Distill Ventures’ Frank Lampen on the Diageo acquisition of Mr Black

In September, Diageo acquired Australian cold brew coffee liqueur brand Mr Black from accelerator programme, Distill Ventures. Drinks International caught up with Frank Lampen, chief executive and co-founder of Distill Ventures to talk about the purchase and what’s next for the programme.

What was it that initially drew you to Mr Black as a brand to bring into Distill Ventures’ stable?

“It was love at first taste with Mr Black. From the moment we met [Mr Black Spirits founder] Tom Baker, we could see that he was one of the most intuitive brand builders we'd seen in a long time. He was combining his talent in product design with an incredible vision to disrupt the industry and we could immediately tell that he was a founder we wanted to work with.

“Fundamentally, the last 20 years has seen our morning coffee change – from instant coffee or over-heated filter coffee to a world of espresso, single origin and cold brew – and coffee liqueurs hadn’t. Like many innovations, the premise was really simple, to take craft coffee into the night.

“Tom was talented, energetic, passionate and above all, he had a vision that we believed in.”

What was the approach taken by Distill Ventures to grow Mr Black into the fastest-growing brand in the coffee liqueur category?

“Our model is to support founders to grow their brands, so it’s their approach and not ours. What we do is help them think through the many options of how they could grow the brand and put together the commercial pathways to do this.

“The beauty of Mr Black as a brand is that it both sits at the high-end of cocktail culture but is also super-easy to drink at home over ice. So the challenge was to find a commercial strategy that enabled it to do both of these things, and the natural place for this was the US.

“The combination of a thriving cocktail scene but also great liquor chains with a big customer base paying for premium spirits offered up so much potential, but the challenge with the US is having sufficient focus to make an impact as it’s an expensive place to operate. We worked extensively with Tom and team to do this, utilising Distill Venture’s team on the ground in the US and the sales capabilities of Redwood Brands.

“And it paid off in spades, resulting in five years as the fastest growing brand in the global coffee liqueur category. Today, Mr Black is available in 22 countries and is one of the most exciting brands in the sector.

"We’re incredibly proud to have supported Tom. Ultimately, it was his vision to bring the global coffee culture to the world of spirits and cocktails, we just nurtured the inherent talent he already had to make the brand what it is today.”

Now that Mr Black has been acquired by Diageo, where do you see Distill Ventures’s next success story coming from?

“We’ve been big backers of New World Whisky and after several years investing in production capacity, laying down stocks and helping our brands to find their place in the whisky world, we really feel like this is the moment we’re starting to see significant commercial impact from our whisky portfolio. In addition, our focus on investing in non-alcoholic brands which broaden the choices available to drinkers across a range of occasions is paying off with several of our portfolio showing great momentum.

“Looking beyond that, we’re excited to be supporting a new generation of spirits founders. Ownership within our industry is generally not very representative of wider society, and when you look at one of the reasons why, start-up ecosystems have historically worked to favour certain groups, to the detriment of those from traditionally underrepresented parts of society who have struggled to access early-stage capital and support.

“We are passionate about changing this - that’s why we launched our Pre-Accelerator Program last year. It’s going from strength-to-strength, and when we see the quality of some of the brands within it and the connections, they are able to make with consumers, we’re confident that soon we’ll see some breakout brands from this part of our portfolio.”