more competitive tax advantage at $8.59 per gallon, but their laws are much more restrictive than Washington’s, and most of their local consumers don’t know that they, or Minnesota-made spirits, even exist.
CREATING A BRAND CONNECTION “We have many customers that say, ‘I didn’t know I could buy local spirits, and I didn’t know that anyone in Minnesota was doing this,’ so we’re still looking at an educational component to our marketing,” explains Shanelle Montana of Du Nord. The bulk of that education comes through Du Nord’s cocktail room, where customers can sip the spirits they were previously unaware of while watching Montana’s husband make them. Customers are fascinated by your distillery’s shiny industrial equipment and raw ingredients, so when they taste your spirits in-house, they make a deeper connection with your brand. If you present those spirits in a tasty, fresh cocktail, your vodka is no longer just a curiosity, it is now that customer’s preferred cocktail base because you showed them it was possible. This is especially helpful when you have a story or product that is challenging to sell without face-to-face interaction. Du Nord’s spirits are made with grains from their family farm. It is a compelling story, and many would say it makes a qualitative difference, but it comes at a cost. A consumer that might have skipped reading the label in the liquor store due to the higher price tag becomes a captive audience at their distillery, where Montana and the bartenders can tell them why the bottle costs more and why it is worth it. Dominion’s Henry Anderson says that is a big benefit in Washington, where the high taxes take his expensiveto-produce single malt vodka to $43 a bottle. Compared to the lineup of other lower-priced labels on the shelf, very few consumers will choose Dominion’s vodka. But if Anderson can get them to taste it in his tasting room, they discover the flavor difference, a difference that makes it the top-shelf vodka in many regional high-end bars and restaurants. “A lot of times people will have a cocktail with our vodka in it and they think it’s really good,” begins Anderson, “so we’ll offer them a sample of the straight vodka, and they’ll say, ‘No, I don’t like vodka straight, it’s not good.’ We offer the sample on the house, and half the time they walk away with a bottle. If I can get them to try it, even the hardcore whiskey drinkers that don’t like vodka will end up buying a bottle.” WWW.ARTISANSPIRITMAG.COM
BETTER PROFIT MARGINS Thanks to Washington’s absurd spirits taxes, that $43 liquor store sale nets Anderson about $3. If he sells the bottle in-house, he keeps $7. When he serves a cocktail with that vodka, though, even happy hour prices net at least $3 per drink. “It’s about a 30 to 40-fold increase in profit,” explains Anderson. “By selling one cocktail we make more than selling the whole entire bottle.” Thanks to a change in legislation, Dominion is not required to serve food to offer limited sample cocktails. But even before that change, when the only way they could serve cocktails was to obtain a bar/restaurant license which required food sales, cocktail sales were so important to their business plan that they were painstakingly planning how to provide food to customers in their small, speakeasy-style distillery. “Onsite sales are your anchor,” offers Anderson. “That’s where you make your money to pay your employees, keep the lights on, and that’s basically where you build from. Anymore you cannot really start out by doing strictly production and make it. The market’s not there. You’ve got to slowly build up and grow your name, you can’t really just jump out there and all of a sudden be a moving production facility.” Anderson built his own still at Dominion’s sister company, Gatling Still Works, with an intentionally small footprint to save square
footage in their basement space. He says they are working to add more seating now, and possibly a rooftop bar, because that space fills up quickly on busy nights. Likewise, Montana says Du Nord’s 90-person winter occupancy, with an extra 30 outside seats in the summer, is still not enough on Saturdays and holidays. That exposure is also driving bottle sales and helping Du Nord exceed their production and distribution goals. That is especially positive
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