My Biggest Mistake: Harry Drnee

Click to follow
The Independent Online
Harry Drnec, 45, is chief executive officer of Maison Caurette, the beer distributor. A captain in the US Air Force during the Vietnam war after earning an MBA at Rutgers University, he began his career in the brewing business in 1976 with Anheuser Busch. Five years later he became senior director of marketing with Gallo Wines in California, but he rejoined Anheuser Busch in 1983 and moved to London as director of marketing for Europe. Then in 1989 he negotiated an pounds 8m management buy-out of Maison Caurette, and has since increased its turnover from pounds 15m to pounds 45m.

MY BIGGEST mistake was in allowing market research to dictate one of my major decisions.

In 1981 I had joined Gallo, the largest producer of wine in the world, and Ernest Gallo had decided that at a time when people were drinking an awful lot more beer, they weren't drinking nearly enough wine.

Since men drink more of everything than women do - basically because of their gluttonous nature - we set out to do something about it. The problem was that men tend to drink in rounds, and therefore, with wine containing around 12 per cent alcohol, anyone drinking it would normally be on their knees in their efforts to keep up.

We couldn't lower the alcohol content, because that would have ruined the flavour. The only solution was to market a wine-based drink, so we formulated a product and packaged it into individual servings. It had to be mixed with something to keep the alcohol down to five per cent of the drink. We kept this aspect deliberately vague, suggesting fruit juice, sparkling water or tonic.

We took it to our in-house market research department, which set up focus groups in nine cities over 14 days at a cost of more than dollars 100,000. I went to every single one and I can't tell you how much people hated our product.

First, they assumed we would use the worst wine we had in the product. Then they asked: 'Why should you tell us what proportions to mix it in?' and 'Why should you tell us what to mix it with?'

The list of criticisms went on and on. I've never seen such a negative impression of a new product.

After two weeks on the road, I came home, absolutely hammered - saying that it wasn't a good idea - that it was a complete failure and we shouldn't do it. At the same time, about 100 miles away, there were two guys making a product in their garage called California Cooler.

Four years later they sold out to Brown Foreman, a big US distiller, for pounds 150m and the 'wine cooler' became a phenomenon.

After I left Gallo, it came out with its own product, which became No 1 in the market. It was a better product with better advertising and, most important, I guess, the best retail distribution.

How could I have blown an opportunity like that? I had all the resources at my disposal: the world's largest winery, more money than God, the best sales force going . . . I could have made it happen, and I didn't.

Where I went wrong was in allowing a system to dictate my decision. Now I know why I hate market research. I watch so many people - particularly the MBAs of this world - make up their minds on the strength of it.

But if it was all about research, and all you had to do was hire somebody for dollars 100,000 to make the decision for you, everybody would make the right decision, wouldn't they? And obviously not everybody does.

I never made that mistake again. When we launched Sol, we came up with an advert that had no bottle, no label and no beer: all it had was a piece of lime. If I had used market research, people would have said: 'A beer from Mexico? Forget it. A beer with some fruit stuck in the top of it? Come on.'

Today Sol is Britain's No 1 imported bottled beer, but I wouldn't have been able to pull that off had I not made my mistake with Gallo.

If you know your business well enough, you ought to be willing to take a chance on a product that you believe in.

(Photograph omitted)

Comments