Ahead of this week’s One Step Beyond webinar on October 13 Richard Siddle talks to Robert Chin, chief executive of leading US and Canadian drinks company, Aquilini Beverage Group, about how, in just over two years, he has transformed it from being largely a bulk supplier of alcoholic drinks to a leading drinks brands producer in its own right with a number of fast growing lines across North America. Here he looks at what he thinks it takes to be a successful drinks brand.
Hear Robert Chin go into greater detail on what makes one drinks brand succeed and another fail as part of the free One Step Beyond webinar, co-hosted by The Buyer and Sophie Jump, in partnership with the Wine & Spirit Trade Association, on October 13 (4pm-5.30pm GMT). Click here to register.
It might be a strange thing to say considering the 1,000s of wines, beers and spirits there are in the market, but creating a successful drinks brand is still one of the hardest thing any drinks company can do. For every success there are many others that have crashed and burned.
Which is why when you strip back the wine, beers and spirits categories and analyse the Top 50 brands in each channel there are actually very few new entries that make such an impact that they are still in the best sellers list five to 10 years later.
Which makes the achievements at the Aquilini Beverage Group over the last two and a half years even more remarkable. For in that short period of time, half of which has been in the global pandemic, Chin and his team have been able to launch eight brands that have each made a considerable impact on the American and Canadian drinks scene.
In fact such has been the extent of the new brand launches that the business changed its name this summer from Aquilini Brands to the Aquilini Beverage Group to better describe a business that is moving into more drinks categories – and even has a new innovation lab to drive its NPD strategy.
The business is only one part of the Aquilini Group, founded and still run by the Aquilini family, that also has interests in hotels, construction, entertainment and sports, where it owns a professional ice hockey franchise in Canada among other interests.
The drinks division has come a long way from when it was set up in 2012 as primarily a supplier of RTDs and limited production wines to the Canadian market. Then in 2013, the Aquilini’s acquired significant holdings in Washington State, focused on the the prestigious Red Mountain AVA. It now has a portfolio that includes a number of premium wine and spirits brands, as well as an increasing number of wine and spirits-based RTDs.
It was Chin’s ambition and vision to transform the business from a primarily bulk supplier to a branded player in its own right that got him the job in the first place. But creating and building brands is what Chin is all about. He is quick to thank the 27 years he spent in a number of senior marketing and branding roles at E. & J. Gallo Winery E&J Gallo for that.
An invaluable experience he admits has been essential in helping him make the changes he has at Aquilini in such a short period of time.
Creating a drinks brand
So how do you create a successful drinks brand? Chin says he does not have the definitive answers, but is happy to share his insights and, in particular, the factors that the majority of successful drinks brands have going for them.
“I come from a branded background. I have spent most of my career at Gallo. It’s perhaps the best foundation I could have had to lead yet another iconic family business.”
For him the Aquilini business model had to change from being a bulk wine supplier to also dealing in finished goods. “If you want to create a drinks business that is profitable then it has to be in brands. It’s not easy, but margins, profit potential are better and allows you to pivot more in uncertain times.”
Having your own brands, stresses Chin, puts you in control of what you are doing.
It’s also vital you create brands for the drinks channels that are growing the overall market. Which is why Aquilini has invested so much of its NPD in creating a wide range of RTD products – the fastest growing drinks category in the US, now bigger, by volume, than spirits, claims Chin. A category that is also crying out for innovations and new lines, like flavoured whiskies to go with all the flavoured spirits.
“Flavoured whisky is now a massive segment of the US drinks market,” he says. “It’s grown like crazy over the last three years and is now nearing a 20MM case category.”
Aquilini, he says, is close to introducing a brand of its own based on a caramel popcorn flavour. Its other RTDs include a vodka soda called Boldr (sold only in Canada) that sells itself on the back of having 110 calories and 3g of carb and Beautiful Drinks, that uses natural botanicals to pitch the brand as being close to nature and the outdoors. He’s especially excited about Beautiful Drinks as initial market reception has been above expectations and the marketing platform around the importance of pollinators is consistent with the values of many leading US retailers.
Chin has also looked to sprinkle a little of the Gallo branded wine success onto Aquilini’s portfolio with a number of new premium wine brands including: Be Human; 10000 Hours; Roaming Dog; Dixie & Bass; and Chasing Rain. “None of these wine brands existed 18 months ago,” says Chin.
The magic four factors
Chin’s premium branded wine strategy is based on four key factors: To create excellent quality wines (every wine introduced has scored at least 90 points in the major US competitions thanks to the quality of the Red Mountain AVA the family invested in); to have brands with a genuine back story to them; to be over $10 (“We are not competing below $10 by design. That’s the segment of the market that is in decline,” he says); and to have widespread distribution.
Most important of all is the quality of the product. That is what drives everything else, he says. “A consumer will try your brands once and if the quality is not there they won’t come back.”
It’s why it is absolutely essential each of its new wines is at least a 90 point wine. “It’s not the first sales that counts. It’s the second. It’s that repeat purchase. That’s what we are looking for.”
He likens it to the number of celebrity wine brands there are now in the market. People will be tempted to try in once because of the star status. But if the wine is not good enough they won’t buy it again.
Storytelling is key
The storytelling around brands is also essential. A brand has to have a story that consumers can latch on to and believe in. It could be its authenticity, its history, or it could be a human connection that people can have with it.
One of its new wine brands, for example, is called Roaming Dog from Columbia Valley in Washington State, named after the family’s rescue dog that lives and runs around the winery’s vineyards. That in itself is a nice story to hook on to and its Instagram feed is full of pictures of Blue, their own dog, but also dog photos taken by their customers. But Chin and his team have taken it a stage further and for every bottle sold it donates money to the American Society for the Prevention of Cruelty to Animals.
Then there is distribution. You can have the greatest product on the earth but it is not going to sell anything if it is not in the right stores, bars or restaurants. Distribution is even more crucial to get right, says Chin, if you are going to make an impact in the US’s complex three tier system.
“If our new branded wines were going to be successful, we needed to build an infrastructure around them,” explains Chin. “Your distributor network is the number one most critical aspect of doing a retail skewed commercial business in North America. Without that you can’t do anything. You need tier one distributors in every state in the US. Once you have that network set up, you can feed new brands into it.”
He concedes his strong Gallo distributor contacts have certainly helped fast track that network being put in place, and why Aquilini has partnered with among the best distributors in the country.
“I am proud to have been to the college of Gallo. It is the best education you can have in the drinks industry. While I was primarily a marketer (and sales early in my career), I was exposed to many parts of the company allowing me to learn, and foster those crucial relationships that’s been pivotal to our success today.”
It’s an approach that Chin has fast tracked into Aquilini and its brands, he says, are now in all the major customer channels in the US.
The size and scale of the Aquilini business has been a key factor in that success, he says.
“Distributors want to work with companies that are stable and secure. Companies they know they can build long term relationships with and we are fiercely committed to that. We are also going for the premium end of the market which is attractive to them.”
Chin believes there is also another key ingredient he thinks successful drinks executives and entrepreneurs need. Curiosity.
“Being curious is so important,” he says. “You should always want to find out more.”
Be it about your competition, new drinks trends, pop culture, how you can cultivate new relationships, find new customers, build your network. “The power of the handshake is also so important,” he says.
“When Aquilini interviewed me for this role I admitted I knew little about vineyard management or how to make wine, but said I would make it my number one priority to learn. A couple years later, I feel I can have an intelligent conversation with any vineyard manager or winemaker.
“I am incredibly driven largely by key life experiences. My late father as my mentor. He never went to school and came from little means, but instilled values that are engrained. Being the middle child of nine children wasn’t always the easiest, but we were taught the importance of working hard, respecting others, high integrity, loyalty, and never never becoming complacent. Growing up playing sports was also critical. I played many different sports in high school, but excelled in table tennis where I played for Canada internationally, but more importantly learned how to manage success and failure at an early age.
Chin can also look back on the last two years, and even with the pandemic, say the business is further along than when he set out when taking over. “We have more distributors than planned, more retailers than expected, and have kept our forecasts in place.” he says.
In fact, he believes it would have achieved better sales growth without Covid-19 as there would have been more opportunities to introduce the new brands to their target consumers. Retailers were more reluctant than ever to bring in new items during the pandemic as consumers gravitated to those that were familiar to them.
Chin is excited about what’s next in drinks innovation. The e-commerce boom during Covid has opened up direct to consumer sales to alcohol like never before and moved it on from what had predominantly been a channel dominated by fashion, technology, health and beauty….
Now anything goes – and sells – online and it is where Aquilini will be focusing part of its growth. He is particularly interested to see what happens with spirits and DTC and the opportunities that are going to open up for distillers and brand owners.
Then there is what he calls “International DTC”. Up to now the majority of e-commerce has been around engaging with brands and businesses in your own state or country. But there is no reason why we can’t be ordering a wine from California and have it delivered anywhere in the world 48 hours later. “It’s only a matter of time,” he says. And, have no doubt, Aquilini will be driving from the front.
One Step Beyond is a joint venture between The Buyer and Sophie Jump to give the drinks industry access to first class insights on the latest trends in consumer, technology and innovation. We run both online and in person events in partnership with: the Wine & Spirit Trade Association; Pix, the new online vertical search wine site; Freixenet Copestick, the biggest supplier of sparkling wine brands in the UK; and Stranger & Stranger, the agenda setting drinks design agency.
Our lineup of speakers on October 13 is as follows:
Tamar Kasriel, managing director Futureal: ‘Scenario planning for the future of retail and consumer behaviour’
The Interview: Robert Chin, chief executive, Aquilini Beverage Group (ABG) ‘How to build your brand – Fast’
Paul Mabray, chief executive Pix: Thoughts from the frontline: ‘Be Real’
Richard Morley, founder First Pour: ‘Making the most of influencer marketing’
Georgia Panagopoulou, Thoughts from the Frontline, @wine.gini
The Conversation: Long term brand building with Robin Copestick, managing director, Freixenet Copestick, Kevin Shaw, chief executive Stranger and Stranger and Robert Chin, chief executive, ABG.
Followed by Q&A and closing remarks.