Getting on the list

It is common practice for brands to offer incentives to bars in return for a listing and this works in everyone’s favour – but does it mean smaller players miss out?  Hamish Smith investigates

 

IF YOUR NAME'S NOT ON THE LIST, YOU'RE NOT COMING IN. Unless, that is, you pay tens of thousands of pounds, contribute to a refurbishment, or offer free stock.

Selling spirits in the on-trade is a complex business. The idea that a bar owner simply sells the spirits he wants to, based on the suitability of the liquid, is quaint at best – there are manifold other considerations that have nothing to do with the product. 

Of all the spirits, vodka is where the volume is at so tends to be the deal-maker – the salesman of the portfolio who comes with an open jacket of incentives. But this is a symbiotic relationship and you certainly don’t tend to hear bartenders complaining.

So how do the deals work? One high-profile cocktail bar operator in Moscow tells all: “I choose my vodka by whichever gives me marketing support. Generally it is a big brand. I have bosses to report to, they want me to bring money to the house to finance marketing. No matter what brand I like or believe is worth having on a speed rail, I choose brands that support us in marketing. It is a win-win. We help their image grow and they do the same for us.”

Over at the chain London Cocktail Club, JJ Goodman tells how he runs things. “Our main focus is retrospective investment (eg for every bottle we buy, the brand may give us £x, which is paid after purchase. The more we buy the more we get), which is ideally in cash, but we’re happy with stock. For any special listings, such as bespoke glassware, we require an upfront investment to cover wastage. But marketing is a big one, for companies with a large network we might make concessions.”

In much of the world (although not the US, which has stricter rules on incentives) this is the trading environment that vodka brands find themselves in – by their own making or not. For brands that can pay, fine, but there is a barrier to entry that stifles new blood. For a category whose coolness is sliding among top bartenders, smaller craft brands can play a role in invigorating the category. 

Konik’s Tail, now distributed by Speciality Brands in the UK, is one such brand. Creator Pleurat Shabani has found that hand-selling is his only route into jam-packed back bars. “Bartenders have become jaded,” he says. “Sometimes I wonder who does the finances [at big brands]; how they make any money. They give away so much stock, plus listing fees and staff incentives. It’s the battle of the giants. If one pays £100,000 [for a contract] the other will try to gazump them. I also sell in Italy and France and the behaviour is exactly the same. “I try to build personal relationships with the trade through training, masterclasses and the bartenders I work with show me loyalty in the face of blank cheques. They know it’s not about money.” 

John McDonnell, managing director, international, at Tito’s Handmade Vodka, has a similar challenge. “We are not in the business of paying to play,” he says. “I can’t compete with the money of the major players. “If a bar owner feels passionately about his spirits he will not be told what to stock. We focus on the quality of Tito’s and the story behind it. I only incentivise my distributors to run tastings and food pairings.”

But if a brand can win hearts with its liquid and heads with incentives, it has surely cracked it. The cheque book is the easiest option – and is well-fingered by big brands, though they don’t like to talk about the exact numbers – but there are also more creative ways of currying favour. 

Ketel One has a different approach at the top end bars to those lower down the ladder. “There are bars that require listing fees and those that allow us to be more creative,” says Sheyan Patel, global commercial manager of the Diageo/Nolet family-owned brand. 

The thinking is that bars, such as those in the World’s 50 Best Bars list, are more about passion than paper – and crucially need to be known for being so. “They are trendsetters so we try to build long-term personal relationships through our Fraternity Programme,” says Patel. 

“We focus on taste tests but also offer programmes. One is a stand-up comedy course. You might ask ‘what’s the relevance?’ but we are giving them the skills to present. We also offer training programmes that help bartenders run their business, such as courses on profit and loss.”

It seems to be working. In DI’s World’s 50 Best Bars Brands Report, Ketel One was the best-selling vodka in 2013, with Grey Goose second. The Bacardi-owned brand, though, did finish top of our Trending list, so it has clearly kept hold of its cool since exploding on to the scene 15 years ago. 

Like Ketel One and many other big brands, the Goose is no stranger to listing fees. The brand’s global brand ambassador Joe McCanta points out, though, that rules on incentives differ from country to country. “In the US listing fees are illegal – either to pay flat-out cash or pay for a bartender to go on a trip or hire them as a consultant.” 

Offering free stock is also fairly common practice at Grey Goose, for experimentation purposes. “If there’s something creative a bartender wants to work with we do not want them taking a hit on their bottom line,” he says.

But McCanta stresses that the brand has evolved its communication over recent years – it is not about the bling and ka-ching for which vodka has become known. The new message is that Grey Goose is – and always was – a brand of provenance. It produces its own spirit (kudos there) from French wheat and production – no matter how large it is – is all overseen by its creator, Francois Thibault. McCanta admits that in the early days not enough was done “to educate about the brand”.

Chris Moore, head bartender at the Beaufort Bar at London’s Savoy, is a long-term customer of Grey Goose. “The brand has opened up a lot,” he says. “Before bartenders would speculate [about production], but Grey Goose is produced in a natural way. And the notion that something that is produced in volume can’t be artisanal is just not true.”

Another way of supporting the trade and locking in sales is investing in bars. But not Ketel One. “Bartenders are the guys who do bars – it’s a different business and not one we’re interested in,” says Patel. But Bacardi is in discussions with a new bar in China that is hoped to bring more exposure to the brand in the country.  

At Beaufort Bar there is a plush drinks trolley that allows bartenders to ‘finish cocktails’ in front of guests. It was Moore’s idea and he who designed it, but the trolley nearly didn’t get commissioned. “The quote came back at £20K,” he says in astonishment, standing by his new trolley serving a Grey Goose cocktail. Bacardi ended up helping out.

Moore says his choice to stock Grey Goose is not just about the incentives but the liquid. “It’s not just because the price is right or they give me perks – although that’s nice – the spirit has to meet our standards,” he says. 

The culture in vodka is of incentives and extras, which offer value to the buyer without the devaluing effect of discounting the brand. For the on-trade there is no ethical dilemma – bartenders and bar owners are not independent figures. They are part of the business chain and require a good deal to make more margin or pass the saving to the customer. 

And if a supermarket charges for listings, why shouldn’t a bar? The on-trade does far more for a brand’s profile. But if incentives are all fine and above board, why are brands so coy about them? Would it hurt to know how much a vodka brand spends in a year on listings?

In the long term it could be that it is the vodka category that is paying the price. A culture of pay-to-play says one thing: vodka is about numbers first, liquid second. Regardless, this culture is entrenched and won’t be changed. 

Besides, it would be interesting to know what would happen if brands pulled their funding and to what extent bars have grown dependent. Without Atlas would the sky have fallen?