Litty Mathew is a co-founder and partner at Los Angeles’ Greenbar Distillery. Today, she reflects on the 14 years spent building a successful craft spirits company and offers some advice for those just getting their
feet stills wet…
It all started at a dinner party.
The insane idea that we could transform our hobby infusing spirits into a money-making distillery business. Originally, I was the primary customer of my then-fiance-now-husband, Melkon. Really, it was all a scheme to sell me on drinking vodka at his Armenian family dinners—entice me with vodka that didn’t taste like nail polish remover.
After a few failed attempts, he made a combination that I loved — an infusion of pear, lavender and vanilla beans. Once I became a convert, cousins and friends followed. We loved how the spirits tasted like real ingredients — kumquat-blackberry, chocolate-orange, celery-peppercorn — all from the local farmers’ market. An ever expanding collection of experiments followed and attracted more fans.
Soon, Melkon and I spent our free time peeling, slicing and soaking all manner of flavorful things in alcohol. Over the course of two years, our hobby exploded into something awfully like a full-time job. The year was 2004. No one had yet uttered the words craft spirits. And we had a big decision to make: jump into the distilling business or get our phone number unlisted.
We set up shop in a 1,000 square-foot commercial unit. In the beginning, we commissioned high-proof spirits and made our infusions just like we’d done at home…only in larger and larger containers. In California, this allowed us to sell directly to bars and stores. Melkon and I did everything ourselves—including making some major mistakes like producing unstable infusions (pineapple); creating 18-bottle sales packs (not aware that spirits came in 6 or 12 packs); and launching new products at the worst possible times in the year.
At the time, there were very few spirits-makers and our customers were forgiving. They gave us advice instead of kicking us out.
As we grew and began to distill, we lost the privilege of selling direct to retailers. Instead, the multi-tier system dictated that sales were routed through distributor. The day we landed our first distributor and signed the contract, we were ecstatic. Then reality hit; ultimately, we grew to rue that day because the distribution was the wrong match for us. We even had to kill our first brand to get out of a rotten contract. Yet, we stumbled along, learning the business the hard way. It was a slim existence but the notion that we could change how people viewed spirits kept us motivated.
2008 was the real test of whether we had what it took to continue. The economy was in a massive downturn. There was no room for frivolity. This meant going deep and figuring out what we were all about. How did we make sense to our customers?
The appeal was flavor…from a cook’s point of view. Over and over, customers told us that our spirits tasted like real ingredients. That’s because we made them with real ingredients. In and of itself, this was an absurd idea in an industry where 99.99% of flavored spirits got their mojo from artificial means. Using fake and “natural” flavors never occurred to us, as that’s not how we eat and drink.
Fortunately, our approach resonated with the burgeoning global movement to eat and drink better. By then, we’d switched to organic ingredients which gave us even more flavor and aroma. We’d also embraced our rule-breaking Californianness.
Today, there are more than 1,500 distilleries nationwide. And many more in the planning stages. Can these hopeful startups who’ve impressed friends at their own dinner parties capitalize on the same opportunities as Greenbar Distillery?
I won’t lie. It’s going to be harder. But not impossible. There are many more challenges than there were a decade ago. It’s harder to take chances and break rules today. There are fewer distributors and independent stores to champion your creations and introduce them to customers. It takes a lot more more money to set up.
If you do get that little break, you must bring something truly special. Bluntly put, if you make something that sucks, people know and share their opinion quickly.
The silver lining is that the craft segment makes up less than two percent of the spirits market. Over the next 10 years, analysts anticipate the segment to grow 15-20%, like craft beer did. Every new entrant, though, needs to bring an interesting and relevant offering to the public. And, they must be prepared to spend a small fortune telling their story.
In 2017, We still have those dinner-party aha moments. We’ve just had more time to understand and appreciate fully what the ahas represent.