Industry Matters/News | Booze Business: A Blog Dedicated to the Business of Spirits and Wine

Booze to Broadway to Booze Again

July 5, 2012 2 Comments

Wine and Spirits Daily and Shanken Daily News have each had stories on
Hiro Sake and its co-founder, Carlos Arana. In fact, there’s been quite a bit
of press about them lately.

Since I’ve known Carlos for most of my booze business days, I thought I would chime in.

At Seagram, Carlos and I suffered through the foibles of our Latin American boss and managed to survive the adventures of Patron in the early days. Carlos went on to run the Asia-Pacific whiskey business.

Next came an 8-year stint with the Beckmann family running the tequila business with impressive results and literally put Jose Cuervo on the global map. He managed to double sales and triple profits and increased market share by five percentage points. Not shabby.

A brief tour of duty as President of the Arnell Group was enough to convince him that doing your own thing is far more rewarding than working in a corporate setting.

So, enter Broadway and Hiro Sake.

Screw Your Wine

June 27, 2012 1 Comment

Screw cap or cork?

According to some surveys I’ve seen on line, while corks remain the preferred closure among consumers, the acceptance of screw caps has been growing steadily. One recent study in the UK indicates that twice as many people accept screw caps today as compared to 10 years ago.

Ah, but buying a bottle with a screw cap is another matter.

More and more wineries around the world are turning to screw caps, including some very high priced wines. Nevertheless, it seems as though a bias continues against the device known as a Stelvin Closure. Perception is reality and the notion that wines with a screw cap are inferior is still pervasive. At best, many seem to think they belong only on young, inexpensive wines.

It seems to me to be a conflict between the rational/functional versus emotion/sentiment.

Death of a Vodka

June 21, 2012 1 Comment

Buffalo Trace Newsletter had an article last week with the headline, “Shakers Vodka Brand and Equipment to be Auctioned Online Through June 26.”

Infinite Spirits Inc., the makers of Shakers Vodka, filed for bankruptcy in early 2012 and now the assets are being liquidated. If you go to the auction website you learn that you can bid on the brand, the equipment and a host of other items. The bankruptcy filing shows the company has under $200,000 in assets and liabilities of over $2.3 million.

To me this represents a case study of a start up gone wrong. Got me wondering, what happened and why did it fail?

The story starts in 2003 when a group of entrepreneurs who had created Pete’s Wicked Ale decided to enter the spirits industry. They had sold Pete’s for $69 million to the Gambrinus Company in 1998 and I suppose wanted to parley the money into “the first high-end American vodka.” Their marketing concept was to replicate the elegant 1920s with frosted bottles shaped like Martini shakers.

From what I’ve read, in less than three months from intro, Shakers was number one in their home production state of Minnesota and quickly expanded to 19 other states. They were loved by vodka mavens, received a perfect 100 score from Wine Enthusiast and were Best of Show in the San Francisco Spirit Competition. At one point they marketed five products – wheat and rye based vodkas plus seasonal versions known as rose, violet and summer. The bankruptcy records indicate that they grew quickly from the launch and had annual sales over $1 million.