Organic Alcoholic Beverages

Like many others, I try to buy organic fruit and vegetables. I’m not obsessive about it but given the option,  I will choose organic. Thinking about why I do this, I can narrow it down to several reasons. Firstly there is the health aspect. There have been suggestions, true or not, that the chemicals used during the non organic farming process can lead to deadly diseases such as cancer. I know a million other things are now apparently bad for us but I still get that nagging feeling when buying anything rumored to be harmful.

Secondly, I have the impression, however inaccurate, that organic farming is a good thing to support. I know this is a vast generalization but I imagine organic farmers to be nicer people than the big corporate farmers slaughtering the land to make a big profit. I believe that organic farmers use more traditional, sustainable methods, and are genuinely sincere custodians of the land. I have the mental impression that they are smaller, family run farming enterprises and feel an obligation to support them much in the same way I support the craft beverage industry.

It is very possible that the organic marketing machine has worked its magic on me well and is laughing all the way to the bank but currently unless I am presented with more information I will continue to support organic farming.

Consequently in principal, I must also support organic vineyards and beer producers. Essentially the natural ingredient of these products is straight from ‘a field’ with very little processing.  I’m little embarrassed by how few organic wines and beers I have actually tried. The very nature of why I support craft producers should dictate that I insist on organic ingredients being used where possible. I support craft enterprises because I strongly believe that more care and attention has gone into the production of their products and that the quality of the product is higher than that of the mainstream producers. I also believe that craft producers are the real innovators of the industry and responsible for the surge in variety were now have in the alcoholic beverage market compared to just a decade ago.

By their very nature organic products must be more expensive than non-organic products. The main ingredients cost more to produce, it’s as simple as that. This is probably why I have not tried enough organic beers and wines as my price sensitive nature has dictated that when buying from stores I admittedly have purchased on price and have ignorantly assumed that an organic product would have the equivalent taste of a cheaper non organic competitor. I now know this not to be true and I will in future make myself buy the organic option and I’m expecting to be pleasantly surprised by the taste!

Now let me consider organic spirits. The whole principal of distillation is to turn a low alcohol solution into a solution as close to pure alcohol as you can get. While, that original solution at 8% alcohol may very well contain undesirable elements from nonorganic farming methods, I really doubt that the final distilled solution of 95.6% pure ethanol contains any trace compounds that are going to give me a single sleepless night. There are thousands of undesirable compounds in that initial solution that are removed through the distillation of any grain and I believe even arsenic is one of them, whether it is organic or not. The quality of the distillation equipment and the skill of the particular distiller are surely of far greater importance to the quality of the end product than whether or not the original source was organic.

In terms of the product being of any higher quality just based on its organic nature, I am really not convinced. I am however, aware that many of the organic spirit producers are also small craft producers. I this case I do support the product because the organic aspect is just an addition to the whole small scale craft nature of their production where they have endeavored to use the very best materials available to ensure the quality of their product is the very best achievable.

Basically, for beer and wine, I agree, organic is better. For spirits, sorry, on its own it is not going to influence my purchasing decisions. That said, it would make me look closer  at the whole operation of a particular spirit producer as it is possible that, by being organic, the producer has a policy of only using the very best ingredients. In which case there may be a multitude of other reasons why I should choose their product. As always, I am @bevtalk.

What does 3, 4, 5, 20 times distilled mean and why is it necessary?

What on earth does 3 times, 4, times, 5 times, 20 times distilled actually mean? Surely the more times vodka is distilled, the better it is and therefore the more I should be willing to pay for it, right?

Well done, Grey Goose! If you weren’t the first, you were certainly the first to engrave that… ‘Wow, it’s 5 times distilled’ mentality into me. It’s very clever marketing, justifying why one mixture of clear spirit and water is worth more than another mixture of clear spirit and water.

Let’s face it; we are not talking about 20 year old single malt here. A malt whisky has been sat maturing in an in an oak cask and has certain aspects to it that cannot be easily replicated. So why are some people willing to pay the same price for a white spirit?

I was told by one ‘super-premium’ vodka distillery that the total process from grain to bottle takes approximately 4 days and I dare say some can beat even that timespan. When you ask questions about how much it costs to produce the vodka in that $50 bottle you will be given an evasive answer set out in terms such as the investment required in the distillery’s infrastructure as there is no way the ‘variable cost’ of that spirit is even $1. The most expensive production cost of a full white spirit bottle is often the bottle closure!

Why do you think new build distilleries are so keen to produce vodka and gin? Could it be because they can produce it from the day the distillery is operational? They are waiting for the scotch or bourbon to mature. This takes years and they need to build these stocks up gradually. They obviously need money to support that whisky venture and that means they want to sell super premium vodka and gins. That means making a product just like Grey Goose and hence, surprise, surprise most of the vodka’s are 5 times distilled (or if they want to be cleaver 6!). None of these new ‘craft’ distilleries are making value vodka are they? That’s because it is a totally different set-up to mass produce vodka. Now in my opinion, the craft distillers have a better set up and it’s one I’d like to see develop. To many of us, it’s not just about producing and bottling a chemical substance as quickly as possible. Some of us do care about the ambience of the location a product is made in along with who and how it has been made. However, my point is that they are not and never will be value producers but rather niche producers.

The mass produced spirit set-up throws the logic of this multiple distillation concept out of the window. I am referring to vodka, gin, white rum and to a certain extent blended whisky. For simplicity I will talk about the vodka production process as its the one I have first-hand knowledge of.

Vodka is quite simply a mixture of ethanol and water. In addition to this there are what is referred to as ‘impurities’. While this may strike you as something that should be removed from the end product at all cost, they are also somewhat responsible for the taste of the final product. While we have become accustomed to ‘tasteless’ vodka often being considered as the higher quality product, this is certainly not the case in all countries, especially those with as strong vodka heritage.

Some impurities come from the distillation of the alcohol, and this is why you can often taste the difference between a rye, wheat, corn, or potatoes vodka. Some impurities come from the water. Water containing large amounts of minerals is a bad thing, not a good thing, in the case of spirit production. Calcium is really bad so basically you want the water as soft and as mineral free as you can get when you are producing white spirits. They use all sorts of filtration methods to ‘clean’ the water, ranging from sand filtration to ‘diamond’ filtration to the highly technological ‘reverse osmosis’ filtration that several of the major producers employ. Finally some impurities are added when the spirit and water is combined. These are often a ‘secret’ but can include fruit, sugars, flavoring chemicals etc. For the USA, strictly speaking these shouldn’t be there or you are dangerously close to being considered flavored vodka from the TTBs perfective.

The spirit used is in many cases of less importance than the water. You would be surprised by the quantity of major producers who do not distill their own spirit. It is often purchased from a specialist ethyl alcohol producer who supplies not only numerous alcoholic beverage producers but also the likes of paint and cosmetic companies or indeed anyone that require ethanol in the production of their product.

How many times is this spirit distilled? It’s difficult to say. On a massive scale, it is distilled in flux columns which are very different to pot stills (think whisky distillery). It is a more technically advanced process where tradition is sacrificed for speed and purity of production. Distilling it once this way is the equivalent of pot still distilling it 4 or 5 times. It depends a little on the particular flux column as the larger and taller the column the purer the ethanol it produces. Once you have the spirit from this process it is as pure as you are going to get. The resulting liquid will be 95.6% pure ethanol. Any more than that and the water from the air will condense into your spirit to bring it back down to 95.6% anyway!

As far as vodka is concerned, once this spirit is produced or bought, it is filtered through a carbon product which is generally a form of charcoal. The type of charcoal used is dependent on the producer and I know of several variations. What I will say is that the type of charcoal used should be one with a very consistent nature to ensure a consistent product. While the charcoal does take out some remaining impurities, it is also responsible for some of the taste characteristics of the final product.

To surmise, for a small producer, using a pot still, yes it probably makes a difference the more times a product is ‘distilled’  and it certainly increases the cost of production. It is unlikely to make any difference to the product by distilling it more than 4 or 5 times and I still doubt the spirit would be as ‘clean’ as that produced in a flux column. If it takes more, then I would question the quality of their equipment and what chance they have of producing a consistent product over time.

For mass produced spirit, passing through the flux column once is as good as multiple pot still distillations and may well result in a cleaner spirit. Why does cheap vodka taste cheap? Well it’s probably due to a lack of care filtering the water or the way they handle the spirit prior to bottling. If I wanted to be critical, I could suggest that that the fact many of the companies produce super-premium vodka in addition to value ranges could have something to do with their desired ‘flavor’ of their value range! I would love to hear an explanation from a major vodka producer stating that their vodka is distilled numerous times if they have used flux columns in the distillation process or purchased the spirit from a third party. That doesn’t make any sense to me and I really do suspect that it is nothing more than a clever marketing statement to join the ‘luxury band wagon’ of the smaller pot still producers. As always I am @bevtalk.

Beverage Industry Marketing. A waste of time and money. Or is it?

I have never found it particularly easy to connect with people involved in liquor marketing. This is because almost all of the people I have come into contact with in liquor marketing were trying their upmost to sell me something.

If you have any experience of this industry then you will surely have come into contact with that overzealous, pushy, persistent, almost bullying type of salesperson. A definite ‘no I am not interested and I never will be’, translates in their minds to ‘probably, give me a call tomorrow and let’s finalize.’ You want to throw your phone and change your number when that particular name pops up on caller ID and you want to run and hide when that stabbing projection of a voice ‘Darling, Darling…I was in the neighborhood and…” bellows at you from across the street when you approach your office. You know the people I’m talking about, right? Anyway, I have always tried to avoid them like the plague.

It is this type of person who will recommend you spend thousands upon thousands on multiple marketing campaigns. They want to ‘work with’ glossy magazines nearly always connected with high fashion. They want to spend your money supporting a project or event of which the benefits to your particular brand are what is known as “unquantifiable huge”.  At the end of the day you have spent an absolute fortune and those unquantifiable benefits have resulted in zero extra sales and zero in sales leads. They on the other hand have made money from you, from the commissions they have received, from the venues that you have paid to support, oh and they are now very busy working with a new victim who the preyed upon at one of those such event using your brand as leverage.

I have run several brands in the USA, mostly spirit brands along with a few small food brands. My phobias of these marketing people lead me to do all of my apparent ‘marketing’ myself. I placed a few adverts in the beverage media to show current distributors and potential distributors that there was support coming from myside. I’ve printed 10’s of thousands of flyers and shelf talkers. I have paid for probably 1000s of tastings and participated in all nearly trade events I was invited to. I have engaged in fairly aggressive pricing campaigns, if I was 1 cent in profit and I could get an extra sale I’d more than likely go for it. And I have also ensured that there are decent incentive schemes for the reps on the ground to push my products. What I did was totally quantifiable. I have Excel sheets showing the financial planning, success and the direct effect on sales.

‘My way is the correct way to build a brand in the USA. The industry veterans who have worked all their lives in this industry will in majority agree with me. If you want to survive and make money, you do it my way.’

There is however, a distinct possibility that I may in fact have been wrong all these years and I have honestly changed my perspective.

Why do we drink and what do we most enjoy drinking? Yes, some of us drink every day because it has become very much part of our lifestyle. In my case I would stop almost every day on my way home from work at my local Irish pub, have three pints of Guinness (It had to be 3 because the third one was on the house) and then pick up a bottle of wine from the store at the end of my street to drink while cooking and while eating. It became a total habit which I got very little satisfaction from in the end. However, if you had tied to take that routine away from me then you may as well have taken the air I breathe away in terms of how upset I would have been. What I have just describes, was not a good thing and I’m please I’ve since sorted my lifestyle out for the better. However much I used to love Guinness, I don’t drink it anymore because I associate it with the times I have sat by myself miserably at the end of a bar.

I do enjoy drinking. This is because it is possibly closely linked to the odd occurrence of utopic happiness I have had.  I remember to this day in my early 20s, sitting on the outside veranda of a small family run restaurant in Corfu for hours on end. I was with good friends, the food was perfect, and we were drinking liters of the local red wine poured from a barrel at the back of the restaurant.  It was one of the best wines I have ever tasted and I have bought 100s of bottles of wine from the same region and half of Greece trying to find something similar. I never have. Of course I never have, because I would need the exact ambience and to be in exactly the same mood and stage in my life for that experience to be replicated. Likewise, I nearly bankrupted myself trailing around New York City after convincing myself that a certain Brunello was my drink of choice after a similarly utopic experience in Patsy’s Italian Restaurant on 57th Street.

The point I am making is that an alcoholic beverage does taste differently under different circumstances. I now accept that. I also accept that the design of the bottle will influence the taste of the product as will anything else influencing the drinks state of mind when consuming that product in particular the mental imagery the thought of that product and experience of drinking it conjures up. Some of the old-school boys will genuinely believe that I have completely lost the plot or at least that I’m on the 3rd or 4th such bottle of Brunello I was talking about. I am not and I genuinely believe this. I have seen the light as they say!

It has massive implications to the way I would now run a liquor brand. I would want to build an aspirational brand that inspires that deep inner glow in people. One that conjures up the utopic experiences I describe. I would absolutely not be discounting the product to make it available to people wishing to drown their sorrows that don’t care what they are buying. I would endeavor to keep it so far away from negative energy of problem drinking. Unlike what I was previously told, a good product will not sell itself and excluding taste experts and connoisseurs the public can be ‘educated visually’  to perceive ‘quality’ without the need to taste. The old saying ‘you eat with your eyes’ applies just as strongly to the liquor industry, you ‘drink with your eyes’ too!

I’m not saying I am a now an evangelist of all absolutely forms of marketing but only that brand perception is a major factor of ‘perceived’ brand quality. I believe done well, a previously unpalatable product can be changed to one that is regarded as one of the highest quality by marketing and building that mental image of the customer.

I am a little disappointed in my own stubbornness and arrogance not to open my eyes a little earlier to this concept. Most of the lessons I have learn have been from a certain level of learning through experience and failure. You may not agree, and you’ll probably make more money for several years or decades by following my old approach. But to make a market leader, a brand famous across the World in a good, positive way, I do believe that good consumer marketing is essential. After reading what I have just written, I am now eager to launch another product and make it into that famous product I describe. As always, I you have any questions you believe my experience could help you answer please feel free to email me. I am, as always, @bevtalk.

The Real UK Alcoholic Beverage Market

I have been living in the North of England for a year now and have a few more weeks here before I leave for Japan. I live in a little village in the Pennine hills called Haworth, which is renowned as the birthplace of the famous literary sisters, the Bronte sisters.

I lived in New York City for almost four years before this and central London for 10 years before that. Living here, traveling around ‘the North’ and Scotland has been a real eye-opener in terms of what the real UK beverage market is really like so I wanted to share some of those enlightenments with you.

Firstly it is an indisputable fact that London and the North are polar opposites. London may as well be a separate country at the other end of the world in terms of any synergy in terms of market characteristics with the rest of the country. Yes, there is some seepage from London and things are slowly changing but it really is at a snail’s  pace and cities in third world countries have more chance of catching up to the London trends before the Northern towns ever do.  An overgeneralization? Of course, but I think people who have worked in both markets will have some empathy for my comments.

London is a buzzing, multicultural, cosmopolitan, beehive of activity, much like New York City. There is innovation all around and a populace keen to develop and  experience new things. It is also where most of the money is and where most international brands decide to ‘set up shop’ when investing in the UK.

Step North, my friends, and you enter a world which is decades behind the trends of London and very much set in its traditional ways. If you step over a boundary, you are expected to fall. Now,  there are bars and restaurants very much like London in the cities such as Manchester and Leeds and yes, their range of products offered does in most cases match that of the best London venues. There are of course people of sophistication and the necessary income all over the country who love to experience the best places and indeed the best that life has to offer.  Most of them are well traveled, well-educated and in many cases originally from London or the South East. Some on the other hand are soccer stars!

My generalization is regarding the larger Northern populace and those who do not frequently visit the city centers. Go into a Northern pub and you will notice that most people are drinking beer, bitter to be exact, man and woman alike. Rarely will you see a wine drinker unless it’s accompanying a meal, in which case it will probably be a house wine of the cheapest variety. Spirits may be purchases but generally as a ‘last order’ or if there is some serious reason why you can’t drink beer.

Cost is everything. It is built into the psyche here to gravitate towards the absolute cheapest option available. Discussing how much money has been saved on a purchase and moaning about all cost increases whatever the reason is a standard way of opening conversation with a stranger in the same way that moaning about the weather is. Ordering a quality beverage at a premium cost carries a social stigma to it and often leads gasps from the venue’s patrons. I joke, but only a little.

I have tried to sell premium products in the North. If it is a pretty bottle then it is not that difficult to persuade a keen bar manager to stock it. You can generally tell as soon as you walk in. If Smirnoff Red is the ‘top shelf’ option then you stand to be fighting a losing battle.  However, if they do agree to stock it, then it is likely to be one bottle and in the absence of a small miracle, that bottle will still be sitting on the shelf unopened when you return the following month.

What about, cocktail and wine lists, I hear you ask? No, just, no. The word cocktail is a form of obscenity that could lead to you vacating a drinking establishment head first or in the more cultured venues relates specifically the likes of a ‘rum and coke’ or ‘vodka and orange’. Wine lists, again no. Where they exist, the socially acceptable bottle to order is the second cheapest. Regardless of whatever it is, this is the way to demonstrate to the company you are with that you ‘are a real wine buff’ because after all if you weren’t you would just have ordered the ‘house’. Apologies again to those with experience  who order by taste and in some cases obtain a real bargain of a bottle at a silly low price such as a £14.99 bottle of Chateauneuf Du Pape (don’t bother messaging me, I’m not going to tell you where this is before I’ve drunk them all). This is because the bar’s owners equally have as much an idea what they are purveying as the customers know what they are purchasing. The cocktail thing is developing slowly and I must say there are some talented bartenders in the city centers who would cater with flair to all your desires however in 9 out of 10 places where cocktails are available it will probably be a premix.

Beer on the other hand is doing very well. And I mean that nationally. I’ve not seen the figures but I would go as far to say that the craft beverage market is developing with a stronger structure and support outside of London and the city centers. A lot of this is in my mind due to the suburban and country bars establishing their own quality craft brands and being able to offer them at competitive prices to the mainstream.

Another point, I would like to bring up, is that a greater proportion of people in the North are ‘home drinkers’ rather than ‘bar drinkers’ and this influences their tastes when the do venture into the bars. They have become accustomed to what the Northern retailers supply.  Although there are some excellent independent ‘Liquor stores’, the retail market is dominated by the huge grocery stores such as Tesco, Sainsbury’s, Asda and the like.  Unlike the USA, they are allowed to sell the full spectrum of beer wines and spirits and do so 7 days a week.  If you are a small independent beverage supplier to one of these companies then I will take my hat off to you, especially if you have managed to remain on their shelves for more than a year. It is so difficult to get into these places in the first place, let alone try and compete with the major companies which are backed by some serious price discounted marketing strategies.

Let me summarize, for the benefit of brand owners looking to sell into the UK market. If you have a value product that you believe can infiltrate the market based on the value principal alone then you will do well across all of the country. The quality of the product is a consideration but has a limited weighting in comparison to value.

For quality products, specifically spirits and wine. You will be very well received in London in particularly with the on-trade. It’s arguably a more receptive on-trade than even NYC.  I do however warn you that it is very hard to get on-trade sales to filter through to the off-trade and although your brand may appear to be doing really well, please don’t expect the volumes to be anywhere near what you could achieve in the USA. The volume sales are very much the territory of the major internationals. In terms of the North then if you expect to be in more than 20 top end venues in the cities then you may well be disappointed and that’s really because there are in my opinion only really 20 or 30 top places in most of the cities. You are unlikely to do much volume and success here will likely take many years of nurturing. I can’t really comment in terms of beer as I have been surprised by the success of many brands and I take back everything I have said in terms of the peoples’ unwillingness to experiment in the North, but in this field only.

I recommend doing your research properly. Travel around the country and make sure you step more than a few miles outside the country. Base your financial projections on what you are ‘sure’ London can deliver and you’ll be fine. If you base your plans for the whole country based on what you have experienced in the best areas in central London then you are destined to lose a lot of money.  Just be patient with the North, it will develop over time, and think of it as a growing child! As always, if you have any questions, or if I can be of any help for the last few weeks I am here, please get in touch. I am @bevtalk.

WSWA and USA Liquor Industry Exhibitions.

I just wanted to write a quick post for new brand owners about my experience with trade show events in the USA and more specifically the forthcoming WSWA in April 2016, and why you should be going!

Now I am a firm believer is most of these events as you can do months’ worth of business in just a few hours if you play your cards right. You have to support your distributors, so brand owners; you are making a big mistake if you don’t go to the state holiday shows hosted by your distributor. I know you might have a product that no one really wants to taste at these big events (like I had) but it is as much about bonding with your distributors reps and making yourself part of the team. These guys are the ones who will push your product on a daily basis so do everything you can to make yourself part of that team!

The WSWA (Wine and Spirits Wholesalers of America) convention is held every year around April. This year it starts on April 18th and is in Caesars Palace in Vegas. It is here every other year with the alternative year being held in Orlando. It is the best trade event I have ever been to in the World and that includes the food events I have also attended. It is one giant industry party and anybody who is anybody in the liquor industry is probably going to be there. More specifically there will be distributors from every state in the USA there looking for new brands to take on.

Many of the distributors have private suites where they host meetings, there are parties, tastings and an exhibition hall packed with new brands and industry service providers.

If I was launching a brand now, yes, I think it is a good idea to participate in the exhibition area, but it is expensive and if you are going to bother to do it you should do it correctly and make some noise. The liquor industry is still a man’s world and making a noise at such an event really does involve having half a dozen models wandering around with trays dragging potential customers to your trade stand. I have contacts who spend $50K plus on this event for small brands. The big guys will be spending a significant multiple of that!

Now as much as I love Caesars, hanging around by the pool and losing my lunch money on the blackjack tables, the Florida event in my opinion is better. This is really just because it’s smaller, and most of the people in the hotels are liquor people. In Caesars it’s possible to walk around like a headless chicken and miss half the people you know are there. In Orlando, just sitting around the central bar area and chatting to the people around you should facilitate a lot of leads.

It is expensive to get a badge. It’s around $1000 although you do get really good rates at the hotel if you book through WSWA. This gets you into the big exhibition hall hosting the new product showcases, the opening party, and tasting event. I’ve always paid for one but then it wasn’t my money I was paying with. A lot of industry veterans don’t bother paying as they have all their meetings pre-arranged and you don’t need a pass to get into the hospitality suites. The last few years I have been I’ve missed the parties and tastings as I’d meetings concurrent with them and hence I didn’t really need the pass.

If you are launching a new brand or even just considering it, go to this event and you will see what the industry is about. Finally, if you are struggling to find distributors in some states and having difficulties getting responses from distributors arrange a meeting with them or even just walk into their suite. This business is so much easier face to face. If I can be of any help, I’m @bevtalk.

The Russian alcohol market

russian flag

Over the years I have spent a great deal of time in Russia. In my early twenties I lived in St. Petersburg for six months, where I ran a small property company. A few years later, I worked with a vodka distillery just outside Moscow and traveled all around the country experiencing the lengths they had to go to sell their product. It was a wonderful experience traveling around Russia, and it is a phenomenally beautiful place. Out of the many hundreds of hotels around the world I’ve had the pleasure to stay in, my favorite of all time was a little log cabin themed hotel on the shore of Lake Baikal in Siberia. Now, obviously there are elements that are less than welcoming such a ‘system’ doesn’t tolerate a lot of the “nonsense” that we as westerners are used to dishing out to the authorities, and yes, I have met people who villains in Bond movies could have been based. But at the same time, I have never been welcomed so openly into people’s houses and genuinely felt to have been made feel like part of the family.

I am sure I could write a long and decent exposure of the touristic market in Russia; however, I am also sure that you are more interested in the liquor market, so I will try to concentrate on that.

I first went to Russia in 2001. This was a fantastic period of time for someone who had just graduated from university. Sure there were opportunities all around, and I did eventually buy an apartment for $50,000 that would be worth well in excess of 10 times that now, if I still had it. But far more importantly, beer was priced between 20 US cents for a large bottle, sold on the street corners to certainly no more than $1 in most of the pubs. Vodka was 100ml as a standard ‘shot’ and I would get looked at like I was a little ‘simple’ by the bartender, as I tried to add it to the orange juice I’d had to purchase separately.  In one of the city center bars it used to cost $2, and I remember being a little ruffled at that because the vodka they were serving me, ‘Flagman’ , didn’t cost $2 for a whole bottle in the grocery store!  And you weren’t a ‘real man’ if you couldn’t knock half a liter back with your lunch and then go back to work.

Stick your arm out into the road, and a little Lada would swerve over to you and take you to the nightclub of your choice for no more than a dollar fifty, which would let you in for free for waving a foreign passport. It was fantastic. I could go out every day of the week for $100 and live like a king. It wasn’t just me by the way. That was the life of the European and American students living in St. Petersburg. We spent most of the day in the internet café and then trailed the bars in the evenings. It was a real little ‘club’ and I made friends for life.

Unfortunately, that was not the life that most of the people were living as $100 was all some people were earning for a fortnight’s work and very few were earning more than two or three hundred a week. It should not come as a surprise that there were very few foreign produced brands on the market and that there could have been hardly any sales volume for the ones that were.  Johnny Walker Back Label was around as was Chivas, but these were real luxuries and very expensive even by Western standards. It was almost like a badge of honor for a bar to stock them rather than actually serve them. The height of luxury was Remy XO, and I doubt very much that half of the bottles in bars actually contained that product!

In terms of beer, you could find Heineken in the best places, occasionally Carlsberg, and there was a single Irish pub selling Guinness at an extortionate price. I’m pretty sure that was the only cider I saw for years, and it’s not difficult to imagine why it didn’t take off at that time when you consider it was served as a 125ml measure in a wine glass for about four dollars.

In terms of wine, well I wasn’t a wine drinker at that time, but I can tell you that there was hardly any variety on the market. I did not have the budget to frequent the few 5 star hotels around; that I’m certain would have had a good ‘self-imported’ range to choose from.

In most of the bars and restaurants the choice of wine would been between Georgian and Moldovan varieties, if you were lucky enough to be given any choice.  Hat off to some of these Georgian and Moldovan wines though, as some of them are quite exceptional and to this this day are massively under rated on the wine market. If I had the money and I wanted to work in the wine industry, then I would be in Georgia or more probably Moldova building up an international brand as I believe they have so much potential in the global wine industry. Wine is in the blood of the people in these regions more than anywhere else in the world and it has been for 3000 years. Alexander the Great, and we have all heard how he fancied a tipple, sourced his own wine from the South Caucus.  It is my opinion, that many of the companies in these regions are failing to find their international markets due to a reluctance to sell and market their products the way we have to in the west. We have to serve and bow to the market. The market will not serve and worship us!  When you get used to being the only product on a market, you get complacent, and it often takes a new generation to embrace new sales methods.

Leaping forward to present day Russia, it is a very different place. Good for them, and particularly the people who have done very, very well for themselves since I was first there. The city centers seem to be awash with money, and almost everything that you can buy or experience in any major city can be experienced in Moscow, St. Petersburg, and several other major Russian cities. New brands seem to almost automatically work, and there is an almost childlike fascination with everything that is new or exotic. We have all heard the stories, that there is a certain breed of Russian who bases all their purchasing decisions on cost, and it is a reverse of the principals of western economics in that, in this case the more it costs the more they want it!

Walking around the center of Moscow, you could be forgiven for thinking that you are in Vienna as you stroll past the coffee shops and restaurants with people sat outside sipping the very best international wines and Belgian lagers. There are craft brewers popping up all over, and half the people you bump into consider themselves connoisseurs of wine and fine dining. Walk into the odd upmarket liquor store and you will observe half of what the world has to offer, and if you are not in this market you will really feel as if you have missed the game.

This is a veneer. It’s a layer of decadence stuck above the real market which is still very much in its infancy. The apparent internationalization is concentrated on the major city centers in a major way. Most brands are endemic to just Moscow and perhaps St. Petersburg. It is almost as if the brand owners or distributors have decided that if their brand is in Moscow then it is in Russia and they can tick that box and concentrate on something else. Pay big money to a distributor in Moscow, then help them sell your brand, and model looking rep to visit the clubs and bars and yes, your product will be in Russia. Will you sell much? Don’t be silly and if it does, you won’t be the one making the money from it. Give one of these distributors a license where they practically own your brand for decades to come in this country, and you’ll do a little better.

This is not real Russia. Visit the regions. Visit the cities in the south or the east and you’ll experience real Russia. I was in Rostov a few years ago which is a few hours’ flight to the south of Moscow, not far from the border with the Ukraine. It must have been 5 years ago actually because the distributor I was talking about was waving a bottle of Trump vodka around with so much enthusiasm about having the next big vodka that was going to take Russia by storm. This was because “Russians love everything American” or so he claimed and I have no doubt the team behind it had promised him a trip to New York if he did particularly well. The same guy showed me his range of vodka which included well over 100 brands of vodka, of which I recognized perhaps a dozen, and I was traveling with the company that made three of them.

One of the issues we had on this journey was the inability to stop competitors imitating our successful brands and then undercutting the price. Vodka is very cheap in Russia there is no question of that; the new legislation has made little difference if I’m honest, a producer has more tools than just the price on the invoice to get their product moving. That said, it is a market which operates on very low competitive margins. If you are making 5% profit then you are doing fairly well. And this is not helped by the massive quantity of illegal product (the same vodka but not having had the Russian tax paid on it) that is the pain of the market. I take all national vodka consumption figures with a pinch of salt such is the huge proportion of illegal product on the market.

Losing money to get the distributors to support a new brand and build market share is a very common tool, which may be one of the reasons for the new minimum price the government is trying to enforce. When you have entered a regional vodka market from a different region at a decent level of expense and come up against an imitation brand (that essentially looks the same as yours) then you have a serious problem. That is a way of doing business in Russia. Watch what is new and successful, copy it and push the original brand out of the market by using the means available to you.

Yes, they have trademarks, and they enforce them through the proper legal system. The main problem is that it takes time to fight your way through that process and the person who has launched that ‘competitive’ product to yours is probably very powerful in that region and very capable of pressuring your distributor. It’s a big problem and basically there are mechanisms in place where market share is negotiated to make sure the existing market players do not have their noses put out of joint. Other than this, I have very little experience other than Europe and the USA, but I suspect most emerging markets are similar to this. Please also take note that another way of ‘business’ in Russia is watching what brands are new and successful in other countries and registering that trademark in Russia with the intention of selling it back to the real producer at an extortionate price when they want to enter the Russian market. So watch out!

In terms of vodka, in addition to a few major national players such as ‘Gelka’, ‘Russky Standart’ and  ‘Green Mark’, each region has its own brands for example ‘Baikal’ which was a favorite of Irkutsk, a city near that lovely hotel on Baikal I told you about. It also has many different distributors who operate in their own regions rather like the system that exists in the USA. Make a good contact with these people who have full portfolios of beer, wine, and spirits, and you are on to a winner. Make sure you have a different product to what is currently on the market in that region, not just what is carried by your chosen distributor. There is a big emerging market outside of the major cities and I see a vast potential for the likes of Whiskey, Gin, Bourbon, Tequila, Rum, and quality wine. It will just take a little patience and if you want to make money, forget about your dreams of seeing your product in Moscow and St. Petersburg, at least in the beginning. The volumes are not going to be massive for quality produce, but this will come in time as the market matures. Consider getting in there now, as once the brand has some foundation in a particular region, then it is far more difficult for your close competitors to even consider entering the market, and they will struggle regardless of how well they are known in say downtown Chicago, USA.

In terms of wine, I have been in warehouses that were packed full of very cheap French and Spanish wines, we are talking the cardboard bottled with the plastic screw top variety and no offence to Yellow Tail, but that has been the ‘top end’ wine carried by that distributor who was the largest in the region. Many Russians are well traveled now, and many of these often multimillionaires make their money in the regions I am taking about. They often live there for part of the year too, and their newly acquired luxurious tastes do not suddenly revert. Hence, there is a demand for fine wine just like in the major cities just in smaller volumes. Boutique wine shops are opening up all over the place often run by very enthusiastic intelligent entrepreneurs. I would recommend wine producers to travel to the regions, meet this kind of person who will in turn put you in contact with a good local distributor, and then you should put a sustained wine education program together enabling the top end stores to sell your product and present it to the market. Supporting events and parties is also a very good marketing idea. You will do very well. At this stage it is all about educating people about your product, and this information will spread like a virus, albeit a very desirable virus!

To summarize, if you have a quality, somewhat unique product then Russia is a market that could do very well for you. For value products, I’m sorry, I think you have missed the game; the obstacles you will come up against in terms of regional protectionism and greedy distributors are not worth the effort.  Concentrate on the wider market, not just the major cities and there is money to be made for very little marketing outlay other than perhaps some free product. You are not going to take off immediately, it is a very large market but only a small percentage of the population can afford your products. As this develops, so will the appeal of your product and 10 or maybe 20 years down the road, you may very well be the market leader in a particular area. Good luck. I absolutely love this type of market because it’s such a challenge. It’s absolutely not easy and you can chuck your “how to do business” book in the garbage now. Succeed and you deserve to be very proud of your real business sense that can’t be taught on any MBA program. If I can be any help, I am @bevtalk

Choosing a USA liquor distributor

This article relates to the spirits category and to a certain extent wine.

Now you have a fabulous new product that is about to take the market by storm. Which distributor do you select to get that product out into the market and what do you expect from them?

We all love to see our products in the best bars, restaurants and clubs in the best city centers. This makes us feel as if our brand is a real success and gives us that pat on the back and confidence that very soon there’ll be a call or email from the big guys asking “How many millions would you like for that awesome brand?” Well sorry guys, unless you have a revolutionary product or you are exceptionally lucky, following that route is going to lose you a fortune and is why thousands of decent brands disappear from the market each year.

What I have just said is contrary to what many distributors will tell you as they would be making money all the time you are losing money pampering to the needs and loves of these very spoilt sectors of the industry. They also know that by massaging your ego about your fabulous product and how ‘big it is going to be’ will get you to commit to more expense.  Every time you are giving samples away or doing big deals with clubs and chains you essentially have to buy your own stock back from your distributor at their sale price (not the price you sold it to them at). They love this and its how they make a load of their money. The term ‘chargeback’ will send a shiver down the spine of anyone with experience of this and I’m one of them!

If you want to build a brand and I mean properly, not just a façade, then it is like building a house. The firm ground is the nature of your product and onto this you need to set some substantial sturdy foundations. The retail sector, the mom and pop stores and the statewide liquor chains are the foundations. Build your presence here and you will still have a brand in 20 years time. Go first for the sugar and ball balls for your personal vanity reasons, in restaurants and nightclubs and you’ll be another here today gone tomorrow, deceased brand. There are exceptions of course, if you are selling a wine to a few restaurants to attract the attention of a bigger distributor and its a personal contact doing you a favour etc then keep going. Just don’t fall into the trap of giving the on-trade a load of money. They’ll take everything you have and then kick you out and move onto the next victim.

Before I began to rant, the point I was trying to make was that I thoroughly recommend a distributor with a solid retail distribution network. The big distributors have these retail connections and all the hip city centre on-trade connections too. If your product is so unique that you don’t believe you have any competitors in their existing portfolio or the quality, value ratio so stacked on your side that you believe people will be converted at first taste, then go with the big liquor firms. If your product is so fantastic, they will bite your hand off and you shouldn’t even have to commit to the six figure annual marketing support packages that they screw the rest of us mere mortals out of.

The other 99.9% would be better off choosing a smaller distributor and more importantly one that does not carry a similar product. Young, keen companies are the best, particularly those where the owners are the ones running around on the ground making the sales. Be a little careful because if they are too young then you risk them going out of business. Its common sense to make sure anyone you are selling to is financially secure. These smaller distributors will want your product and be happy just to make their margin without sitting back and telling you that “it’s up to the brand owner to make the product sell and all the stocks sat in the warehouse”. Unless you are going to put your own people on the ground to run around selling it for the distributor or you have a phenomenal budget for advertising then the success of your brand will be 90% down to the passion and hard work of this kind of distributor. These guys are generally stronger in the suburbs and in the off-trade sector. That said, they often want nothing more than to build their own companies up and you can work together to get a few decent on-trade accounts.

How do you find the right distributor? Well they are human and all different so may well have a totally different opinion about your brand so it could be a little bit of trial and error. Firstly, go to the state in person, go in a few liquor stores, spend a few dollars, and if the owner of the store seems keen ask him to give you some leads. If its a grumpy old man then he’ll probably give you the details of another grumpy old man he’s known for 50 years and you don’t need that. Also ask in some independent bars and restaurants. Don’t waste your time in the big bar chains and hotel bars as I can tell you already they are with the big distributors. Once you have narrowed it down to three or four potentials, I personally would send an email  introducing your brand with the imagery. If you don’t have a direct email to an owner then mail something. Send some flyers etc, the more chance you have of these laying around an office the more chance you have of them noticing you.  Follow this up by a call a few days later and offer to go meet them in person and showcase your product. If you are prepared to do that and they are a passionate dynamic firm then they should be prepared to meet you. If they are not then they are the wrong firm to be working with anyway. Make a note of their name and make sure you don’t deal with then 5 years down the line when you are bigger as they’ll more than likely be blood suckers. If you can’t find a distributor you like then don’t work in that market. Simple. Concentrate on a market where you are going well, build it up more and you’ll generate interest for when you tackle that market again the following year.

After a couple of years you may very well have a major brand on your hands and these smaller distributors might not be able to keep up with your growth. They wont be happy, but if they if you have attracted the attention of the major players and you know they can triple your sales over night then it may very well be time to switch distributors. It’s not disloyal, it’s business and your own interests and that of your brand must come first.  You can probably afford to start massaging the old ego at this point and focus your own attentions on the on-trade as you will no longer have to go cap in hand to them. They’ll be calling you asking how to get hold of your brand as your hard work building the foundations will have paid off.

Now committing to ‘marketing’ expense supporting the on-trade is not such a crazy idea because the off-trade will make the sales based on your on-trade support. Basically someone tries your product in a bar and then goes around the corner and buys a bottle from a liquor store.  This should hopefully mean that your brand will be generating cash and not burning through your investment capital.

I wish you bran owners the best of luck and hope you find and work with genuine, decent distributors. If I can be of any help, I’m @bevtalk.

 

Bevtax.com USA liquor tax rates for all states and federal.

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As an importer in NYC launching a new product, I was constantly looking for new distributors and working out price plans for existing distributors.

Now the tax system in the USA is a little more complicated than most other countries in that there are multiple different rates. To start with it’s a two tier system in that there is a federal tax, payable to the government and there is a state tax payable in individual states. The producer or importer pays the federal tax and the distributor pays the state tax.

This system is further complicated by each state having a different tax rate for beer, wine and spirits which does not necessarily correlate with alcohol content.  Additionally some states give discounts to small or local producers. The control states are a different kettle of fish and they will generally use a price mark-up system on the types of alcohol they control such as high strength wine and spirits. to be honest, I didn’t even attempt to work out the potential retail price in control states.

As an importer or producer trying to work out prices to state distributors you are probably trying to balance two factors. A, the relative retail price across the whole country and B, how your retail price is projected to compare up against your close competitors. Some people sell liquor at the same price to all states but that is lazy business and they are not going to maximise their profits or their products potential sales.

The price you are selling to state distributors at already includes the federal tax which you have paid. If you work the same way that I did then you don’t know what margin you are going to make before you have worked out how much everyone else is going to make and what the retail price should be.

The distributor will slap on their collection costs (if you sell ex your own warehouse), they will add the state tax and then they will add their own margin. With a decent distributor, if you get away with anything less than 25% you have done well.

The federal tax is constant and you pay it so it is not a major headache. The state tax on the other hand is an issue because not only does it differ between states from for example 50 cents to $5 per litre of 40% Alc, but the distributor margin will be applied to the tax they have paid too. Oh yes, it is the distributor in the USA who is making all the money!

If your product is price sensitive, towards the lower end of the spectrum then trying to negotiate when you have less than a dollar of price flexibility before  your entire profit margin is wiped out, the distributor adding their margin onto a relatively large tax rate is a serious pain.

From the brand concept, I would warn very strongly about building a value brand just because it’s murder in higher tax states to make a profit. You’ll soon notice that most of the value products in particular states are locally produced or you’ll soon read in the beverage media that the company making that brand has a $500m debt from building a brand up!

Anyway, back to bevtax.com. I was frequently called by people in the industry to ask if I knew what the ‘tax on litres in X state’ was and it was clear that the broker or distributor was putting a price plan together. The information out there is not clear, to say the least.

Basically when setting up a price model, you do an excel sheet, list all the costs and margins and at the bottom you get a shelf price. Then you tweak your own margin and work out what you need the distributor to pay in order to hit the shelf price you want.

Bevtax has all the tax rates, federal and state, for beer wines and spirits. If you want to use it, simply then just chose your state, put 1 liter in for spirits or gallon for wines and beer and it will give you the numbers you need for your excel sheets to do your price plans. I will add hard cider at a later date as it is a bit problematic at the moment as some states have not ‘decided’ whether they are taxing it as beer or wine.

It’s completely free and I hope its of help. It would have helped me a great deal when I was operating. By all means contact me if you need any help using it or any assistance with your price plans. @bevtalk

 

Setting up a NYS liquor import company

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Almost 5 years ago I began the process of establishing a liquor import company in New York. I am an Englishman, and at the time I was living and working in London. I worked for a large vodka producer and over the years we had moved from importer to importer to importer in the USA, so a decision was made that I should leave that company and set up an independent import company in the USA. We discussed locating the company in Chicago, Boston, and Miami. However, in the end we decided on New York primarily due to the ease of traveling around the US and back to the UK from the local airports. In hindsight that was an expensive decision.

The first thing I did was set up a Delaware LLC of which I was a part owner. There was one reason or another that a C-corporation was not suitable so the LLC was chosen, and I elected for it to be taxed as a corporation. I then obtained a federal basic import permit, took on an employee, and rented a midtown Manhattan office.

I needed the employee because my visa was still in the pipeline and my visa lawyer advised that taking on an employee in the office would help my case.

Now unfortunately, all the ‘industry experts’ who had been advising me at the time, neglected to advise that in New York State my federal basic permit was worth about as much as toilet roll when it came to authorising me to import liquor into New York State. On a visit to a NYS liquor lawyer for one reason or another I was asked where my NYS liquor licence was, and contrary to my claims that I did not need one, I was soon firmly put in my place. NYS does not distinguish between an Importer and Distributor, and hence you need the NYS distributor licence to trade as an importer in that state.

Now that process takes six to nine months if you are lucky and they only cost $30,ooo plus all the lawyer fees for filling everything in. Now that would have been bad enough, but add the employee who got paid for the next six months for doing nothing and the empty $2,500 a month office, and well lets just say I wont be listening to the advice of morons in future. The lawyer informed me that had I operated the company down the road in Philadelphia non of this would be necessary and I could start trading almost immediately.

Anyway, it all turned out well in the end. We got the licence and set up trading. The only additional costs I can think of were a federal bond for the federal tax and we had to get the bank to issue a letter of credit to the state for their tax bond which tied up a fair chunk of money. One thing I will add is that it is not easy to open a bank account when all the company owners are foreign. I managed by working with a worldwide bank I already had contact with, but it took nearly as long to open as getting the liquor licence.

I didn’t take on any more employees as I’ve always found it better for independent companies to do the service tasks. I took on a book-keeping firm, a CPA firm, engaged the lawyer who had set me right on track and any marketing or design work was just done on one-off contracts. I used a very good New Jersey based bonded warehouse team and made contact with an insurance broker and customs broker.

Customs broker fees are negligible (I think $100 per time they have to clear something) but I needed product liability insurance (I believe for $2m) and business owners liability insurance. Together the insurances were another $3000. You can imagine how much the professional fees are on an annual basis. Additionally, competent people working in NYC earn a lot of money, and I mean a lot. Remember, you are in an industry where it is common for bartenders to take home $1000 a night in the city. Yes you can find people willing to work for an ‘normal’ salary, but if you are going to pay peanuts, I can assure you that you will end up with a monkey working for you.

The point I’m trying to make about New York is that although it is a fabulous place to do business it is not a cheap place to set up a liquor company. It’s a wonderful city and I had a great time living there and visiting all the bars and restaurants, but you have to have a decent budget or it will grind you down. On another note if you have the budget and you are able to put a sales team together to run your own distribution in NYC while also running the import company and selling to distributors in other states then it could be ideal. I don’t know of another state where you can be an importer and distributor that simply.

I will share some of my experiences of running this company and selling to distributors across the USA in future posts. If I could possibly be of any help advising people interested in doing similar to what I have, feel free to email me or you can find me @bevtalk.

Beverage Trademarks

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Firstly, I am not an attorney and not qualified to give you advice about trademarks. I am writing this from personal experience registering many trademarks for myself in the USA and Europe. I hope this provides the reader with a decent insight and perhaps helps brand owners considering registering trademarks themselves.

I cannot emphasize the importance of registering your trademarks (TMs). It really is a priority. I have spent a lot of money developing brand concepts to then try and register a TM and have it turned down by the trademark offices. This can stop your dream project like a sledgehammer to the forehead and can mean the loss of a great deal of hard work. Would you want to keep investing in a concept, knowing that there is a possible conflict and at some time down the road lawyers’ letters could start arriving under the door potentially shutting you down? I doubt it very much. I have tried to register brands that I was certain did not conflict with any currently registered brands only to receive letters from the lawyers representing multibillion dollar firms claiming that they did in fact see conflict and that I should withdraw my application. When you are a little guy, running a small company, you really don’t want to start a battle when you have enough problems staying afloat as it is. To be honest, if I was about to launch a new brand now, I would think of two or three brand names that would support the product and the imagery I had in mind. You’d have to be unlucky for all three to come up against obstacles, and at least you could start the ball moving forward while you wait for the trademark to be registered. And that is typically 9 months, providing there are no issues. Just like waiting for a baby!

That said in the USA, the system is very much built on ‘proof of use’ and not necessarily just who tries to register the name first. However, you are going to need some damn good proof of that use if you are planning on going up in court against someone who owns that TM certificate. The European system is a lot more weighted towards supporting whoever buys the trademark first although there are a few exceptions. TMs in the US and Europe are protected for 10 years and can be renewed.

I can only talk about ‘word’ trademarks, as I never attempted to register a logo or combined mark. Regarding logo, think something like the Nike ‘tick’ or a ‘unique’ aspect of label. If I was trying to protect something like that, I admit that I’d be the first one to call a IP lawyer!

The process for ‘word’ trademarks is fairly straight forward. Now a lawyer will tell you that the most important part of the whole process is the research they do to find out if there are any conflicting TMs, be these registered TMs or existing products on the market. I’m not saying they are wrong, but what I will say is that if you are confident that there are no existing products in the alcoholic beverage sector that a called the same as what you intend and you have done a decent job searching the database to check officially registered brands then you will save a decent chunk of money applying for registration yourself. Obviously, if you can afford the expense then use a lawyer, it will give you peace of mind at least.

USA TMs are handled by the USPTO (United States Patent and Trademark Office) and they can be found at www.uspto.gov . The link to search the database is on the first page.  You must be a US resident individual or a US company to start a registration here. If you already have a foreign TM registration or an application in another country which they approve, such as the UK or a EU TM then you can use this application/registration as a basis for the US registration. Do a little research to find out what is acceptable as a TM. If it’s simply descriptive of the content such as Polish Vodka or simply a surname Smith, then I can tell you from experience it is not going to be accepted. There are ways of registering such things, but for that even I would need a lawyer; it’s something called ‘acquired distinctiveness’, it’s a different database and it takes years. A little different for the European system in that I have registered just surnames and they’ve been approved, although I will come to the European system a little later.

The cheapest way of registering a TM online with them is the TEAS Plus application and it will set you back $225 per TM class. They will examine it and let you know if they think it is acceptable and doesn’t conflict with anyone else’s mark and then they’ll publish it to give other people out there the chance to object if they think it conflicts with what they have. All being well no one will object and the final step is proving that you are actually using the TM. I have simply sent a photograph of a bottle with the brand name on the front label and the registered US importer’s name on the back label to them and received my TM certificate shortly after. However at other times I have sent a much more detailed set of documents to them proving extensive use in the US.  There is a fee of $100 payable with this proof. If you haven’t actually used it by then, because you are still waiting for your label approvals, production to take place etc, you can file up to 5 six month extensions for extra time to file this proof of use. Each time you do this it will set you back $150. If you started your US application using a foreign application/registration as your basis, they will simply ask for a copy of the trademark certificate before issuing your US certificate. You don’t have to prove use and there is no fee when you email this to them.

Now I have mentioned ‘class’ a few times. All goods and services can be categorized somewhere within the International (Nice) Classification of goods and services. There are 45 such classes.  Alcoholic beverages (except beers) are included in class 33. Beers and non-alcoholic beverages are in class 32. If you are not sure which of these covers your product, I’d recommend searching the database for products similar to yours that were already on the market and see what they registered under. One bit of advice I’ll give you here is that when using the online search system and you come up against 100s of results, click on the structured search, chose what you just searched for and add 032 and 033 (the zero is important!)  in the international class fields. This will save you a lot of time sifting through every category. Additionally if you want to nosey around at what documents were filed and issued about various trademarks then it is the TMDR tab you should be choosing. It’s so exciting guys; you will have so much fun haha!

So you have searched your brand name for vodka and nothing has come up. Yay, or perhaps not!  I have had a TM for lemonade rejected because someone had the same name registered as a whisky even though they are in different classed. The examiner said they were both drinks so there was a likelihood of confusion. Hat off to them for doing a thorough job as I suppose they are right and I thought I was being cleaver. It is possible to try and argue your case with them if they object in the hope of getting them to change their mind but I have never done this. The examiner will also search for pseudonyms relating to brand names and if someone already has ‘X’ registered, don’t think you are going to get away with trying to register the likes of Red, Blue or Green ‘X’.

Now for the European system. This can be found at oami.europa.eu and is shortly changing its name to the European Union Intellectual Property office (EUIPO). Go to trademarks, then apply online, then search availability. I would then search using TM view which covers the whole of the EU plus a few other countries including the US. Now the reason I’d use this search is because if you can see your potential TM registered in EU countries already then you are unlikely to get a community trademark which covers the whole EU. It’s quite expensive at €900 but it comers the whole community. If you think you are going to come up against conflicts then I would recommend just registering in the individual countries you expect to trade in.  You or the company you are registering the TM for needs to be in the EU or you need to have engaged an EU based agent qualified to register a TM for you.

I have generally had all my EU TMs approved, even just surnames and words that I would not have held my breath trying to register in the USA. I had however, made sure there is nothing close to what I was registering already registered when checking that TM view database.

For you guys located in the UK, check out ipo.gov.uk, most of the UK search and application system is fairly easy and they are helpful on the phone too. It costs £170 for an online application including one class and £50 for each additional class. The majority of the TMs I registered were registered in the UK. The process is quite quick to receive a TM certificate which I used to register my US TMs, thus not having to go through the proof of use step.

Now as my brief outline into trademarks is turning into a novel I shall end here. I hope I have at least provided a little insight into the TM system from my own experience and given a few of you the confidence to try and do these registrations yourself. I would very much appreciate comments and I will try to edit this document as the comments highlight any shortcomings.