April 2011

The New Spirits Thin-dustry

By: Tim Teichgraeber

As of March 21, Skinnygirl Cocktails became part of the Beam Global Spirits & Wine portfolio.

The epiphany came shortly after Bethenny Frankel mixed herself a cocktail on the reality show Real Housewives of New York and said, "You know what this is? It's a Skinnygirl Margarita!"

"The minute I said that on Bravo, it was earth-moving," says Frankel. "It generated tremendous response on bulletin boards and in emails. Everyone wanted to know what was in the Skinnygirl Margarita."

Frankel knew that she had stumbled onto a potential hit in her recipe for a lightly sweetened, lower calorie pre-mixed Margarita. Two years later, she's proven herself right.

A natural food chef and the author of two bestselling food books-Naturally Thin and The Skinnygirl Dish-Frankel has long been an advocate of healthy eating and specializes in developing healthy versions of conventional high-calorie dishes. When it came to cocktails, though, Frankel had been a bit frustrated. "I wanted a drink that I could order every night. I'd try to order something that was low in calories and it would end up being raspberry vodka on the rocks with a lime, and I'd be miserable. I'd wind up drinking 700-calorie Margaritas afterward because I wasn't satisfied."


Bethenny Frankel thinks thin in front of a 300-case display of Skinnygirl Margarita at the Stater Bros. grocery store in Huntington Beach, CA.
PHOTO: ROB BROWN

 


"The minute I said that on Bravo, it was earth-moving," says Frankel. "It generated tremendous response on bulletin boards and in emails. Everyone wanted to know what was in the Skinnygirl Margarita."

Frankel knew that she had stumbled onto a potential hit in her recipe for a lightly sweetened, lower calorie pre-mixed Margarita. Two years later, she's proven herself right, and left some big spirits companies in her wake.

A natural food chef and the author of two bestselling food books-Naturally Thin and The Skinnygirl Dish-Frankel has long been an advocate of healthy eating and specializes in developing healthy versions of conventional high-calorie dishes. When it came to cocktails, though, Frankel had been a bit frustrated. "I wanted a drink that I could order every night. I'd try to order something that was low in calories and it would end up being raspberry vodka on the rocks with a lime, and I'd be miserable. I'd wind up drinking 700-calorie Margaritas afterward because I wasn't satisfied."

As a solution, she created Skinnygirl Margarita. Frankel compares her straightforward recipe of blue agave silver tequila, lime juice and agave nectar to the Margaritas she had enjoyed on vacation in Mexico-only less sweet. The subtle natural sweetness of agave nectar meshes perfectly with its distilled counterpart and is considerably lower on the glycemic index than corn syrup, sucrose or fructose.

Phenomenal Growth

Marc Taub, President of Palm Bay International, a significant player in the wine import business, was in the process of building a strong portfolio of spirits, including Aperol, one of the fastest-growing spirits brands in the world. He, along with his father David, Chairman and CEO, decided to hire Alain Barbet, a Pernod-Ricard veteran to expand that portfolio and lead a dedicated spirits operation. Then, in early 2010, Marc discovered Skinnygirl Margarita and saw it as a potential winning addition to that portfolio.

"Bethenny and her public profile were getting bigger and bigger by the month. We tasted the product and thought the concept was really interesting. We knew that Palm Bay's distribution strength and wholesaler relationships could take the brand to a whole other level. We decided to take it on," says Barbet.

Skinnygirl had sold a few thousand cases in its first six months before coming to Palm Bay. With Palm Bay's powerful national sales force behind it and production kinks worked out, sales growth has been nothing short of phenomenal. In the past year, the brand has rocketed to being the fastest growing ready-to-serve on the market.

"At this point we have depleted over 120,000 cases in ten months, despite supply challenges. I've been in the business for about 12 years now, and this is one of the most successful launches ever," says Barbet.

Skinnygirl at Retail
Palm Bay's long-standing network of relationships with key national and regional chains has been an integral component of Skinnygirl's success. One of those chains is Nugget Market in Northern California. Hank Beal, Director of Adult Beverages for both Nugget Market and Food 4 Less, has put Skinnygirl Margarita into all of his stores. "It has been the category leader for us since we brought it in," says Beal, noting that it has outsold some very well-established brands.    
Hank Beal is impressed with the Skinnygirl sales at the Nugget Market chain in Northern California.
PHOTO: RYAN LELY
"You'd expect it to be a good summertime product, but this has done well right through the winter months," says Beal. "I look forward to seeing how it does in summer. With enough product to sell now, it's going to look really appealing come June, July and August."

 
Pete Burra, owner of John and Pete's in West Hollywood, CA.
PHOTO: RACHEL BURKONS
At John and Pete's in L.A.'s chic West Hollywood neighborhood, image-conscious customers have been driving successful sales of Skinnygirl since before the brand's partnership with Palm Bay. "When it first launched, we couldn't keep it in stock," says owner Pete Burra Jr.  Now that the brand is in the Palm Bay portfolio, Burra is able to meet his customers' demands for Skinnygirl, which he cites as particularly popular among "young ladies who want to look their best."

"Skinny girl sells so well because it is the first ready-to-drink Margarita that doesn't have lots of excess sugar and calories, and that's exactly what our customers are looking for."  —Rachel Burkons

Costa Mesa, CA, in Southern California's (in)famous Orange County, is known for being a hotbed of beautiful bodies on beaches, and sales of both Skinnygirl and Voli Vodka at Hi-Time Wine Cellar are reflective of the city's fitness-conscious mentality. "The response to these brands has been quite amazing," admits Keith Hanson, who owns the store and has carried both products since their initial launches.

"We get a lot of people calling the store in advance, from all over the country, asking specifically for Skinnygirl and Voli by name, because they've heard about the brands and they are interested in low-cal options," says Hanson. Skinnygirl, in particular, has captured the attention of Hanson, who sees that it stands out from the rest of the ready-to-drink pack. "It's much more palatable than anything else on the market," he says.  —Rachel Burkons
 
Keith Hanson.
PHOTO: ROB BROWN

Low-Cal Category Leader

With Skinnygirl's success on the rise, Palm Bay is looking to build a new calorie-conscious category into the spirits industry, a move that seems like a natural progression to Voli Vodka CEO Adam Kamenstein, who has also joined Palm Bay's pioneering effort.

 
Voli's fusion-flavor vodkas have 25-40 percent fewer calories than traditional vodkas.
PHOTO: MARIA SHRIBER
 

"If you go to the grocery store, you'll see that every food and beverage category has a lighter or low-calorie component-then you turn the corner to the spirits section and you see there's no such choice for the consumers," says Kamenstein of the pre-Voli and -Skinnygirl days.

Since early 2010, Voli has been working to bring that low-cal option to consumers with a lineup of unique fusion-flavor vodkas, including Espresso Vanilla, Raspberry Cocoa and Orange Vanilla, all of which weigh in with 25-40 percent fewer calories than traditional vodkas on the market.

As a ready-to-drink product, Skinnygirl takes the guesswork out of calorie-counting for consumers, and Kamenstein hopes to do the same with Voli, thanks to the rich smoothness of the fusion flavors that can be enjoyed without the addition of high-calorie mixers. "We wanted to develop flavors that are delicious enough to just drink on the rocks, or with a splash of soda or tonic," explains Kamenstein. "It made no sense to offer a low-calorie product that was undermined in its use through mixers."

 

With Palm Bay's support, Kamenstein and Frankel have been bringing the low-cal revolution to fitness-conscious consumers who don't want to undermine an entire week's worth of weight-watching with a Friday night cocktail, and sales of both brands have reflected that Palm Bay is answering a long-awaited consumer call.

"With the help of Palm Bay, we look at ourselves as pioneering a new category: the low-cal spirit," says Kamenstein. "It's exciting; we're forever changing the spirits industry, and we're legitimizing the calorie-conscious spirit category."

 

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