How To Start Your Very Own Liquor Brand

Conception: The Grand Idea

“The first step in bringing a new spirit brand to market is deciding to whom you are marketing,” said Moore. “Know who your target customer will be and ask yourself ‘how will the brand meet the needs and expectations of this market?'”

Vaughn concurs. “General business rules still apply,” he said. “If you’re gonna come out with something new, it has to solve a problem that is currently not ideally solved by the current offerings on the market.”

Much of the motivation for Moore and his business partners to create their brand derived from the fact that pisco,  a colorless grape brandy produced in Peru and Chile, was largely unknown in the U.S. market. “We knew our primary market would be the growing mixology and bar culture and their desire for new and interesting spirits,” he said.

This doesn’t mean that one couldn’t get into producing another vodka or rum, but the more you try to put a new spin on it, the better your chances at penetrating the market.

What’s Your Story?

Part of your brand is your story. This is the story that will enhance your advertising and help you pitch your product to wholesalers (more on that later). The story can be told through packaging, design, and narrative about the blends’ origins.

The story of Skinny Girl margarita appeals to calorie conscious women and Ludacris’ association alone gives his brand Conjure Cognac a story. As for other non-celebrity backed products, Moore’s company provides a good example of storytelling:

“We were inspired and enchanted with the history of Pisco fueling the Gold Rush and the development of San Francisco in that era and beyond,” said Moore. “The Pisco Punch was the most infamous drink on the West Coast, created and made famous in San Francisco.  Prohibition killed the bartending trade in the US and for all intents and purposes Pisco was completely forgotten about until recently.  The three of us co-owners and creators of Campo de Encanto, all from San Francisco, created a brand with a package that recalls and honors this intriguing history.”

Get Your Legal Ducks In A Row

Be prepared to deal with a lot of legal issues when it comes to building your business. There is a lot of regulation in this industry. From importing to getting approval to the bottle’s label, make sure you’re well prepared to handle the rigors of regulatory processes. Incorporating  your company and trademarking your brand is also part of it.

Creating The Product

Did you know that tequila can only be produced in one region in the world? “Many spirits, like tequila or pisco from Peru, have strict laws governing where, how, who and even when they can be made,” said Vaughn.  Even champagne can only come from the Champagne region of France.

So it’s good to know what you can or cannot do.

If you don’t plan on making a champagne or tequila, what you’ll need to do is find a distillery (anywhere in the world) to help create your blend or product.

“If you are not an expert in the product you want to make, find someone who is and taste as many similar products as you can,” said Moore.  “Once you have done your homework and know what style you want to create or emulate then you can search for a producer or producer/partner. ADI (American Distilling Institute) is a great resource for interaction with distillers in the US.  There are some distilleries that will make custom products.”

Manufacturing: Get That 25k Ready

As was previously mentioned, starting a liquor brand is not cheap. As a consultant, Vaughn tells his clients that between $20 and $25 thousand is the amount needed just to get your product ready to go into production. At that point, you have your concoction, your bottle and most of your legal matters taken care of.

Of course, the number is vulnerable to varying factors including whether you’re working with a consultant or not (a consultant may cost you more upfront but can negotiate better rates along the way), and also the type of liquor you’re producing. “Vodka, made from grain, is much cheaper to produce than brandy, made from grapes,” said Moore. “ Packaging costs also vary greatly and you usually have to order higher quantities to get discounted pricing.  A high-end looking Cognac bottle is more expensive than an inexpensive house Vodka bottle.”

Distributing

You have your product, now you have to actually distribute it. In order to understand how distribution works, you have to understand the three tier system which governs how alcohol is distributed in the United States.

The three tiers involve producer (or importers), distributors, and retailers. Producers must sell to distributors, who then sell to retailers. This  system somewhat limits the options for producers. For each state you distribute your product in, you will need to obtain a state license. Some states are easier to infiltrate than others, according to Vaughn.

Wholesalers are basically your conduit to the market. Impressing the wholesaler with your plan can determine the trajectory of your success in any given market, since the wholesaler will essentially act on your behalf when it comes to distribution.

Marketing – Maybe A Milli?

You have your product, now it’s time to move it off the shelves. “People will not buy that which they do not know exists,” said Vaughn. “You have to figure out with limited funds how best to get people to know that it exists so that there’s demand, bottom line.”

Although you have a wholesale rep in place, the work of creating buzz ultimately rests with the brand owner. Considering that marketing is an expensive venture, with Vaughn setting $1 million as an adequate marketing budget, one must exhaust all resources to get the word out.

“Word of mouth is the cheapest and most effective way if you are on a tight overall budget,” said Moore. “The acceptance and use of your brand by “tastemakers” or influencers of the industry including journalists, bloggers, and of course top mixologists and bartenders are key to a brand’s success.”

Both experts agree that social media constitutes the most inexpensive means by which to promote your brand.  As for getting the product onto bar shelves and into the hands of bartenders, there is a creative mix of marketing and money involved. The wholesaler will help you get on store shelves, but a marketing allowance helps to really push your visibility and push demand for your product.

Stay Focused

Building a liquor brand is a lot like building any brand, so your dedication is key.

“Building a spirit brand is an expensive proposition,” said Moore. “A singular vision is crucial, distribution imperative and patience essential.  There are more brands and products flooding the market and shelf space is limited so if your brand doesn’t stand out, it can be easily lost.”