How to create a new luxury spirit business

By Matt Dunn, Co-Founder of Cadello.

 

Spirits have been around almost as long as beer – the first distilled spirits were made from sugar-based materials, and the early use of starchy grains can be traced back to the Middle Ages. With such a mature market it may seem unlikely that there is anything new under the sun to create. How does one invent a new version of something that has existed for thousands of years? Surely any innovation in the market will come from developing products in existing categories, such as gin and rum?

 

And, indeed, those traditional categories have been growing rapidly (and improving) in the past few years. It seems that, although the younger generation is drinking less, they increasingly prefer higher quality from their purchases. Older, more affluent drinkers are also inclined towards more refined and complex flavour profiles, drinking their spirits neat or with a few rocks.

 

Cue the rise of the ‘craft’ spirit sector.

 

Even 15 years ago, when we first started discussing the idea for a new spirit, my business partner and I saw an opportunity to create a new product for the market. As the market has grown and developed in the time since, with more and more product innovation and higher quality products in every traditional category (vodka, gin, tequila, rum), our beliefs and convictions were reinforced.

 

The question became: How do we create something that is unique and premium? Here’s how we sought to answer that question, and a few thoughts on bringing a unique spirit to market…

 

  1. Feel Inspired…

For several years, I was spending 3-4 months a year in Venice doing research for a book. It’s a magical city that almost requires its visitors to delve into the depths of the imagination and conjure up images of scenes from the city’s past. As I spent time on the Grand Canal and was, at times, even invited to parties in some of Venice’s grand old palaces, it was only natural to start imagining and visualising the lavish masked balls held by wealthy Venetian merchants. I began to ask myself: What spirit would wealthy Venetian merchants have served at their lavish masked balls in the 18th century? Our new spirit was born, and created, from the answer to this question.

 

If you’re looking for inspiration, turn to what you know and love. A product that is borne out of your identity and passions is the best way to ensure what you create is truly individual and unique. Perhaps it won’t inform your choices in the same manner as mine or others, but being inspired by your passions will provide a great starting point for a spirit and brand that is unequivocally yours.

 

  1. Focus on Flavour

 

As you are developing your product and trying to create something that doesn’t yet exist in the market, it is imperative to expirement, test, taste and solicit relavent independent feedback (over and over and over again). To bring your vision to life on the palate it is also important to push the boundaries and try every conceivable (and inconceivable) combination of ingredients and flavours imaginable. Initially, we spent more than a year working with a Swiss producer to create sample batches using various combinations of ingredients. Once we found the right distillation partner in Italy, we then spent a further 3 years working with them to ensure that we had the highest quality, natural ingredients in the right combination to create a flavour profile that was complex without being overwhelming.

 

If you’re creating a spirit for the luxury end of the market, it is essential to use the highest quality ingredients and the appropriate extraction method for each ingredient to get the right flavour characteristics. In today’s highly competitie market, it is also important for new spirits to be truly unique and, preferably, to have an interesting finish with multiple layers which take the consumer on a bit of a sensory journey.

 

  1. Decide on a Distillery

We spent 12-18 months to do due diligence and identify a suitable distillation partner in Italy. My business partner and I each went to Italy on different occasions and met with around 15-20 different distilleries.

 

From our first meeting with the Pisoni family of Distilleria Pisoni, they were incredibly passionate about our project. We had some discussions with another Italian distillery, but I had Elio Pisoni’s business card in my pocket for a while and it kept jumping out, seemingly all by itself. I felt as though it was trying to send me a message. We began to take our discussions with the Pisoni family more seriously and, as it turns out, they have been the absolute perfect partner in every way for Cadello.

 

Over the years, we have developed a strong partnership and friendship with the family. Distilleria Pisoni is a 150year-old family-owned distillery that employed its vast experience and knowledge to work with us for three years to perfect the recipe and formulation and to create a production process that is truly unique. Their contributions were invaluable to the creation of our new product.

 

I would highly advise anyone looking to produce a quality spirit to find an experienced distillery who will work collaboratively with you to develop the approriate production method and can advise on ingredients and flavours. Not only will your finished spirit taste better, but you’ll also save time and money refining your production process.

 

  1. Build Business Relationships

The supply chain of a spirit involves a number of businesses. You need to source your ingredients, distil your spirit, bottle it, add well-designed labels, export the spirit to a number of countries, and distribute and sell them within each country. That’s a lot that could go wrong.

 

To ensure the smoothest supply chain and best ongoing relationship, I recommend choosing each of your business partners based on three criteria:

 

  1. Does the person or company possess the best possible experience and skill sets?
  2. Are they passionate about my business and vision?
  3. Are they a person or company with whom we could develop a friendship with?

 

While the first two are critical (and perhaps a bit obvious), for us, the third element is equally important. You want to know that the people you are dealing with and relying on are people you like and trust. Our partnership with the Pisoni family has developed into a friendship and we now go skiing with them every year in the Swiss Alps. We discuss business issues that invariable arise as friends, knowing that we can (and will) find a mutually agreeable solution to any and all situations that arise.

 

  1. Consider Your Branding

Drinking a premium spirit is as much about the experience as the flavour. Consider what makes your spirit unique. What do you want to evoke as your customers drink it? Is it subtle or bold? You should also consider the textures on your label and the look and feel of any box that may accompany it. Make sure everything quietly screams your brand.

 

We didn’t just want people to enjoy the flavour of Cadello, we wanted every aspect of the experience to connect back to an 18th century Venetian masked balls.

 

The first aspect of this is reflected in the name. The name ‘Cadello’ is a derivation of sorts. In Venice, the word casa is abbreviated to ‘ca, particularly when used to name a family’s house. We wanted to name our new spirit after a Venetian palace where grand masked balls would have been held. Hence… Ca’ Dello… Cadello.

 

Our logo is the “Ferro Dragon” (created by one of our founders). The head of the logo is a dragon, which represents China ‒ a source of several of our ingredients along the old Silk Route. The tail of the logo is actually a ‘ferro’ ‒ the distinct prow of a Venetian gondola ‒ which represents Italy.

 

The ‘88’ on our bottle represents the fact that there are 8 ingredients in Cadello and, in Chinese culture, 88 is considered the luckiest number. Finally, we added a subtle mask in the background of our label to represent the masked balls of Venice where we imagined Cadello would have been served.

 

I would recommend starting from basic principles: Why did you create your spirit and for whom? Then consider your brand as a whole, including your brand name, before drilling down into the specifics like the bottle and label design. Don’t get hung up on the details first, otherwise you’ll end up with a confusing brand design.

 

  1. Test the Market

Finally, it’s important to test your spirit on the market. You may like it, but you’re also too close to be objective.

 

We did test marketed Cadello in Switzerland (primarily in and around Zurich) for 6-7 months. While Switzerland was never intended to be one of our major markets, we wanted to gauge reactions from restaurants and bars in Zurich before we formally launched Cadello in the UK in Sept 2018.

 

Ideally, I would recommend testing in your initial launch market as tastes are different across different geographical locations. If this is not possible or you have a particular opportunity to test in a different region, use whatever is available. You should also be prepared to take on board feedback and develop your product or brand accordingly. It may feel like a sacrifice but, ultimately, you’ll end up with a better product for it.

 

We truly believe there are exciting times ahead for those who love to experiment and want to create new and unique spirits. The market for new, unique, high quality is growing perhaps faster than it ever has – and there is plenty of demand for more high-quality products that offer new flavour profiles. To make a real business success out of your creations, however, it takes more than a nice tasting spirit. You need to have a well-developed brand and story behind it. Hopefully, my experience will help keep you on track as you progress. Good luck!

 

 

ABOUT THE AUTHOR

Matt Dunn is co-founder of Cadello,a new, category-defining spirit produced by a 150year-old family-owned distillery in Italy. A unique flavour combining eight ingredients, Cadello is perfect served neat or in cocktails.

 

Web: www.cadello88.com
Instagram: https://www.instagram.com/cadello88
 Crowdcube: https://www.crowdcube.com/companies/cadello/pitches/qQX6wb