Cocktail Syrup Manufacturer Pivots to DTC

Some helpful advice about eCommerce and Content Marketing.

The pandemic has upended businesses. Take Liber & Co., for example. The Austin, Texas-based manufacturer of cocktail syrups sold mostly to bars and restaurants. Then Covid hit.

“The pandemic initially decimated our revenue,” said co-founder Chris Harrison. “In the third week of March 2020, 70% of our business was wholesale to bars and restaurants.”

Harrison didn’t panic. While his wholesale revenue evaporated, direct-to-consumer sales greatly expanded. 2021 was the company’s best year, and 2022 has started strong. DTC revenue is now larger than wholesale.

He and I recently discussed Liber & Co., including the pandemic-induced pivot, expansion plans, and more. Our entire audio conversation is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Tell us about your company.

Chris Harrison: I co-founded Liber & Co. in 2012 with my friends Adam and Robert, who are twins. We were in our early 20s at the time. We went to high school together and then to the University of Texas here in Austin. Our interest was making good alcoholic drinks. We saw a niche for cocktail syrups. It was a slow start and bootstrapped — no business plan and no venture capital — although a family friend invested for a bit of equity.

We gained momentum, accrued knowledge, built supplier relationships, and acquired the right equipment. We eventually manufactured the syrups ourselves. We sell to bars and restaurants and direct to consumers.

The pandemic initially decimated our revenue. In the third week of March 2020, 70% of our business was wholesale to bars and restaurants.

But we rebounded. 2021 was our best year, with 80% year-over-year growth. 2022’s been strong, too. This week we secured a lease in Georgetown, just north of Austin. We need more manufacturing space. We can’t launch new products as we don’t have available pallet positions. We’re going from 7,000 square feet to 21,000. It’s a big bite. We signed a seven-year lease.

Bandholz: Did you consider shutting down the business when Covid hit?

Harrison: No. It was a gut check for sure. Our bar and restaurant business stopped, but our online sales via Amazon and our Shopify store increased by 300%. Sales to liquor stores were stable. We ended 2020 with more revenue than in 2019.

Our direct-to-consumer channel is now larger than wholesale.

Bandholz: How do I make an Old Fashioned?

Harrison: It’s a simple drink, just two ingredients: whiskey and our Old Fashioned Cocktail Syrup, which is enriched with gum arabic, aromatic bitters, and a little orange peel. It’s the non-alcoholic version of an Old Fashioned. Just add a quarter ounce of the syrup with a shot of booze. Then stir over ice, and you’re good to go. It’s all-natural with real citrus and sugar and looks similar to maple syrup. You can make 36 Old Fashioneds with one bottle.

Bandholz: Have you considered private labeling?

Harrison: No. The margin on private labeling is low. Plus we don’t have the capacity. The most valuable aspect of our company is the brand. The products are great, but anybody could reverse engineer what’s happening here. It’s not complicated. Sourcing, ingredients, quality control — it’s a food item.

We have big plans to move beyond non-alcoholic syrups and do some booze stuff. Selling booze triggers a slew of regulations, but the margins are great.

Bandholz: You’ve had a strong 2022 thus far. What’s driving that growth?

Harrison: It’s mainly direct-to-consumer sales via our Shopify site and Amazon. We generate about 40% more revenue on Amazon, although the per-order amount is low, barely over one bottle on average.

Amazon is good for us because we tightly control who gets our products — no third-party resellers. Our contracts for all distributors prevent reselling on Amazon, although we’ve had issues with that. In general, however, we are the only seller of our products on that marketplace.

Plus, Amazon drives customers to our Shopify site because our bottles say, “You want cocktail recipes? We have 600 on our website. Go there.”

But most of our Shopify-store customers hear about us word-of-mouth. We pulled our Facebook ads after the iOS update last year. We do some Amazon advertising.

We’ve retained influencers on Instagram who promote and tag us. We’re big on Cocktail Reddit and Tiki Reddit. Bars and restaurants that buy our products also drive awareness. People go to Saltgrass Steak House, for example, and order a pineapple margarita. Then they ask, “What is this?” The bartender gives them our recipe, which has our name and brand.

We use Grapevine, the post-purchase questionnaire, for feedback. It’s basically, “Where did you hear about us?” Many people will say a bar, a friend, or on Amazon. It’s critical to know how people come to our brand.

Our marketing lead, Alex, and our marketing assistant, Cristina, are cocktail novices. They are pushing TikTok. Cristina appears in our videos — 15, 20 seconds. She’s great. I still like longer videos, however, for YouTube. It’s hard to review a bunch of bourbons in a short clip.

Bandholz: Talk about the Instagram influencers.

Harrison: We’ve had good luck with that program. The influencers generally love our products and don’t ask for money, just samples.

We’ve recently started experimenting on YouTube with cocktail influencers doing reviews. These are usually former bartenders who are taking their knowledge into their home studio.

An example is Anders Erickson out of Chicago. He does quality productions and knows his stuff. We partnered with him, and it’s been a great match. We extended an affiliate discount to him. He adds the link below his YouTube video that sends people to our website, which we track.

So far it’s been nothing but upside for us. It’s not like a 10-times return on ad spend, but it’s definitely worth it. And because it’s YouTube, it’s evergreen. We’ll get traffic from those links five, 10 years from now.

Bandholz: Where can people find you?

Harrison: Our site is LiberAndCompany.com. We’re on Twitter, Facebook, Instagram, and YouTube. I’m on LinkedIn.

The above post “Cocktail Syrup Manufacturer Pivots to DTC” was published on this site.

We hope that you found the article above of help and/or of interest. You can find similar content on our blog here: blog.hostfast.com/blog
Let me have your feedback below in the comments section.
Let us know which topics we should cover for you in future.