October 31, 2005
The spirit of spuds | A Freeport startup hopes to make connections between potatoes, vodka and Maine
By Sean Donahue
Call it the transitive property of branding. Maine is known for growing potatoes, and potatoes are an ingredient in high-end vodka. Ergo, Maine should be known for producing high-end potato vodka.
That's the theory behind Freeport-based Maine Distilleries and its new Cold River Vodka, a small-batch vodka made from Maine potatoes and western Maine water that is expected to reach the state's stores and restaurants Nov. 7. Maine Distilleries' founders, including a Fryeburg potato farmer and a former American Skiing Co. executive, are hoping to develop a new market for Maine potatoes while creating a premium vodka brand that can earn a place on the top shelf of bars and restaurants nationwide.
That top shelf has become the most lucrative space in the spirits market. Last year, vodka accounted for 26.2% of all consumer liquor purchases, according to the 2005 Adams Beverage Handbook. Vodka sales topped 44 million cases, a 6.4% increase over 2003 sales and a 23% gain since 2000. And within that category, the fastest growth came among premium or super-premium brands like Grey Goose, which saw its sales increase 25.7% in 2004.
"We certainly want to compete with Grey Goose and Belvedere and Chopin and Hangar because we're going to placed right up there next to them," says Bob Harkins, CEO of Maine Distilleries, who says a 750-ml bottle of Cold River Vodka will retail for $31.99. "The quality of the product is paramount, the quality and appeal of the packaging is paramount and we've got to have a marketing platform that really tells our story."
The last factor may be most important, given that the booming vodka market has attracted a host of new brands in recent years. To stand out among so many etched-glass bottles, Maine Distilleries wants to claim a niche based on its key ingredient: Cold River is one of only two domestically produced potato vodkas (the other being, naturally, in Idaho), and wants to challenge high-end Polish varieties like Chopin for a place in U.S. drinkers' glasses.
The trick, though, is that Maine isn't Poland ˆ which has a potato heritage of its own but also claims to be the birthplace of vodka (a claim Russia disputes). With no vodka tradition to fall back on, Maine Distilleries is trying to make that final link between potatoes, vodka and Maine in consumers' minds through a brand that's heavily steeped in the company's history and the state's identity. "It has to be a really good product, and you need attractive, striking packaging," when introducing a new vodka, says Richard Brandes, editor of the spirits trade magazine Beverage Dynamics. "But it sometimes helps to have a story behind the brand."
Upscale, down home
Maine Distilleries' story is simple: A little more than two years ago, Fryeburg-based potato farmer Donnie Thibodeau was looking ways to boost potato sales in the face of an Atkins diet-driven slump. He returned to an idea of making potato vodka he'd been pondering for years with his brother Lee, a southern Maine neurosurgeon. The brothers contacted their old friend Bob Harkins, who had recently left American Skiing Co. after serving as vice president of resort services for Sunday River, for help analyzing the vodka market.
Harkins says he was convinced of the potential after only a day of research. Later, after performing more research and beginning to develop a business plan, the partners added brewing expert Chris Dowe as their head distiller, and got to work designing their distillery and developing a product.
Harkins can't say exactly what the initial production will be, but Maine Distilleries is capable of producing about 5,000 cases annually ˆ tiny, even compared to niche brands like Chopin, which sold 77,000 cases in 2004. But unlike other high-end vodkas, which tend to market themselves with an image of cool European sophistication, Cold River Vodka is going for something more rustic.
The bottle touts its key ingredients ˆ Maine water and potatoes from a family farm ˆ amidst images of mountains and potato farms and a literal/figurative tagline, "The spirit of Maine." The company's website describes the drink as being at home in fine restaurants or sipped on a back porch, and offers recipes like the "Backwoods Martini" ˆ a name it's hard to imagine Grey Goose or Ketel One using. "We want to be perceived as a high-quality product that is sophisticated and elegant, but at the same time, we are who we are," says Harkins.
Based on that marketing platform, Maine Distilleries has already lined up local support for Cold River Vodka. Hannaford Bros. has agreed to carry it, Harkins says, and nearby restaurants, including the Muddy Rudder in Yarmouth, plan to serve it as soon as it's available.
But to succeed, Harkins admits, Cold River Vodka needs widespread distribution, which Brandes of Beverage Dynamics says is the biggest challenge for a new spirits brand.
Maine Distilleries must approach distributors in every other New England state ˆ the company's initial target market. (Harkins already is working with brokers to place Cold River in New Hampshire liquor stores.) And success will depend on how well Cold River's product and brand stands out among other high-end vodkas.
For that effort, at least one small vodka maker likes what he sees. Duncan Holaday started Vermont Spirits in 1998 to make vodka out of the abundant maple sap available on his off-the-grid farm in St. Johnsbury, Vt. Now, after three years on the market, he sells about 1,000 cases of his unusual spirits annually, helped in part by the connection consumers make between Vermont, its maple trees and its farming heritage, he says. He sees Cold River Vodka developing what he calls a similar "authentic" brand. "If they're picking potatoes and making vodka right there in Maine, that's what people want to know," says Holaday. "They're not just buying a fancy idea but are enjoying something done in an authentic way."
Come November, Maine Distilleries will start testing the brand's appeal with a marketing campaign that combines print advertising, in-store promotions and events such as a media tasting session. Harkins declines to say what the company's marketing budget is, but claims it's "modest." In the meantime, the partners are busy trying to finalize the all-important product. As of mid-October, they were still tweaking the filtration method.
But Harkins insists Cold River Vodka is ready for its Maine rollout, which will in turn help determine the brand's fate across the region. "The Maine market is a very important proving ground," says Harkins. "We need to do a great job in our own backyard."
That's the theory behind Freeport-based Maine Distilleries and its new Cold River Vodka, a small-batch vodka made from Maine potatoes and western Maine water that is expected to reach the state's stores and restaurants Nov. 7. Maine Distilleries' founders, including a Fryeburg potato farmer and a former American Skiing Co. executive, are hoping to develop a new market for Maine potatoes while creating a premium vodka brand that can earn a place on the top shelf of bars and restaurants nationwide.
That top shelf has become the most lucrative space in the spirits market. Last year, vodka accounted for 26.2% of all consumer liquor purchases, according to the 2005 Adams Beverage Handbook. Vodka sales topped 44 million cases, a 6.4% increase over 2003 sales and a 23% gain since 2000. And within that category, the fastest growth came among premium or super-premium brands like Grey Goose, which saw its sales increase 25.7% in 2004.
"We certainly want to compete with Grey Goose and Belvedere and Chopin and Hangar because we're going to placed right up there next to them," says Bob Harkins, CEO of Maine Distilleries, who says a 750-ml bottle of Cold River Vodka will retail for $31.99. "The quality of the product is paramount, the quality and appeal of the packaging is paramount and we've got to have a marketing platform that really tells our story."
The last factor may be most important, given that the booming vodka market has attracted a host of new brands in recent years. To stand out among so many etched-glass bottles, Maine Distilleries wants to claim a niche based on its key ingredient: Cold River is one of only two domestically produced potato vodkas (the other being, naturally, in Idaho), and wants to challenge high-end Polish varieties like Chopin for a place in U.S. drinkers' glasses.
The trick, though, is that Maine isn't Poland ˆ which has a potato heritage of its own but also claims to be the birthplace of vodka (a claim Russia disputes). With no vodka tradition to fall back on, Maine Distilleries is trying to make that final link between potatoes, vodka and Maine in consumers' minds through a brand that's heavily steeped in the company's history and the state's identity. "It has to be a really good product, and you need attractive, striking packaging," when introducing a new vodka, says Richard Brandes, editor of the spirits trade magazine Beverage Dynamics. "But it sometimes helps to have a story behind the brand."
Upscale, down home
Maine Distilleries' story is simple: A little more than two years ago, Fryeburg-based potato farmer Donnie Thibodeau was looking ways to boost potato sales in the face of an Atkins diet-driven slump. He returned to an idea of making potato vodka he'd been pondering for years with his brother Lee, a southern Maine neurosurgeon. The brothers contacted their old friend Bob Harkins, who had recently left American Skiing Co. after serving as vice president of resort services for Sunday River, for help analyzing the vodka market.
Harkins says he was convinced of the potential after only a day of research. Later, after performing more research and beginning to develop a business plan, the partners added brewing expert Chris Dowe as their head distiller, and got to work designing their distillery and developing a product.
Harkins can't say exactly what the initial production will be, but Maine Distilleries is capable of producing about 5,000 cases annually ˆ tiny, even compared to niche brands like Chopin, which sold 77,000 cases in 2004. But unlike other high-end vodkas, which tend to market themselves with an image of cool European sophistication, Cold River Vodka is going for something more rustic.
The bottle touts its key ingredients ˆ Maine water and potatoes from a family farm ˆ amidst images of mountains and potato farms and a literal/figurative tagline, "The spirit of Maine." The company's website describes the drink as being at home in fine restaurants or sipped on a back porch, and offers recipes like the "Backwoods Martini" ˆ a name it's hard to imagine Grey Goose or Ketel One using. "We want to be perceived as a high-quality product that is sophisticated and elegant, but at the same time, we are who we are," says Harkins.
Based on that marketing platform, Maine Distilleries has already lined up local support for Cold River Vodka. Hannaford Bros. has agreed to carry it, Harkins says, and nearby restaurants, including the Muddy Rudder in Yarmouth, plan to serve it as soon as it's available.
But to succeed, Harkins admits, Cold River Vodka needs widespread distribution, which Brandes of Beverage Dynamics says is the biggest challenge for a new spirits brand.
Maine Distilleries must approach distributors in every other New England state ˆ the company's initial target market. (Harkins already is working with brokers to place Cold River in New Hampshire liquor stores.) And success will depend on how well Cold River's product and brand stands out among other high-end vodkas.
For that effort, at least one small vodka maker likes what he sees. Duncan Holaday started Vermont Spirits in 1998 to make vodka out of the abundant maple sap available on his off-the-grid farm in St. Johnsbury, Vt. Now, after three years on the market, he sells about 1,000 cases of his unusual spirits annually, helped in part by the connection consumers make between Vermont, its maple trees and its farming heritage, he says. He sees Cold River Vodka developing what he calls a similar "authentic" brand. "If they're picking potatoes and making vodka right there in Maine, that's what people want to know," says Holaday. "They're not just buying a fancy idea but are enjoying something done in an authentic way."
Come November, Maine Distilleries will start testing the brand's appeal with a marketing campaign that combines print advertising, in-store promotions and events such as a media tasting session. Harkins declines to say what the company's marketing budget is, but claims it's "modest." In the meantime, the partners are busy trying to finalize the all-important product. As of mid-October, they were still tweaking the filtration method.
But Harkins insists Cold River Vodka is ready for its Maine rollout, which will in turn help determine the brand's fate across the region. "The Maine market is a very important proving ground," says Harkins. "We need to do a great job in our own backyard."
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