The Birth of a Brand

Look out Rumchata, here comes a serious competitor

Bom Bom CocoMochanut Sales Sheet-1A while ago, a friend in the spirits business introduced me to some very interesting people developing a new product. I thought it would be worthwhile to follow their journey. One company is driving the liquid and the go-to-market efforts, while the other has developed the concept, branding and product strategy.

The latter, is a unique agency called Cops and Robbers and is run by Patricia Verdolino and Richie Beretta. They describe themselves as follows: Part Ideation House; Part Creative Studio; Not a Traditional Agency; But Agents Provocateurs.

I found them to be such a breath of fresh air as an agency that I intend to write about them in depth in my next posting. For now let’s turn to the product and its development.

The Parent

Meet Kevin Mowers who owns the brand and has been instrumental in its birth as a product and liquid.

Kevin’s background is in science and engineering and he began his work life in product development in the food industry working with such companies as Con Agra, Heinz and Campbell. Along the way he got his MBA in Business Development and Marketing and decided he wanted to be an entrepreneur.

Remember Jello shots? He developed a product called Gel Shooterz, which took quite a bit of effort to manufacture. Nevertheless, the brand overcame production hurdles and was on its way when suddenly the co-packer decided to sell and the new owners had no interest. The business did not jell.

Next came a stint at Diageo in the innovation area where he worked on whiskies, gins, flavors, distillates and other lab based efforts and innovations. Then one day he decided that his skills as an innovator and marketer might be put to better use. His company, Liquid Innovations was born in 2011.

The company consults and advises clients in a wide range of businesses and also looks into new opportunities to feed its entrepreneurial efforts.

The baby

Kevin’s new product, to be launched in early 2016, is Called Bom Bom and the first-born is named Coco Mochanut (mocha-nut). Here’s how he describes it:

Bom Bom Mochanut is an award-winning premium Caribbean rum made with cream, chocolate, coconut, and coffee flavor.

coco-mochanutIt’s a cream product that tastes, well, absolutely delicious. It’s slightly higher in alcohol than Rumchata – 18% AbV versus 13.75%. The product received a Gold award from a recent Wine and Spirits Wholesalers of America (WSWA) tasting. Suggested retail price is $19.99 for a 750 ML.

Many consumers describe the taste of Rumchata as as the milk leftover after a big bowl of Cinnamon Toast Crunch cereal infused with rum. Bom Bom’s Coco Mochanut tastes like a liquid Mounds or Almond Joy with rum. The target audience is millennial women aged 22 to 35.

Coco Mochanut is the first of a line of products with a similar approach but different flavors such as, Chocolate Bomsicle (think Fudgsicle) and Nutty Cup (think Reese’s Peanut Butter cups).

The Package

For some, the package might appear as kiddy. But it’s based on adult fashion trends.

As Kevin puts it, the product is “built on the chocolate loving kid in all of us that’s looking for some grownup fun.”

Patricia and Richie have this to say about the packaging, “It’s a contemporary fashion look inspired by Jeremy Scott, Pharrell Williams (BBC Ice Cream) and Moschino. It’s designed with the target audience in mind.”

And, by the way, the TTB approved both the liquid and the packaging.

The inspiration -- designers such as Jeremy Scott and Moschino
The inspiration

The challenge

Bom Bom is close to launch and Kevin is moving ahead full throttle in preparation for an early 2016 kick off. As is true for all entrepreneurial new spirits product launches, the key is distribution. But, the mainstream distributors, thanks to the dwindling number and big supplier pressures, are a very hard sell. In fairness, they already have a lot on their plate so it’s understandable that they will react cautiously, if at all. Recognizing this, he is smart enough to know that he needs to start slowly, demonstrate consumer acceptance and have patience.

cocktail_03-shakeMy advice to him is to spend whatever he can afford on product tastings where feasible and allowable. I also think the on-premise market will be very attracted to Coco Mochanut with such suggested drink ideas as the Fire Bom (with Fireball Whiskey) or Café Bom (with Patron XO Café) to name just a few.

Based on the tasting I had with my wife and friends his baby is indeed beautiful and will grow stronger each day in the market. One taste and you want to buy a bottle.

To my distributor friends and readers – want to meet the baby?

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Craft Spirits Exchange

A new venture that blends commerce and content

Join. Taste. Share. Explore. That’s the motto of an online startup looking to help craft startups.

CSX Promo (Large Banner)

If you find yourself, as I do, leaning more and more toward high quality craft and small batch spirits products, availability and purchase are often a problem. All levels of the business – craft producers, retailers and consumers – face hurdles.

The craft producer has limited budgets, a cluttered marketplace and is generally ignored by the mainstream distributors. Consequently, it is difficult for these producers to build awareness and to gain significant national distribution.

Retailers have low margins, need to depend on large brand deals and face limited shelf space for new craft products. In fact, the first question from a retailer when you walk in to pitch a new craft brand is very likely to be, “Which of the products that are selling do you want me to take off the shelf for your new start up brand?”

For consumers, lack of availability is a problem. If you live in a large metro area you may find a nearby store that might carry what you’re looking for and maybe they’ll deliver it. But, what about in the suburbs or smaller cities?

You can use companies like Drizzly, Thirstie, Flaviar, DrinkupNY, Binny’s and Caskers but for the most part you need to know what you want and you don’t always have the opportunity to get a range of reviews and/or ratings.

The Craft Spirits Exchange (CSX) approach

CSX describes itself as “the first and only online community and marketplace exclusively focused on artisanal craft spirits

 

from around the world.” They provide consumers with discovery of craft products, detailed information and access to hard to find or unavailable products.CSX_logorelease-02

They see themselves as a platform that, well, is like TripAdvisor and Amazon rolled into one. The CSX community provides loads of information about brands, events, recipes, and interactive tasting notes and reviews. There are more than 1,100 spirits profiled on their site.

At the same time, CSX works with spirits retailers nationally to provide a single online resource for a wide range of quality spirits. You name the brand and chances are they can provide it.

As to producers, CSX does not, at this stage in their development, charge a fee for being listed. Instead, they have a brand partnership program that provides links to websites, social media, product offerings and more. In the program so far are distillers such as Tuthilltown Spirits, New York Distilling, Mezan Rum and Finger Lakes Distilling.

The people

This new venture officially launched on October 1st and is founded by Luis Troccoli, a man passionate about being an entrepreneur and a craft spirit advocate. I asked him what makes CSX different from other sites. “We’re both about content and exchange of information as well as an ecommerce site. I don’t know any who do both.”

The CSX team -- Kelly Magyarics, Luis Troccoli, Steve Gilberg
The CSX team — Kelly Magyarics, Luis Troccoli, Steve Gilberg

He also seems to appreciate that craft spirits are more than just about the process. “More than just batch size, type of still or yearly production, these spirits have a unique story or heritage, often produced through artful or otherwise creative methods.”

The Chief Marketing Officer is Steve Gilberg, a real pro in digital marketing and communications with a string of successful ventures under his belt. Rounding out the team is Kelly Magyarics, an experienced published wine and spirits writer and educator. Kelly’s postings are fun to read.

Startup Woes

Unlike many new ventures, they have the product and marketing under control. In fact, here’s an interesting article from New York Business Journal about their launch event, which was top-notch. And, their website has a great look and feel and is easy to navigate.

Like many new ventures, funding is an issue but CSX is handling it better than most. For one thing they raised a quarter of a million dollars pre-launch and have increased their seed round to $750,000.

Here’s a link to their current fundraising effort. Their demo video is here.

Worth looking into, folks.

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Ambassador Wine and Spirits: Retailer Focus

What does it take to succeed in NYC?

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At the corner of 54th St and Second Avenue you’ll find my favorite spirits and wine shop. It’s close but not exactly in my neighborhood but I go out of my way to shop there. It’s arguably the best in Midtown.

If you live in Manhattan, chances are there’s a store up the street, around the corner or, a block over. There are “destination” shops like Astor, Beacon and others so I suppose Ambassador fits this genre – well worth going out of your way. Besides, they deliver. But before I talk about them, let’s spend a few minutes on the New York retail scene.

Only in New York

It’s a complicated market at all levels of the Booze Business.

As recently as the 1980s, there were over ten significant distributors. Today there are only two main players. While the gap has been partly filled with wine and beer distributors moving into spirits, the market is in a state of limited competition aka as an oligopoly. In short, the wholesalers call the shots.

A consumer living in the boroughs other than Manhattan can purchase most alcohol products for less than in “the city.” Lower overhead is the main reason.

Thanks to state tax differences, for many consumers it makes more sense to go across the river to New Jersey if you’re looking to stock up, particularly spirits. The difference in state excise taxes is almost a dollar per gallon –$6.44 in NY vs. $5.50 in NJ.

(I used to joke that a car coming to NY from NJ whose trunk was much lower than its hood probably was either a small New York State bar owner stocking up or someone having a party.)

So imagine you’re a retailer in Manhattan. Your rent is high; you have to compete with many businesses for qualified employees; your customer base (in the midtown area) has changed, with LLCs buying apartments that are frequently unlived in; and the guy down the street is selling the same brand as you for less.

It’s not a level playing field

There’s a rule in NY State that only a single individual can hold a license to sell wine or spirits at retail. Its origin has to do with preventing chain liquor stores from doing business in the state. But guess what? It doesn’t stop retailers from opening other stores in the names of their family members.

So, when a distributor has a multi-case discount, the sole proprietor store can’t take advantage of it but the stores “owned” by cousins, sisters, in-laws can. In short, that’s how many NY State stores beat the system.

This is the environment in which Ambassador Wines & Spirits operates.

The Ambassador Story

Leonard Phillips. owner
Leonard Phillips.

Meet Leonard Phillips, the owner of the store and whose family has been in the business since 1973. It started as a small shop run by his grandmother that has grown to the current 1400 square feet store on two levels.

Leonard’s original calling in life was to be a biochemist and ultimately become a physician in the military. However, as we all know, life has a way of getting in the way of plans and dreams. But if you spend five minutes with Leonard you quickly realize that his passion and tenacity is what has makes Ambassador unique.

 

Here’s why I think the store is special

This is not the place to go to buy the popular vodka and expect a discounted price. It is the place to go where you will find new or extraordinary products that appeal to the spirits enthusiast and aficionado. Their selection of whiskies (particularly scotch and single malts) is unbelievable.IMG_5313

In fact, if you’re a follower of this blog, you know that I love the whiskies and gin from Koval Distillery. All their products are available at Ambassador, which is how I came to the store in the first place.

Their wine selection is also second to none. But, interestingly, thanks to the whiskey and craft spirits explosion, wine as a percent of volume has gone from 80% to 65% in the last 3 to 4 years.

In addition to wine and liquor, their selection of Sake, Soju and Sochu is, in my opinion, the best in NYC. If you’re looking forIMG_5319 hard cider this is the place to go. And, while you’re in the store check out their champagne and sparkling wine selections.

There is even a room downstairs for tastings and education either conducted by companies or groups of friends wanting to discover new and interesting products.

Hey, don’t take my word for it. Go to Yelp and check them out. Not only did they get 4.5 out of 5 but also the comments left by reviewers are amazing.

It’s about the people

Most of the reviews on Yelp talk about the knowledge, helpfulness and friendliness of the staff. In most wine and spirits shops I’ve gone to around the country over the years, most should have the slogan, “shut up and buy.” This is a store whose service orientation matches their style of business – personal recommendations based on knowing the customer and the products they sell.

* * *

When I asked Leonard about how he copes with the peculiarities of doing business in New York City his response was mixed. On the one hand, as a true sole proprietor store facing competition from multi-owned stores and their ability to deeply discount, he describes the situation as akin to being a “one legged man in an ass kicking contest.”

At the same time, or perhaps as a result, he views Ambassador Wine and Spirits as a Dylan’s Candy store for adults.

An article in Serious Eats sums it up nicely:

Ambassador is the liquor store I wish I had in my neighborhood; you find yourself wanting to hang out there, even if you don’t really need to buy anything.

My kind of store.

 

Leonard and Schlomo. He may look intimidating but he's the friendliest pup.
Leonard and Schlomo. He may look intimidating but he’s the friendliest pup. Schlomo, that is.
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