Justin Metallo made his way toward the double door entrance, right across from a near wall-to-wall bar adorned with iconic brands such as Jim Beam, Maker’s Mark, Courvoisier, and Suntory Whisky Toki. Affectionately called Fred’s Rackhouse after Jim Beam master distiller Fred Noe, the bar is a signature display on the 16th floor of the Merchandise Mart building in Chicago, which has been home to Beam Suntory since 2017.
The move may have been recent, but as the third-largest premium spirits company in the world, the craftsmanship of some of these brands ranging from bourbon and tequila to gin and whiskey spans centuries. While new flavors are introduced every year, the recipe for bourbon, for example, is timeless. What has changed, though, is the innovation behind marketing, evolution in retail, and all the risks and rewards that come from monitoring digital security in today’s constantly connected world.
“We’re growing very fast because we have an entrepreneurial mind-set, and we embrace true innovation through all channels,” says Justin Metallo, senior manager, information security and compliance for Beam Suntory. “It’s not just, let’s make a new flavor. It’s how can we sell to new markets? I thought we just made bourbon, but we haven’t done that in twenty years. The bourbon is made. It’s aging. Now, it’s time to sell it.”
Using demographic & behavioral data to sell spirits
Spirits have been around since before Prohibition in the United States, so in order to help gain an advantage in today’s competitive landscape, Metallo and the Beam Suntory team are delving deeper into data and analytics. Today, companies such as Nielsen can provide data regarding demographics of shoppers in stores that sell various spirits.
But now, this data and insight can be used on a much more granular level. Rather than data depicting such statistics as time of purchase, a person’s age, and gender, these insights can tell companies what customers were doing before even entering the store to make a purchase and discern a consistent factor that encouraged them to purchase a product.
For example, these insights may say that across the demographic of customers who were thirty years old, 20 percent of them went into the store at 8:00 p.m. after leaving a specific movie. Then, it comes down to analyzing the movie to see if a brand was featured and determining if that could have been an influence on the customer’s purchase.
“From a cyber perspective, it’s figuring out how I secure all this tremendous data,” says Metallo, emphasizing that the data is not sensitive because consumers agree to the terms when downloading applications, such as a free weather app, to their smartphones. Users who provide the data have opted in to sharing it, and no names are attached to the behavioral data. As a result, Metallo’s major security concern is keeping this data from Beam Suntory’s competitors.
Cocktails meet smart technology
The Internet of Things (IoT) has also changed marketing and retail, as well as cybersecurity. Recently, Beam Suntory invested in Bartesian, a company that produces innovative at-home cocktail technology. Essentially a smart cocktail maker for one’s home, Metallo says the technology is connected to a cloud-based system that can make cocktails based on one’s preferences. Linked with devices such as Amazon Alexa or Google Home, the technology can learn your preferences and make a custom cocktail.
For example, reading F. Scott Fitzgerald’s The Great Gatsby could prompt it to suggest a martini using Sipsmith gin, or watching television’s Mad Men could inspire the suggestion for an old fashioned cocktail using Knob Creek bourbon.
IoT is also becoming popular around the globe, particularly when it comes to vending machines that dispense alcohol. While prohibited in the United States, it has become a booming industry in countries such as Japan. It’s here where data and mining have merged with the traditional vending machine. Now, instead of the machine sending a notification to the back-end supply chain system that inventory is empty, these machines can inform the supplier how much is being sold and when.
For example, data may show that when an ad was displayed on the vending machine featuring Suntory’s The Premium Malt’s at a certain time of day, sales increased by roughly 30 percent.
“Then on the fly, and without human intervention, the rest of the machines in the network will talk, reflect that change, and display that ad,” Metallo says, adding it’s another factor in today’s technological advancements that he needs to be sure to secure from a cyber perspective. “If anyone hacks into our system, then they can damage our brands, and they can not only get free liquor, but it’s also damage to the supply chain itself because it’s now connected to some of our back-end systems.”
Protecting brand integrity in the cloud
IoT and increasing capabilities are only making cybersecurity more complicated. As Metallo explains, IT and most technology is moving to the cloud—mainly to cloud applications. Now, companies such as Beam Suntory are looking beyond that in terms of cybersecurity by moving beyond cloud strategy to a platform-centric strategy, where anything can be hosted within a platform on a virtual server. As a result, traditional networking security is quickly becoming nonexistent because of the shift to a digital platform.
Moving toward that provider platform is a shift Metallo envisions for all businesses, mainly because of how much it saves on expenses. Companies that maintain physical servers must license these from major corporations, such as Microsoft, which includes cost to install, operate, and maintain the servers. All of that becomes quite expensive on the security side because now IT departments need antivirus scanners on the servers, firewalls, and intrusion prevention systems. Moving to a cloud provider is not cheap upfront, Metallo says, but the cost in the long run is substantial even when considering that the system requires fewer hands on deck to monitor security.
“You don’t have to do that care and maintenance,” he says. “There are now going to be less people to run the network and less people to run the data center. At the very least, you’re going to reduce your people count to run the same stuff you’re running.”
Changing this mind-set around platform-based security is now one of Metallo’s core responsibilities. Metallo regularly has conversations with Beam Suntory’s leadership team, in which he educates them in risk management when it comes to internet security.
“It’s not just fighting cyber warriors and doing all the cyber controls,” he says. “I have to make sure that I’ll do the threat modeling based on our business and then take that risk to the business and say, ‘Hey, this is what I think the risk is if we do X/Y/Z. What do you think about that?’ We’ll have the conversation, and then we’ll implement the control.”
And as retail and technology continue to evolve nearly side-by-side, it’s that risk-based approach that Metallo has to educate the company on when it comes to any cyber decision. As technology becomes more advanced, so too will hackers and assorted threats. But that doesn’t mean Metallo ignores cost in favor of protecting against the unknown if the threat doesn’t suffice. “A big component of risk-based approach is price and cost. That’s a dollar you’re not spending on innovation,” he says. “That’s one less vending machine we could put out in Tokyo. I’m very cognizant that the security budget cannot just grow and grow and grow because it’s scary out there.”
At Allendevaux & Company, it’s a privilege to work with Justin Metallo and his security and compliance team at Beam Suntory, auditing and stress testing the defensive posture of the global enterprise, promoting continuous lifecycle improvements to protect from external and internal threats. Congratulations Justin Metallo on this well-deserved honor.
