Written by WES WOODDELL
THROW AWAY YOUR MBA Going Small to Grow Big
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hen it comes to creating the next generation of spirits and liquor, forget everything your MBA taught you. While ROIs, ROEs, and fundamental business KPIs will never go away, the new world order is more about thinking smaller in order to grow bigger. And by smaller, I mean way, way smaller than you’ve ever thought before. In the past, companies pursued YOY (year over year) growth by starting with their TAM (total addressable market), whittling down to their SAM (serviceable addressable market) … and maybe they’d hazard a guess at their SOM (share of market). Wow, that was a lot of acronyms. Sure, this old playbook might work if you’re a spirits industry Goliath (meaning you have $10M worth of infrastructure and ample distribution systems at your beck and call, for example). Goliaths, this article isn’t addressed to you. If you’re a startup in the spirits industry, then don't go head to head in a sword fight with Goliath — David uses a smaller, mightier, unexpected approach. We’ll get to this in a minute. First, it’s important that we understand the current state of the industry; we need to acknowledge that while it’s taken more than 50 years, the pendulum has somewhat swung away from mass brands. What’s the takeaway from this insight? Craft has become the new mass that’s ready for disruption. That's a bold assertion, but please bear with me. 90
CRAFT = MASS Just like craft coffees, craft beers leveraged their smallness to be more unique and relevant to consumers than the big brands. But now buzzwords like “small batch,” “hand-crafted,” “hand-made,” and “home-made” have oversaturated the market to such an extent that they’ve become almost meaningless. They’re all watered down versions of the same thing. Need proof? The lawsuits surrounding the use of phrases “handmade” products and “homegrown” recipes within the industry should more than speak for itself. Now, I’m not hating on our “handmade” craft forefathers. In fact, we owe a lot to the first movers and brands who instigated the shift from mass to craft. We wouldn’t be here without them. But we also need to recognize that running the same brand positioning playbook is no longer an option, as today’s brands don’t have the luxury of being the first to market in craft spirits. The important question now: Who are the brands that will lead the next phase of categorical evolution?
YOUR CRAFT APPROACH DOESN’T SET YOU APART While the song implies that one might take 99 bottles of beer off the wall, consumers are only grabbing one bottle of spirits at a time. You must be different from the other 99. Of course you’re going to make great bourbon, gin, tequila, vodka, etc. However, it's your packaging, design, and marketing that set the stage for your flavor, not the other way around. This means your story needs to be real, real-specific, and really to the point. Because there are so many brands on the shelf, it’s critical to quickly communicate your specific — and relevant — perspective. Again, that doesn’t mean your ingredient sourcing, type of still, or distillation process. Everyone aims to make good products, so everyone makes these claims. Instead, you’ll need to be precise, tiny almost. Be as precious with your narrative as you are with your ingredients, copper pots, and tastings. Be narrow. Be focused.
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