In the wine and spirits industry, there are some great success stories that have been shared among our peers. In recent years, many aspiring wine and spirits entrepreneurs have become very familiar with one such story.
For this article, we are going to discuss some of the key elements within the case study of none other than Tito’s Handmade Vodka.
The story begins in a small town, when a financially strapped, but passionate man has his “Ah ha” moment.
He scrapes up what he can from various credit cards, finances a few acres of land, buys some stills, and starts making his own handmade vodka.
Now you may be thinking: “I am a passionate person! If Tito could do it, so can I!”
I applaud your confidence, and will continue by sharing what you can do as a brand owner to make this dream (understanding it will likely be long, and arduous) a reality.
We are going to discuss the truths, set some expectations, and identify the key elements that it takes for an emerging wine or spirits brand to become the next success story of their industry.
Start with a Passion
Regardless of what business you are in, you have to be in it for the right reasons. Of course everyone wants their business to be successful and make a ton of money. Is money the only reason you are starting your business?
On some occasions, wine and spirits brands are created and launched by people that have substantial savings, partner(s) who are willing to invest, and all the “industry connections” they could ever need. This can sometimes create an illusion that these individuals can create a successful brand.
About four years ago, our team was introduced to a highly funded ready to drink (RTD) brand that launched in the US markets. Right from the start, they were hosting huge parties, paying for celebrity guest appearances, sponsoring major events, and buying up advertising spots in multiple markets across the country. It seemed that they had an endless budget and inventory. It also seemed as if they were determined to reach everyone they could in a very short amount of time and had the means to do so.
Within 3 years, they were no longer in business.
How could a brand that was so loud, seemingly popular, and with a presumably endless budget, not be able to become a success?
Tip: “It’s not about how many people drink your product when it’s free, but how many will buy it when it’s not.”
So how did a small brand like Tito’s survive while other brands with more potential failed?
Here are some points that Tito’s Vodka achieved that many other brands fail to do…
Sharing a Story That Resonates
People love a good story. Now I’m not just talking about the classic “battle of the underdog,” although Tito’s definitely had that appeal going for him.
Regarding the founder of a wine and spirits brand, people are interested in understanding why you made the product, who is it for, and why should they buy it?
Relating To Your Customer
Consumers gravitate towards products that they feel they can relate to. Will their association with your product make their lives better in some way? Is this a product that they can share with family and friends?
In the world of marketing, we call these kinds of products “lifestyle brands.” Lifestyle brands are more than just products. They invoke an emotion with buyers. By providing buyers with reasons or a vision as to why they should buy it, and giving them clear direction as to how this brand can and will fit into their personality or lifestyles, they are now inclined to be drawn to them more often than the competition.
Tito’s made that happen by presenting his product as a “handmade,” craft spirit that was created from hard work and offered to consumers at an affordable price. It also just so happened that critics liked it above most of his competition. With all of these attributes combined, it creates the perfect brand narrative.
The Truth Behind “Word of Mouth”
Most business professionals have heard the phrase: “word of mouth is the best form of advertising.” But what does that mean?
Does “word of mouth” just involve you telling someone something and they sharing it?
Word of mouth happens because someone took the time to craft a strategic message. This message was then actively shared with a target audience. That audience then decided to believe in that message enough to willingly share it with others.
Muhammad Ali did not only tell people “I’m the greatest,” he proved that he was. By becoming the most outspoken heavyweight champion of his time, he not only believed that he was the greatest, but others began to believe him as well.
Ali crafted a message that he believed in. He then shared that message with an audience who cared about what he was saying. That audience then told others about what they now believed.
Even after his death, Muhammad Ali is still one of the most recognized people in the world.
How Does “Word of Mouth” Work for Wine and Spirits Brands Like Tito’s?
Beveridge worked hard to craft the right message, a great product, and share it with the right audience at the right price. Early on he took the time to personally share his product with the right audience to help them experience it for themselves.
In the end, those people were so impressed with him, his message, and his product, that they shared their experiences with those closest to them.
Tip: “There is a lot of noise out in the digital world. You and your team should take the time to craft the right message to be delivered consistently to the right audience.”
Success Takes Time
Many wine and spirits entrepreneurs have an alarming misconception that Tito’s Handmade Vodka was an overnight success.
Beveridge started commercial production of Tito’s sometime in 1997. After years of struggling to keep the lights on, it wasn’t until 2001 that he finally received some real attention from industry buyers. At the San Francisco World Spirits Competition Tito’s Vodka unanimously won the Double Gold Medal for best vodka, beating out brands like Grey Goose, Belvedere, and 70 others.
This opportunity provided a launch pad for Tito’s to incorporate his big win into his brand message. This allowed him to enhance his marketing efforts with an audience that wanted to learn more.
Hard Work and Perseverance
As an entrepreneur, many times we are left juggling multiple roles in our business in order to keep the “ship afloat.” This can cause us to become bogged down or frustrated that success has not yet happened or doesn’t look to be in sight. This feeling can be very apparent in the first 2-3 years of business.
During various industry events, our team has experienced ambitious business owners describing their brand as being the next Tito’s. Some even comparing their potential growth to that of successful brands such as Skinny Girl Brand and Casamigos Tequila.
I am not one to judge, but let us not forget, Bethany Frankel and George Clooney both spent years developing their personal celebrity status. Their success as beverage brand owners was a byproduct of their own personal fame and outspoken support of their brands. In spite of their celebrity, their brand success still took time, effort, and constant promotion to achieve what they have. In addition, each owner still has required involvement well after the sale of their brands.
The truth is, success takes time. It may be four years, it could be ten. The fact is, it may never even happen. This means you have to plan accordingly based on your future expectations of the business (legacy brand or exit strategy) to the best of your abilities. Your plan needs to be strategic, executed with confidence and consistency to be successful.
Tip: As a brand owner, it doesn’t hurt to get yourself behind the bar every once in a while either.
Building a Brand is About Relationships
Whether you are just starting your business or have been out for some time, establishing and nurturing your relationships are important tasks for any brand owner to manage. The relationships you develop with your team (internal and external), with distributors/importers, on and off-premise buyers, and most importantly, the consumers are vital to your success.
If your relationship with consumers is solely based on how much money you are spending on them, eventually you will run out.
In the story of Tito’s, Beveridge was not wealthy. The marketing/advertising landscape was also very different from the way it is today. Relationship building media channels like Facebook were not even created yet. At the time, Beveridge also did not have an established “celebrity status” (he was no George Clooney).
The better a brand owner is at establishing and managing his relationships with those who are essential to his business, the more enthusiastic your partners will be in the overall success of your business.
How Can Your Brand Become the Next Success Story?
It is important that entrepreneurs learn from the success of their peers. Today, business owners are fortunate to have a vast amount of demographic data and communication platforms through various channels such as F&B bloggers, industry influencers, B2B and B2C events, traditional media, social media, local industry groups, etc.
By understanding how to craft an appealing brand narrative and identifying your ideal audience, you can now take advantage of the proper deliver channels to share that message with the masses.
To start crafting such a message, you should take the time to truly think about the following critical elements to your business:
- What is my product?
- Who is it for?
- Why did I created it?
- Why should people buy it over my competition?
Success is not a short term plan. Success takes time, especially in the highly sought after wine and spirits industries. However, with a strong brand narrative, the right team, an actionable plan, nurtured relationships, and long term strategy, you will be able to navigate your brand to success.