Distillery In-house Sales and Tour Model

[sbivalacqua]

We are a start up distillery that is partnered with a local tour company that pushes a very large number of people through various tours each year.  We are therefore implementing what I call the tour-centric model. In other words, we are not [at least initially] attempting to crack the distribution nut.  We plan to drive consumers to our location.  Moreover, our tour isn't just of our distillery but rather a broader approach including history, education of spirits and a lot about our city.  I say all of this to ask a simple question, namely once you get people in the door, how often do they buy product and how much product do they buy? Also, how much merchandise do they buy?

Also, anyone operating this model who would be willing to discuss the model please message me.

[HedgeBird]

We have found tours to be helpful and are trying to keep growing that aspect of our business.  I don't think I would want to make that the main focus of our sales as its not always easy to keep growing the number of tour takers.

I dont have any solid numbers on how much our tour visitors spend but here are a few observations.

Small parties of two or four that come to your location because they have heard of you and are excited to visit, or they are regular craft brewery/craft distillery visitors, or foodies in general will buy bottles.  (perhaps one bottle sold per 3 visitors)  They have multiple drinks and leave with bottles.  Anyone who drives to your distillery on their own will be the best visitors/tour takers.

Bachelor party type tours, or group tours that arrive in a limo, mini-buss, etc. (typically 10-15 people) will all get at least one drink at the bar.  If they have other locations to visit as part of their tour then they are done after that first drink.  You might sell one bottle to the one person in that group who randomly likes to make cocktails at home.

30-45 person bus group tours filled with an older crowd will take the tour, not drink, and not buy bottles.  The last bus group tour I gave I sold exactly one $15 t-shirt.

 

 

[sbivalacqua]

Thanks. Very helpful information. 

[bluestar]

What Hedgebird says sounds right by our experience as well. So, if large tour blocks are being scheduled in, I would strongly suggest you have it arranged as a package that includes tasting, cocktail, a swag item (tasting glass?), and a coupon toward spirit purchase. Then have the tour company provide you with enough revenue as a cut of the tour fee to cover your base costs for the tour/tasting at least, so that any additional sales will be profit. Otherwise, you could end up with the bus tour scenario Hedgebird describes, and while you may not lose money giving those tours, there is an opportunity cost, you aren't doing something else that could be generating revenue. And if you are not located in a place where people who visit once are likely to return, the advertising component is nil. In fact, most give tours as a means of advertising, presuming the product is distributed and will be purchased elsewhere. Hence, why you might also want to distribute sooner rather than later.

[Blackheart]

Yeah, +3 on this tour size breakdown.  Big tours suck, and dont even get me started about biker types that want to make you a poker run stop or some such bullshit.  Our SOP is that if you have a group of more than 6, somebody's paying for our time and samples.  

The exception: classic car clubs that use your place as their meet-up destination.  Just the other week we had 60-70 guests and everyone bought at least one bottle.     

[sbivalacqua]

Thanks everyone!  The tour company is actually an affiliated company.  Most of the tour revenue will go directly to the distillery. i like the idea of upselling packages that include swag.

 

re: advertising and distribution; great point bluestar. I didn't mean to suggest we wouldn't distribute.  more like we're hoping the tours and in house sales lead to distribution. Also, we have a great local grocery chain that will put all local products in all of their stores.  I'm going to reach out to some of the other distillers and see if we can't also start working on changing the law and allow us to ship to customers but that will likely be a tough battle.  

Reminds me of a thought, can anyone recommend an online retailer? Probably a better question for our distributer once we get a deal, but I'm interested.  I get like 5 emails a day from various internet retailers; just wondering if anyone has had any good or bad experiences.

 

I will definitely be hitting up the classic car clubs now; thanks for tip Blackheart.

[philstill]

Some great thoughts and information on this thread.

[Southernhighlander]

sbivalacqu There is a distillery over near Branson that does not distribute at all and they do really well.  They do several tours per day plus they have a bar over the distillery with live music.  I heard that they tried distributing (a distillery can get a distributors licence in MO) but they found that they make allot more profit selling at their facility.  In MO you get a by the drink licence and carry out licence with your state dsp.  Email me and I will give your their contact info.  paul@distillery-equipment.com

[JoshGreenDoor]

We have had great success with this model, and have been open for 2 months. One thing we do different is scratch made cocktails in the tasting room as well. We currently do tours on FRI/SAT/SUN which has been really helpful in getting new people in. The cocktails/tasting room brings in enough regular attention by it self. Our top 5 sellers includes 3 cocktails and the other 2 are our only 2 bottled spirits (white whiskey / honey whiskey). To date, bottle sales and cocktails have brought the largest revenue. Merchandise has maybe been a 1/10th of the revenue volume. 

Hope that helps.