Pinnacle Drinks

INSIDE PINNACLE DRINKS

A LOOK AT THE UNIQUE BUSINESS BEHIND WOOLWORTHS LIQUOR GROUP AND SOME OF AUSTRALIA’S MOST SUCCESSFUL ALCOHOL BRANDS AND PARTNERSHIPS.

Perceptions could be that Woolworths Liquor Group (WLG) has long kept quiet about Pinnacle Drinks and what it does. Indeed, many will refer to Pinnacle Drinks as a manufacturer of a long list of owned label brands stocked on shelves at BWS and Dan Murphy’s, the truth however, reveals an incredibly clever and complex arm to WLG that does more than just that. Behind the scenes, Pinnacle has been establishing partnerships across the industry and building exclusive brands which drive loyalty to the retail banners. Here’s Chris Baddock, General Manager of Pinnacle Drinks on how the business works to support its retailers and how its vision is to do the same with its suppliers.

drinks trade: How does WLG perceive what trade think of it and the Pinnacle business?

Chris Baddock: It’s important to Woolworths Liquor Group for us to be involved in the industry and this is best demonstrated through our signing up to the Australian Wine Industry Code of Conduct. You’ll also see many of our team at industry events, including drinks association events and breakfast talks. This is about us showing more faces to the industry, because too often people think of Woolworths Liquor Group as a big corporation and don’t see or interact with the people behind it.

DT: You have only recently joined Pinnacle. What’s attractive about the business to you?

CB: Pinnacle is a serious player within the industry; it acts as a conduit for exclusive suppliers to form a relationship with Woolworths Liquor Group.

Unfortunately, because Pinnacle hasn’t widely communicated its reason for being, people misunderstand what we’re about.

DT: How does Pinnacle work with Woolworths Liquor Group?

CB: We are a supplier embedded in the business and have two reasons for being.

One of the reasons is entry-level brands. Every retailer has them and customers want them, so we need to compete. We call our value brands our anchor brands - the brands that we know we need in order to compete - but I wouldn’t say these are our core brands.

Our core brands can be both owned brands, such as Minchinbury and John Boston, and the brands we develop or distribute with suppliers, which is the second reason why we exist. It is to drive brands which over-deliver for customers and, in turn, create loyalty to the retail banners.

So the way that Pinnacle works is to see what the category needs are. Pinnacle then supplies into Dan Murphy’s, BWS and The Wine Quarter with the brands that it believes meets those needs. But there is no guarantee the products we source will be ranged. Because at the end of the day, the buyers, business managers and the heads of the categories have the final say on what the category make-up is.

DT: Pinnacle has an interesting mix of brands. What percentage is agency and Pinnacle owned brands?

CB: One third of the portfolio Pinnacle manages is our owned and two thirds are others – our exclusives. This is something we’re quite proud of. The majority of our time is spent dealing with suppliers, building and co-creating exclusive SKUs and brands.

Our international portfolios are a great example of where we are able to offer brands distribution in up to 1,500 stores with access to millions of customers every week. Pinnacle also acts as custodian of the brand, which means the company doesn’t have to employ its own managers here.

Domestically, we have very strong relationships with a number of small Australian wine producers. Some of the brands we own and others are owned by the winemaker, but then we have the exclusivity to sell the brand.

DT: What’s the vision for Pinnacle?

CB: The Pinnacle business is diverse and our strategy is driven by what our customers want as well as delivering them the best possible value for high quality products. We want to give them a reason to visit our stores and try new ranges.

WLG Managing Director, Martin Smith says, “Woolworths Liquor Group and our banners are buying agents for the consumer, not buying agents for the supplier.” And when a supplier understands that, it’s amazing how well we (Pinnacle) and the supplier can work together.

Our vision is also to enable innovation through co-creation. Yes, we crush fruit in the wine category, but we don’t own any manufacturing facilities when it comes to the spirits and RTD categories; that’s all done through suppliers. And yes, we own 25 per cent of Gage Roads Brewing Company, but again we don’t always brew through them. We will choose the supplier based on what’s best for the product and customer.

“PINNACLE IS A SERIOUS PLAYER WITHIN THE INDUSTRY; IT ACTS AS A CONDUIT FOR EXCLUSIVE SUPPLIERS TO FORM A RELATIONSHIP WITH WOOLWORTHS LIQUOR GROUP.”

DT: How do you think Pinnacle can turn around its perception in the industry?

CB: By giving an open invitation for all suppliers to have a conversation with us about how we can bring their brands to life. I wouldn’t say that we get it right every time - that’s the risk in creating a brand - but we will always work closely with our suppliers to deliver the right outcome for all parties.