How an Olive Launched a Brand

The Ketel One Story

Nolet, the distillery behind the vodka, recently celebrated its 325th anniversary and is run by the 11th generation of the Nolet family. While they rightfully take pride and recognition for this accomplishment, the real credit for the success of Ketel One (partially owned by Diageo) belongs elsewhere.

The distillery has been around since 1691 but they’ve only been producing Ketel One vodka since 1983. And, that’s where our story begins.

David van de Velde

I first met Dave back in 2010 when I started writing this blog. Here is that story. But, there is much more to the launch of Ketel One than I realized at the time I wrote that article.

David van de Velde
David van de Velde

In recognition of the sustained growth of the brand—reportedly selling at 2.1 million cases and the fifth largest import—and given the 325th anniversary, I contacted Dave to get more of the back story. Specifically, what were the most important elements in successfully launching the brand?

Before I get into that, here’s a brief historical context.

Vodka’s growth spurt began in the mid 1980s. The market was dominated by domestic brands (Smirnoff, Skyy was beginning its ascent, and others). Based on a number of factors, Absolut led the charge of the imports and became the poster child for vodka. Suddenly, two other market imports entered the fray with price points much higher than Absolut. One, Grey Goose, had a range of things going for it (name, packaging, country of origin, and the Sidney Frank team). The other had Carl Nolet Sr. and his belief in the ingenuity and business skills of David van de Velde.

The Challenge

The relationship with Carl Nolet, Sr. started with a handshake, a 20-foot container of Ketel One (litres and no 750ml bottles) worth around $20,000. Dave put up around $250,000 and no salary for two years. The US operation started in Dave’s garage in Sebastopol, CA under Luctor International, his licensed import company.

The obstacles were clear and considerable: Limited resources and going up against some powerful competition.

I was head of US marketing for Seagram at the time, and as mentioned in the earlier blog post, all I kept hearing about was this upstart brand and it’s appeal to bartenders and retailers. We paid some limited attention, but often Goliath doesn’t take action until David has made it too late.

How the brand was launched

Three elements became the focus of the launch of Ketel One:

1. An emphasis on the bartender and enlisting them as brand ambassadors.

2. Convincing the trade (sales reps and bartenders) of the taste superiority of the brand.

3. A very unique promotion and value added piece at point of sale in off premise stores.

The Bartender

Dave and Ketel One were not the first to recognize the power of the person behind the bar in influencing brand IMG_0490choice. But he did it in a most unusual way and with the help of technology. The most common approach to sway the views of bar and restaurant people—then and now—is face to face with brand ambassadors, sales reps, other bartenders, special tasting, events, and so on. But what do you do if you can’t afford this approach?

In Dave’s case, he told the Ketel One story on VHS video (this is before DVD) and mailed copies to the top bars, stores, restaurants, hotels, etc. He reports that, in his estimation, the videos were viewed by around 20% of those who received it, and that it created ambassadors on its own.

All I can tell you is that wherever I asked about Ketel One, a bartender or food and beverage manager would wave a copy of the video or tell me about it. While we take such actions for granted today, it was ahead of its time.

The Smell and Taste Test

At the heart of the Ketel One story was it’s clean, smooth taste, based on its unique (at the time) distillation process. How do you get this message across?

For Grey Goose, it was the Beverage Testing Institute (BTI) taste test showing Grey Goose on top of its competitors with a score of 96.

For Ketel One, here’s how Dave describes their program:

“We trained the distributor sales reps to do a “Smell and Taste Test” with the trade. That consisted of asking the storeowner or bartender to smell and taste a sample of his or her own favorite vodka. But, of course, when the alcohol touches the taste buds there is a numbing effect. So the next sample—which was Ketel One—with the nose and mouth taste buds numbed, tasted a lot smoother.”

The “trick” as he puts it, worked very well.

{For another clever/tricky sales taste test see the posting called Salesman in Winter.}

About That Olive…

Actually it wasn’t an olive, it just looks like one. It’s called a TomOlive and is a small green pickled tomato. “For a TomOlives_Aasmall company in the startup mode, it was extremely difficult to get Point-of-Sale (POS) materials into a store…so we decided to do something very unique,” Dave recalled.

It happened this way. Dave received a phone call at home from a stranger, who he assumed was a stockbroker, but turned out to be someone in the movie business. The man told him, “Find TomOlives, make a Ketel One martini with it, and you’ll have discovered the ultimate martini.” Dave tried it and it was indeed sensational.

(Having bought some recently on Amazon and tried them with vodka, I can attest to the fact that they taste great. In fact, we sometimes, add TomOlives to a salad to add a bit of a kick. But I digress.)

photoA week later, Dave was on his way to Alma, Arkansas to meet with the producer of the TomOlive. The next thing you know, he buys the annual production and co-packs it with Ketel One. Some of the Nolet people were “aghast” and said, “we’re not in the fruit business!” But he did it anyway and came up with a terrific marketing program that had bars, stores and consumers clamoring for Ketel One and TomOlives. It became the darling of the sales force.

I know this for a fact, because after telling me about the video, people would add, “and why don’t you have those olives?”

The punch line to the story is twofold. David van de Velde never found out the identity of the mysterious caller with the idea for TomOlives. Second, Diageo no longer uses the exclusive Ketel One TomOlive program. Sounds like an opportunity for another brand, if you ask me.

Oh, by the way, according to Dave, Diageo had the opportunity to own a chunk—if not all—of Ketel One in the early days but let it go by. When they finally got around to a significant investment, it had gone from millions to billions.

He’s Still At It

Power Assist Golf - StrikerOne

Finally, Dave continues to be motivated by the notion, “Find a Hole and Fill it.” He and some colleagues have invented The Striker-One™ Smart Golf Club. It is designed for golfers who can’t play anymore because of injury, disability, age or any number of reasons. You can learn more at info@PowerAssistGolf.com. Or contact me and I’ll put you in touch with David van de Velde.

A remarkable man with a thirst for ingenuity and creativity.

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Find a hole and fill it

This blog has given me the opportunity to re-connect with friends and to make new ones like David van de Velde whose business motto is the headline for this posting.

In addition to being a very smart and affable fellow, David is an interesting entrepreneur and created Ketel One and Van Gogh Vodkas. In that regard, he changed the spirits industry.

I hope one day to write his full story but here are a few things that make him so interesting.

Let’s start with the motto. In an age of me-tooism, finding a hole and filling it speaks volumes about brand development strategies.

Not long after Seagram got Absolut Vodka, I kept hearing about this new brand, Ketel One, which was unique in its packaging, name, underlying concept and one other “outrageous” factor… a price at a significant premium to the category.

In addition, they concentrated on bartenders and servers and used videos and events to tell the story and even special olives for a martini. Everywhere I went at the time, all I heard was how we needed to learn from the Ketel One folks.

Many people think that the ultra premium vodka market was created by Grey Goose when, in fact, by the time Grey Goose came along, Ketel was already doing 200,000 cases.

David’s understanding of consumers is very impressive. He describes the target customer for high-end vodkas at that time as someone who wears Armani suits without pockets. Someone who walks into a bar and is holding the following – car keys with a Mercedes or BMW logo, an expensive cell phone and a wallet chocked full of goodies. No pockets. The question he asked himself is – would this person drink anything but a top shelf brand?

After Ketel One, he created Van Gogh vodka and brought the flavored category to new levels.

A little birdie told me he will be celebrating a milestone birthday this week so congratulations and keep finding and filling those holes.

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And the winners are…

Two things came to my attention recently.

First, David van de Velde, founder of Ketel One and Van Gogh was kind enough to post a comment on the “What makes a brand successful” piece below.

Second, the trade magazines have selected the ‘hot brands’ and ‘growth brands’ of the year.

Got me thinking…

The very successful brands since the 1980’s came from entrepreneurs – Grey Goose, Ketel One, Patron, Skyy and so on. When those brands were getting started it wasn’t about bureaucracy, process or systems it was about hard work, tenacity, ingenuity and persistence. No gates, no silos…just determination to win.

Take a look at the current roster of hot and/or growth brands. Nearly all of the 14 brands identified by Beverage Dynamics as “Fast Track,” were created by an entrepreneur or a company not among the top 10 suppliers.

I guess the slogan should be “Build it and They Will Buy.”

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