Thursday, February 5, 2015

Steven Soderbergh & Singani 63 (Part 2 of a 3-part series)

By Antonia Fattizzi, Founder/President, Cork and Tin

In Part 2 of this 3-part series, we discuss the challenges that new importer Steven Soderbergh faces with his Bolivian spirit, Singani 63.

To say that introducing a new wine or spirit in the USA is not for the faint of heart is putting it lightly. The decision to import and distribute in a market as competitive as the USA is usually based on the unflagging belief that one has something so special, so unique, that it will succeed in whatever saturated category it is that they are trying to enter.

What, Me Worry?
Like anyone importing a spirit that’s over 500 years old, Steven has his concerns.

“My fear of bringing a new product into the market is that you find out in 5 years it makes you grow hair on your forehead. I remember at one point I literally had a dream that there was this side effect of Singani that turned out to be a huge problem. I woke up and was like ‘oh no, no no, no’ - it’s been around for 500 years! If it caused a problem, you would know it by now.  A billion Bolivians drink this. In the dream it had totally caught on where people were like, ‘this is amazing’ and then someone told tell me: ‘you grow tumors’. It gave me an idea for a campaign we’re working on which is “tested on humans for 500 years”.

Unlike everyone, Steven might have a bit more of an active imagination.

So the real question becomes, ‘what’s the effect of Singani 63 on humans?’ “We live in the world of metrics and data and that’s why I would be willing to spend the money to do some real research on what is it and why does it have this effect – like why not? Why not do that? We have the technology, let’s find out what the active ingredient is and what it does to your brain. We don’t know a lot about what alcohol does and why to you. It’s still a huge area of exploration – why it affects us the way it does, exactly.”

Most of us don’t want hair growing from our forehead. We know that the body has evolved to the point that processing alcohol has been a thing for thousands of years. Paraphrasing the book ‘Proof’, Steven goes on to state, “fermentation is a naturally occurring process in the world and would happen whether we were here or not is a key component of a lot of alcohol.. and then you have distillation, which IS a man-made process and which is fascinating when you read the history of it - you’re like ‘wow’, people sat around and somebody thought this up and started this process of distillation. The whole idea of distillation and what it means is really interesting to me because the principal behind it is, the further you reduce something down to its essence, the better it is. And that’s always been my approach to art. The more distinct something is, the more it just is what it is and you feel the individual behind it really burrowing into something and being super super specific and filtering out everything that’s unnecessary and uninteresting – the better I respond. So it was interesting to read this book and go, ‘oh, so that’s like a chemical description of how I work’.”

Like anything, too much of something is never a good thing. Thus, the conversation takes a slight turn to the example of overly distilled spirits, (spirits distilled more than necessary).  Steven’s response, fittingly: “well the analogy I would use is, in a piece of art, something that has been distilled so much that nobody knows what the fuck is going on.”

Fair enough.

Creating a New Category
Singani 63 looks like vodka, plays like an eau de vie but is categorized as a brandy according to the ATF (Bureau of Alcohol, Tobacco, Firearms & Explosives).  It’s a spirit that needs its own definition. “One of the things we are in the process of is filing a petition with the TTB (Alcohol and Tobacco Tax and Trade Bureau) to get an “asterisk” of some sort because we’ve been put into a category without an explanation so that is confusing. I don’t know what the result of that will be. They’ve established categories with pisco and cachaca. I think we made a pretty good case.  Apart from that is the chemical fact that when you age something in wood you literally alter it on a molecular level. This product never touches wood and is not aged the way that brandy is. I told the TTB an anecdote - we just finished shooting Magic Mike and of course I was trying to find an artful way to have a bottle here and there appear.  At one point I was looking over at this table where it was arranged with other bottles and I noticed that it was half-filled with brown liquid. I went over to the assistant prop guy and I said “this should be clear, not brown” and he said, “oh well it said ‘brandy’ on the label” and I said to them (TTB) ‘that’s my problem. I spend more time explaining what it isn’t than what it is.’ So we’ll see what they say.”

Steven’s unwavering passion of Singani 63 is apparent. “I told another story and my consultant, Steve Raye of Brand Action Team, was giving me the ‘stop’ sign. When we brought it into the USA, I was pulling cases out of the importer’s warehouse for myself to drink and give out to friends.  This went on for a while and we got a call asking ‘what is going on, why are these cases moving but they’re not being sold anywhere?’  We had to explain that I was drinking it!”

“The whole reason I brought it over is that I got hooked on it and was very naïve about what would be involved to get it here.  I wasn’t in a hurry to import, so the fact that it took like 6 years to get it to New Jersey didn’t faze me because I had other stuff going on. When we went to the TTB to deliver our petition there were 17 people representing 4 different agencies within the government. They were all super nice, and I was really glad that they were there because no one had to tell anyone else how the meeting went since they all took the time to show up.  I think they appreciated (forgetting about me doing what it is that I do) that the individual bringing Singani 63 here and making this request is in the room. I think it would have been a very different meeting without me there.  But I got a real sense of how these things work. There’s a lot of discussion, it’s a very regulated industry and it should be. I appreciate what the TTB is doing. I don’t feel like they have ever been an obstacle to us.”

Reality Check:

Getting the government to approve a product is just one piece of the puzzle. Once those hurdles are cleared, there’s the challenge of sales and marketing. “After I had brought in my initial wave of product (250 cases), I sat down with Steve Raye to find out how the industry works. For over 2 hours he gave me his take on the beverage alcohol business. I swear to you, if I hadn’t had those cases sitting in a warehouse in New Jersey, I would have thought twice about what I was getting into. I had thought, ‘well it’s here! So why don’t we just start calling people? I have friends (who would want it)’.  No pun intended, it sobered me up fast. He walked me through what happens when you cold call an account and explained how a distributor salesperson works when they are pitching your product. This is what they say; this is what gets said back to them. “

Distribution Concerns:
One of the first questions producers have to ask themself when launching a brand is what they want as an end result. They need to think about whether they are trying to sell their brand in a certain amount of time or if they want to hold on and build it over the long haul.

“That’s one of the questions that Steve asked in the first meeting: “so is your 5 year plan to be bought out by somebody?” And I said no. It’s not.  Because that’ll mean a loss of control that I’m not willing to give up in terms of how it’s sold and the content that’s created. That’s not my goal. That’s not why I got into this.”

In choosing a distributor, there are a limitless amount of pros and cons in each but Steven’s thought process is correct in that there’s typically a wide gap between priorities and goals of producer and distributor.  “When we enter this new period of potential growth, my concern about literally everyone that’s out there representing US is that they have to be one of US – or we’re failing.  And that’s why I’m trying to imagine or conjure an event or a sequence of events that will allow those two things to become closer together.  It would be what I call an ‘inciting incident’ in storytelling terms – one that would help my mind kick off into ‘Act 2’.  Something has to happen that pushes us into the next round of expansion and I don’t know what it is yet.  We haven’t made any mistakes yet, and everything’s gone great. We are still in the process of talking to bars/distributors and that is really terrifying.”

At the time of this interview, Singani 63 is self-distributed. This means that they are dealing with retail and restaurant buyers on every level and are 100% in charge of their own penetration of the market, as opposed to relying on a distributor sales force to broaden their base. Many new brands start out in this manner and then move into a distributor.  For an emerging product, trying to find the right fit in a distributor house full of wines, beers and spirits brands of all sizes is a process that requires extensive research, many discussions and real soul-searching.

Steven is very frank about his emotions concerning the move to a distributor. “It’s so personal right now, so intimate, there’s some part of me that’s getting the shakes when I think of the first time that somebody goes out and represents Singani and it’s not someone I’ve been able to brainwash and they’ve got the wrong vibe, the wrong chat..we’ve been talking internally how we keep this indie vibe, so we’re talking to small distributors. We’re in a really interesting phase.”

If we talk in a year – if I’m still here – I’ll either be going “oh shit, it worked” or “that was an interesting chapter in my memoir about the time I tried to import liquor”. 

Money Matters
“I need equity, I need somebody to come in, I cannot keep financing this.  And so we’re in that stage where we’ve now, through some contacts that all of us have made are setting up a series of meetings to talk to people about coming in and describing to them ‘look, this is what we’ve done so far, this is what we’ve spent, this is what we’re thinking that the next 6 months are going to look like and this is what the next 2 years are going to look like. And here’s our master world domination plan and here are the numbers we’re talking about.”

“It’s funny, in making films a lot of people talk about the setup, and a lot of people talk about Act 3 and I’ve always found that actually the 2nd act is the secret repository for a lot problems that people don’t see because they’re so obsessed with the setup and the payoff, and I’ve been involved in a couple of things that ultimately I was frustrated with my own result and when I went back later and looked at it, I was like “these are all second act problems”. Like the middle – I didn’t figure the MIDDLE of this out.”

To most people, what Steven considers to be the middle is not the “sexy” part, if you will. It’s the building blocks. Because the creation is sexy and the payoff is sexy, but the building blocks are just granular details.  “Well yeah it’s like you said, it’s not the sexy part in the sense, it’s just the engine kind of running. In the beginning you’re building the engine and that’s fun and in the end you’re blowing it up or it’s flying to the moon, but in the middle it’s just kind of the engine. And it’s the place where things stall or it gets like quicksand where you take a character in the wrong direction and you never recover. That’s why recently I’ve latched onto this analogy with the team and have said that we need to be very, very careful about what happens next. Because we’ve been very smart so far and lucky – we’ve had good timing, everything has gone right, let’s not make a misstep here. The next 12 months are going to be critical. If we talk in a year – if I’m still here – I’ll either be going “oh shit, it worked” or “that was an interesting chapter in my memoir about the time I tried to import liquor”. 

Singani For The People:
As the “national drink of Bolivia”, people consume Singani at festivals, sporting events, weddings. ”It’s important to me that there HAS to be a “2” in front of the price. This is a product that, in Bolivia, is something that everybody drinks and can afford to drink.  It has to be accessible to people.” ( $26.99!)  My attitude is, well if you’re somebody who at home, likes to have a sort of staple set of products available for when people come over, I want to be the addition to that. I want it to be a thing where people want to have Singani. Especially if we end up with our little asterisk. Then you definitely gotta have it.  But my whole thing is that it’s not like anything else in your bar. Its flavor profile is not like pisco, it’s not like other brandies, it’s not vodka, and it’s not gin.  It’s got a totally unique flavor profile. So my hope is that we become the whatever, the 9th thing that you’ve gotta have represented.”

Steven Soderbergh today proved he is not beneath staging that most American of oddities: A CONTEST. How you enter and what prizes you might win will be revealed in the thrilling conclusion to this three-part interview. The answer of WHY you would enter such a contest will, like the allure of the unicycle, remain a mystery forever.”

Cheers from DrinkUpNY!

Since 2003, Antonia Fattizzi has managed, marketed and sold boutique wines and spirits in the US market. Her passion for artisinal products propelled her to found Cork and Tin, which serves as a voice and a strategic partner for small and emerging brands. 

Check out: Steven Soderbergh & Singani 63 - PART I

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