Posts Tagged ‘business strategy’

Keep Spirits Nutty

I have not spent a lot of time in Austin, Texas, but I like the slogan:  Keep Austin Weird. I am thinking about this today because, quite often, it occurs to me that the alcohol beverage industry, similarly, seems to draw more than its fair share of eccentrics. In my view, that’s a good thing and helps make it a fun place to spend a career.

I am thinking about the distiller who lit his finger on fire in the office, to make sure we understand that his product is the real deal.  I am thinking about the client who owns a small island in the Caribbean, and once ditched his Rolls-Royce by the side of the road to sail around the world with a monkey. I am thinking about the Tequila importer who said 20 minutes was more than enough time to get across town, to our front section seats at Madison Square Garden, for Elton John’s 60th birthday concert.  (Little did I know that he’d park his big Mercedes at the adjacent curb and scurry up a back-alley entrance, midway through President Clinton’s introduction.)  I am also thinking about the beer executive who wore a green leisure suit, all day, on St. Patrick’s Day a while back.

It would not be better, if everything were plain like a Safeway-brand Vodka. In this spirit, I look forward to raising up a glass of Dumante Pistachio Liqueur — a nutty spirit indeed. A Louisville publication explains that David Dafoe, a “beverage architect” is one of the forces behind this unconventional product, along with lawyer-and-pistachio-devotee Howard Sturm. The Louisville article further explains:

Dafoe apparently is creating Epicenter, a center/distillery/entertainment complex where you can watch booze being made and bottled, then buy the first products made in downtown Louisville since Prohibition started 93 years ago. … For more than 20 years, Flavorman has been proud to be the beverage development partner for premier companies across the United States,” said Dafoe. … The Epicenter is part of a growing national trend toward artisan distilleries. While there were 143 distilled spirits plant licensees in the United States in 2006, there are now over 700.

We look forward to meeting the next fun and eccentric clients, and working with them to keep beer, wine and spirits off-centered — or nutty — or anything but boring.



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Make Your Own Spirits

It’s clearly okay to go home, add some tomato juice to your vodka, and call it a bloody mary. And it’s almost certainly a bad idea to go home and fire up your small pot still, to make just a little spirits.

Somewhere in the middle, we now have “High Proof Micro-Batch Distilled Neutral Spirit Designed for Infusing.” It comes in a 375 ml. bottle, at 160 proof. It is made by The Northern Maine Distilling Company, of Houlton, Maine. The first related approval seems to go back about one year. It mentions that the vodka is designed for “infusions, extractions, mixology, and culinary applications.” The information-packed website explains:

160 Proof?  Yikes!  Don’t freak over the proof!  The high concentration of alcohol makes Twenty 2 HPS perfect for infusing fruits, vegetables, meats, or dairy into vibrant liqueurs or flavored vodkas.  Think of the 160 Proof like a very sharp knife in your kitchen.  If you handle the knife with respect, it can perform amazing tasks.  Same with the High Proof Spirit.  It’s “sharp blade” creates infusions in hours, not weeks.

We think Northern’s COLA is interesting because we don’t know of too many other products designed for this manner of use. Also, the label underscores that TTB has no problem with strength claims on certain spirits products. This one has “High Proof” in big letters. Plenty of other labels have “Overproof.”

The site has many copyrighted recipes, such as “The Dude’s Caucasian,” inspired by Jeff Bridges and The Big Lebowski. Other eye-opening recipes include:

  • Smoked Gouda Infused Vodka
  • Caramelized Red Onion Infused Vodka
  • Failed Recipes such as Bacon Infused Vodka (“One of the simple rules of this game, like distilling, is ‘junk in = junk out.'” “These are not soy based Bacos, but actual real bacon pieces packed with preservatives so that they don’t need to be refrigerated.  Yum?  Maybe on a salad, but not in an infusion.” “The flavor was of bacon, but not pleasant.  It just wasn’t good.”)

I spent a fair amount of time trying to figure out why Twenty 2 as a brand name. I assumed it had something to do with the consumer’s age, such that, e.g., 7 Teen would not be a good choice. The answer was not evident on the company’s website but may be here:

originally, the name for the vodka was Jewell Vodka. But a company out West already had a copyright [trademark?] on that name, so it was back to the drawing board. The couple decided to get a bit more abstract. … “We talked about doing Aroostook Vodka or Katahdin Vodka, but those are so obvious. We figured, let’s pick a word that can be freely associated with anything,” said Galbiati. “Twenty 2 could be anything. It could be your address, your birthday, a sports jersey. It can mean anything to anyone. It sticks in your mind. Plus, the alliteration is nice. A Twenty 2 and tonic sounds good.”

The same Bangor Daily News article also explains, about the owners and startup:

Starting in early 2006, Galbiati and Jewell quit their jobs and began the process of starting up their business. While getting a license for a winery or brewery is, relatively speaking, not uncommon, getting the license for a distillery is a much more involved process. According to federal law, a person can brew up to 100 gallons of beer on their own, or 200 gallons if two adults are present in a household. A person also can make up to 5 gallons of wine. Any more than those amounts, and a license is needed. … A person cannot under any circumstances distill any amount of spirits without a license. It took Galbiati and Jewell about three years to get the OK to start making Twenty 2.

When I first saw the 2011 approval, I was concerned about blowing Twenty 2’s cover, before they were ready, in that the COLA is only a few days old. But they are clearly ready. Of course they have the 2010 COLA, along the same lines, and the 2011 COLA is a public record — but also, Northern has a big website with a lot of information about this idea (plus Twitter and Facebook). On this topic, I will take this opportunity to reconfirm that we have no real interest in publicizing anyone’s news, before they are ready. We make no claim to be journalists. We will be especially careful not to publicize any client news, before the client is good and ready. In the case of non-clients, we may ask, or be guided by generally available information (or the absence thereof). If, as here, the company website has a lot of the same information, it becomes difficult to ascertain what could be sensitive about the COLA.


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Cougars on Facebook

Clos Lachance has two fairly new wines. CougarJuice and MommyJuice.

In the matter of lusty cougars, Peyton Imports was fairly early, with the Urban Cougar. Perhaps she is real, what with this site exhorting over a million members to:  “Join CougarLife.com and meet great young guys before they’re snatched up.” Foreshadowing that this theme may be over-ripe, or ripe for a trademark lawsuit, Cougar Juice Vodka slinked into the bar a few months ago.

The MommyJuice label also happens to mention Facebook on the back label, prompting TTB to assert that “Information on Facebook and/or Twitter must be in compliance with all labeling and advertising regulations.”


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The Dessertification of Beverages (aka The ChocoVine Sensation)

Congratulations to Clever Imports for propelling ChocoVine into one of the biggest trends across wine and spirits in recent years. The brand seems to be growing at well over 100% per year, and at about 1 million cases per year, may just be getting going, in view of the recent deal with The Wine Group. ChocoVine is wine with chocolate and cream; it is produced in Holland by DeKuyper.

At first, many people spoke snidely of ChocoVine, suggesting that grape wine is not the best match with chocolate flavors. But, to a large extent, this condescension has been overshadowed by admiration, purchasing, and emulators. Chocolais is one example of a chocolate flavored wine that has hastened down the path cleared by Steve Katz at Clever. But there are well more than a handful of other, substantially similar examples, such as this one. TTB approved the first ChocoVine label in 2007. Three years later, TTB approved the first Chocolais label and the first Choco Noir label, both in November of 2010.

A bit further afield from ChocoVine, hundreds of other examples continue to accrue, further showing tremendous momentum behind a trend toward the dessertification of beverages. Here we have Pineapple Upside Down Cake Liqueur, various alcohol infused whipped creams, and cupcake flavored vodka. Let us know of other examples and what you think.



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wine specialty

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Design Patents

I got to talking with Dan Matauch the other day. He is a leading package designer in Michigan, at Flowdesign. I would have been impressed enough that he handled the design for Honest Tea. But he also handled Peet’s Tea, and Xango (aka Tiger Blood), and most of the designs really appeal to me. The list goes on and on, with Catdaddy Carolina Moonshine, Blue Ice Vodka, and the not-to-be-ignored Bawls and Stubb’s.

I was fairly surprised to see that Dan worked on the package design for Pama Pomegranate Liqueur — and it had some kind of patent. The March 2010 press release says:

To differentiate its product, PAMA Spirits turned to the expertise of Flowdesign to develop a custom bottle that was both unique and could be patented. … Flowdesign is a unique branding firm where experience is infused in both brand graphics and structural design. Founded in 1997, Flowdesign has led the brand design field in custom structural design with 10 prestigious GPI (Glass Packaging Awards).

It surprised me because the conventional wisdom seems to be that it’s normal to get a trademark related to alcohol beverages — but it’s not realistic to get a patent. The conventional wisdom may be too simple. We have covered several alcohol beverage-related patents in the past, such as Malt Liquor, Cubes, and Fruity Caps. To understand this better, I talked with Paul Hletko. Paul is perfect to dissect this because he happens to be a patent lawyer — and runs Few Spirits (of Evanston, Illinois). Paul explained as follows:

The beverage alcohol business is exceptionally competitive.  Innovative companies are always trying to distinguish themselves to stand out from the competition, while others try to engage in “sincere flattery.”  Brands can go a long way by distinguishing themselves with distinctive and unique propositions, but this can attract copying.  After investing the time and money for uniqueness, it is rare that a brand welcomes a copycat.  Protecting against these problems can be expensive short term, but prove highly valuable long term. One of the first strategies to protect innovation is the use of trademarks.  However, trademarks are “usage” based and thus have certain advantages and disadvantages.  In particular, it can be difficult to gain traction with a new trademark. This short post is not intended to address trademarks – another topic for another day.

Another potential strategy is to seek patent protection for unique and nonfunctional designs.  In the beverage alcohol industry, this typically means unique bottle designs. For example, the PAMA brand secured design patent protection for a new bottle. D598,777 S claims this unique bottle shape, and gives its owner the exclusive right to make, use, or sell bottles with that design for the life of the patent.  Other designs could also qualify for design patents, such as a unique bar top (Blanton’s) or the like. A design patent covers the design of an object, so long as the design is not mandated by the function.  Additionally, the design must be novel as well as not obvious to one of ordinary skill in the art.  Unlike trademarks, however, design patents have a limited life span, and the patentee may be faced with questions about what to do after the patent expires.  But, so long at the design patent remains in force, the owner of the design patent has the exclusive right to make, use, or sell the design.

Unlike trademarks, design patents are based on registration, and prior to registration, the design patent application must be examined to ensure that the design is indeed novel, useful, and nonobvious.  Unfortunately, this can cost money, but the advantage of the exclusive right to make, use, or sell may justify the investment.  If your product is getting a new bottle or other design flourish, you should consider trying to protect the investment. By no means does this brief note apply to all situations, and it is not legal advice, but it should help you talk with your attorney – consult your attorney for guidance on how best to capitalize on your unique situation.

Thus, if one of your brand’s differentiating characteristics is a new bottle design or other similar packaging, consider and evaluate whether a design patent would be appropriate. Paul explained that the cost will likely be significantly lower than the investment in the new design itself (molds, designers, etc.) and the investment may prove highly valuable when the “flattery” starts.


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alcohol beverages generally

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