Beverage Dynamics

Beverage Dynamics July-August 2016

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

Issue link: http://read.dmtmag.com/i/705687

Contents of this Issue

Navigation

Page 13 of 50

14 Beverage Dynamics • July/August 2016 www.beveragedynamics.com Brand SPOTLIG HT Q&A BY KYLE SWARTZ Patrón Tequila has used artisanal production techniques well be- fore that trend swept through spirits and marketing. The brand has long positioned itself as ultra-premium and has become a giant of the top-shelf. Still, the company remains loyal to its craft roots. I recently spoke with Patrón's Chief Marketing Offi cer, Lee Applebaum, about the company sticking with small-production methods, its target customer and what's coming next in the pipeline. BD: How can you be considered craft tequila at your size? LA: We're small-batch, but large-scale. It's really expensive to make tequila the way we do, but it's also very important. Cost is not in the discussion. It's about quality and craftsmanship. As a general rule, as brands achieve scale, they lose a lot of handcrafting. They begin to look for effi ciencies. That's particularly true if it's a publicly traded company (which we are not). And this helps explain the un- derstandable misperception that large brands cannot also be small craft. There's no legal defi nition of 'handcrafted.' We produce mil- lions of cases and have a 70% market share of U.S. ultra-pre- mium tequila. But we still produce everything in small batches. Our copper stills are just as small as brands that only do a couple thousand cases. We don't have larger production mechanisms. We just replicate our small-batch production many times over. We have rows and rows of small stills. There are 1,300 men and women working at our distillery, and only 130 people in the balance of the company. BD: How do you communicate this to the consumer? LA: We're being ultra transparent about it. We add it to all of our advertising. We're actually using Oculus virtual reality to take people inside our distillery. And this isn't some video we put together. This is an unedited tour. We're increasingly inviting media and the press to our facility. We want people to have a very open view of what's going on. This lets other people tell our story for us. There have been legal battles over companies using certain terms to describe their production. We don't take this lightly. We believe that we use these terms appropriately. And we believe we have the right to do so and have the production processes to back them up. BD: Who is the target consumer for Patrón? LA: We tend to look at the world more in terms of behavioral qualities and lifestyles. So we have these two categories: Bros and Knows. The Bros are not just guys. They're any consumer in- terested in the swagger and aspirational aspect of the brand. It's a badge of value walking up to the bar and ordering Patrón. Same thing with gifting a bottle of Patrón. And these people run the economic gamut. After all, our bottles range from $45 to $7,000. The Knows are the customers who are fi rst and foremost interested in our authenticity and story. These are people who want to know how we make it and what we do for sustainability. Our marketing is geared towards those two types. The good news is that they're not mutually exclusive. Many Bros want to be perceived as Knows. It adds substance to their style, which is where our brand really delivers. BD: What's next for Patrón? LA: We have a limited-edition, wood-fi nished expression that's coming out next year. I can't tell you the fi nish yet. Partly because we're still holding our breath and making sure it fi nishes right. Until the last minute when it comes out of the barrels it can still change and mature - tequila is a fi nicky spirit. In general, we're interested in a lot of wood fi nishes moving forward, including Scotch barrel-fi nishing. But we'll never be a brand that releases a new expression or fl avor every month or year. You don't get to be a world-class spirit that way. Our innovation will never be led by marketing. We're led by our distillery. They innovate and then we fi nd a way to market these new products. BD CRAFT ON A LARGE SCALE How Patrón retains its craftsmanship despite its size.

Articles in this issue

Links on this page

Archives of this issue

view archives of Beverage Dynamics - Beverage Dynamics July-August 2016