Sampling whiskies at a special tasting
In the last of this series, we leave maker's world and enter drinker's world. The whisky becomes a label, and one day a brand. After years of outgoing expenditure in production, now the harder part is to generate incoming revenue from sales. In the drinker's world, your job is to create consumers, ideally brand relationships, that build loyalty and repeat sales. The success of your business depends upon it. Selling and brand affinity cannot be overstated. Too many start-ups fail to appreciate this. This is the harder part of the business as you leave the security of your maker's world. The game is to attract attention, break into the trade channels and face a tsunami of competitors.
Think of the two greatest whiskies, Johnnie Walker and Jack Daniel's who sell more than 30 million cases between the two of them. Both are over 150 years old and have built their success through consistency and good value. Consistency in sensory product and familiarity. Consistency in having distinctive bottles and labels for instant recognition. Consistency in positioning and messaging; communicating what they stand for. There's a change over some brand experience between their maker's and drinker's worlds. Successful brands become emotionally owned by their drinkers. Your whisky, their brand. It's worth remembering these famous brands began as small start-ups too. One blended in a provincial grocery store, the other at a small backwoods distillery. Their long road to success was paved by consistency and much shoe leather: community by community, mouth by mouth. Leading brands still do, by continuing to recruit new whisky drinkers and retain existing ones. Learn from their example, the principles are the same, only the scale is different.
First sales will probably start at the distillery door with passing foot traffic and maybe online sales. Next, you'll need to hit the streets encouraging local liquor stores and bars to support local products. Then as production and sales grow you'll need greater trade support, such as local, national and even transnational distributors. As you move out of your town or regional neighbourhood, the competition intensifies. Competitors are hundreds of large global whisky brands and new 'craft' brands fighting for facings and attention. Shelf space on back bars and liquor stores is prime real estate. Your goal is to win over the trade so you can reach the consumer. There are some simple market building blocks you'll need to lay down.
Your brand identity is what you want the world to see, feel, think, remember and respond to when your tradename is mentioned, and your packaging sighted. This is known as 'putting the sizzle on steak'. 'Steak' being the product. Be warned, though, poor product and no amount of sizzle will make it appetising once a consumer feels misled or disappointed. The 'sizzle' dresses the whisky up to attract attention and signify your brand's differentiation. Ensuring your brand stands out and stands for something. Each distillery has its own unique stories. The skill is putting all your functions and features into benefits for your audience. Then find simple, engaging and memorable ways to communicate it. It may be your whisky has a nuanced flavour difference. Not to worry if it doesn't, most consumers drink brands, influenced by peer affiliation, label popularity, discernment, status seeking, rebelliousness, independence, etc. These influences and motivations are affected by location, occasion, context and need state. Much of this happens outside your control. At bars and restaurants, in homes and offices, with family and friends, even the indirect influences of media and opinion leaders. At this point, what you have advanced as your brand identity in the minds of the public becomes their brand image. So it's vital you are consistent and leave the desired brand impression through packaging, online narratives, presentation and literature to your distillery visitor experiences.
The most important item in your brand identity is your packaging as this embodies your whisky and brand positioning. The bottle, label, capsule and other adornments is a significant cost, second only to the liquid in your COGs. Consider packaging as your most important and eternal advertisement. It gives you competitive presence on-shelf in bars, and at liquor stores, it's the memorable image in PR and the key visual in all your marketing and paid communications materials. The brand is what consumers buy, the whisky they drink. Through bottle shape, graphic design and label copy the packaging not only communicates factual information but connotes quality, price, to user symbolism and most importantly, it affects an emotional gestalt. Do not neglect opportunities for special purchase occasions and events, such as gift-giving. Be aware, however, some countries have label regulations and approval systems (COLA in the US, HMRC for UK Scotch and EU regulations), Canada and Australia (INM along with state-based policing).
Start-ups enjoy few if any efficiencies from production to packaging so you're likely to be premium priced. You'll be competing in the smaller and competitive segment of the category. Premium price tells consumers you are special in superior quality, rarity, a unique product claim or interesting brand back-story. Delivering fair value for money perception lowers resistance to trial and repeat purchases. Consumer decision making is mostly subconscious and emotionally centred, then justified by finding a rational context to validate it. Make sure your brand identity, packaging and price all support one another.
Visitor centre/distillery door
If your distillery has been designed to accommodate small tours, distillery bottle and bar sales, or conduct tasting classes, this will generate incremental income streams. This can be augmented with immersion programmes, merchandising units, displaying of historical artefacts as well as inviting exhibitors and communities into utilise the facilities. Food or catering licences can extend your community reach and income to weddings, events, entertainment, or a community meeting centre for businesses and associations. Tasting, tasting, tasting. The most immediate method to instigate consumer trial and brand interaction is tasting. Either by training internal staff or employing part-time representatives, brand exposures can be taken in retail outlets to support the trade and stimulate immediate sales during weekends and evenings. The night-time economy is ideal for holding tastings and promotions, from distillery masterclasses, visiting clubs, business associations and corporate offices, to bars and whisky events. Whisky shows are proliferating and represent an ideal venue to showcase your whisky to enthusiasts, anoraks and bloggers. Every year, millions of new consumers enter the whisky market, from a wide range of age cohorts, those shifting between liquor categories, sensory development. Brands can afford to vacate recruitment or abandon retention to stimulate interest and sustain sales.
Buildings sales outside the distillery
It starts by working the streets, the very granular one-on-one group tastings. All the large global brands started this way and still do, albeit with theatrical tasting experiences and events. Trial is the key, so tastings, tastings, tastings and trusted referrals are how brand sales are initially built, where purchase risk is neutralised. Often a mechanism called reciprocity obliges some respondents to purchase a bottle after buying into the product pitch and tasting the sample. Building brands through bars is a traditional route-to-market. Bartenders are always on the lookout for something new to showcase to their patrons, so by making calls to solicit their support can make them influential advocates with their customers.
The ability to create and propagate product information and brand impressions has been radicalised by the net. Setting up a website and managing a social media profile is both powerful and extremely cost-effective today. Subject to your location and laws, it could be an effective and intimate sales channel. Messaging tactics should have a distinct voice and communicate news about the people, product, place, events, etc. Needless to say, you need to be informative, entertaining and truthful. If you have company responsibility policies on good environmental practices, working environment and conduct (staff, suppliers) and community involvement, these are worthy subjects of modest PR. Brands are primarily emotional constructs in the consumer's mind, while products are primarily functional.
Similar to production, the expertise of specialist firms and individuals will be a significant part of your success in developing your brand. Ideally, you'll form long-term relationships with the right people who are not only serving your business but adding strategic and tactical advice. Some may prove proactive in advancing the business and sales growth. With your oversight and their specialist capabilities, the business maintains a high degree of consistency in communicating the brand's values and benefits, style and voice, messages and images.
Through this four-part series, you would have gained an insight into many of the issues you will face in running a whisky business. It is a highly competitive industry, with thousands of brands and relentless product development and marketing innovation. The whisky brand cemetery over the past 150 years has filled with over 35,000 casualties. Brands will find niches to occupy and appeal to new consumers and markets. Some of these new brands in a generation's time will become the next big global brand. Whether global, national or regional, success depended on a thoughtful business plan, an efficient distillery, superior value whisky, then marketing your brand with inspiring and insightful determination to garner loyal advocates and repeat consumers.