Philip Duff: Why on earth do people start craft liquor brands?

Philip Duff

16 June 2017

In the first in a five-part series, Philip Duff asks (and hopefully) answers why people start craft liquor brands 

Well, there’s moo-lah, for one. The recent Park Street Craft Spirits Data Project reported the craft spirits sector growing at about 27% each year in the US alone, in both value and volume. Ka-ching!

Then there’s opportunity for the small player. Big drinks firms – and don’t take this personally, chaps – structurally can’t create truly new brands. To quote Peter Thiel, they can go from 1 to 2, but not from zero to 1. 98.6%* of all new brands don’t work out, and everyone knows that, so the new product development (NPD) department of big firms is usually devoted to creating new versions of existing brands, not genuinely new brands.  Hello, gluten-free Stoli!

Additionally, if it’s a big firm, it will have soooo many levels of sign-off, input, legal blessings, the 5 Gates of NPD and what the chairman’s wife thinks that by the time an initially good idea has been through them all it is a weak, pathetic shadow of its former self, no more able to survive in the outside world than Howard was after Take That.

You, on the other hand, only have yourself to consult, so decision-making is fast. Instead of being a liquor exec with 2.5 children and a house in the suburbs with a swimming pool and a unicorn floaty for the seven-year-old, you’re a cool urban dweller, alert to the faintest stirrings of fashion ‘midst the tattooed barkeeps in the trendsetting bars of your gentrifying ‘hood. Do they want more aquavit? Are they over sherry? Is cachaça due a reboot? Do they still hate vodka? You’re in their bars every week, so you know. You don’t have to wait for the IWSR report, because you don’t need to cover your arse - you only need to risk it.

If your gamble works and your brand takes off, however modestly, you will be able to build the brand until the time comes to hook up with a big firm. More on that in a later article but let me say this now: you WILL need a big firm, not just for money, but for their distribution army. There is more chance of you qualifying for the 2020 Olympic rhythmic gymnastics team than of you being able to build a large brand without tying up with a big firm at some stage: embrace the concept.

Perhaps you are in love with the idea of creating something, working with your hands, making a difference? All well and good, but it has to sell or you won’t be making it for long. Every moment you spend making it is a moment you could have spent selling it.

The world is awash  - really, knee-deep and rising - with the most amazing brands that you have never heard of, because the people who know how to make them don’t know how to sell them. If you don’t know how to make the stuff, there is any number of distilleries who will do it for you, and the best ones will frankly make it better than you ever could. It is far harder to outsource marketing and sales, though, so that is where your focus should lie.

In summary, the real reasons you’ll start a brand are, “I think I can do it better than the current players”, and “I think there’s both a gap in the market and a market in that gap”

Ego and greed, basically.

I’m a perfect example - I’m starting what will be the world’s best genever brand (of course!) AND naming it after myself, so what’s more egotistical than that, eh?

Plus, anyone who knows me knows how greedy I am; I once tried to introduce junk-bond trading to a game of Monopoly.

In the next article, we’ll delve into what you should do before you do anything, and why you need to heed the teachings of the Stoics.

Stay thirsty, my friends.

*I made this number up. It’s a really, really high percentage, though.



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