for our local communities during tough times, and this is no exception. This moment in time has forced every person and company to be more resilient and adaptable. A great example is with our operations teams, who shifted production at 12 of our distilleries across the globe, including the Grey Goose distillery in Cognac, France, the Bombay Sapphire distillery in Hampshire, England, and the Bacardi rum sites in Jacksonville, Puerto Rico and Mexico and India, to produce hand sanitizer for local communities. As of today, we’ve produced nearly 400,000 gallons of hand sanitizers and have donated the majority to first responders.
Our teams moved quickly to figure out how to make this happen because they knew it would help their community. From sourcing some of the ingredients, making new labels, to figuring out all the regulatory requirements. This became our fastest product launch ever. We’ve never been in the business of hand sanitizers, and we didn’t have all the answers when we raised our hands to do this, but that didn’t stop us. It’s been a great leadership lesson in pivoting a business strategy at tremendous speed. While we plan a year out, we had to shift gears quickly and focus on what needs to happen right now in order to keep the business moving. I hope this same sense of urgency, agility and attitude stays with us for the next 150 years.
Safe–and entertained–at Home: What business leaders are doing with their downtime
Morning routine?
My morning routine hasn’t exactly changed; it’s just adapted to doing it at home. I still wake up early at around 5am for a workout. Then, I get to business by checking emails and jumping on video calls. I’m lucky to have a home office, but now I find myself negotiating office space time with my son who finds it to be the best room to do his online classes. The biggest change? Not traveling which has given me back time with my family.
Currently binging?
I never have time for TV, so this has been a treat. I am FINALLY watching Game of Thrones and am close to finishing Season 2. I have somehow managed not to find out how it ends…so please don’t tell me which family ends up ruling. And of course, I had to watch Tiger King. I just wanna ask Carole, “where is Don?”
Currently reading?
There is a lot of fun digital content right now as people are looking to entertain and be entertained. I’m a big sports fan so I am missing watching my favorite teams. In the meantime, I’m enjoying watching Bob Menery share his play-by-plays of some unusual athletic moments, like cats and dogs chasing each other.
When I’m looking to end my day with a cocktail, I log onto the Punch Instagram stories to see a featured mixologist share a cocktail recipe. We’ve partnered with Punch to help showcase bar teams whose venues shut down during this time so that they have a way to connect and, most importantly, get some tips. You can tip the featured bartender online and Bacardi is matching every dollar with a donation to the Restaurant Worker’s Community Foundation. A different bartender is featured every day at 5pm ET. It’s fun entertainment, and you get to help out our industry. You might event become a great mixologist!
What are you doing to spend quality time with those you’re sheltering with?
My work life usually involves a lot of travel. I was supposed to be gone for most of this month, but of course I’ve replaced those business meetings with virtual ones. This has given me so much more time at home with my wife and my son, from working out together to and watching shows together, and sharing meals. Two of our kids don’t live with us anymore so we’ve established a virtual family dinner every Sunday. We say grace together, talk about our week, share what we are eating, and sometimes even invite special guests (virtually of course) like other family members and neighbors. This ritual also includes enjoying a nice cocktail to celebrate another week of good health. My wife has recently mastered a few new cocktails, including an Old Fashioned made with Patrón Reposado, which is an aged tequila.
Bacardi Limited North America President Pete Carr.
What are you doing to stay healthy mentally and physically?
Fitness is a part of my routine every day and I am finding it even more important during this time. It really helps me both mentally and physically. Since I can’t go to the Bacardi office gym, I use my home weights, treadmill, and am making good use of our Peloton bike. I’ve also joined in on some online programs we’ve put together for our teams and for our friends in the bar community, including boxing with Cazadores tequila and a workout with the Bacardi Rum Shakers—although I couldn’t keep up with the dance moves.
Where are you dreaming of visiting once things are back to normal?
Our first family trip will be to Dallas, Texas to see my parents. We missed my father’s birthday due to the quarantine and will likely miss Mother’s Day, so we have some celebrating to make up for. My hope is that we will be able to make the trip for Father’s Day and celebrate both of my parents with a fun family get together.
As for a meal out, I’m looking forward to when our office building reopens in Coral Gables, Florida so that I can pay a visit to a nearby favorite, Caffe Abbracci. We have a special dish we like to call “Veal alla Bacardi” which is veal Milanese topped with parmigiana cheese and prosciutto and a side of angel pasta.
To me, these are moments that matter, and I can’t wait to get back out there and reconnect in person.
