The pandemic has upended companies. Take Liber & Co., for instance. The Austin, Texas-based producer of cocktail syrups bought largely to bars and eating places. Then Covid hit.
“The pandemic initially decimated our income,” stated co-founder Chris Harrison. “Within the third week of March 2020, 70% of our enterprise was wholesale to bars and eating places.”
Harrison didn’t panic. Whereas his wholesale income evaporated, direct-to-consumer gross sales vastly expanded. 2021 was the corporate’s greatest yr, and 2022 has began robust. DTC income is now bigger than wholesale.
He and I just lately mentioned Liber & Co., together with the pandemic-induced pivot, enlargement plans, and extra. Our whole audio dialog is embedded under. The transcript is edited for size and readability.
Eric Bandholz: Inform us about your organization.
Chris Harrison: I co-founded Liber & Co. in 2012 with my mates Adam and Robert, who’re twins. We had been in our early 20s on the time. We went to highschool collectively after which to the College of Texas right here in Austin. Our curiosity was making good alcoholic drinks. We noticed a distinct segment for cocktail syrups. It was a gradual begin and bootstrapped — no marketing strategy and no enterprise capital — though a household buddy invested for a little bit of fairness.
We gained momentum, accrued information, constructed provider relationships, and purchased the suitable gear. We ultimately manufactured the syrups ourselves. We promote to bars and eating places and direct to shoppers.
The pandemic initially decimated our income. Within the third week of March 2020, 70% of our enterprise was wholesale to bars and eating places.
However we rebounded. 2021 was our greatest yr, with 80% year-over-year development. 2022’s been robust, too. This week we secured a lease in Georgetown, simply north of Austin. We’d like extra manufacturing area. We are able to’t launch new merchandise as we don’t have accessible pallet positions. We’re going from 7,000 sq. ft to 21,000. It’s an enormous chunk. We signed a seven-year lease.
Bandholz: Did you contemplate shutting down the enterprise when Covid hit?
Harrison: No. It was a intestine test for positive. Our bar and restaurant enterprise stopped, however our on-line gross sales through Amazon and our Shopify retailer elevated by 300%. Gross sales to liquor shops had been steady. We ended 2020 with extra income than in 2019.
Our direct-to-consumer channel is now bigger than wholesale.
Bandholz: How do I make an Outdated Long-established?
Harrison: It’s a easy drink, simply two components: whiskey and our Outdated Long-established Cocktail Syrup, which is enriched with gum arabic, fragrant bitters, and a little bit orange peel. It’s the non-alcoholic model of an Outdated Long-established. Simply add 1 / 4 ounce of the syrup with a shot of booze. Then stir over ice, and also you’re good to go. It’s all-natural with actual citrus and sugar and appears much like maple syrup. You can also make 36 Outdated Fashioneds with one bottle.
Bandholz: Have you ever thought-about non-public labeling?
Harrison: No. The margin on non-public labeling is low. Plus we don’t have the capability. Probably the most worthwhile side of our firm is the model. The merchandise are nice, however anyone may reverse engineer what’s taking place right here. It’s not difficult. Sourcing, components, high quality management — it’s a meals merchandise.
Now we have large plans to maneuver past non-alcoholic syrups and do some booze stuff. Promoting booze triggers a slew of laws, however the margins are nice.
Bandholz: You’ve had a robust 2022 up to now. What’s driving that development?
Harrison: It’s primarily direct-to-consumer gross sales through our Shopify website and Amazon. We generate about 40% extra income on Amazon, though the per-order quantity is low, barely over one bottle on common.
Amazon is nice for us as a result of we tightly management who will get our merchandise — no third-party resellers. Our contracts for all distributors stop reselling on Amazon, though we’ve had points with that. Typically, nevertheless, we’re the one vendor of our merchandise on that market.
Plus, Amazon drives clients to our Shopify website as a result of our bottles say, “You need cocktail recipes? Now we have 600 on our web site. Go there.”
However most of our Shopify-store clients hear about us word-of-mouth. We pulled our Fb adverts after the iOS replace final yr. We do some Amazon promoting.
We’ve retained influencers on Instagram who promote and tag us. We’re large on Cocktail Reddit and Tiki Reddit. Bars and eating places that purchase our merchandise additionally drive consciousness. Individuals go to Saltgrass Steak Home, for instance, and order a pineapple margarita. Then they ask, “What is that this?” The bartender provides them our recipe, which has our identify and model.
We use Grapevine, the post-purchase questionnaire, for suggestions. It’s principally, “The place did you hear about us?” Many individuals will say a bar, a buddy, or on Amazon. It’s crucial to know the way individuals come to our model.
Our advertising and marketing lead, Alex, and our advertising and marketing assistant, Cristina, are cocktail novices. They’re pushing TikTok. Cristina seems in our movies — 15, 20 seconds. She’s nice. I nonetheless like longer movies, nevertheless, for YouTube. It’s laborious to overview a bunch of bourbons in a brief clip.
Bandholz: Discuss in regards to the Instagram influencers.
Harrison: We’ve had good luck with that program. The influencers typically love our merchandise and don’t ask for cash, simply samples.
We’ve just lately began experimenting on YouTube with cocktail influencers doing evaluations. These are normally former bartenders who’re taking their information into their residence studio.
An instance is Anders Erickson out of Chicago. He does high quality productions and is aware of his stuff. We partnered with him, and it’s been a terrific match. We prolonged an affiliate low cost to him. He provides the hyperlink under his YouTube video that sends individuals to our web site, which we observe.
To date it’s been nothing however upside for us. It’s not like a 10-times return on advert spend, but it surely’s positively price it. And since it’s YouTube, it’s evergreen. We’ll get site visitors from these hyperlinks 5, 10 years from now.
Bandholz: The place can individuals discover you?