III. MARKETING A. Major marketing objectives and goals Manifest Destiny’s goal is obtain 40 acres of property off of Country Road 181A in Salida Co. and begin the process of clearing and planting the rye fields. Once that is accomplished we plan to build a structure to house the distillery, with mills, barrel rooms and eventually event space for tasting and farm to table dinners. We plan to open the distillery with the first batch of barrel aged rye whiskey in 4 years. The Manifest Destiny Distillery will market to the entire state of Colorado but will have targeted marketing towards the Salida and its surrounding ski resorts. It will focus on remaining in the Micro-Distillery market which is loosely defined any distillery that produces less than 300,000 bottles per year.
Objectives: 1)To Release the first 25,000 bottle batch of rye whiskey in 2021 2)Increase production output to 100,000 bottles per year by 2023 3)Increase production output to 150,000 bottles per year by 2026 4)Gain Market share of 3% in the Colorado Whiskey Micro-distillery Market during the first production year and increase by 1% for the subsequent 3 years. 5)Reach the breakeven point after the 2nd year of production and start to operate profitable during year 3 or production. Sales Estimates by Production Year
Year 120,000 bottles @ $40 retail per bottle (5,000) previously sold during crowd funding. = $800,000 Year 2 60,000 bottles @ $40 retail per bottle = $2,400,000 Year 380,000 bottles @ $40 retail per bottles =$3,200,000
B. Product /Service Rye Whiskey is a drinking spirit that is required by law, in America, to be made from at least 51% rye mash, while the remainder is corn and barley. This is pointed out as Canadian Rye often contains very little Rye. It is then aged in oak barrels for a minimum of 2 years. It is then bottled at a minimum of 80 proof and a maximum of 160 proof. The creation of Rye whiskey uses large amounts of water to distill and process the mash, which Manifest Destiny will source from local mountain spring water. The end product is enjoyed as a strong alcohol with spicy and “brash” flavors. (Liquor.com)
C. Control methods As a micro distillery we will not have in house labs to test the quality of our product. We will address this concern by sending samples out to an independent third party liquor lab to run the following tests: 1)Alcohol (by volume or Proof)
2)Solids (or extract) content, 3)Specific gravity of sample 4)Acidity and certain volatiles (congeners) – 5)Iron Content in the Water being used – This is particularly important when distilling Whiskey as even a small amount can turn it sour. These five are the baseline for Whiskey Quality Production, as our distillery increases in production, more resources will be put towards quality testing. Aside from laboratory testing routine checks of the bottling process, including the sanitation of the bottles, checking the bottles for malformation and lid fit will be conducted. (http://alcbevtesting.com/) Inventory control will be managed with the purchase of Distillery Solutions Software, produced by a small firm and available on a sliding scale based on distillery size. The software will aid in: 1)The tracking or purchase orders
2) Providing reorder alerts for supplies 3)Formula Management and Calculations 4)Barrel Management 5)Vendor/Distributor Management As Manifest Destiny grows in production it will add additional options focusing on the sales aspect of the software.
D. Target market The target market is the active and educated millennial generation ages 21-36 throughout the state of Colorado and those that go there to engage in winter sports. In Colorado this population numbers about 1.1 million. According to the most recent census data they now outnumber all other generations in number of employed individuals. We will target individuals and couples with a median income of $50,000 and above, which is below the average in that age range throughout the state. This salary allows residual income to travel and engage in experiences such as dinners at the distillery. We are focusing on this demographic as according to Forbes research they highly value authenticity and expect brands to give back. This aligns with our goal to craft Whiskey in a responsible and ecofriendly way and to create a true farm to table whiskey that is both rewarding to drink and leaves zero carbon footprint. E. Place
We have chosen lot #227180 off of County Road 181A in Salida Co. This lot is made up of 40 acres of undeveloped land. While it is in mountainous terrain there is enough level space to clear 30 acres to be used as fields for the production of Rye, Barley and Corn. A one acre field can produce enough Rye, Barley and Corn to make about 5,000 bottles. With an eventual production goal of 150,000 bottles per year, the full 30 acres will be needed. There are lots on either side of our 40 acre parcel and as production increases an analysis of the need for extra land will be performed. 3 of the front acres will be cleared for a drive, a distillery and an event space. The remaining 7 acres will be left wild and can be reevaluated once growth starts to occur. Channels of distribution
Colorado is one of the few states with Self Distribution Laws in place for distilleries. This means when you distill Whiskey in Colorado you are then permitted to deliver, sell and collect revenue yourself without engaging distributers. As a small distillery we plan to begin our distribution through self-distribution channels by partnering with local ski resorts and restaurants in our demographic. We also plan to encourage direct to customer sales, through the experience of visiting the distillery, tasting and taking tours.
F. Price CompetitorPrice Per Bottle Breckenridge$50 Downslope Double Diamond $32 Stranahan’s Whiskey$58 Mystic Mountain$32
Through analysis the competition fell into the $50+ and less than $35 price point categories. Due to the fact that our product is newly emerging, we don’t want to go above established local brands such as Breckenridge, but our unique process and local sourcing demands a higher price point then some of the lower options. The plan is to come in around $40 a bottle. As the brand expands there may be room to create premium labels at a higher price point, if our customers show an appetite for it.
G. Promotion Our main consideration is that we are an eco-friendly and socially responsible company, that id focused on local sourcing and leaving no carbon footprint. With that in mind as well as our customer base it is expected that most of our promotions and communications will be electronic, so as not to leave and paper. The generation of our target customer base has some specific trends when it comes to engaging with a company and spending money on their products. The first is that that they aren’t influence by commercials and print ads, according to Forbes only 1% of millennials polled said that they would trust a brand more due to an advertisement. With this information we will not create a commercial campaign through the television medium, or printed advertisement.
The second way our target audience makes purchasing decisions is by checking blogs and social media. The first way that we can impact this venue, is to host a media dinner where we invite bloggers based out of Colorado, to come to the distillery and tour the facilities, and taste the whiskey once it has been produced. 62% of millennial say that it is important to them to engage with brands on social media. It is expected that we have Facebook, Instagram and Snapchat pages with a dedicated staff member to post pictures, updates and answer questions. To create buzz, we will run contests with Instagram and other social media platforms where anyone that tags themselves and our company drinking whisky, will be entered to win a bottle or a tour of the distillery.
We plan to set aside 2% of the bottles produced for promotional purposes. Social Media will also play a large part in garnering interest in our crowd-sourcing campaign. Prior to the production of whiskey we will need to obtain funding, which we have chosen to do through Kickstarter. Kickstarter allows us to set rewards for different donation amounts to our campaign. For small amount, a social media shout out is usually acceptable. For $100 donations (limited to 5,000 bottles) customers will receive a voucher for one of our first bottles, then once production has commenced they can pick up the bottle on site at any time. For $250 investors will receive an invitation to a farm to table meal at our venue, prior to production so they can see the status of our operation.
For $500 investors will be invited to the first bottling party hosted at the distillery. As investors show interest we will increase the amount and diversity of rewards offered. The idea of Kickstarter really plays into our target demographics desire to “co-create” products with companies. (Forbes) It allows them to feel as if they are part of the company too and are backing something that they believe in. Another marketing tactic we will use to play on this value is crowd sourcing ideas. Once the Whiskey has begun production, we will launch a crowd sourcing campaign for ideas on the best cocktail recipe for our spirit. Peers will be able to vote on their favorites, once the top two have been chosen we will being the finalist to Colorado and choose a winner.
The winner will be the featured cocktail at Monarch Ski Resort on opening weekend. A final campaign that we will use to engage the community is partnering with Universities that have sustainable energy departments throughout the state. This will promote our alternative production modalities such as biodiesel powered tractors; solar panels that power our distillery and stills that are heated by wood from locally sustainable sourced beetle kill pine. We will facilitate discussions with the students around why we have made these choices and engage them for capstone projects if they take an interest. As our business expands, we will look into establishing a scholarship. Not only does this allow is to circulate Manifest Destiny as a brand it also fills the need of our target demographic to give back to society.
The costs for advertising will until production launches will be social media management from the founding staff. This does not have a cost associated with it. During the third year as production gets closer we will set aside $25,000 to bring bloggers, local bar owners, and ski resort managers up to Salida for tours of the distillery. Once production commences we will put aside $40,000 and 2% of our bottles to engage with entities throughout Colorado. As max production is reached we will set aside 5-7% of our profit for promotional events, contests and networking. Although the majority of our advertising will be through electronic media, and personal engagement, we will also put 10% of our resources towards outside advertising such as banners at ski resorts. H. Competition
Our major competitors are other micro distilleries located in Colorado such as: 1)Breckenridge Distillery 2)Downslope Distillery 3)Boulder Distillery 4)Mystic Distillery 5)Stranahan’s Distillery While these companies are local to Colorado and produce similar product to our Whiskey, we are setting ourselves apart by focusing on the impact of our distilling process to the environment and society.
The distilleries listed above are concentrated in the more northern part of the state and towards Denver. In our unique location there is only one other distillery, Wood’s High Mountain. However their tasting room is located in town, which is a distinctly different feel from our high mountain retreat, which doubles as a destination for farm to market. They also produce whisky under traditional methods, while we will focus on clean production. Compared to our Competitors our strengths and weaknesses are: StrengthWeakness
Focused solely on Rye Whiskey, so we can perfect itDon’t have a mixed production line Eco and Environmentally FriendlyNew to production Socially ResponsibleLack of relationships with local establishments Unique Price Point
Marketing Positioning Follower vs. Leader We plan to follow the initial entrance path of the established distilleries, but break apart as a leader in clean, eco-friendly production of Whiskey. Quality vs. Price We will not lower our quality standards. Manifest Destiny will be founded on exceptional production standards and product quality. We will raise the price of our product if we must but we will not produce a lower quality product. Innovator vs. Adapter
We are an innovator when it comes to our production methods and focus on not leaving a carbon footprint. International vs. Domestic We have no short term plans to operate internationally or even outside of Colorado. Customer vs. Product We will work to engage our customers and create the highest quality, socially and economically responsible product available. We believe that our customers can also me some of our strongest allies and look forward to partnering with them.