Creating a new vodka brand takes two sets of skills. One is the knowledge of how to make a good vodka from grain, potatoes or other source materials. The other is the knowledge of marketing. With a skilled marketing campaign, you may convince vodka lovers to try your private-label spirits, but it's quality that will bring them back.
In House or Outsource?
To make vodka, distillers take vegetable matter such as potato, rye, wheat or grapes and ferment it to create the neutral spirits that are the basis for Absolut, Smirnoff and other brands. Making a new vodka brand requires either setting up your own distillery or outsourcing the work to an established distiller. This is a big choice, so think it through thoroughly.
- Do you know anything about distilling? Can you learn? If you're passionate about getting hands on, setting up a distillery may be the way to go. If you're more into the marketing and selling side, outsourcing might free you up to focus on your strongest skill set.
- Is the distillery part of your marketing concept? Presenting yourself as a small, indie distiller with a vision can make an effective hook for customers. A distillery of your own offers the option to set up tastings or guided tours or to open a restaurant or pub attached to the premises.
- If you want to outsource, you need to find a distillery that can produce your original formula. Alternatively, you can buy one of their vodkas and release it under your own brand label.
- Money matters. Even if you start small, opening a distillery of your own requires a much higher upfront investment than outsourcing. It will also take longer to make your product available so that you can start earning back your investment.
- Having your own distillery gives you more control over the vodka's quality and taste.
- If you plan to start small, many distilleries are reluctant to go to the effort of just running off a single, small test batch. Be prepared to negotiate.
Learn About the Law
Alcohol is one of the most tightly regulated products. Whatever your plans are, you should be certain they fit within the letter of the law. Research this before you shell out any money.
A distillery, for example, requires both federal and state permits to operate. In North Carolina, for instance, a $300 distillery license lets you open the distillery, sell at wholesale and sell individual bottles to customers. If you want to import European vodka, the permit for that costs $500. You'll also have to apply for the relevant federal permits.
What's Your Brand?
In a crowded, competitive market, it takes more than quality to attract customers. It's essential that you put some thought into the image you're going to give your product, starting with the name.
- You want a brand name that's appealing to customers. Nobody's going to snatch up bottles of Chernobyl vodka, for instance.
- It's important that you choose a name you can trademark. Using a generic name like "Rye Vodka" or "Quality Vodka" would be a long shot, as common words are too generic. You can, however, use ordinary words that don't normally relate to vodka, as the White Rhino or Grey Goose brands do.
- Get feedback. A targeted focus group or an online poll can show how well potential names work with potential drinkers.
Apply the same care to the rest of your brand details, such as the bottle design and the label graphics. A custom-designed bottle isn't essential, but it can make your product stand out. Coca-Cola's bottle design helped make the soft drink a legend.
How to Distribute Private-Label Spirits
Another important question is how you'll get your product into vodka lovers' hands.
- If you open your own distillery, you can sell directly to the public, provided you comply with relevant state laws.
- You can strike a deal with a wholesaler who will deliver your product to retail stores or bars.
- Talk to restaurants and bars in your town. See if they're willing to offer your premium vodka to their customers.
The law plays a role here too. Giving retailers a kickback or gift in return for them selling your brand is usually against the law. Know what your state allows or if you're selling in multiple states, what every state in which you operate allows.
- Difford's Guide: Vodka — How Is Vodka Made?
- Flow: How to Start a Successful Liquor Brand
- Sam Priestley: How to Start a Vodka Brand on a Shoestring Budget
- Tales of the Cocktail Foundation: The First Steps to Starting a Spirit Brand
- ABC North Carolina: Types of Commercial Permits
- Alcohol and Tobacco Tax and Trade Bureau: Applying for a Permit and/or Registration
- The Equipped Brewer: Licensing, Permits and Opening a Craft Distillery
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com