Pernod Ricard's North American CEO says people will still want the bar experience. But they may want it at home.

By Jennifer Maloney 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 3, 2020).

Ann Mukherjee became chairman and chief executive of Pernod Ricard SA's North American business in December. Four months later, the coronavirus pandemic had shut bars and restaurants around the globe. And she quickly learned a lesson: When the facts on the ground are changing every day, it can be a mistake to prepare for an uncertain future too soon.

Ms. Mukherjee, who was born in India and raised in the U.S., now lives in Dallas, where she has witnessed the pandemic's whipsaw effect on business as Texas Gov. Greg Abbott opened and then reclosed the state's bars amid a surge in new Covid-19 cases.

Pernod, the maker of Malibu rum, Absolut vodka and Jameson Irish whiskey, is adjusting distributor inventory levels up and down as states open and close. At the same time, its executives are contemplating how the pandemic may have a lasting impact on the way we drink and socialize. The company has shifted its bartender training programs from in-person to online, and is showing barkeeps how to make takeout cocktails with its products.

In this edited interview with The Wall Street Journal, Ms. Mukherjee talks about managing amid ambiguity, and how she jumped the gun on preparing for the new normal.

Too much too soon

WSJ: When you think about how you have navigated this period of instability, what did you do right and what did you do wrong?

MS. MUKHERJEE: One of the things I did right that I feel really good about is I overcommunicated with my leadership, I overcommunicated with my employees, I overcommunicated with our distributor partners. And in that over-communication, I think we got to better actions.

And I think what we didn't get right...in March, I thought Covid would be done in two months. I was like, we're going to get through this, but let's plan now for recovery, and how do we come out stronger than before we went into Covid? What I did wrong was I didn't adjust every time we found out this was going to elongate.

There is going to be a new normal, and if we don't start preparing for that new normal now, we're going to be behind the eight ball when we get into that new normal. But a lot of that new normal is going to be based on stuff we still don't know. And so if you push your organization way too hard to adjust too quickly, you're going to fatigue them. By the time you get to the new normal, they're not going to be able to act.

We have to stay competitive in this environment. Balancing that and pacing that with people's ability to absorb change, I think that's going to be a constant struggle. And so it's forced me to be ruthless in my prioritization: Do we really need to do X by Y?

WSJ: Can you give an example of how you were preparing for the new normal too soon?

MS. MUKHERJEE: When the pandemic happened, we took it as a two- or three-month hiatus. Bars had shut down, so we had people that we thought we could use to start thinking about new ways of doing things, create transformation projects.

Because restaurants had shut down and a lot of our people weren't out there servicing our restaurants, we said let's take a huge step back. How should we be servicing restaurants? How do we make sure that we understand that we're going to be in towns that really matter and those are the ones that are growing, and how do we use analytics?

That was remapping across all 50 states. So this was a pretty major undertaking. We thought now is the time to do it, and we're going to come out stronger. And it nearly killed them.

WSJ: Because they didn't actually have any downtime to work on it. They were in the middle of a crisis.

MS. MUKHERJEE: They're in the middle of a crisis. Literally, every week, some new thing hit our transom.

The last straw

WSJ: Was there a lightbulb moment when you realized that you were driving the team too hard?

MS. MUKHERJEE: I think the moment for me was when Black Lives Matter happened, because, all of a sudden, I started getting phone calls where people were like, "Ann, I can't deliver this," or "Ann, I need two weeks for this," or "I need an extension here." For a two-day period, I went on a listening tour. I started calling people.

The amount of people that started breaking down in front of me.... People felt like they were in a war zone, and all of a sudden, it just started clicking together about what they were trying to deal with personally, and here we are shifting all these priorities on top of it, and that was the moment that I said, "We need to stop."

WSJ: Did you experience that mental fatigue yourself?

MS. MUKHERJEE: When Black Lives Matter happened, I was struggling to concentrate. My children -- we're people of color. We're brown. My children were facing some very difficult things in their own school. So I was having a really hard time. I was so disturbed by what was happening, and I admitted that to my employees. I said, "If I'm having difficulty concentrating, you must be, too."

Focus on agility

WSJ: Can you give an example of how you're prioritizing now?

MS. MUKHERJEE: Now prioritization has become a weekly activity. We meet as a kitchen cabinet, as a leadership team, once a week, and we take a hard look. When Black Lives Matter happened, my marketing organization had to relook at all the content that was about to go out. We did not want to be tone deaf during that time. Two weeks later, now it's a social-media boycott. So then we had to overhaul our entire media plan. [Pernod paused its advertising on Facebook and all other social-media platforms in response to the boycott.]

We're still trying to do a lot of analytical projects to help us, post-Covid, start making decisions at the speed of business, and we're going to have to because it's going to get so unpredictable. It's almost like tending a garden. You've got to weed it every single week.

WSJ: What is your thinking now on the new normal? What will it look like?

MS. MUKHERJEE: Alex Ricard [CEO of Pernod Ricard] talked about this notion that the power of humankind to want to connect and bond, that isn't going to change. The variable is, will we have a safe enough environment for people to socially connect?

We make products that allow people to connect. So we're starting to think about things that we've never thought about, which is people want to still socially connect, but they might want to do it at home. So they might want to have a bar experience at home.

We've seen a lot around cocktails to go. So for bartenders at restaurants who are doing carryout, do we have an easy way for them to create a cocktail, provide the containers for them to do carryout?

WSJ: How have the recent reopenings and reclosings affected Pernod Ricard?

MS. MUKHERJEE: Right before Memorial Day, we were opening back up again. States like Texas, California, Arizona, Florida. Our biggest businesses are in these states. So here we are getting ready with our distributors. We're sending people back out again. We're ramping up our production. We're making sure inventory and stocks are there. It was a major operation, and here we are six weeks later, and they're all reclosing again.

And so, how do we do things like educating our bartenders about our brands? Well, now you've got to do it virtually. So new training comes into play. This opening and reclosing of bars tells you how nimble and agile you have to be, state by state, to figure out what you do with your workforce.

WSJ: Do you think some states opened bars too soon?

MS. MUKHERJEE: I think some states opened up bars too soon without protection. We could absolutely open up restaurants and bars if we manage to do it with social distancing and masks. When Texas started reopening again, my husband and I went out to a restaurant, and they did a phenomenal job. Gloves, masks. The tables were far apart, large tables.

If you reopen everything too fast without safety, you're going to get an uptick in cases, which is what we're seeing.

WSJ: What will you do differently moving forward?

MS. MUKHERJEE: We've got to build even more agility and flexibility into the way we operate and make decisions. How do we help the organization work smarter in real time? We have to build in that, if we get it wrong, we don't throw out the baby with the bathwater. You learn from the mistake and use that to get stronger, and that's a big culture change.

Ms. Maloney is a Wall Street Journal reporter in New York. She can be reached at jennifer.maloney@wsj.com.

 

(END) Dow Jones Newswires

August 03, 2020 02:47 ET (06:47 GMT)

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