Small fish in a big pond: how do small brands survive?

 

I was chatting to some friends in the drinks industry the other day about the challenges facing new-to-market brands in the UK. As tends to happen over a few beers, we started setting the world to rights, as well as drowning our sorrows about the challenges smaller brands often face. With a handful of large companies holding a portfolio of leading products, it can be hard for smaller brands to find their place in the market, and even good products don’t always last long. The conversation stuck with me (despite the beer drinking) and I thought I’d share some of my thoughts on this subject. It’s an important topic, as actually it comes down to how bartenders and brand owners have to work together in order for good brands to survive in one of the most competitive drinks markets in the world. I’m sure many of the things mentioned below will ring true to those of you working in other countries too.

I should start this by pointing out that this is not me taking a swing at the larger drinks brands, or disrespecting what they add to our industry. In fact one of the things that we all agreed on was that we wouldn’t have such a vibrant industry, or nearly as many great events, without the financial clout of the larger spirit brands. Without their sponsorship and marketing spend, many great bar shows and cocktail gatherings wouldn’t be possible at all. In fact global brands such as Bacardi, Absolut, Gordon’s or Jose Cuervo, form the backbone of our industry and have paved the way for smaller brands to reach a larger audience.

That being said these huge brands also make it hard for small brands to compete. You see in the UK most good cocktail bars receive financial support in exchange for ‘pouring’ certain products. The amount of support varies greatly, as do the conditions under which that support is offered. It’s possible for a company to offer finances upfront, or provide support by giving free stock, but in return they can also stipulate how much of the cocktail menu must feature their brands, which of their products must be available on the menu or back bar, or even which drinks they want served using their brands.

From a bar owner’s point of view this support can be invaluable of course; an injection of cash early on, or a certain amount of free stock to get you started can buy you time while you are working on bringing customers through the door and get your cash flow sorted. On the down side though, having your menu even partially controlled by a single portfolio of products, can limit the uniqueness of your offering and restrict the creativity of the bartenders who end up writing the menu.

CHALLENGING FOR HOUSE POUR

Of course running a bar is about making money, as well as creating a reputation and hopefully having a good time. So with that in mind it’s hardly surprising that signing a pouring deal to get support from brands is a part of the process. Selecting the products that will be your house pour is a balancing act between trying to offer a good quality range of products that reflect the standards of your bar, and also not paying too much for the spirits in your rail. In an ideal world every bar would be able to pick any spirit they wanted, but ensuring that you make a good profit margin on every drink is also important. So how on earth can a new-to-market or existing small brand challenge for that valuable space on the cocktail list, or even in the speed rail?

It seems to me that there are two sides to the coin; what the small brand owners and distributors need to do to make it easier and more tempting for bars to use their product, and what bars can do to help the smaller players in our industry. It doesn’t all come down to house pouring either, there are cocktail listings and bartender recommendations too, and even a small amount of effort from a few bartenders can make a big difference to a brand in its infancy. So below I’ve looked at a few things that we can all do to help ensure that smaller brands get a fair crack at the whip, while still ensuring that the big brands get their share too.

POWER TO NEGOTIATE WITH BIG BRANDS

Having worked on the brand side of the industry, negotiation pouring contracts and support packages for bars, I’ve seen enough to know that while the larger companies wield big budgets, there can still be room for the bar owners and managers to control the details of the contracts. When offered a ‘portfolio deal’ to pour all the brands from a company such as Diageo or Pernod Ricard, there’s nothing to stop a bar from agreeing to just some of the conditions being offered, it's your bar, you have the power in this situation. I’ve seen first-hand how experienced bar managers have been able to say yes to some of the basic conditions ensuring that the brands on offer will get the volumes they need, but have also said no to having conditions placed on them about which products have to go in which cocktails, or what percentage of their menu must be given over to the brands being discussed.

Taking a stand about which products you want to use is a way of ensuring your menu is different from the bar down the road that is being offered a similar deal. Being firm but fair in your negotiations can lead to a more balanced deal, that still ensures good volumes for the big brand offering the most support, but gives the freedom to work with smaller suppliers with interesting products that aren’t as mainstream or widespread while allowing your bartenders to have greater creative scope.

Talking to your rep while negotiating a deal can be a great way for a bar manager to find out what it is that the large brand companies are concerned about achieving. You might find that their vodka, gin and white rum are the most important to them, as well as the products with the largest support package behind them. If this is the case, then you can maybe be a bit more discerning about which tequila or cognac you want to list. Even sticking to your guns on a few points can allow you the flexibility to help support smaller independent brands, and working with them can offer rewards that go beyond purely financial benefit. It’s often the smaller brands that will work hardest to support bars as this is how they succeed or fail, and often it is they who will be the first to return a phone call, arrange a training or sponsor an event when you need them to.

To my mind being told that you have to devote 80% of your cocktail list to products from one portfolio, just to secure financial support, is a form of financial blackmail, and while it’s in no way illegal, it can be stifling to creativity as well as a huge handicap to smaller competitors. Leaving only 20% of a menu for smaller brands to fight over is a huge barrier to success for a challenger brand, and certainly doesn’t encourage new products flourishing in the industry, or offer customers the variety they deserve.

I’ve always looked at back bars and thought there is reason for every product to exist, and while I might prefer one product to another, there should be room for all of them to have a place at the bar. Any company that limits the opportunity for other brands to get a small slice of the pie, is frankly flexing their muscles too much, and they need to be held in check by whoever is negotiating the pouring deal. Managers and owners have the power to make a huge difference to small brands, by ensuring they aren’t signing deals that tie their hands and stop them from being able to work with the brands they want to.

I remember a high profile opening not that long ago, where a good friend of mine apologised to me for not even being able to list the brand I was working for ‘because their contract forbade it’ telling me to come back in 12 months when they would be free to talk to whoever they wanted to. This industry is at its best when we are all working together to promote great drinking experiences, not when companies are bullying the smaller kids in the playground!

RECOMMENDING PRODUCTS TO CUSTOMERS

Even once the contracts are in place and the deal has been signed, there is still room to help a small producer get their share of the volumes. Managers and bartenders have the influence to make recommendations to their customers, and introducing a good new product to your customers is often all a brand in its infancy can ask for. In fact it is often the crucial first step to growing as if no one has heard of your product, then no one is going to order it.

So here’s a simple challenge to all the bartenders reading this. Pick a product from your back bar that you know isn’t part of the portfolio of a larger company, and for just one or two weeks recommend it to your customers whenever you can. I’m not suggesting that you try to make every customer who orders a gin and tonic drink mescal instead, but where you have the chance to, recommend it to those who you think might be open to trying something new. Come up with a new cocktail or two, get a few people drinking it, and then most importantly let the distributor or brand owner know what you’ve been doing and how it has been received by your guests.

Offering some feedback to the people behind the small brands gives them a chance to learn what is working and what isn’t, as well as giving you a great personal connection to the people who care about the success of these smaller brands. This also ties into my next point about how brand owners and distributors need to help support the industry from their side of the bar too.

SUPPORTING THE BARTENDER

It’s often the smaller brands that I see supporting and promoting bars and bartenders on social media platforms such as Twitter and Facebook, and it’s important to realise how important this can be. We are all familiar with the ‘big names’ in the industry, but working out how to promote yourself and grow your reputation in the trade can be pretty daunting. Social media is free, but that doesn’t mean that it isn’t powerful, and having your drinks and your name promoted by a brand owner is a step towards getting recognition in the drinks industry.

Brand owners have the power to engage with bartenders regardless of the size of their product and marketing budgets, and doing so can make a big difference. I’ve seen the pride that a young bartender has when they first see their name in print or featured on a brand’s website. It’s a great feeling when someone publicly recognises you for what you’ve been working on. In the UK it’s a sad fact that being a bartender is not generally speaking a well paid job, so it’s important to get a pat on the back from time to time and to feel that someone recognises your work.

So as I’ve issued a challenge for bartenders to pick a small brand and give it a little love and attention, it seems only fair that I issue a similar challenge to the people working on smaller brands. The next time you hear of a bartender creating a new drink, or promoting your brand to their customers use the free tools at your disposal to give them some public recognition. Share their recipes or unique serves on Facebook and Twitter, help them to build their name and reputation, and give them some well-deserved credit! It’s free, it only takes a minute of your time, but it is important that the small fish on both sides of the bar support each other to enable both to grow.

LEADING BY EXAMPLE

This blog of mine is a privilege to run, as it offers me a public voice within our industry, so it’s only appropriate that I do my bit to help promote a couple of smaller brands in a public way. I have chosen two new brands that are in the process of trying to get some recognition and maybe take a small slice of the volumes from the larger companies. They’re not for one second likely to bankrupt the category leaders they’re going up against, but they will face challenges in growing to a size where they are profitable and successful. If they do carve out their place in the industry, then hopefully they will invest in looking after the bars and bartenders who helped them to grow.

These are good quality products that deserve a little help in gaining some attention; there are plenty of others I could have chosen, and plenty more that you as a reader of b&t could get behind and give a gentle push in the right direction. In the meantime I’d also like to raise a glass to the drinks giants that have already walked this path and have grown their brands to be the industry leaders they are today. I hope they never forget their roots and remember to leave room for the small brands to grow too!

COLONEL FOX AND HIS ASTOUNDINGLY GOOD GIN

This recently launched gin, is priced to be affordable for bars to have in their speed rail, the packaging looks great, and the liquid stands up against its competitors. Being priced as a house pour isn’t always enough though, as a new product on the market it doesn’t have the marketing budgets that many of the larger brands have. For me this is an easy product to get behind though, you see it has everything going for it and supporting it a little bit now means that our industry will have another great gin option to play with in the future. I’m not for one second saying that all the bars in the UK should turn their backs on other great gins such as Beefeater, Plymouth or Bombay Sapphire, but if you want to be a little different then why not give this a go.

If you aren’t in a position to change your house pour or renegotiate your pouring deals, then at least order a bottle or two of the Colonel Fox's London Dry Gin so that your bartenders can have a play around with it and introduce it to a few of your customers.

The proper name for this gin is Cremorne 1859, although let’s face it, Colonel Fox is more catchy name, so that’s what I’m sticking with. It’s a straight forward London Dry, with a clean juniper led flavour, supported with traditional botanicals, with a hint of licorice bark adding an interesting spice note. The packaging has been designed to appeal to consumers and bartenders alike, with the quirky Colonel Fox making it feel typically English, it really seems to tick all the boxes.

While it was designed to be perfect for the gin and tonic, it’s also a versatile cocktail base and can handle having flavours thrown at it. I’m suggesting the Colonel’s Crusta here, but make sure you order a bottle in and let the guys at CASK liquid marketing know what you come up with, I’m sure they’ll appreciate the support!

THE COLONEL’S CRUSTA

50ml Colonel Fox’s Dry Gin

15ml lemon juice

15ml Cointreau

2 dashes orange bitters

Shake all ingredients with plenty of cubed ice and strain into a sugar-rimmed goblet (moisten the lip of the glass with lemon and roll it in sugar) filled with cubed ice and garnished with a lemon twist. If you’re feeling a bit more creative then try garnishing as below with a sugar crusted lemon peel.

3 STAR BY NAME BUT 5 STAR IN QUALITY!

The second brand I’m championing today is a new rum from Plantation, their 3 Star White Rum, that officially launched last week. It’s a white rum, priced to compete with brands such as Havana Club 3 year old or Appleton White Rum. Once again affordable for the speed rail, or at a bare minimum the cocktail list, this is an entry level white rum that offers loads of character, and is distinctly different from the other products at the same price point.

Tasted neat, it’s lively and flavourful, with hints of tropical fruit including pineapple and dried guava, there’s also grapefruit and a hint of vanilla. It delivers on flavour to, with a hint of grass, pink grapefruit peel and even a touch of coconut to it. It’s lively on the tongue, with a gentle burn that lets you know you’re drinking it, but never develops too far. Another product that cries out for mixing and when we worked our way through a bottle the other night, we found it stood up to classic white rum cocktails beautifully. That being said it can handle robust flavours too, and could easily be used for tiki style drinks as well as more refined classic style cocktails.

For your consideration I offer a rather unusual drink to try before you flood the guys at Bibendum with emails about how you’re using it in your bar or at home. I wanted to play with a classic, but twist it in an unusual direction, so here’s my take on a Hemingway Daiquiri.

THE SUN ALSO RISES

50ml Plantation 3 Stars white rum

20ml Roses lime cordial

2 dashes grapefruit bitters

2 large pink grapefruit twists

Shake all the ingredients with cubed ice including one of the grapefruit peels, then fine strain into a chilled coupe before twisting the second peel over the top.

I hope you’ll raise a glass of your favourite small brand spirit, maybe share it with someone new, and make space between all the big brands on your bar, to let a few of the smaller ones have room to shine too.

 

Comments

Probably the best articel i

Probably the best articel i read in months i must say. You hit the point Dan! Thank you

too kind

Hi Stephan,

thanks for your very kind words, and as always thanks for reading the b&t blog

D

Brand Overcrowding

There was an article on BBC (http://www.bbc.co.uk/news/magazine-18360315) last week about the overpopulation of vodka on store shelves… some states won’t even allow small brands to legally sell their liquor due to market overcrowding. It really is sad to see.

Cheers,
DIA
@drinkinamerica
http://bit.ly/DrinkingInAmerica

Well Said. Awesome. Absolutely.

Yep. I hold classes for small brands to teach them how to get on backbars, and your article was so well-written that I’m re-writing a piece for ShakeStir to include your story & your quotes.

Great job.

Cheers!

Hi Andrew,

thanks for checking out the article and for taking the time to comment. I’d love to read what you write for ShakeStir when it goes live.

Cheers
 Dan

Thanks for supporting small brands

Hello Danial,

Thanks for your “Small Fish in a Big Pond” article. We produce an award winning gin in rural Missouri, USA. While the legal environment in which small brands must compete with large ones here in the US is very different than the UK, challenging Goliath is no easier.

Our gin was reviewed in the UK before received much attention in the the US, and we are not even available in the UK yet. We have learned about and tasted Sipsmith and Sacred Gin thru an informal international group of gin enthusiasts and bloggers who never would have been able to meet each other without the the net and social media. Thanks for your support of small brands, and for taking the time to write about how to help them get the attention essential to grow.

Like micro-distillers, there is a small but growing cadre of micro importer/exporters on both sides of the Atlantic, focusing exclusively on craft distilled products. It’s all good!

Peace,
Ralph Haynes
Pinckney Bend Distillery
New Haven, Missouri, USA

thank you

Hi Daniel,

As a producer of a boutique rum in the Seychelles (Takamaka Bay), I wish to thank you for writing this blog, its so nice to see experienced guys like you thinking this way and certainly gives small brands like ours some encouragement when trying to list in bars or get some exposure in markets like yours. We’ll be at Rum fest this year so please feel free to pop in if you’re around.

Thanks again

Richard

you are welcome

Hi Richard,

firstly thanks for reading my blog and for taking the time to comment. Over the years I have been lucky enough to work on a number of brands including large ones and newly launched products, and this issue of listing fees and contract stipulations has always been on my mind. I’m sadly not in a position to offer a solution, but can at least encourage readers of my blog to do their part to help support the smaller producers as well as working with the larger ones.

I’ll definitely pay you a visit at RumFest, and look forward to sipping a rum with you then!

Cheers
 Dan

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