This is Maffeo DRINKS. Hi, Tarquin. Welcome to Maffeo DRINKS.
Tarquin Leadbetter:Hi, Chris. Thanks for having me. Fantastic to finally chat to you because I listen to so many podcasts. It feels like you're the celebrity, I know more about you than I do some of my friends. Really a pleasure to be on.
Tarquin Leadbetter:Absolutely delighted to chat to you. I'm really looking forward to it.
Chris Maffeo:Thank you for your nice words. It's an honor. You are one of the founders that I really respect. You are doing a fantastic job and we're going to have a very interesting conversation. We were chatting before recording that you went through so many stages because you've been around for quite a while.
Chris Maffeo:So let me start with a broad question. Introduce Tarquin's for the listeners that are not familiar with the brand.
Tarquin Leadbetter:So I'm Tarquin, founder of Tarquin's Gin. We're 13 years old and we're an independent craft distillery based outside Padstow on the North Coast Of Cornwall. I started the company fourteen years ago really. It took me a year to learn how to make gin. And over the past decade, we've grown organically and we've added some more strings to our bow.
Tarquin Leadbetter:So we've also launched a rum brand called Twin Fin Rum. We've launched a vodka brand called Connie Glaze Vodka and most recently last year, a whisky brand called Tinner Bros Whisky. So now we're Tarquin Spirits, this family of spirits, which is really a portfolio of gin rum vodka whisky. We're a tiny version of the big boys. We're based in The UK and on the journey to be the most innovative distillery in the world and the greatest distillery.
Tarquin Leadbetter:Not the biggest, but I like to say the greatest. I think that's a nice aim objective to have.
Chris Maffeo:I like that. So let's go a step back. You've been around for, let's say, thirteen, fourteen years. How did you move your first steps? Because this is one of the things that many founders have unclarity when they create their big idea, a nice product, and then all of a sudden, they hit the door of the distillery, there's like, and now what?
Tarquin Leadbetter:Should I rewind right back to the beginning as to how I started making gin? Right at the beginning, after university where I studied economics and politics, I took a desk job in London, but I knew it wasn't what I wanted to do forever. It's a great job, but really not for me for the next forty years of my life. I was very enthusiastic about food, but I was only 23. I didn't know that much about alcohol world.
Tarquin Leadbetter:But we had wine training from our wine supplier, The Benderm, which was quite cool. It was a gateway into the world. I'm from the West countries. So we've had real ale boom in The UK since the 1980s. You've got lots of small batch producers.
Tarquin Leadbetter:We've had cider, small batch ciders forever. You used to be able to drive along the side of the road and buy cider in a sort of milk jar bottle with an honesty box when you're driving through Somerset. But spirits wasn't the case and I didn't really know that much about spirits. I grew up in Devon. We have Plymouth Gin and I had no idea it was owned by a French multinational company called Pernod Ricard.
Tarquin Leadbetter:It was extraordinary. It twigged that the majority of the back bar that I was serving was owned by about two, three, four companies. And then I'd begun to read a little bit of research about The US craft distilling boom that was in whiskey. And the way that it had translated itself across The Atlantic, which is pretty much Ian Hart at Sacred Gin and that Zipsmith, they started about the same time, was into gin. And we're a gin drinking country and gin has its benefits in the sense that it doesn't have to be aged for three years to go to market.
Tarquin Leadbetter:I thought that was amazing that you could create a commercially viable product on a very small scale. We'd had microbreweries and small cideries, but spirits, the market had consolidated over the prior fifty years. It was very much an industrial endeavor and I thought it was incredible. And what appealed to me primarily was making the product. I didn't have huge budgets.
Tarquin Leadbetter:I had about £50,000 which wouldn't even buy me the same still that Sipsmith had. I decided then and there that I was going to launch a gin brand, make my own product. And I wasn't going to do it in London. London again was too expensive, too difficult. Sixth Smith and Sacred were already there.
Tarquin Leadbetter:But I thought it was a fantastic opportunity for me to move back down to the West Country and live by the sea in Cornwall, where I'd been going to my whole life to my grandparents' house on holiday and combine it with my love for surfing. So I wouldn't say I was particularly serious at this point. I thought I could make a few bottles of gin in the afternoon, sell them for a profit and go surfing in the afternoon. That was my plan on paper, which I sounded amazing. It wasn't difficult to leave a job in the pub.
Tarquin Leadbetter:Quite fortunately, it coincided with my older sister who's a chartered accountant. She just got married and was leaving London and moving back to the West Country. So it was fortuitous in that that she could be the brains behind the operation, helping me perfect my financial model. It was a journey of trial and error inspired by Ian Hart at Sacred Gin who looked like Breaking Bad making a gin brand in his living room up in Highgate in North London. I bought a little still off the Internet.
Tarquin Leadbetter:I began to buy botanicals off the Internet. Ones I could pick in my garden, ones that I could pick out on a wok and distill them all individually from vodka bread wok from Macash and Curry and macerate them overnight. Then I could do six, seven back to back distillations on my cooker at home to build up this repertoire, almost a flavor bank. I like to describe this as my apprenticeship into distilling. I pretty much spent about six months to a year on this journey of experimentation.
Tarquin Leadbetter:I did everything on a shoestring, so GBP 50,000 was it. It's either I make a business from this or I go back with my tail between my legs to get a proper job. That was the gamble. I was 23, no wife, no kids, no mortgage. I didn't really have much to lose other than that money.
Tarquin Leadbetter:But at the same time, that £50,000 needed to be working capital. It needed to be literally everything. So my actual startup costs needed to be really quite lean. Instead of the $50 still, I bought like a $2 still from Portugal. I managed to cobble everything together.
Tarquin Leadbetter:I rented a 500 square foot converted old cow shed outside Padstow, which is this beautiful town on the wild coast of Cornwall. Got to work. I scaled up to the commercial still only two fifty liters in size and made about two twenty bottles in a batch. I sold the first bottle out of the boot of my car on 07/30/2013 to a pub called The Gunnerds Head right down at the tip of Cornwall, very close to a place called Land's End. And that's how the journey began.
Tarquin Leadbetter:I quickly learned that I didn't need to sell it myself, that I could send stuff by courier, got a FedEx account. I don't remember what a pallet was and that I could send stuff by Haulia at the end of the next week. And at the end of the first month, we sold our first export consignment to Portugal. And at the end of the first year, we won our first gold medal at the International Wine and Spirits Competition in London, one of only six gins out of hundreds to win gold, which gave me the confidence that I've been doing this trial and error self made recipe, got that nod of approval from some of our industry peers, and gave me the confidence that I had a real business and to crack on.
Chris Maffeo:Wow. That's a story. So let's go into the commercial aspect. I mean, you're talking about selling the first, you know, there must have been yes moment kind of thing. But how one of the things that I'm always discussing on the podcast is the fact that you have to win your home turf before venturing elsewhere, which doesn't mean that you shouldn't sell that first few bottles to Portugal, but at least you should secure the surrounding away.
Chris Maffeo:Like, in Czech Republic, here they go around the chimney. You have to really win around the chimney so that then you get that confidence. What is your take on that? Is that so in your experience?
Tarquin Leadbetter:Yes. Definitely. That's exactly what I did. It wasn't a theoretical masterpiece of strategy. It was really just the lowest hanging fruit.
Tarquin Leadbetter:I could service the places nearby. Cornwall in the Southwest Of England had six fantastic independent wine shops. So that was my first call for the off trade. Then we have a really nice mix of independent hotels, restaurants and pubs. All of the ones where typically owner operated where I could walk in, chat to someone and they could buy a case or a few cases on the spot.
Tarquin Leadbetter:And lucky for me, lots of them felt quite inspired by this young guy coming in this car selling them some gin that they would even write me a check on the spot. Little did I know how amazing that was for cash flow and help fund that next stage of growth. But, 100%, Cornwall I was particularly lucky, and I wouldn't say this was planned, but Cornwall has a fantastic local food scene. People are very proud of their local produce. We also have lots of farm shops.
Tarquin Leadbetter:So we had a lively independent retail or off trade community. We could get listings quite easily and we'd supply all of them direct. No three tier system. We would open accounts to them individually and we would fulfill those orders initially by driving around, then by FedEx. And then the biggest customers, when I'd start to open wholesale accounts, would get that on a pallet after I got a van or used a haulier.
Tarquin Leadbetter:But super important. And then words sort of spreads from there. I think you build almost a cult following. There's pioneers or those early drinkers who want to buy this quite exotic expensive gin on the shelf of an independent shop. They then tell their friends, they might tell their local Pabo bar and we started to get inbound leads as well.
Tarquin Leadbetter:I think timing is very important. There weren't that many gins around, only a few independent brands that had that regional tie. So I think when we launched, it was quite new and people were very excited to stock something that wasn't a household brand. Was served in 10,020 thousand dollars retailers or pubs in the country. It was their point of difference.
Tarquin Leadbetter:They were curating a fantastic offering for their customers who had come in and they were proud to do it. There was a secondary benefit in targeting to our local area and it's something which has served us quite well over the last thirteen years in the sense that to put a bit more color on Cornwall where we set up almost by accident for me. We're one of the most visited tourist destinations in Europe. We get over 5,000,000 overnight visitors, I believe over 10,000,000 visitors per year. The people who are drinking in the gurnard's head or the dog and duck down the road in peak season in the summer aren't necessarily going to be locals in Cornwall and they're going to be from elsewhere typically in The UK and they can bring that love for our brand home with them.
Tarquin Leadbetter:What we've coined over the last decade is something which we call the Doomba effect, which is this phenomenon inspired by this local beer brand called Doombar. Doombar was launched by a microbrewery back in the 90s and it grew from this tiny village in Cornwall called Rock to be the number one real ale brand in The UK and at its peak doing a £150,000,000 in retail sales. It did sell to Molson Coors and be bolstered by their distribution network. But they had a systematic and methodical way of marketing their brand instead initially like Us market on their doorstep and then they'd follow their tribe or their customers back along the key motorway or highway corridors up across the rest of the country, the M4, M5, M6 motorway corridors back to London, the home counties, to Manchester, to Birmingham. We try to do it with digital marketing.
Tarquin Leadbetter:That's probably the key way. When you've got through a critical mass of size, they're looking for you on the high street and when you're available, hopefully that drives the rate of sale. It's easiest to sell locally. It makes it easier when you already have that demand, and that's been a positive side effect of being located in Cornwall, which I appreciate not everyone has, but it's definitely part of what has supported our growth.
Chris Maffeo:Yeah. No. I was thinking about that. And were you also because of the surfing community, like, where these people traveling there mainly part of the surfing scene as well, or was it like a mix of
Tarquin Leadbetter:It's definitely a mix. A lot of our brand, we're inspired by the coast. There's a love for the coast. We have the longest coastline in The UK in terms of a county. We're the surfing capital of England, but we're not quite California or Australia.
Tarquin Leadbetter:People love Cornwall and they have such a strong affinity to it and they might have been coming down on a holiday since they were children. It means a lot to a lot of Brits. During COVID, we calculated that one in four people in The UK went on holiday to Cornwall where you couldn't travel internationally. It's particularly well known. Yeah.
Tarquin Leadbetter:It definitely was a tailwind in our journey as we're building brands. But equally, there's a lot else what we've had to do as well.
Chris Maffeo:What is the difference? We were discussing the importance of the middle layer. You But there's a lot of conversation about the one nine ninety, all this conversation about the top 1%, the 50 best bars, and so on. Did you ever take that kind of route in your thinking in the early stages? I was like, I need to do this top of the pyramid so that then there will be a spillover effect, or did you take any other approach?
Tarquin Leadbetter:I think very early on, I was keen to grow. There was a sense of urgency in those early days that other brands were popping up regionally, like a gin in Yorkshire or a gin in Northamptonshire. And so I kind of spurred on by a bit of competition. I thought that I needed to get into London. I probably didn't have a proper marketing plan, but it was early on in my strategy.
Tarquin Leadbetter:I'd chat to drinks wholesalers and they'd tell me, We're not going to list you. I thought it'd be easy. And then they said, No, we won't list you until you've got the demand. I I think don't anyone's going to buy your gin. You really have to bring them a dozen accounts.
Tarquin Leadbetter:I was living in Cornwall so I couldn't find 12 accounts in London. So my first hire was a London based hire, a mix of events and sales and marketing. A fantastic guy and he would do some of the early groundwork in the city while we were doing foundation work down in Cornwall. So it was a two pronged approach. And after a good amount of work, we'd get the wholesale listings and the route to market and then we could target some prestige accounts.
Tarquin Leadbetter:We did do that initially because it makes a lot easier having one or two, even just one Halo account. It makes your sales pitch a lot easier when you go into those other accounts. You can say I'm poured in this Mission Start restaurant or this top bar. It does help. My view on that has definitely evolved over the years and we do have a few fantastic prestige accounts in London, in The UK and internationally.
Tarquin Leadbetter:But I am acutely aware that as the landscape has got more competitive and everyone has the same marketing plan, so everyone, top 50 bars, top Michelin starred restaurants. And you're on the list of the multinational brands. You're on the list of the domestic regional brands. You're on the list of international challenger brands. It's turned into a pay to play landscape in The UK.
Tarquin Leadbetter:It's very hard to get on these menus unless you have this genuine relationship or there's a little bit more to tie you to that account. If there's a really strong reason, particularly for us, whether they have a coastal link, a link to Cornwall, or whether everything that they do is handcrafted, it might tie a little bit more closely to us rather than big brand pays £10,000 to be on Martini Menu kind of thing. We're very focused on long term sustainability. I run the company to turn a profit. You can quickly get yourself into a loss making situation if you target that strategy too aggressively.
Tarquin Leadbetter:Over the years, our position has evolved. We have prestigious accounts in the Southwest elsewhere in the country and can use a number of them so we can be less focused on the really expensive places to do business. Still important to us is we have grown Topgreens to be a national brand, but we are very focused on national distribution, not looking to be too Southwest or London centric necessarily. We're trying to expand our breadth. But it is tough.
Tarquin Leadbetter:It's a tough strategy and I think it's very important to think outside the box in this competitive market. And very clearly, I think I see other regional brands or other people who set up brands. I've made the product. What do I do now? And the very obvious thing is to sell to your local set, places that you can walk to, that you can drive to is number one.
Tarquin Leadbetter:And you should do it yourself because you're a 100 times better at selling than a hire. You only widen the net as you get bigger and you can afford to. I've heard you say similar things in lots of your conversations, but you need to go for that lowest hanging fruit, and it's pointless going after something else, which is going be much more difficult. The independent on trade, which is in The UK, is the ones that are independently owned, not part of a big group. You can typically get the highest margin, so you don't necessarily have to do giant retros.
Tarquin Leadbetter:This will be one of your higher margin channels, your sales channels. Very important, if a buyer changes or someone wants to delist you and they turn you off, you're not going to be removed from 500 accounts. You'll be removed from one account. So it's important to build that independent on trade base, which means you're more resilient and potentially can weather a few more shocks as we've seen in The UK where the gin's slightly maturing market. One of the key words you hear from big buyers is rationalization where gin ranges might be cut 50%.
Tarquin Leadbetter:And if you're in the 50%, which isn't cut, it's amazing. You have a bigger piece of a smaller pie. But if you're cut, your numbers can move quite quickly. As we've seen with some of the biggest brands, seen double digit drops overnight when they lose some listings. So it's interesting.
Chris Maffeo:Let's talk about this because this is fascinating for me, especially because, you know, k, US, you know, some markets have got a lot of multiple on trade, but that's not usual in many countries. Like, most of the countries, if I take Prague and Czech Republic, majority are independent pubs and bars and restaurants. You may have some owners having 10, you know, 12, but you're never gonna have, like, the 300. I mean, you have to go to McDonald's to get into the hundreds Yeah. Places.
Chris Maffeo:I'm also a big fan like you on the fact that it is tougher in a way because you have to have single conversations with 500 independent rather than one buyer putting you in. But then you are putting all your egg in one basket. And then if you don't have that baseline of volume, then you may grow very fast, but you may burn yourself because then all of a sudden you've got a listing at Tesco and a listing in a chain. And then if one of those two jump, then you're out. No?
Chris Maffeo:How was the journey for you? What is your take on that independent and managed on trade from a scalability perspective?
Tarquin Leadbetter:So we started my first year of selling was half of twenty thirteen into 2014. I sold about 15,000 bottles, an enormous amount of gin at the time. In our first year, did about £300,000 of sales. My customer base was primarily independents, independent retailers, farm shops, wine shops that I would onboard directly and then independent on trade primarily via route to market wholesalers. Big one in the Southwest called Stolster Brewery, one called LWC DRINKS and then I would add other regional ones or big London powerhouses as we grew.
Tarquin Leadbetter:The first five years of business, we pretty much doubled in size every year, albeit from a small base, but 15,000 models, then 30, then 60, then 120, then two forty. It was very much an organic growth for us. I wouldn't say 100% year on year growth is massive, but I would say it felt very organic. It was a combination of our proactive selling. We built our own sales teams.
Tarquin Leadbetter:We did self distribution in The UK. I didn't really know you could go through distribution agencies, typically importers, they'd have imported brands, but that would take another margin, which I hadn't necessarily budgeted for. So we carried on doing what we were doing. So really had a solid foundation of independence. You can actually in The UK get to quite a significant volume as a super premium gin brand.
Tarquin Leadbetter:So our price point now is £39 for our Topgmans gin. When we launched, it was about £30 But we were in the super premium gin bracket delineated by the IWSR rules, the category above Hendrix. The volume wasn't huge, and you could get to quite a decent amount of volume through independent on trade and independent off trade. Not everyone realized that. They thought that they needed supermarkets to get the big volume in this segment of the gin market.
Tarquin Leadbetter:I remember Sacred Gin was doing fantastic volumes through independents and department stores and that's where we got to. Then in 2017, we won world's best gin at San Francisco World Spirits Competition, which gave us the confidence to step things up a bit. I got this inbound phone call from a guy called Nick Fordham, was previously master distiller at Bombay Sapphire. Prior to that, he was distillery manager at Beefeater. This veteran with knowledge that no one really has in the industry called me up, said he loved our gin.
Tarquin Leadbetter:Could he move to Cornwall and help us scale the business? I said, Nick, fantastic. Come on down. So he then joined us for the next five years of growth as we moved from this knowledge based startup to a proper systems based company. But most importantly, focusing on the product quality systems to make sure each bottle of gin was as good if not better than those that came off the still back in 2013.
Tarquin Leadbetter:But him joining the team really gave us the confidence to try and scale and target those more national accounts, national managed retail than the on trade, and then look at supermarkets as well because you needed more quality systems than we probably had in place. So we were almost limited by our systems in that early stage. I think if you were buying gin from a third party manufacturer, which is BRC, AAA rated, You could go into Tesco on day one, but we couldn't. You know, they probably would have looked around on the distillery and said we weren't ready. So there was this organic sort of getting ready for the big league, really.
Tarquin Leadbetter:My the journey has very much felt organic. While it was rapid growth in the early stages, it felt sustainable. We'd have conversations with the large retail accounts like Michelin and Butler's, Tesco and we'd get regional listings with the big process in The UK, which was fantastic because that's where our rate of sale was highest. That's where the demand existed. Where we had fantastic penetration and the on trade independence as well.
Tarquin Leadbetter:So we had that textbook on and off trade relationship, which is what you're after, that holy grail of the on trades are boarding the off trade and the off trades are the on trade. We had that in the Southwest, which had taken us five, six years to build up. And then it was a great springboard. We could talk about the doom bar effect and how our customers were looking for us on the high street throughout the rest of the country. We dived into Amazon into 2016.
Tarquin Leadbetter:So we're very early players into first party vendor central supply to Amazon. And it had this extraordinary self fulfilling thing with Amazon's algorithm that the more you sell, the higher you rank, the more you sell. And because we were in so early, this natural momentum in the algorithm lasted for about four years all the way into COVID. We were the number one best selling gin on Black Friday and Amazon. Probably 2018, 2019, 2020, we were doing tens of thousands, maybe 50,000 bottles a year.
Tarquin Leadbetter:We had all this data. We could show it to buyers. This is where they are located around the country. Your consumers are desperate to buy us on the high street. Time for you to list us.
Tarquin Leadbetter:So then we would start to build up our distribution outside of the Southwest, outside of London and go a little bit north as well. But it was slow and steady. We're 13 years old now. It got to COVID and we've been focused on independent on and off trade, business to business sales other than Amazon really. COVID came along very concerned about what might happen to our business as we're quite heavily concentrated in one channel.
Tarquin Leadbetter:So we decided to diversify to try and reduce that channel concentration risk. So we started selling online via Shopify direct to consumer, which had always been on the list. It was just very low down. We're doing other things. Should have done it years before, but it was a good opportunity to dive into it.
Tarquin Leadbetter:We opened our first brick and mortar shop, which we now have seven. So we have another channel direct to consumer. We have six shops in Cornwall, one shop in Devon, like gift shops with experience as well, gin schools and tasting classes. And we began to crank up export, and we were aiming for travel retail. So we needed to be diversified where we'd sell to independent supermarkets, brick and mortar, direct to consumer, Amazon, export, travel.
Tarquin Leadbetter:But suddenly if any one of those channels ended like we thought the on trade was going to in COVID, we would be propped up by another one. Online saved the business, grew that to 2,000,000 sales a year pretty much overnight. Our peak sales driven by COVID headwinds and also the fact that no one could go on holiday. One in four people in England came on holiday to Cornwall during twenty twenty, twenty twenty one. Our sales grew to about I think it peaked at 11.7, 11,800,000 in sales in that year.
Tarquin Leadbetter:And I think like rest of the spirits companies, we thought it was never going to end. It's very much guilty of this, which is reassuring for us. We thought the spirits food was never going to end and then transport opened up, people had well stocked home bars and the spirits market changed a little bit. Had a slowdown post COVID, readjustment and then we returned to the long term growth trend, which we're back on. We're back at over 10,000,000 sales a year.
Tarquin Leadbetter:We're growing at 15% year on year. It's been a bit of a roller coaster ride. You think you're a genius in COVID with all these tourists queuing around your shops to buy your gin. It's made us stronger as a business. We've made every mistake in the book, but we're now in a position we feel super strong, have a great foundation, and are growing in a time when lots of spirits companies are either closing down, they're in decline, or struggling.
Tarquin Leadbetter:So I think we feel very proud of ourselves at the moment. Wow. And, yeah. And our gin is in growth as well. Gin is maturing.
Tarquin Leadbetter:The Hawkins is doing well. Really proud of it. It's our largest brand. Our other brands are also really excited and in growth too.
Chris Maffeo:It sounds like everything goes back to the Southwest, like, to this stronghold that is so relevant because the brand is so relevant there that then it creates this entree and the independent bar, independent wine shop, and then the brick and mortar. I'm a geography fan. So it sounds like when you look at the map, you look very well covered, which is the reason why you are catching all possible buyers because they bump into your brand with 99% confidence that there is a boss of your products there. When you were still doing the independent part before you ventured into managed on trade and multiple on trade, how did you get to the rest of the country? So how did you go
Tarquin Leadbetter:to Through the panels.
Chris Maffeo:North Of England?
Tarquin Leadbetter:I remember back in 2013, I'd target the wine shops, and I'd literally get the list of wine shops in England. It was pre AI email slop outreach where I could write twenty, thirty emails, and probably half of them would reply and say, yeah, mate, sure, I'll buy a couple of cases. When I say timing, timing is key in this journey. If you do now, you'll probably get blocked in spam. They'll never want to hear from you again.
Tarquin Leadbetter:It was extraordinary. And that independent community, like I said, they were looking to curate something fantastic for their customers. As the gin market grew, there's been this glocalization of gin production or hyperlocalization in the sense that when Yorkshire vintners up north had their local Yorkshire gens, they might sell more of them and not less of us. Over the next decade, we might fall by the wayside. But there's that natural progression for us as a business and then we would open up new channels and new markets or bigger customers.
Tarquin Leadbetter:But we did build our own sales team. So we built at our peak seven field sales representatives, still quite Southwest focused, but we had Devon, Cornwall, Bristol, London. And people were willing to travel, but to cover the North would be either brand ambassadors, so we'd pay bartenders and they would if they wanted to get into the sale field sales or the sales side of the business, they would work for us one day a week, one day a month. It would be run by our field sales manager. Be great for their CV and fantastic for us as well, and they would be able to target the top accounts.
Tarquin Leadbetter:They'd probably end up with a great job somewhere like Campari. We were the stepping stone for them to start their career in the spirits industry. So that's how we did it. It was affordable for us as a business to operate like that, and the returns were working for a single brand company. I think when I say single brand company, primarily we were only a gin company up until 2020 so we were effectively at the top of this gin company.
Tarquin Leadbetter:But as we grew, I had this realisation post COVID that we diversified by channel but it also became quite important to me to understand we needed to diversify by product. There are very few single brand companies in the world at the higher level of spirits and typically the ones that are single brands and then they'd sell their company and they'll sell their business and then that's kind of it. I started this company to run a profitable business to be my living. I had to live by the income earned from this company. It was also very clear to me that you're very exposed to the market cycles and product life cycle of gin in one particular market.
Tarquin Leadbetter:So it's very important to use our infrastructure and our sales team and add another bottle in the rucksack when you go and do your field sales calls. Say we launched TwinFit Rum 2020, then we launched a vodka brand, Conny Glaze, and we launched Tiller Pro's whiskey and whiskey liqueurs last year. It's enabled us to capture more of the market. We can walk into an account and offer them what they're looking for. They might say, No, mate, I'm not interested in gin.
Tarquin Leadbetter:Don't even talk to me about gin. But we can say, But what are you interested in? We might have the answer with try our conglis, passion fruit liqueur, just add sparkling water and you've got a spritz. Easier than Aperol, better margin, easier to serve, and it looks delicious. And they might say, that's exactly what I'm looking for.
Tarquin Leadbetter:So we have a much fuller complement and allows us as a company to target different demographics. So whether one product is more female, one might be more male, one might be younger, one might be older. Lastly, we've taken the difficult route in launching each one as its own individual brand. The easy route would be to call it Tarquin's rum, Tarquin's vodka, Tarquin's whiskey. It would be more inexpensive, easy to do, but I don't believe that every product is designed for the same customer.
Tarquin Leadbetter:Separate brands allow us to go younger, older, more masculine or feminine in terms of packaging and tone of voice and marketing. But I don't believe that a supermarket or a bar would necessarily want 30 products from the same brand. Some of them are fantastic and they'll list four, five, six Tartman's variations. It's very easy to sit alongside a TwinForm Rum, a Connie Glaze Volker and a Tenebrous whiskey. And the consumer definitely still understands that they're getting variety.
Tarquin Leadbetter:For example, I think in Tesco in the Southwest, we have about a dozen, maybe 12 SKUs listed in the regional stores, which is incredible. I truly don't believe that if it was all top ones, they'd tell me to would have told me to get lost a long time ago, and they will list two. So kind of lucky.
Chris Maffeo:I'm often discussing the famous post, the one case in one bar is better than six bottles in six bars. No? Yes. Obviously, you need to have the six bottles to understand if those six bars are going to buy a case at some point. But what was the role of velocity per account, rate of sale per account versus growing distribution for you?
Chris Maffeo:Many brands I see, they just wanna go for distribution. I like to just stick a bottle in the back bar, buy this bottle. Yeah. Yeah. Yeah.
Chris Maffeo:Whatever. Good luck. Mhmm. While my approach because I'm coming from beer when once you open the keg, you have to finish the keg. Otherwise, they're going to throw it down the sink.
Chris Maffeo:So for me, it's always been like, I'd rather grow the footprint but to secure and build the habit into those bars where I am rather than growing and putting one flag in every bar across the country. And then Yes. Good luck, and then let's go in six months and see if anybody needs another one.
Tarquin Leadbetter:Yeah. Yeah. Kind. A 100%. I think you're right.
Tarquin Leadbetter:The distinction between beer and having that tap versus a spirit just sitting on the back bar is significant. We self distributed for years, but actually in 2021, we did distribution with Molson Coors, a beer company. So they were dipping into Beyond Beer, in spirits, and in soft drinks, and in coffee. It was a great way for us to get into supermarkets. But it was very clear that all of their sales team were trained on beer.
Tarquin Leadbetter:You win the tap, that's it. But we became acutely aware of the difference in how it is. You win an account. You need to be on a menu. Ideally, train the staff.
Tarquin Leadbetter:And if you're not on a menu, you do not sell anything. You might sell one shot a year. You can see the dust gathering on lots of gin. In the days when it was probably easier six, seven years ago when every pub you go into would have a gin and tonic list. Now that's less the case.
Tarquin Leadbetter:You need to be a bit more creative about what that gin is, what is your occasion, what is your serve in that. If you're not the house and contracted where they have to serve you, you need a reason for them to buy you. I would agree. 100% that's super important. And then the independent trade, that's the way to do it.
Tarquin Leadbetter:It's very time consuming. If people are trying to grow as quickly as they can, they might forget. They skip that stage, and they go over distribution and hope that it sells. And it's that hope which is a bit tricky. I think it's very rare to have a phenomenon where it just flies off the shelf in the entree.
Tarquin Leadbetter:It's just like that would be like the one in a million brand. So you definitely do need to do the heavy lifting. With the national entree, it's a slightly different story because effectively, might be speaking to one buyer who might come out at 300 pubs or a thousand pubs or at least different brand managers for each brand, which might be a 100 pubs. And in that sense, you're not necessarily gonna visit each of those 300 pubs, but you are able to influence the menu. So you can pay for menu positions to be the Negroni or to be the gin and tonic in this menu.
Tarquin Leadbetter:You can pay for menu highlights. So it turns more into a paid to play position, but you've justified your position on that back bar due to your sales data, your existing category data, your brand fits in nicely to that brand and pub group. So hopefully you've got the first things right, but then you are able to drive decent rate of sale through your top down marketing approach. So the bigger accounts, which I know The UK has the luxury of having enormous managed retail pub groups, there is that sort of secondary way to do it. The smaller the brand you are and the fewer products that you supply that group, you might just get less airtime or smaller budgets.
Tarquin Leadbetter:So it could potentially work against you. But independent entree, definitely, I think that one case and one bar is definitely better than one shot. Six.
Chris Maffeo:And looking into hindsight, could you have gone with the managed on trade earlier, skip the independents if you had more money, more budget? From a brand building perspective, do you think that it would have worked, or do you think that you always have to go through the independents anyway to really build your muscles first?
Tarquin Leadbetter:I think it can work. I remember seeing very early, must have been like 2015, '16, the silent pool was on the GMT list and Weatherspoons. I thought it was crazy. I was trying to understand that from a marketing decision of what they were doing. But I'm sure there was a commercial element there.
Tarquin Leadbetter:There were 900 pubs there on the menu, they're selling a billion bottles a year. They did grow to be a very successful brand. They did exit William Grant. It felt premature in my mind when I saw it when we were just with independents. So there are examples where it probably has worked.
Tarquin Leadbetter:I don't think it was a long term listing, probably changed in a year or two, but they still seem to manage to do that alongside having five star Michelin hotel listings. I'm not sure how. Maybe they manage their accounts very well. So it is possible. But our first and probably one of our biggest managed retail listings came I remember it was an inbound.
Tarquin Leadbetter:So I was at a trade show and I was filling in for our London sales guy. He was on holiday. So I was filling in and the buyer of one of the biggest pub groups in The UK came up to us and was like, Oh, I'm so pleased I've seen you. I've been trying to get a hold of this guy. I've been trying to email him, get a hold of him for ages.
Tarquin Leadbetter:He's not returning my calls. I couldn't believe it. I was like, wait, what? We had this buyer banging down our door trying to list us and we're returning his calls. Thank God he was persistent.
Tarquin Leadbetter:That's led to one of our biggest, longest, and strongest partnerships in the managed on trade for ever since then, know, over five, six years. But I think there's a lot of luck involved in lots of these, you know, winning over a buy or, you know, the serendipitous fact that they go on holiday to Cornwall, they you're listed in their favorite bar at home. But there are a myriad of reasons as why someone might be keen or it ties in with a quest for Britishness and premiumization of their menu and they want to increase average order value and we tick that box. They want to sell something interesting and unique. So I think it was we served a place on their list and we've been there ever since with a fantastic rate of sale.
Tarquin Leadbetter:But it's funny. I think lots of these moments in your career, as much as you wanted to drive it by brute force or be a part of a function of effort. Isn't just like kinda just like stuff comes at you when you least expect it.
Chris Maffeo:Let's talk about the financial part. You're one of the few that managed to build a business bootstrapping and out of your own funds. Until now, I saw on LinkedIn that you finally made a a round of crowdfunding. So now there's a change in the approach, but I'm interested to see how did you manage to do that for thirteen years, And what was the rationale for that choice? I'm talking often to founders, and I always say the disclaimer is there's no right or wrong in doing one or the other, but definitely there are differences in in the approach.
Tarquin Leadbetter:Yeah. I suppose it initially starts with your objective. I wanted to start a business. I wanted to be creative. I love the idea of being my own boss.
Tarquin Leadbetter:I love the idea of building something and having a tangible product that I could sell. I knew I wasn't the best salesperson, but I felt so passionate about being able to make something that I knew that being able to talk about it, I should be able to do it. My objective wasn't about starting the company just to sell it. It was to start a company and grow it. It didn't occur to me that I would ever be loss making.
Tarquin Leadbetter:That sounds naive. I kind of thought that companies made money. You start a company, you've got to make money to run a company. If you want to be around in five years, which I knew was a significant milestone for startups, you had to make money. So from the beginning, the idea was to be profitable and to make decisions which allowed for profitability.
Tarquin Leadbetter:We were probably very slow on hiring as a result, very cautious. I'd have in my mind that our gross profit margin for a duty paid bottle with is about a third. I know turning two bottles into three, I'd know in my head how much money I'd made from each bottle. I'd start to think in quantities of bottles in the early days of what I'd need to do. I think I started with that focus because we started I suppose we're quite lucky in the sense that, again, I don't want to talk about our location in Cornwall too much because there's many aspects to our journey because we had a summer season, tourists coming down and the classic spirit season Christmas.
Tarquin Leadbetter:And this double kind of pronged season in the spirits world, which isn't typically the case. Typically, Christmas is q four is the peak and January builds up to that in a steady line. Because we had lots of sales in summer, by the time all of my receivables and my debtors booked was paid me in twenty eight days in September, I then had enough money to fund the growth in Christmas and then winter as well. I was growing at just the right rate. The growth was really important, but growing at the right rate where it allowed us to be cash flow positive The company was producing cash and able to self sustain itself, which improved even more in COVID when we started to have those direct to consumer channels with the brick and mortar shops and the D2C.
Tarquin Leadbetter:Those were profitable producing cash, which is able to allow some of the more capital intensive channels within the business. I think we would not be the brand there's also a luxury. A brand raises £5,000,000. They start making very bad decisions. I think that's typically what's happened.
Tarquin Leadbetter:I feel like the hare of the tortoise with a tortoise in its race. I've seen so many brands come and go over the past thirteen years. There's always boom and bust and boom and bust. And you look at a cocktail menu in the best 10 bars in London and you'll know who's raised money recently because they are all of them. And then five years time, are they anywhere?
Tarquin Leadbetter:No. They run out of money and they've decided that it was a poor investment. Equally, I get what they're trying to do. They need to grow very quickly to be attractive to a company to buy them. They get the growth, great.
Tarquin Leadbetter:If they don't get the growth, whatever, they can shut up shop and do something else. So they probably just have different objectives to me. I've always wanted to run a profitable business. We have raised money for the first time ever earlier this year through our community, embracing the crowdfunding ability, which has developed since we've been going as well. We've got over 1,000 of our community invested in the company at around about £1,000 each.
Tarquin Leadbetter:Raised just under £1,000,000 to support the next step of growth in Tarkwins, which is The Crack America, and also to support the growth of our Tinner Broth, which is our whisky brand which we launched eighteen months ago, which has grown an absolute wildfire, the most successful launch we've ever had. So this two pronged growth approach to double the size of our business over the next five years. We're looking to move from a £10,000,000 a year company to a £20,000,000 a year company. In five years, the idea is to review the position of the company to try and provide liquidity to the investors. In the meantime, to run the best company we can be, we're looking to run self sustaining profitable business.
Tarquin Leadbetter:That's the number one most important thing we can do and it will give us an infinite time horizon to do anything. The beauty of raising the money is it allows us to be quite aggressive in this time when lots of the big players are pulling back. Everyone's nervous. They're contracting. They're rationalizing.
Tarquin Leadbetter:They're cutting. This is that once in a cycle opportunity to be a bit more aggressive. Sazerac is one of the most aggressive big players at the moment, and they're making fantastic moves and new brands and M and A. I feel like they're in retreat mode at the moment. We're not Sazerac.
Tarquin Leadbetter:We're tiny Sazerac, but we are launching innovation and new product development at a time when lots of brands are putting that to the side and looking to extract as much margin they can from their existing brands. So really raising the money is just allowing our company to make that aggressive move and support the foundation of growth for the next five years. To be 13 years old and growing at 15% year on year feels pretty amazing because we're bigger now. So adding 1 million, 1,000,000 of sales each year is still quite a lot of bottles to sell, incremental bottles to sell within the business. We were very lucky we were in a gin boom in the early days.
Tarquin Leadbetter:That facilitated growth profitably. And the key to our success now, I talk about it as an innovation engine. So the beauty of The UK is that we're very liberal in terms of how you can sell alcohol. We've got brick and mortar shops. There's no three tier system, right?
Tarquin Leadbetter:We can sell direct to customers, we can sell direct to the trade accounts, we can have our own shops in which we have seven. We can sell online. We can sell on Amazon. We can sell anywhere. And you can set up a market stall with a temporary license for the day and sell booze on a farmer's market.
Tarquin Leadbetter:So you can be very creative. We're a small country. We've got high Internet sales penetration next day delivery. It's a very easy place to run a spirits company. You can be involved in every layer of the spirits distribution ecosystem.
Tarquin Leadbetter:We're a manufacturer, a small batch manufacturer, very proud that we can launch a new product in twelve weeks. We have a really strong customer email database, 120,000 people and we did about 20 new product developments last year. We'll use category data, we'll look at the market of what's moving, what's in growth, what's interesting and exciting to us. We'll then survey our database of 120,000 people of what do they like the sound of when we refine our concepts. We then pop them in our shops and we've got seven shops.
Tarquin Leadbetter:We ask people whether they'd like to try a taster for free within thirty seconds of walking in the shop. So we sample over 120,000 people a year. So then we can get the live data of does it taste good? Is it selling? We then launch it online shop, which is quite material in terms of sales for us to get that more data.
Tarquin Leadbetter:And then we can layer it up down this funnel. By the time we kill the losers and double down on the winners, anything that we launch into the trade, the buyers know that it's got this track record behind it and it allows us to get that distribution where it should have incremental rate of sale. And most importantly, when it comes to marketing investment, it should maximize the return on investment on those dollars that we are going to spend on that winning product. We launched 20 products. We probably whittled them down to five of what we've kept and turned into court, but it allows us to keep it evolving.
Tarquin Leadbetter:If you're not moving flat forwards, you're almost moving backwards in the spirits again. You keep on reading about some of the big players. I think that's what's kept us nimble and exciting for me, an opportunity we've been creating new brands, new extensions of variations of existing brands. And it's been the fun part and allowed us to dip into RTDs and all sorts of cool stuff. The advantage we have as a small company over the big ones is that agility.
Tarquin Leadbetter:And that's it. So it's a very important thing for us to be aware of. You know, that is what's special about us and make sure that everyone within the company is aware of that because it's easy to forget.
Chris Maffeo:It's fascinating for me that you have sticked to The UK for so long. Obviously, you have been selling and exporting, but the focus was very UK specific. Correct me if I'm wrong, but what I witness when I see other brands is that as soon as they bump into a an obstacle into The UK, You know, all of a sudden, it's like, oh, Germany is the solution. China is the solution. Australia is the solution.
Chris Maffeo:US is All of a sudden, they have this grass is greener on the other side approach. You're one of the first ones who was telling me The UK is an easy to make business kind of approach because most people would say it's so segmented. It's so fragmented. It's so tough here in The UK. So that's why we want to export as much as possible.
Tarquin Leadbetter:Yeah. I would say The UK is the most alcohol friendly country to do business. Very easy to sell in multiple channels. But for export, we've always been keen on exports. We sold our first pallet to Portugal in September 2013.
Tarquin Leadbetter:It's been hovering between five and growing to about 10% weight of business for us over the past thirteen years. We've had a dedicated export sales manager for the past six, maybe seven years in our company where we've been proactively managing existing customers. We used to be very much reactive. Someone contacts you, I'll buy a pallet. Thanks very much.
Tarquin Leadbetter:I'll sell you the pallet. I'll take your money and I'll see if I can do any marketing from England. So managing the accounts better, the global marketing office, giving them the tools and assets to be able to do selling effectively in their country. But it's not easy. It goes back to it's easiest to sell at the pub down the road and the shop down the road, easier to sell to them then probably easier to sell in a shop further away in England and then it's harder to sell in any other country in the world.
Tarquin Leadbetter:And you really need to change your sales pitch. Your key sell points are different. Why should someone in x, y, or zed country buy your product? So it's more difficult. And then you're reliant on your export partner or import partner as well.
Tarquin Leadbetter:And there needs to be incentive for them to sell your product as well, which is typically margin related. This is a very tough business for them. They're making very low margins building brand equity in a company that they don't own really. I think that it's tricky. There's also been that markets have evolved and there has been this localization of gin specifically internationally, especially in Europe.
Tarquin Leadbetter:So there's been ebbs and flows in different markets as well. And then The US, I mentioned that we've raised money and one of the objectives is to grow tacos in The US. I think many brands have been there before and we've taken a sensible approach in everything that we do. So we've already been exporting to The US for about three years. Last two years, we've been growing at 100% year on year, albeit from a small base, but it's reminiscent of gin in The UK about a decade ago.
Tarquin Leadbetter:It looks like the market signals are there that some of the forecasters expect the the gin market or the super premium gin market to double over the next decade. Bars are getting into it as well. So we are diverting resources specifically to The US as a bit of focus with export. If you export to 30 countries or so that like we do, it's easy to spread yourself too thin. So you do need a little bit of focus where you're able to give the time, energy, and resource to support a market properly.
Tarquin Leadbetter:You can do best in class toolkits, marketing toolkits for all of your markets, and that should be the very minimum. But you're gonna fly somewhere or spend enhanced marketing dollars. You need to have focus.
Chris Maffeo:What did you see? I heard you were just coming back from The States. How do you see the difference versus The UK, the early signals from the market?
Tarquin Leadbetter:Yeah. The early signals are exciting. People are it's a martini country. We've got a great tradition of gin and tonics. America, I think martini is maybe the best selling or one of the top best selling cocktails in the country, primarily made with vodka.
Tarquin Leadbetter:I think that's a small bridge to cross. Right? You've got the occasion, and it's all about trying to bridge that vodka martini into a gin martini. That's probably the core strategy for the on trade. But of course, we go in, we focus on three products.
Tarquin Leadbetter:We focus in America with three variants, our dry gin, a pink gin, and then a blood orange gin. The blood orange gin is designed almost like a spritz, that alternative to an aperitif for the entry level gin drinker. Got a pink gin, which is for a bold gin and tonic, a gateway into the gin and tonic, looks great on Instagram. And then the classic gin, which makes a fantastic gin and tonic, but that's that martini led gin. So there's a three pronged approach, offering the consumer or the bar what they're after.
Tarquin Leadbetter:It is a different market. Talking about Cornwall isn't as relevant to them, but we focus on product quality and taste. We believe that we've grown over the past thirteen years to be the number one super premium gin in The UK primarily because of taste and quality. There's a saying that it's easy to sell the first bottle, but it's hard to sell that second bottle. The second bottle is driven down to taste and does someone like the product and do they want to drink it again?
Tarquin Leadbetter:We're proud of that. So we're product led. The halo account for us is really that we're number one seller in The UK. They should definitely give us a go. We're a top seller in Europe and we taste delicious with all these gold medals.
Tarquin Leadbetter:You should try it. Anything more than that is quite complicated. We are an aspirational coastal brand delicious botanicals, but the story can get lost in translation.
Chris Maffeo:It's a
Tarquin Leadbetter:beautiful looking bottle. But it is definitely a harder market, but the scale is enormous. Three tiers, three margins, so your gross profit per bottle is less. You're hoping ultimately to sell more the bigger picture. Maybe you get one big retail listing, it could be hundreds of stores.
Tarquin Leadbetter:But that said, it is a competitive market as well. So while gin is showing exciting signs of growth, American liquor stores are so well stocked, You'll go in and they'll have it will be like the best stocked liquor store you've ever seen in England and they're everywhere. Every single one has the whole wall of gins and it's not their top selling spirit. Vodka, tequila, but gin right at the bottom. So it's the smallest of the spirits.
Tarquin Leadbetter:There are exciting signals and that's why it's very exciting for us. We were already getting the growth and it's all about how to build the brand, talk with us in America effectively. And we work with this amazing import partner that's kind of seven or eighth generation distillers called Laird and Company. And we very much get each other. We're both family businesses.
Tarquin Leadbetter:I started with my sister. We both have these independent brands and it's kind of like David and Goliath. They kind of get us perfectly, so they've been fantastic. And they can serve all 50 states. So that's the beauty.
Tarquin Leadbetter:I think we're in about 22 at the moment. Some of them there's a few cases in each state, but we do have some states which are going really well like Virginia, one of the control states, and we're working on some of the other ones. And also working on DTC to try and replicate what we do in The UK where we do probably 1,500,000 a year in direct to consumer sales trying to replicate that in The US to an extent, but it's harder with the three tiers. I think everything is just a little bit harder and you're trying to navigate it in a creative way without spending too much money. So I think, again, it's all about the path of least resistance.
Tarquin Leadbetter:You're trying to think creatively. And you just can't be a mini Diageo. I think that's the key when you're the scale that we are. You just can't do the same thing with less money and think you're gonna get a better result. It's just impossible.
Chris Maffeo:I like what you said about the patholist resistance. Now the fact that what you were saying about, for example, the key serves or drink strategy on however we wanna call it, like, to really adapt it to what's happening in that market. No? I mean, the last conversations I had with Robert Simonson, the cocktail writer and author, We were going through the history of drinks, and, ultimately, it is about spotting something in the market and then doing a small twist to bring your brand in rather than if you think you're gonna conquer The US by pushing gin and tonic and pushing Americans to learn how to drink gin and tonics, the volume opportunity is gonna be much more on a twist on a Martini or something on what they're doing with the peculiarities of each country and each state because there are some Negroni cities and some Margherita cities and old fashioned cities. You know?
Chris Maffeo:Some cities are totally different than others in those countries. It's interesting to hear the approach and how you can take the learnings from The UK, but also adapt it because one of the biggest mistakes that global brands do is going too often single mindedly on you must do it this way because that quarter is telling you to do it this way. And then you just hit the wall because it's never gonna be the same as what the global head office is headquartered.
Tarquin Leadbetter:Yeah. I think luckily, global head office is probably a couple of us, and we're also the K. Margolin team, global team. We're quite lean. I'm trying to think of our growth over the years.
Tarquin Leadbetter:You know, we run quite inefficient. I like to think of our team as quite efficient. I'm always amazed sometimes I see these small brands and they might have, like, I don't know, eight people in marketing. I'm always like, oh my god. You know, that's more people than £100,000,000 brands have a Diageo.
Tarquin Leadbetter:You know, they'll have, like, three people running the whole brand.
Chris Maffeo:No. That is ultimately the issue with many of these things. Once you raise 5,000,000, if you know how to be efficient with small money, you can be efficient with big money. Yeah. But if you are trained to think big money, then you're in trouble.
Chris Maffeo:When I look back at my career, my gift was I was always in export companies of a big brand. So my colleagues had millions of pounds, and I had €200,000 to run marketing and sales in a country. So I never even dreamt of having a sponsorship sponsorship because it would be like, hey. Shit. Like, it's gonna be 10 things that I can do here, and I finish the money.
Chris Maffeo:So it shapes your mindset into what you can do with the money, and then you can press on the accelerator and scale.
Tarquin Leadbetter:I love complementary to the bottom up approach. Doing business in England and The UK is quite to do is this kind of the digital marketing piece. I think the ability to drive direct to consumer sales is a very efficient way to spend money. Some brands have done it phenomenally well, like Motherroot in The UK is a nonalcoholic brand. They've grown an enormous tribe through online sales.
Tarquin Leadbetter:And then when they go into the high street, the demand's there and it just explodes. Other things that you can do from behind the laptop in your evening or spare time is to master the art of digital marketing and achieve that holy grail where you can break even with your ad spend and sell bottles. Because if you could do that, you can spend digital marketing money to break even. You can drive growth pretty effectively. You're never gonna have big budgets for above the line marketing.
Tarquin Leadbetter:It's hard to drive demand other than that liquid on lips piece, which is what we get through our seven shops. Doing events, winning people over one by one, they buy your product at a farmer's market or maybe they go to a big festival and try your product, but you need as many people to try it as possible. But the funny thing with alcohol, with any brands, you have super users, eightytwenty rule, probably more extreme with alcohol. Maybe it's ninetyten. 10% of your customers probably deliver a lot of your consumption.
Tarquin Leadbetter:You might only need to win over a few thousand people even within a country to see decent traction and velocity within a small area. You're not necessarily trying to win over millions of people. The numbers are a lot smaller than you might realize.
Chris Maffeo:When you do this one case in one bar, then you are and especially when you are talking to provincial cities, you have the same people going to the same bars over and over. So you build the habits.
Tarquin Leadbetter:Yeah.
Chris Maffeo:Like, the gin and tonic for me at that pub in Devon Mhmm. Is gonna be with Tarkin's gin. Mhmm. Because I go there all the time. While if you want me to go to the savoys of the world and the 50 best of the world, it's gonna be I go there twice a year maybe.
Chris Maffeo:And then I'm gonna go to other places because it's kinda like an experiential experience. I'm flipping myself the way brands need to be built because there is so much more into these provincial towns and into these places that have amazing scene. They just don't want and they're not interested in getting into Michelin stars and 50 best necessarily, but they have the same crowd of people going to that bar or to that wine shop. You know? They go to the owner of a wine shop in the village, and they say, I need a refill for my gin and tonics.
Chris Maffeo:And they know exactly what to recommend rather than someone that is looking for always the newest thing because then is old news from Yeah. The week after just because, oh, no. Yesterday, I gave you. Now I need to give you another one. You know, somebody that is confident into suggesting the same thing over and over again.
Chris Maffeo:I'm coming to your restaurant because I want I feel like carbonara. I want to have the same carbonara. I don't want to have any crazy dishes. I'm coming to a trattoria to have the same carbonara. Otherwise, I would go to a fish and chips somewhere else.
Chris Maffeo:Obviously, it depends who your tribe is and so on. If you're connected to posh bars and you have an access there and maybe you don't have to pay a listing fee and, obviously, feel free. But I've been guilty of this myself. I'm not kinda like preaching. But at the same time, it's so misleading to think that this all one nine ninety works because it could work back in the days.
Chris Maffeo:You know? It's like when TV was there. You had to do TV campaigns because
Tarquin Leadbetter:Mhmm.
Chris Maffeo:That was the medium to reach scale. But nowadays, it's so fragmented that how long are you gonna be listed in that bar? Maybe you have these five bars where you are on the menu, and you will be visible. But then how do you get the spillover effect if you don't target those corner pubs and bars that need a gin for a gin and tonic, how are you gonna succeed? This is the vicious circle of proving something.
Chris Maffeo:What I like about not having shareholders in the early stages is that you are free to do mistakes without having to justify them to anybody.
Tarquin Leadbetter:I was also thinking about that regional piece. There's lots of gin I didn't start the company in London where I was living at the time. I started it in the Southwest. Lots of brands subsequently set up in London, and they never had that you're diluted into a city of six to 8,000,000 people. They never had that strong local support unless it's hyper local.
Tarquin Leadbetter:You just don't have it like we had in Cornwall. And I feel like lots of the London centric brands have struggled because their local bars, the one that they might want to get into, which might be their local bar in Soho, They have 500 brands trying to knock in that same one bar because it's in
Chris Maffeo:You reference very often to Cornwall and the fact that it's a cool region. You're not like in the middle of the country, but Yeah. If you think about it and think creatively, wherever you set up your brands can be interesting to some people, and at least it's interesting to the local people. Whatever county in England you take, there is gonna be a tribe from the county that is going to be proud to drink that gin. So very often people think, okay.
Chris Maffeo:I'm from whatever Shire is not really fancy, so we need to win in London if they are closer to London or in Manchester or Birmingham just because otherwise nobody's going to be interested in us. But, ultimately, you can make a living out of regional sales for a while if you're not thinking of a fancy exit or if you want to set up the business in a sustainable way to provide for you and your family first Yeah. And then take the next step. It's always interesting for me to analyze these things because it's very simple to go and jump. Oh, I need to build it in Rome.
Chris Maffeo:I need to build it in Milan. If you don't win in Milan, you're never gonna be successful. I mean, you can be a small brand in a region in Italy and still make a living for you and your business partners. And it's like two people and you got your salary, and then at some point, you will grow, but you will have such a solid foundation of people that can refer to your brand.
Tarquin Leadbetter:Yeah. I think people, particularly if you raise money, can get caught up in those vanity distractions. And you can see it when you see really small brands doing London tube campaigns with no distribution. Lots of people are guilty of that. They'll do billboards, above the line campaigns.
Tarquin Leadbetter:They're not on the high street. So you can't buy them anywhere. There might not even be a call to action where they are available. I'm gonna get 50 k on that. I was listening to one of your podcasts with Morris Doyle, and I think he was talking about maybe it was Compass Box.
Tarquin Leadbetter:I'm not sure. They had interest from a supermarket buyer, and they said, no. We're not ready. We're not gonna sell it. Contrary to everything I say, I think when you're really small and scrappy like us, we would say yes.
Tarquin Leadbetter:Do you know what mean? We would say, yeah. I actually will go for it. It might not be strategic, the textbook right answer, but we would have probably taken that pipe filled. Yeah.
Tarquin Leadbetter:If we sold, we sold, but the gamble paid off. And if it did, then we got delisted. It's like, that's sad, but at least I got the $100 order and the profit to drive the next part of the brand building to get to the next step and maybe cross that supermarket. So we say I think at the early stages, you say yes to a lot of stuff. And I remember getting to sparring in the spirit spot is Elwyn Dadsden, the founder of Maffeo, and he's kind of this amazing industry expert.
Tarquin Leadbetter:Always has snippets of advice. I remember the early days, he was like, you've got to do everything everywhere all at once. And so I had that in my mind and he was just like, well, it doesn't matter if you sell it, just target Chicago using The US example. Sell everywhere. If it works in Wisconsin, it works in Wisconsin.
Tarquin Leadbetter:You double down there. Try it all. You don't have the luxury of time. You're not William Grant. You can't run Hendrix for the loss for ten years.
Tarquin Leadbetter:You've got to find out now if your brand's going to work and you've got to do it quickly. So I was operating like that for a little bit. Then conversely, he changed his philosophy completely and was like, actually, no. Then I want to be laser focused. I think he only has Shanky's he's narrowed down his portfolio just to Shanky's whip and he is like, you've got to be laser focused too much as death by a thousand cuts.
Tarquin Leadbetter:You don't want all these brands. But I think you can you can ebb and flow, but I think experimentation and trials is really important. I think we haven't necessarily followed this textbook, big company playbook of how to build and grow a brand, which they probably do have to build it in the on trade than the off trade. Think we've had to do stuff which works and say yes and take gambles. You win a listing.
Tarquin Leadbetter:You lose a listing. Typically, you just can't afford to say no. If someone's offering you a $100 order, what world could for us would we be like, no? Yeah. I don't know.
Tarquin Leadbetter:Sorry. In three years' time.
Chris Maffeo:Because I've been thinking about this for a while, and I've reached the conclusion, and I've said it in some other podcasts. I say, take gambles, but if you already know that that's gonna jeopardize your future, then don't do it. If there's no risk for the future, it's fine because the £100,000 order as such, obviously, you would go for it. But then if all of a sudden, it starts to be imagine you're cash short. Yeah.
Chris Maffeo:Yeah. And then all of a sudden, this supermarket chain is gonna pay you at two seventy days. You need to get a debt to get that order, and then probably it's not gonna sell. Maybe you're gonna go bust. Yeah.
Chris Maffeo:Sometimes you have to think there's so many things in play that there's no playbook anymore, ultimately. Yes. You know? Yeah. Because we are part of an ecosystem.
Chris Maffeo:It's like nature. It's like the forest. You're the fox and the hare, the deer, and you don't know in which ecosystem you are. And maybe now you are the wolf of the ecosystem, but then you go into another country and then there's a bear. And now in your ecosystem, the bear is extinct.
Chris Maffeo:So there's no challenges to the wolf. And you never know because maybe salmon's come back and the bear is back. And you never know how that works. So you have to retain that agility of thinking like COVID came, how you change the brick and mortar, Amazon, like all these things that you could foresee and maybe even do some small mistakes and then double down on the wins. We don't live in a world of I've done this before and now I can do it again
Tarquin Leadbetter:Awesome. I'm going to be are you doing BCB this year? I'll miss you.
Chris Maffeo:I will.
Tarquin Leadbetter:I'll see you then.
Chris Maffeo:We'll see each other soon. That's fantastic. Bye, Thanks.
Tarquin Leadbetter:Thanks so much. Thank having me on.
