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Written by DOUG HALL Illustrations provided by WOODCRAFT BOURBON BLENDER
FOR YOUR
SALES STRATEGY
More Customers or More Product?
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hen I really understood the math of the three-tier system, it was clear that it wasn’t going to deliver the kind of profitability that I felt my team deserved given how hard we work. To grow our profitability I borrowed from the playbook of big whiskey. In Scotland they make big profits from single malts; however 80 percent of their volume comes from blended whisky that they mostly purchase, blend, and package. In the U.S., Sazerac makes some of the most expensive bourbons in the world. At the same time, over 80 percent of their volume is in low-priced Canadian and U.S. whiskey. In both cases the profit per bottle is low on the 80 percent; however, it covers overheads and makes the big profits on the 20 percent possible. In our case we had a high-volume Noble Oak collaboration and a small three-tier business. What was missing was a high margin/high profit business. The idea was a simple one — custom bourbon. It was not a new idea. In fact it was the way bourbon was sold when it was born in the 1800s. You would take your clay jug to a barrel blender or whiskey merchant to get it filled to your personal tastes. To make custom bourbon work we identified what we called “Death Threats” — TTB, State of Ohio, three tier, customization system, bottling speed, and costs. Then, step by step we problem solved and created reliable systems for quickly and profitably delivering custom bourbon a bottle at a time. Custom bourbon has changed our math model. Today, 70 percent of our profits are from custom bourbon bottles for on-trade and consumers and our revenue per person for those visiting our distillery has doubled. Again, just like with big whiskey, our other profit streams pay the overhead and custom bourbon delivers profits. My advice is to diversify your income streams. For us it’s custom bourbon. For you it might be focusing on very old whiskey, prestige contract brands, making a deep commitment to high-value experiences, or even VIP curated brands. 120
COCKTAILS AS MUCH 1. ASLOVE YOU LOVE YOUR SPIRITS
This means being just as fanatical with the raw ingredients, the storyline, the taste, and the presentation of your cocktails as you are with your spirits. It means that your whiskey maker takes ownership of how their spirit is translated into cocktails. For example, we have a bourbon that naturally pairs with orange. As such, we’ve found that when we add a little orange to our sour versus just straight lemon juice, the result is a magical taste experience. As a craft distiller you spent hours running experiments to create your products. Apply that same mindset to the creation of your cocktail experiences. To win with cocktails you need to “own the finished cocktail.” W W W . ARTISANSPIRITMAG . C O M