In today’s issue, I’ll analyze the top 5 reasons why many drinks founders don't focus on their home market. I'll show you my 5-step process to change that and make winning on your home turf your priority.
By adopting this process, you’ll fix the basics before scaling abroad.
Unfortunately, many drinks founders underestimate the importance of having solid foundations and try to run before walking.
They fail to analyze the root cause of what doesn't work and look for shortcuts for growth abroad. They think that selling abroad will be more accessible but the problem at home will repeat a bit later.
They don't understand that the home market is the crash test for their brand. By skipping it, they end up having to fix their foundations later, when it's much more painful.
It's easier to manage a slow growth than a nose-dive in revenues later after you've invested a lot. Your home market is a tough school. If you can make it there, you can make it anywhere. Let's dive into these challenges:
Challenge 1: your home turf is not a cool place to start from. Not everyone creates a brand in NYC or London. Most of them, especially those with a rural positioning are born in small villages. Many of them are nothing picturesque. It's normal to believe that you should start selling in the nearest cool city, but is it so? What about winning the hearts of the villagers that can relate to your local story?
Challenge 2: initial opportunities abroad arise and you defocus. Often you get contacted by random importers that will buy a few cases. You say yes, dreaming of fast growth. Saying you're sold in many countries won't help your investor relations. It will add more pressure on you. Most brands sell 90% of their cases in 1-2 markets, anyway. It's not doable to grow many markets in a short while. Focus your efforts. Don't make it a competition of how many markets you're sold in. If you ship there only a few cases, it's not a market, anyway. It's easier to control issues near home than a thousand miles away.
Challenge 3: you are shy to sell your own product. Many founders I speak to tell me they don't have time to sell their brand. They hire a salesperson or go with a distributor right away. This way they get stuck in their ivory tower not understanding what their brand's issues are. You might have tried dealing with distributors, wholesalers, chains, etc. Let me tell you that it's the same everywhere. You're wrong if you think your importer abroad will fix it for you.
Challenge 4: selling abroad covers up for unclear brand essence. When this happens, there are 2 sides to the coin:
1) your brand has a "dubious" local positioning: you might have based your brand on an imaginary origin instead of on a real place. Locals will spot it so you avoid them by selling abroad, instead. Many brands sell a dream of a place but they're not authentic. E.g. They sell the dream of the Italian Riviera but nobody's ever seen the brand there.
2) your brand lacks a home. You are contract brewing or distilling so there's no place to visit. Without a local place to start from you go abroad, swiping the dust under the carpet. Instead, you should try to build a story about something else (e.g. provenance of the ingredients or a compelling story around the founder).
Challenge 5: starting from the world’s top cities = burning cash there. Most people think that to make a brand scale up, it should win in the world's coolest cities. That's where all brands want to be. Are you sure you are ready for such an A&P (Advertising & Promotion) blood bath? Make sure you don't run out of runway.
Here’s the 5-step process I recommend to overcome the above challenges:
Step 1: Prove that it works where it was born.
Fix your commercial proposition and make local success part of your reason to believe. It doesn't matter if your town doesn't have great venues, make it a regional home, then. If local bars don't want it, ask them why. For "local" you can mean a neighborhood, a city, a region, or a country but start somewhere. Imagine you go to an Italian restaurant with no Italians eating there. Suspicious, uh? The same happens to a Czech Gin that nobody knows in Prague.