Remembering Roger Enrico

FILED JUNE 5, 2016

THE INCREDIBLE VALUE OF MENTORS: REMEMBERING ROGER ENRICO

I've been particularly fortunate to have several brilliant mentors in the beer industry along my 20 plus year career: Joe Huggins and Perry Parsons in learning beer distribution, A-B's Bob Lachky in understanding beer marketing, Miller's Norman Adami in the power of strong leadership and taking risks, Caroline Levy in understanding how Wall Street works, my father in how to read financial statements -- just to give a few examples. But what you may not know is that while my father and grandfather were beer distributors, my other grandfather was a Pepsi-7UP-Schweppes et al bottler, and as a kid I actually had more exposure to the soft drink business than the beer business.

My grandfather also owned a game ranch near San Antonio to entertain his retailers and suppliers, and as a brat I often helped take visitors hunting. One frequent visitor was Roger Enrico, the iconic chief of PepsiCo who started his career as a brand manager for Frito-Lay (he once told me he invented Funyuns -- not sure if he was kidding or not, but for that alone he should be fêted). Mr. Enrico is a legend in beverage marketing circles. He invented the Able Challenger strategy before it was called Able Challenger. He is credited with creating the successful Pepsi Generation campaign, and was the first to sign celebrities to sell soft drinks (Michael Jackson, Madonna, Lionel Ritchie, etc).

But perhaps his greatest coup was creating the Pepsi Challenge. Knowing that Pepsi is slightly sweeter than Coke, he intuitively realized that in side-by-side blind taste tests (one sip each) that people would naturally pick the sweeter drink (even though many preferred Coke in larger quantities). He filmed these all over the country in grocery store parking lots and ran them in national TV ads. Almost immediately, Pepsi started to gain market share against Coke for the first time in 85 years. (Yes, a little blonde Harry Schuhmacher was featured in one ad).

But here's the money shot: Mr. Enrico essentially single-handedly forced his much larger competitor into what is considered the biggest CPG marketing blunder of the 20th century: New Coke.

As Roger famously put it at the time: "The other guy blinked." Talk about an understatement. He won the infamous Cola Wars of the 1980s, and he gave every PepsiCo employee a day off in celebration. He was that kind of guy, and he knew how to leverage PR before that was even a thing.

Plus he enabled my grandfather to gain a little market share against the infamous Biedenharn family, the oldest indie Coke bottler in the country with 85%+ market share in South Texas. (They also started Delta Airlines).

SIDEBAR: In San Antonio social circles, people still say "rich as a Biedenharn". Nobody says "rich as a Schuhmacher". More like, "Who is Schuhmacher?" Our family legacy: We excelled at running incredibly low share beverage operations on the cheap with the uninspiring goal of breaking even. Honickmans, Andersons, and Reyes we were not.

Anyway, Mr. Enrico had some great stories (one involving Fritos that I can't print here, but I'll tell if you sign up for my seminar at NBWA in Chicago). Perhaps the greatest lesson I learned from him was relayed while we were sitting in a blind waiting for turkeys. He was less interested in the hunting than in learning about my schooling, what I knew about cola marketing, and insisting that the Cola War was a REAL WAR and I should be a foot soldier in that war. How, I asked? (I was like 12 years old).

"Merchandising!" he shouted, scattering every turkey within three counties. What's merchandising, I asked innocently with big blue puppy eyes? He looked at me with a bit of disgust. I remember he had big bushy scary eyebrows. "Harry, Harry! What's merchandising!? Has your grandfather taught you nothing? Merchandising is EVERYTHING!" [I'm paraphrasing from memory, obvi].

He continued: "My job as CEO is easy: I put out some cheap Pepsi Challenge ads shot in Kroger parking lots and cut a few big checks to Michael Jackson and coddle Joan Crawford. But it's up to YOU to make sure Pepsi is on the shelf at eye level, on the handle, verti-branded from top to bottom. And if there's a gap, I don't care if the shelf tag says Coke or Big Red or Mellow Yellow, shove Pepsi in there!"

Thus he explained the basic tenets of merchandising to me, and more importantly how very crucial it is to the overall success of a brand. "I can't spend marketing dollars against empty shelves." He was one of the few CEOs who came from the marketing side …. but also understood and respected the importance of sales and simple distribution. And honestly, from that point on, every time I was in an HEB, I would front cans and fill shelves -- a habit I retain to this day no matter the brand. Merchandising Matters " . It's a shame that it's the lowest paid job in the industry, but I get it.

Roger Enrico died last week while snorkeling at the Cayman Islands with his grandson. He was 71. The Coca-Cola Company, in a classy move, bought a full page ad honoring their former nemesis. It reads: "Remembering the life of a true leader, passionate competitor, and an incredible human being." Amen.

I was extremely flattered recently when a young A-B chain exec told me that he's learned more about the beer industry from reading BBD every morning than any other single training tool. That, to me, is the ultimate compliment. If I can be a surrogate mentor to others in this industry through this dumb daily email, then I feel my life's work has meant something way more meaningful than just affording me a living. That's what Roger Enrico was to me, and I suspect he was an inspiration to many others as well.

BEERNET EXTRA: Read what my friend Paul Pendergrass, a longtime consultant to Coke (and MillerCoors), had to write about Roger Enrico in Fortune: http://fortune.com/2016/06/03/roger-enrico-pepsico/

BEER BRIEFS:

Don't forget to register for the Beer Industry Summit 2017 in San Diego January 29-30 at The Hotel del Coronado. Already lining up some great speakers, and pushing them to go beyond the usual canned speeches and really dig deep for actionable content. Reserve your spot today: beernet.com/beer_summit.php

Until tomorrow, Harry

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