Liquor companies have always been interested in selling in high volume. Stop by any club and you’ll see ultra-branded bottle service and menus bought out by a behemoth portfolio. But as the cocktail movement has gained momentum over the past decade, spirits brands have begun to pivot their attention toward craft cocktail bars and their bartenders.
Brands now vie for placement on the shelves of respected bars and menus and will do whatever it takes to get there, especially if they have the money to spend. A culture of brand ambassadors devoted to entertaining and educating bartenders about their brands has sprung up to facilitate this. Parties, contests, trips, dinners and kickbacks abound. Liquor companies pay distributors who sell to the bars to focus their efforts on specific brands. And smaller spirits companies without million-dollar budgets are struggling to compete. PUNCH decided to explore this complicated topic with a two-part series (part two) where we asked bar owners, spirits experts and brand owners how they navigate the challenges of everything from evaluating spirits to dealing with brand ambassadors.
Nicolas Palazzi | Owner, PM Spirits
As a small spirits importer, what is the greatest challenge to going up against big brands?
In the wine business, people are aware there are big brands and small producers. Big brands can sell products for cheaper because they can produce more. Wine lists and stores stock 600 to 2000 selections. It’s diverse, and there is a range of prices. And then you look at the average bar, or restaurant backbar, and there are four Armagnacs and three Cognacs and they’re made by the two biggest co-ops. Big brands own the spirit business. They have the reach and they can market stuff to everyone. But the problem is there’s not much education done about the categories aside from what a brand’s marketing team offers. People won’t question whether there are smaller producers making Cognac or whiskey. People will drink Macallan 12 and never wonder if there’s a smaller producer making good stuff too.
Is it a challenge to change bartender and bar owners’ minds in stocking smaller brands?
If you look at some of what bartenders are doing, they care about their craft enough to make their own vermouths and bitters. They’ll spend a lot of money on the perfect ice machine or hand-cut ice to a specific size for glassware. But then they serve you a Sidecar with Hennessey VS. I don’t think it’s because they don’t care, but because they haven’t thought about it. For so long, a handful of brands have been able to supply the product that they needed and wanted. And they’ve made a decent margin and they don’t question that. The final consumer questions that even less.
So how do you compete?
You don’t really, because you can’t. The way we approach it is by trying to educate and offer knowledge. We’re not trying to give sales speeches about how much better we are. We’re going beyond the brand and are trying to be seen as a resource for knowledge. And hopefully little by little, we will make sales. But we will never compete with Diageo and Pernod Ricard.
Who else do you think is providing this sort of education?
There are brand ambassadors that will tell you, “My product is the best,” and “If I was on a desert island, I would only drink my stuff.” And then a competing brand offers them more money and they’re selling it the next week and telling you the same story. Then there are people who are involved with brands, but are involved for the greater good of the category—between Jake Lustig and Thomas Estes and David Suro, you’ve got three guys who are hardcore tequila and mezcal people. Wyatt Peabody is great for mezcal, tequila and rum. Ed Hamilton for rum and Forrest Cokely, Dan Farber at Osacalis in California and Hubert at Germain-Robin.
Are there any bars and restaurants you think have a good balance in supporting small brands?
Jim Meehan at PDT and has been a great support and he’s open-minded. Bobby Heugel at Anvil in Texas does a pretty amazing job. There’s Thad Vogler at Bar Agricole in San Francisco and Erik Adkins at the Slanted Door. All of Steve Levigni and Pablo Moix‘s bars in Los Angeles.
Is there ever an instance where big brands are better?
I’m not saying just because a brand is small means it’s better. Nothing beats know-how, time and business knowledge. When you’re a company that has been making bourbon for decades, it’s hard to beat that with a bourbon that was rested for four weeks in a three-gallon barrel. I understand that point of view. I’m just saying that one needs to give the small guys a chance. There are small makers that make crap; I’d rather have a cocktail made with Bacardi than with artisanal crap. It’s about being open-minded and trying to support both and the small when it makes sense.
Do you think big brands have become too pervasive in the booze world?
I was talking to Levi Dalton once when he compared wine people and bar people. A lot of bartenders work as part-time brand ambassadors and their colleagues look at them like they’ve made it. If someone were doing that in wine, his peers would look at him like he sold out. I think there’s something that brands have created in the spirits world that will be hard to undo.
Jim Meehan | Proprietor & Bartender, PDT
What’s your initial feeling about the relationship between brands and bartenders?
In the US because of our laws, spirits companies are not supposed to spend money on us. They can’t have parties or give us gifts. But in the UK, it’s common practice—brands pay for bartenders to travel and go to parties. It’s not scandalous, it’s just business. We’re puritanical in our views on brand relationships here, and in some ways, that’s great.
Do you think brands have become too involved in how bars run?
If you’re not in a relationship with a brand, you’re missing the boat. I know someone from every bottle on my back bar, whether a brand ambassador or importer or distiller. There’s no brand I stock that I don’t have a personal relationship or contact with that company. To remain in the ivory tower is not only bad business, it’s short sighted.
Do you think brands ever go too far?
They certainly go too far. Certain bars’ entire lists are bought and paid for, and you have to pay them to get on the menu. Brands will write, print and pay for their menus. This is definitely where the relationship goes too far and undermines the integrity of the operator. Of course, brands are going to do what they can for high-profile bars to stock their brands, but the onus to do the right thing is on operators and tastemakers.
What is the responsibility of the “tastemaker” when it comes to choosing what to stock and which brands to work with?
“Tastemaker” is the notion that the best bartenders and operators are tasting through and stock to determine the best products for their guests. I’m becoming more vocal about it. We have to continue to evaluate what we’re serving and why we’re serving it.
Has the way you stock your bar changed over the years?
I’ve started stocking products from bigger companies. One of my pet peeves is going to other bars that carry all these small-batch, craft distilled 375s, or where you order a Tanqueray and tonic and they roll their eyes. People think Maker’s Mark is bad because it’s big, but it’s been around for a long time.
You’ve worked on the brand side before. How do you evaluate which brands you’re willing to work and collaborate with?
I’m tiptoeing a bit, but if I like the liquid, the packaging, the story, then I want to bring it to people. I’ve learned that when in the spirits business, we’re in the relationship business. At the end of the day, it would be shortsighted to lose track of the fact that people bounce from brand to brand. Spirits companies are bought and sold relatively regularly. For that reason, to be so brand-focused instead of people-focused is a little shortsighted. It’s not the way I do business anymore. As I’ve gotten older, it’s served me much better than focusing on liquids.
Bobby Heugel | Owner & Bartender, Anvil & The Pastry War
What are your initial thoughts about the relationship between brands and bars?
We’ve transitioned from focusing on great drinks and being professionals to being challenged on how to deal with global conglomerates and brands. When bartenders who try to be thoughtful and evaluate objectively are guilted into carrying a product by brands or brand ambassadors, the conversation becomes difficult. I’m serious. That’s my personality type. I don’t see why that should put me at odds with doing business. I think the cocktail community is having trouble reconciling itself with these issues.
You’ve been pretty vocal lately about these issues including the role of the brand ambassador. How do you perceive that role as a bartender?
People on the brand ambassador side are told to do their job. They’re supposed to saturate and permeate bars with their brand. It’s strange, and I think the role of a brand ambassador should be reconsidered. What is that person’s job? It should be to promote positivity at all times, teach about and advocate for the brand and allow people to make their own choices. Sometimes the line between education and selling gets blurred, and that’s overstepping the relationship.
A lot of these conversations have played out on social media. How do you feel about that as the medium for these conversations?
It’s strange because our conversations are monitored by brand people. If we say we do or do not like something, they’re paying attention. People tell me all the time that they censor their opinions about brands online because they don’t want to offend anyone. Conversations about labor, sustainability and environmental issues concerning brands are not welcomed. Why aren’t these questions for brand ambassadors?
I think all of this represents a significant departure from 10 years ago. There were cocktail forums where you could ask any question and ask what people liked and didn’t like. And that’s not allowed anymore.
Have brands become too close to bartenders and bar owners?
We don’t have really close relationships with brands because we have an additional tier of distribution in Texas. It’s difficult for us to get kickbacks or financial benefits extended our way. I know that some of the other relationships I hear about in other states are different, but if that’s what you want to accomplished—to get wined and dined—I don’t really have a problem with that.
What I do have is a problem with the fact that there’s an objection to another perspective. For instance, for a large company like Bacardi to represent the category of mezcal with something like Zignum disrupts how global conglomerates should represent categories. It’s a company treating agave like oil reserves to create a profitable venture right now, and you can’t apply the same marketing procedures you might to a vodka to plants that sometimes take 30 years to grow. I want it to be okay that there’s a dissenting voice.
You’ve been a great advocate for stocking sustainable products behind the bar. Do you ever have to make compromises?
It’s a struggle. There are times that I think about it, especially in our market. Our prices are lower than the national average. How do you compromise on the price point when you have our opinions on tequila and mezcal? It’s always really tough.
Essentially, I need to feel two ways about a spirit to carry it: It needs to taste good and I have to believe in it. I need to feel good about selling it. I need to make sure that the people who make it are not contributing to environmental pollution and that I’m not contributing to depleting a rare crop. I’m doing the best I can.