The Global Marketing Executive & Entrepreneur Eric Sampers has shared his start-up journey with real honesty, delving into how and why the project did not work out as planned. It is a post full of insight for anyone out there looking to follow in the path of becoming a drinks industry entrepreneur. Eric kindly allowed me to reproduce the post on Inside the Cask, which originally was published on 1st March 2022 on LinkedIn.
“Today marks the end of a truly rewarding adventure. They say you learn a lot more from your failures than from your successes. But why then are failures not celebrated? I wanted to write a couple of lines about our honest attempt at launching a completely new product in the niche category of low & zero alcohol spirits.” Eric Sampers
Quick Recap of the Project
In 2019, after ending my 16-year international marketing career at Pernod Ricard I reached out to some friends about starting our own independent beverage business. I found the name and in July 2019, The Illogical Drinks Company Ltd was registered at Companies House with three co-founders.
Fast forward to today and after over 5,000 units sold, significant awards, prestigious listings and export launches, great feedback from consumers but no money in the bank, we entered a Company Voluntary Liquidation (CVL) and are winding up the business.
For as frustrating as it may sound given the positives (of which there are many), we sadly failed in our enterprise to launch the first ever low alcohol and low-calorie spirit: MARY.
Why did we choose Low Alcohol in the first place?
We had been working together over several years on the Gin category to (successfully) reinvent and transform the performance of the Beefeater Gin brand and we were very interested in the emerging Low & No Alcohol category which was building on similar macro consumer trends than Gin. Dry January was consistently gaining popularity amongst UK consumers, Seedlip had shown it was possible to produce a quality 0% abv alternative to Gin and low & zero alcohol was getting more and more attention from the industry.
However, up until that point low & zero alcohol was essentially an “alcohol free” affair with two notable exceptions: The Original Small Beer with its low abv range of craft beers and the very quiet launch of Portobello Temperance (4.2%) by the Portobello Gin Distillery.
With an alcohol industry background and having done some research we were convinced that the bigger insight for low & zero was moderation rather than teetotalism: Most people want to be in control of their alcohol consumption rather than abstain totally from drinking alcohol. Offering the choice between full strength alcohol and no alcohol at all felt like a very binary approach to a complex challenge and we felt that, if we could crack this, we would change radically the way consumers interact with alcoholic beverages.
And so, we therefore decided to create a lower abv spirit brand that could benefit from the newly found interest of millennial consumers in Gin.
Creating the Recipe and Manufacturing
Thanks to our network, we rapidly found a fundamental piece in the equation: someone who could help us develop a unique recipe and guide us through the different steps leading us to production. I told my partners that we needed a “wizard” to help us create our liquid and we found two: I cannot praise highly enough Anthony Wilson, Nicola McCraith and the team at Alkemista Liquid Innovation. This team has huge experience in developing award winning liquids and it was pure joy to work with them to develop our recipe and work with them towards our first production. By the end of 2019, not only did we have a recipe that delivered on the brief we had prepared, but our liquid was systematically coming on top during the blind tastings we ran against what we considered to be our key benchmarks in low & no.
We landed on 6% abv as the perfect balance between the contribution alcohol can bring to taste but without any of the negative effects.
It is virtually impossible to get drunk on MARY & Tonics (1.7% abv). We had a delicious, fresh, pale green, aromatic, herbal, dry and sophisticated liquid that tasted like no other.
Thanks to Alkemista’s thorough and highly professional process we rapidly found the key elements of our supply chain: amazing suppliers and partners like Omega Ingredients, G&C packaging, Smurfit Kappa, Future Pro Logistics who were as responsive as they were enthusiastic about our project.
One special mention goes to our co-packer the Natural Food & Drinks Company in Reading its founder Ketan Joshi and his sons Jay and Dev who took over after Ketan passed away unexpectedly at the end of 2020. Ketan was the best co-packer we could have hoped for, always so accommodating, and working hard to support us and find solutions. His sons have done a fantastic job with the team, pursuing his vision of making the Natural Food & Drinks Company an expert partner in the low & zero alcohol drinks industry and innovative food & bev in general. We are very grateful to them.
In June 2020 we carried out our first trial production and from then on, we scheduled a handful of small batch productions that I would attend personally with renewed excitement despite the often very early train ride from London Paddington to Reading.
Positioning, Design and Marketing
Having a great liquid was only part of the equation we needed to solve and not enough to be successful, as our many years in marketing had taught us. We also needed great packaging and an engaging story. A fourth co-founder with exceptional design skills had joined the team and the work that led to the creation of the brand MARY then started in parallel to the liquid development.
We knew that we needed to educate our consumers about low alcohol and that this would be a huge challenge. The main idea behind MARY was: let’s make it super simple for people to understand what we are about, let’s make ourselves memorable, enticing and accessible.
Eventually the name MARY was chosen because it did all of these things and it was also a nod to the fact that most old-fashioned booze brands all bore male names eg. Jack, Johnnie, William, George, John etc.
We took a standard bottle and decorated it in such a way that it would look unique with frosted glass and ceramic printed impactful artwork that highlighted the colour of our liquid.
Sales & Distribution
The hardest part and the one which we eventually struggled to crack was sales and distribution.
A few months before we carried out our first production trial, Covid-19 took the world by surprise and disrupted our plans: No more face-to-face meetings would be possible with distributors and venues, all trade shows were being cancelled and the hospitality sector was eventually shut down. This was a major blow to our plans, particularly because we lacked the commercial expertise (and network) within the team. Selling a niche, ground-breaking product that challenges paradigms into a traditional industry is already hard enough. Without the skillset, contacts, and the ability to meet people face to face it became even harder: The on-trade market had come to an almost complete stop.
Direct to consumers sales via e-commerce was always part of the plan but it became even more pressing and strategic, and we quickly set up our own website on Shopify. Amazon was to take a bit longer due to the amount of paperwork the platform demanded. We were eventually able to open our website to friends and family in July and Amazon in September 2020. The pandemic had a positive effect on e-commerce with people stuck at home and thinking about making healthier choices. We started learning about and running online advertising in August 2020 and saw our sales grow almost consistently up until April – May 2021 when the lockdown ended.
On the distribution side and despite some encouraging listings in on & off-trade (in very limited numbers), the results were not great: We were unable to generate enough interest with distributors and had to “pay to play” which is far from ideal for a company with limited cash flow.
A big ray of sunshine appeared when we discovered a solid distributor in Italy for MARY: Paolo Gargano from Fine Spirits liked our liquid and we were able to overcome the hurdles of Brexit to dispatch a pallet to Genoa (still, it took 90 days to reach its destination when it would have taken 72 hours door to door prior to 1st January 2021). MARY was very well received in Rome and Milan by local bartenders who appreciated its almost Mediterranean aromatic, fragrant profile.
Raising investment is almost a full-time job and unfortunately, we were not as lucky in our second attempt, which perhaps may have started a bit too late at a moment when we were also experiencing adverse results.
We were very lucky to be funded for our seed round by several friends & family members who trusted us with their money, and for that we are very grateful.
Eventually, what did go wrong?
It would be too easy to blame the pandemic although it played a role in disrupting our plans and interrupting the momentum that was building ahead in the trade for low & zero alcohol. The brands that had been able to establish some off-trade distribution agreements and traction prior to the pandemic fared better. In our case we lacked the skills and contacts and could not establish those despite our best efforts.
E-commerce was doing well until it was no more, and there again the pandemic may have played a part. E-commerce became a strategic battleground for all beverage brands and more players got involved, making the cost of acquiring new customers more expensive. The introduction of a new IOS by Apple, directly targeting Facebook advertising, also made matters worse and even more experienced online performance marketing agencies were struggling to find solutions.
We most likely underestimated the importance of honing proper commercial skills. If we were to do it all over again, we would invest in getting our own small sales force to swiftly generate listings and traction in the trade, so as to establish a solid distribution partnership in the UK.
We should also have raised more investment to allow ourselves more runway to weather the disruption created by the pandemic, but that was hard to predict.
And finally, despite the awards and great reception from end consumers, we may have underestimated how difficult it would be to promote the “low alcohol” way within the low & zero category. I remain convinced that low alcohol is a fantastic option and still a massive opportunity but it takes a lot more education and liquid-to-lips for it to become a sizeable market option.
There were many gratifying moments: signing off on our liquid, watching the PowerPoint design making its way onto the bottle, the first ever bottle emerging from the bottling line, the first sales on our website, our listing at Harvey Nichols (and in fact every listing we got!), the launch in Italy, our investors embarking on the adventure with us… all were duly celebrated.
We sold over 5,000 units altogether, 85% through e-commerce in the UK, with 3,620 consumers on Shopify alone. Our product ratings were excellent on Trustpilot (4.4/5 stars) and good on Amazon (3.9/5 stars).
Awards! In 2021 MARY was chosen as the best low & zero alcohol product in the first ever Low & No Masters competition organized by industry leading publication The Spirits Business, among 90 entries across multiple categories in wine, spirits and RTD. It also won a Silver Medal from the prestigious IWSC with a score of 92/100, a Silver Medal from the Beverage Tasting Institute of Chicago (89/100), a 4/5 stars rating from Simon Difford (Difford’s Guide) and was a 2020 finalist at the Food Matters Awards in drinks innovation.
The most respected Gin Master Distiller of the industry – and my former colleague (whose name I won’t mention here) loves MARY and bought several bottles without telling me. Knowing that one of the industry legends, who has been making Gin for over half a century and holds an MBE truly likes your product, is very gratifying.
Although things did not go as planned, I would like to thank my co-founders Adeline, Angel and Michael, my family and friends for their support, all the people who gave generous advice (John Roscoe, Antoine Del Serra, Elwyn Gladstone, Shilen Patel & many more), our partners (Catch Comms, Labelium, We Are Fable, Field Work, Natalie Rita, La Maison Wellness, On The Sauce Again, Sipmeister, Duncan Hayter, The Vegan Trademark, Vegan Friendly, The Spirits Business), our suppliers (Alkemista, The Natural Food & Drinks Company, Future Pro Logistics, LIS Logistics, Omega Ingredients, Firmenich, Givaudan, G&C Packaging, Smurfit Kappa, The Label Makers, Flexi Hex, Hayman’s Group, Sensient) our investors, our customers (The Gin To My Tonic, Enotria & Coe, Harvey Nichols, Vida W&S, Dry Drinker, Fine Spirits Srl), and of course our precious consumers.
So although this is the story of a business that didn’t work out, on a personal level it was both a rich and invigorating experience, and what I have learned I will carry forward into both my professional and personal life.
Waking up each day to run a start-up business is very different to going into the office in a large corporate environment. I have nothing but admiration for people who choose that path. Levels of stress and uncertainty can sometimes run high and become overwhelming, but the entrepreneur somehow deals with these and keep pushing forward.
Besides the new skills and technical aspects that I had no idea existed, some of the most important things I have learned are to always try and remain positive, keep an optimistic eye on the horizon and to manage my emotions. It was also a very collaborative adventure where solidarity, positivity, and shared enthusiasm are key to overcoming obstacles. I am now available for new challenges and looking forward to the next steps of my professional career.