This could be one of my less popular posts, but it may also be one of the more important. And, I should say that I owe it to Ella Parlor, a woman I’ve never met. She’s a brand-building, beverage sales and distribution consultant based in Texas.
In a recent Linkedin post she asked
“So what does Tito‘s [vodka] have that your great-tasting, medal-winning, highly-rated brand [of vodka] doesn’t?”
Before answering it with
“Over $1bn in revenue, annually.”
And going on to add that
“Maybe I should say it tastes like fertilizer.”
This is where most social media commentators would begin to rant about the regrettable awfulness of well-marketed substandard products doing well. But that’s not what Parlor does. In fact, she does the opposite.
“I’m not mad, I’m impressed.
Money doesn’t have to taste good.”
No need to taste
For most wine people, this is saying the unsayable. We are all obsessed with how good our wines taste ("just look at the critics’ comments, scores and medals we’ve got!”), but Parlor’s words reminded me of the many liquor store visits I made in New Jersey and New York State with a salesman from the US distributor of my French wine brand, le Grand Noir. I was carrying a couple of bottles, ready to speed-taste them with the potential customer in the five-to-seven minutes we’d get before it was time for the next sales representative to have their turn.
Shockingly – to me as a European – almost none of the owners and managers of these large stores had any interest in sampling my wine. Many, I suspected, did not even drink. Nor were they particularly interested in hearing the background ‘story’ I had carefully polished in readiness for these encounters. They all had variations on one simple question: Why should they believe their customers were going to buy this product? So, for example, even if a long list of other, authoritative experts had rated it more meanly or not tasted it at all, a sticker touting a 90+ score from a single critic or magazine would help to prompt purchasers. But so too would an image from a TV series or movie in which the wine was being enjoyed by a famous actor. Unless, of course, it could go one step further by claiming a more direct link to a celebrity. Was there an advertising or PR campaign? Or a local event that would raise awareness of, and interest in, the wine?
In other words, what had it, and I and my distributor done to earn an invaluable piece of real estate, in the shape of space on the shelf and in the warehouse? And my saying that it’s good and – still less usefully – ‘reflects the terroir of the place where it is made’ was not going to help the only thing that, quite reasonably for any business, mattered to them: their bottom line.
Handmade?
Which brings us back to Tito’s vodka. Created in Austin, Texas, in 1997, in the oldest legal distillery in the state, by the improbably-named Bert ‘Tito’ Beveridge who apparently had a dream “to make a vodka so smooth you could drink it straight”, it claims on its label to be America’s ‘handmade vodka’. Whatever Ms Parlor or others may think about its quality today, the Double Gold medal at the SF World Spirits Competition and a Four-Star rating from Spirit Journal in 2001 apparently helped it to take off.
In 2014 it was named Spirit Brand of the Year by the Wine Enthusiast. This was also the year when two attempts to define its use of the term ‘handmade’ as false advertising were filed. Two years later, they were dismissed because the term is not legally defined in the US. So, in 2023, some 140m bottles of this ‘handmade’ spirit were sold in the US.
The website features photos of the original distillery and the copper still in 1997, and claims that the vodka is “Crafted in old-fashioned pot stills and inspired by the distillation methods of fine single malt scotches and high-end French cognacs” But there are no more recent images of the equipment used today. Indeed, in 2013, Forbes reported that the brand manager, "direct[ed] a photographer [from the publication] away from massive buildings containing ten floor-to-ceiling stills and bottling 500 cases an hour and into the shack with the original still, cobbled from two Dr Pepper kegs and a turkey-frying rig to cook bushels of corn into booze."
Similarly and perhaps unsurprisingly, lovers of craft spirits are not invited to visit the distillery to see how the vodka is made. But, if Tito’s isn’t interested in spirits-tourism, it makes a lot of effort to engage with the public in other ways.
Good to dogs and golfers
Specifically, it has lots of ‘merch’ and a ‘Tito’s Golf Club’ with a sweepstake in which one might win a ‘Tito’s X Vessel Golf Bag, Tito’s X Swag Golf Driver Cover, or a Tito’s X William Murray Golf Polo’. The brand also does lots of charitable stuff. In fact, as the website states, it has supported over 50,000 Nonprofit events and 20,000 Nonprofit organisations over the last five years. These efforts have contributed to some $150m in donations over that period. The company founder had a dog, and there were apparently some stray dogs around the distillery so, there’s also a ‘Vodka for Dog People’, initiative. The $30m annual charitable spend, however, needs to be set against that $1bn in annual revenues.
In other words, Tito’s is a huge spirits brand that won some big awards a quarter of a century ago and now uses some of its considerable income to give relatively generously to charity. It claims to produce its vodka by hand, but offers no evidence of doing so.
Predictably, some readers, like the chateau-owner who wrote “So what? We shall drink fertilizer because it sells? It is an example to follow because it sells?” missed Parlor’s point. If you are in any business, you cannot dismiss successful competitors whose quality – in your view – is worse than yours. You don't have to cut your standards, or indulge in potentially dishonest marketing, but you still have to compete. And making a better quality product may not be sufficient for you to do so effectively.
As Parlor made clear, quality – and your perception of it – is not a silver bullet. Tito's, like many a successful wine brand, is good enough to satisfy its target customers. It's sold at an attractive price, is available almost everywhere, and apparently produced by likeable people with a social conscience.
There are clear lessons to learn here. While producing wine of the quality you want, if you cannot also afford, or be bothered, to address ‘positioning… placement, and DISTRIBUTION’ (Parlor’s capitals), and to price your wine appropriately, quite frankly, you may deserve to fail.
