In the wine and spirits industry, there are some truly inspirational success stories. In recent years, many aspiring wine and spirits entrepreneurs have become very familiar with one brand that has taken over everything from music events to airline bar offerings.
If you’re looking to build a strong brand in the wine and spirits business, here are some of the key elements that turned Tito’s Handmade Vodka into an iconic American brand.
Find a Niche, Build a Strong Foundation
Bertito “Tito” Beveridge was not the product of a legacy or experience in a family run wine and spirits business. He also did not have millions of dollars to start a brand.
After a career path chasing oil, and then real estate wealth, the story of Tito’s Vodka says that after making holiday spirits as gifts for friends, he was inspired to get into the alcohol business. He found a loophole with the Texas alcohol board, who initially said he couldn’t build a distillery in Texas, and then scraped up funds (the amount varies in the storytelling), financed a few acres of land, and started making vodka.
As simple as this may sound, Tito wasn’t living the American dream in the early stages of the company. In various interviews, Beveridge shared that he tried to launch initially with a multi-flavor product line. After months of minimal sales, Beveridge asked one of his accounts why his products weren’t selling. The bar owner responded that women were their primary buyers. His advice: make a vodka smooth enough that women could drink it straight, and he would have a winner.
The advice Tito received was acted upon quickly, transforming the product into a smoother, affordable, and authentically American spirit that appealed to tastemakers in the area. Beveridge also made sure that everyone in the burgeoning city of Austin and its surrounding markets knew about his Texas-made vodka, and sought out brand and product placements everywhere he could. The next move would take a story, time, and an understanding of his audience.
Brand With Purpose
Creating a wine or spirit brand is more than just creating a product, putting into a bottle and throwing a cheap label on it. Tito knew that to succeed, his product needed to stand out, and have a purpose. In a time when glitz was in, people were getting excited about premium products, and frosted bottles were all the rage, Tito took the advice of his then girlfriend, and chose a recycled paper that, in her opinion, was better for the environment. In contrast to other vodka labels, the simplicity of Tito’s package still continues to stand out on the shelf.
In addition to packaging with purpose, Tito’s story had a core aspect that resonated with consumers. In doing legal battle with the Texas alcohol board, who had originally told him a Texas based distillery was out of the question, Tito became a first mover in the industry to be based in the state. Although hundreds of distilleries now apply for approval each year, this ‘first’ continued to be part of his messaging, and create below the line marketing appeal to both male and female consumers passionate about entrepreneurship, and the pursuit of the American dream.
Although brands today will be hard pressed to be ‘first’ in a highly saturated, competitive American marketplace, it’s not impossible to do. Understanding what your product is about, how customers can relate, and how to fill a void that other brands do not will create a common purpose, and more of a reason for them to choose your product over another on the shelf.
Relate To Your Customer, Or Put Your Dog on Everything
The most highly successful brands aren’t just a marketing gimmick or a flashy celebrity ad. When the product, reason for its production, or another element of the business are something that consumers can relate to transparently, the effect is an emotional connection.
From day one, Tito’s referred to their brand as ‘vodka for dog people’. Images of Tito and his dog, Dogjo, were on everything from trade sell sheets to the website, and the brand prominently promoted their support for pet rescue shelters and animal causes. They even took their business ethos one step further, with employees rescuing over 30 dogs and cats from the farm where the distillery was located. Giving back was in their DNA, and customers rallied behind the brand to show their support.
The market has changed, but consumers continue to gravitate towards products they can relate to, with over 70% of shoppers saying they will choose a brand that is socially responsible, even if it’s a higher price. (source: Nielsen) For brand owners and entrepreneurs today, it’s important to give consideration to whether or not buyers will feel a sense of pride and affinity for something of greater value than the product itself. Look beyond your bottom line the way that Tito’s did, and you’ll give them another reason to choose you over the competition.
Creating a Lifestyle Brand
In the world of marketing, building a sustainable lifestyle brand is about more than growing your bottom line. Properly branded lifestyle products will inspire, evoke positive feelings, and help a buyer to understand what you do for them, helping to sell from the shelf long after a promotion has ended. Smart marketers today know that influencer marketing carries a value of 6.5x greater return on spend that traditional advertising, and the key lies in their ability to create authentic, real stories.
Tito’s made that happen by presenting his product as a small batch, handmade craft spirit, created from hard work, and offered to consumers at an affordable price. It also just so happened that critics liked it more than much of his competition. In addition to being the first distillery in Texas, and an all American brand that gave back, this ‘cocktail’ of elements created the perfect brand narrative, and a key driver in brand expansion and growth.
Word of Mouth and Liquid To Lips Go Hand in Hand
If you’ve been around business for a while, you’ve liked hear the phrase ‘word of mouth is the best form of advertising’.
Word of mouth is no accident, however, and occurs only when a brand takes the time to craft a strategic message. For many years, Beveridge worked hard to craft the right message, and share it with the right audience at the right price. He knew the value of personally attending events, market visits, and sharing how to use his product with bartenders, retail owners, and customers who fit his ideal demographic (21-32, frequent casual bar goers, many of whom were women) to help them experience it for themselves.
By creating approachable, easy ways to use Tito’s Handmade Vodka, he inspired the every day customer to ‘be the bartender’, and increased word of mouth.
Adding to that, Tito’s collaborated with a wide variety of events and groups across the country, sponsoring liquid to lips promotions at everything from pet adoption weekends, fitness races, food and wine events, music concerts, and galas. This kept their brand top of mind, and on the palate of a broad spectrum of American drinkers.
Have an Audience in Mind
Many brand owners today feel that their product appeals to anyone over the age of 21. Frequently, they’ve been overheard to say, “If they drink [a competitor’s spirit], they should be drinking ours.” However, just because a consumer is of drinking age, ask yourself, does that mean they’ll actually choose your product? Are you accurately comparing your brand to the right competitors, or are you trying to change buyer behavior, asking customers to ‘trade up’, in addition to switching brand loyalty, without having a compelling reason to do so?
In the end, trying to appeal to everyone ends up leaving you without a target. As Millennials and following generations are less and less loyal to brands, the ‘try anything’ demographic has become even more difficult to convert into repeat sales. Statics show that below the line marketing to an intended audience will go much further than broad based advertisements or marketing that does little more for the consumer than scream, “Buy my product!”
In contrast, Tito’s appealed to women (and men) that believed in craft products, wanted a smooth drinking experience, and cared about their pets and the planet. Additionally, at a time when other vodkas were positioning as ultra premium and luxury, he used blue ocean strategies, and offered an American made product at an affordable price point.
By understanding who he was speaking to, with what message, and where, Tito’s was better able to aim and hit their target, creating an organized structure that staff and sales could easily mimic, and a reason for buyers to purchase that positioned the brand effectively as a different and better choice, versus other brands on the shelf.
Building a Brand is About Relationships
Whether you are just starting your business, or have been in the CPG space for some time, establishing and nurturing your relationships are important tasks for any brand owner to manage. The relationships you develop with your team (both internally and externally), with your distributors, importers, on and off-premise buyers, and most importantly, your end consumers, are all vital to your success.
If your relationship with consumers is solely based on how much money you are getting from them, or how much visibility your ad budget can buy, competitors will likely beat you at the game.
When he started the distillery, Beveridge was not particularly wealthy, nor had celebrity status to fall back on. The marketing and advertising landscape was also very different from the way it is today. Relationship building media channels like Facebook were not an option, and there was initially much less competition in the craft brand space than in today’s market.
By focusing on people and relationships, however, success and momentum were building for the brand. As Tito’s grew, they became savvy at using new tools and ways to spread their brand message to those that wanted to hear it. Hard work, dedication, and a good team of the right people helped Tito’s to claim his rightful place in the spirits industry.
“Fear of failure paralyzes some people when trying something new. As in sailing, you have to set your course — and it rarely follows a straight line.” – Tito Beveridge
Success Takes Time
Many wine and spirits entrepreneurs believe that Tito’s Handmade Vodka was an overnight success. In fact, 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 Handmade 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, and allowed him to enhance his marketing efforts with an audience that wanted to learn more.
Like other successful brands, he continued to use Tito’s ratings versus his competitors, making it easy for shoppers to compare one versus the other on the shelf.
Hard Work and Perseverance Pay Off
Although launching a brand in today’s market requires financial backing, as well as a good product, it’s where you spend, and with whom, that counts. Over the years, many an ambitious business owner has described their brand as ‘the next Tito’s, Skinny Girl, or Casamigos Tequila’. The reality is, success takes time, and more than just being a celebrity to succeed.
Most spirit brands have said that breaking even before year three to five is a rare instance. There are many more, including celebrities, who have launched brands that failed. Success requires planning, based on the future goals of the business. That plan needs to be strategic, executed with confidence, and consistently adjusted as the market shifts, in order to be successful.
How Can Your Brand Become the Next Success Story?
If succeeding as a CPG brand, a winery, or a distillery is your goal as an entrepreneur, you are wise to watch and learn from the successes and failures of your peers. Today’s wine and spirits landscape is moving faster than ever. If you think you are the only player on the court, be warned: there is a squad ready to kick you off.
Business owners today are fortunate to have a vast amount of demographic data and communication platforms available, including various social media channels, influencers, bloggers, industry and consumer experts, trade and consumer events, public relations, industry groups, and media eager for a story that their readers will want to hear. Take advantage of these resources, because if you don’t, your competition will.
Tito’s advice when interviewed the the New York Times was this: “Fear of failure paralyzes some people when trying something new. As in sailing, you have to set your course — and it rarely follows a straight line.” Sometimes, you just have to take the leap.
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.
Success is not a short term plan. It takes time, especially in the highly sought after CPG, wine, and spirits industries. If you come to market with a strong brand narrative, the right team, an actionable plan, solid relationships, and a long term market strategy, you will be able to navigate your brand to success.
Our team has years of experience working with SMB to international beverage brands looking to increase their market footprint. To learn if you are a potential candidate, schedule a call with our team.