The pandemic has upended companies. Take Liber & Co., for instance. The Austin, Texas-based producer of cocktail syrups bought principally to bars and eating places. Then Covid hit.
“The pandemic initially decimated our income,” mentioned co-founder Chris Harrison. “In the third week of March 2020, 70% of our enterprise was wholesale to bars and eating places.”
Harrison didn’t panic. While his wholesale income evaporated, direct-to-consumer gross sales enormously expanded. 2021 was the corporate’s greatest yr, and 2022 has began sturdy. DTC income is now bigger than wholesale.
He and I just lately mentioned Liber & Co., together with the pandemic-induced pivot, growth plans, and extra. Our total audio dialog is embedded beneath. The transcript is edited for size and readability.
Eric Bandholz: Tell us about your organization.
Chris Harrison: I co-founded Liber & Co. in 2012 with my mates Adam and Robert, who’re twins. We have been in our early 20s on the time. We went to highschool collectively after which to the University 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 good friend invested for a little bit of fairness.
We gained momentum, accrued information, constructed provider relationships, and purchased the fitting tools. We ultimately manufactured the syrups ourselves. We promote to bars and eating places and direct to customers.
The pandemic initially decimated our income. In the third week of March 2020, 70% of our enterprise was wholesale to bars and eating places.
But we rebounded. 2021 was our greatest yr, with 80% year-over-year progress. 2022’s been sturdy, too. This week we secured a lease in Georgetown, simply north of Austin. We want extra manufacturing area. We can’t launch new merchandise as we don’t have obtainable pallet positions. We’re going from 7,000 sq. ft to 21,000. It’s an enormous chew. We signed a seven-year lease.
Bandholz: Did you contemplate shutting down the enterprise when Covid hit?
Harrison: No. It was a intestine verify for positive. Our bar and restaurant enterprise stopped, however our on-line gross sales by way of Amazon and our Shopify retailer elevated by 300%. Sales to liquor shops have been secure. 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 Old Fashioned?
Harrison: It’s a easy drink, simply two components: whiskey and our Old Fashioned Cocktail Syrup, which is enriched with gum arabic, fragrant bitters, and a little bit orange peel. It’s the non-alcoholic model of an Old Fashioned. Just 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 comparable to maple syrup. You could make 36 Old Fashioneds with one bottle.
Bandholz: Have you thought of non-public labeling?
Harrison: No. The margin on non-public labeling is low. Plus we don’t have the capability. The most dear side of our firm is the model. The merchandise are nice, however anyone may reverse engineer what’s occurring right here. It’s not difficult. Sourcing, components, high quality management — it’s a meals merchandise.
We have huge plans to transfer past non-alcoholic syrups and do some booze stuff. Selling booze triggers a slew of laws, however the margins are nice.
Bandholz: You’ve had a powerful 2022 to this point. What’s driving that progress?
Harrison: It’s primarily direct-to-consumer gross sales by way of 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 sweet for us as a result of we tightly management who will get our merchandise — no third-party resellers. Our contracts for all distributors forestall reselling on Amazon, though we’ve had points with that. In basic, nonetheless, 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? We have 600 on our web site. Go there.”
But most of our Shopify-store clients hear about us word-of-mouth. We pulled our Facebook adverts after the iOS update final yr. We do some Amazon promoting.
We’ve retained influencers on Instagram who promote and tag us. We’re huge on Cocktail Reddit and Tiki Reddit. Bars and eating places that purchase our merchandise additionally drive consciousness. People go to Saltgrass Steak House, for instance, and order a pineapple margarita. Then they ask, “What is that this?” The bartender offers them our recipe, which has our identify and model.
We use Grapevine, the post-purchase questionnaire, for suggestions. It’s mainly, “Where did you hear about us?” Many individuals will say a bar, a good friend, or on Amazon. It’s essential 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 are pushing TikTok. Cristina seems in our movies — 15, 20 seconds. She’s nice. I nonetheless like longer movies, nonetheless, for YouTube. It’s exhausting to assessment a bunch of bourbons in a brief clip.
Bandholz: Talk 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 opinions. These are often former bartenders who’re taking their information into their house 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 an amazing match. We prolonged an affiliate low cost to him. He provides the hyperlink beneath his YouTube video that sends individuals to our web site, which we monitor.
So far it’s been nothing however upside for us. It’s not like a 10-times return on advert spend, but it surely’s positively value it. And as a result of it’s YouTube, it’s evergreen. We’ll get visitors from these hyperlinks 5, 10 years from now.
Bandholz: Where can individuals discover you?