How the two-person team at Monday Distillery sold half a million alcohol-free drinks in under two years
As demand for Monday Distillery’s sugar-free, alcohol alternatives rises, the founders have had to adapt the business rapidly.
This article was first published on June 16, 2021.
Alcohol-free beverage manufacturer Monday Distillery experienced supercharged growth over 2020, as its sugar-free gin and tonics and whiskies carved out a space in a booming market.
The brand, which features an old-world, classical design aesthetic, quadrupled its revenue last year through a combination of digital and traditional marketing strategies, and being stocked by major retailers, including Endeavour Group’s Dan Murphy’s.
In 2021, founder Samantha Manning along with her husband and business partner Haydn Farley are forecasting to grow the business by a factor of five. In the 12 months to that date, they sold half a million bottles of their ready-to-drink (RTD) varieties, and are looking to sell a (conservative) 1 million more over the next 12 months.
Revenue for the 2020 financial year sat at $200,000, and the company expects that figure to be finalised at $1.2 million for the 2021 financial year.
SmartCompany Plus recently sat down with Manning and Farley to find out how they grew the brand so quickly, and how they kept up with demand.
Source: supplied
Five key takeaways:
If you’re pitching to a big retailer, having a validated customer model and data through your own online store will help get you across the line.
Traditional marketing like PR and radio ads are great for reaching the mass market, and you can follow up with targeted digital ad buys for maximum effect.
It’s cheaper to keep your customers coming back rather than acquire new ones, so consider a loyalty program as part of your overall customer strategy.
If you’re forecasting your ordering needs, start with your best and worst case scenarios, then go with the happy medium.
If you’re running a business with extensive use of third-party companies, you need to maintain good relationships first and foremost. This helps you when services are strained, and you can learn a lot from more experienced players in the space.
From tea, to water, to alcohol-free alternatives
Manning’s business journey started in her home kitchen seven years ago, experimenting with loose leaf teas and specialising with iced teas.
The self-taught brewer learnt a lot about botanicals, distilling, herbs, PH levels, food acids, shelf stability and sourcing supplies to build up her first brand and business, Cha Cha Tea.
From iced teas, she moved to the convenience RTD segment, starting a luxury water brand called Osun Sparkling in 2017. Osun was sold nationally through Instagram, and through speaking with buyers, Manning learned that the (mostly feminine) customer base was buying the drink as an alcohol alternative.
Charged with crystals and priced at $64 for a box of 12 bottles, it was an early validation of the future business model.
It proved customers were willing to buy a drink they had only seen online, if it was delivered to their door and presented beautifully.
“That gave me the data and confidence to invest in the non-alcoholic RTD space,” Manning tells me.
From here, Monday Distillery’s range of sugar free, non-alcoholic RTD products was born in 2019.
Designed as a placebo for spirits, there are two ‘gin and tonics’ in the range, a ‘dark and stormy’ (rum profile drink), a grapefruit paloma (margarita alternative) and two recently added ‘whiskey’ drinks. The latest product, a mezcal-inspired drink called Mezcalita, was launched this week.
The drinks are more sophisticated than a can of cola, allowing adults to feel included when they’re having them at a barbecue or catching up with friends. It’s about being part of the ritual of drinking, without the alcohol.
Non-alcoholic beverages are the next step in the wellness journey for health-conscious consumers, says Manning. Cutting down on alcohol consumption follows trends in both sugar reduction and meat reduction.
Their success verifies the trend.
View this post on Instagram
Perfecting the third-party process
Manning and Farley stick to the elements of the business they’re best at, and use third-party companies for everything else.
“We are manufacturing a beverage without the heavy expense of a facility or tens of staff,” explains Manning.
This allows Manning and Farley to focus on their branding, customer and retail strategies, and distilling new recipes. The third-party warehouse, manufacturing and packaging can be accelerated to fill demand as it crops up, without huge capital expenditures or hiring and training new staff.
However, running so many divisions of the company through third parties would not be possible without strong personal relationships with Australian businesses, according to Manning.
Even when the company had supply issues with glass, or ingredients, the lead times weren’t dependent on importing from overseas suppliers.
Their early retailers and suppliers also helped with their learning curve by giving direct feedback.
“We kept quizzing them on how we could do things better. They’ve been great at educating us, having not come from the industry,” adds Farley.
Getting on Dan Murphy’s shelves
Endeavour Group, the owner of Dan Murphy’s and BWS and soon-to-be demerged subsidiary of Woolworths, is one of the biggest alcohol retailers nationally. So it was a big milestone for Monday Distillery when its products were stocked in its Victorian stores.
As for how Manning achieved it? She credits pester power and being like a dog with a bone, eager to prove a point.
Her first contact with Dan Murphy’s was for Osun Sparkling two years ago, pitching the drink as on-trend, online, and proven to be successful.
In a meeting with Dan Murphy’s buyer team, she explained her logic: non-alcoholic is a category that is underrepresented, and it’s not based around making something cheap because it doesn’t have alcohol in it.
“People want to experience something that is sophisticated and beautiful, and are willing to pay just as much money for non-alcoholic drinks as alcohol, because they want to feel included,” Manning told them.
She shared the consumer insights and growth from Osun Sparkling over the previous 12 months, and arrived with an early prototype of her Monday Distillery G&T.
Source: supplied
It took a year longer to see the products on shelves, but her pitch cut through.
First though, she had to upscale production and learn what it meant to deal with a big retailer.
Meeting rapidly growing demand
Growing the business by a factor of five over 12 months involved a massive change in order amounts from all Monday Distillery’s suppliers.
As the business has grown, it has become a more important customer for their suppliers and can now secure arrangements for blanket orders.
Farley handles the logistics, and says forecasting has been crucial to ensure supply can meet demand, particularly for glass bottles, which have been in short supply nationally.
He follows a simple method: gain an understanding of all the lead times from different suppliers, then any potential issues that could happen, and work backwards from there so you know when things need to be organised.
He plans for the best and worst case scenarios, then settles on a happy medium in between. By understanding what the business will need from each supplier at different levels of revenue, it’s easier to get the orders right.
One third of Monday Distillery’s sales are direct via its website, with the bulk of the remaining orders divided between Endeavour Group and On The Run, a South Australian chain of convenience stores.
Marketing magic
For their marketing efforts, Manning and Farley have worked with digital agency Hamma.digital to automate the collection of customer and sales data. I spoke to Ian Hammond, Hamma’s managing director, on how that worked in practice.
Combined with the customer insights Manning had been collecting through the company’s Instagram page, Hamma and Monday Distillery took a ‘listen and learn’ approach to the brand’s digital marketing efforts.
What they identified was that people wanted two things from non-alcoholic alternatives: taste and experience.
The company already had a beautiful brand, but it was very product-focused, so the marketing shifted. Instead of just being about a well-presented drink, the messaging focused on how it would let you do more: stay out for longer and enjoy your night better.
Think: ‘whiskey without the wobbles’; and ‘high spirits, clear minds’.
Source: supplied
Hamma built the company’s e-commerce store, and implemented its CRM (Hubspot), and its customer portal (Yotpo). This helped Manning and Farley understand their conversion rate for different campaigns, what made people buy, and where they were arriving from.
For example, when Instagram influencers like Sarah-Jane Clarke, the co-founder of Sass and Bide, mention Monday distillery’s products, the team could identify where the sales spike came from.
Revamping its website, CRM and customer portal has led to Monday Distillery drawing in leads beyond customers buying bottles.
Farley says the business now reliably pulls in five-to-ten wholesale leads from its website every week.
Traditional marketing for non-traditional drinks
For mass-market reach, Monday Distillery has found radio ads and traditional PR are both highly effective for drawing attention.
Then the brand follows with performance-based marketing through digital channels, leveraging the intelligence behind Facebook, Instagram, and Google Search, in what Hammond describes as a “two-pronged attack”.
The business has also launched a traditional brand loyalty program, Club Monday.
It supports customers with free products, access to limited-releases, gifts, and tutorials for how to make non-alcoholic drinks, keeping them connected to the brand.
After starting Club Monday, the brand achieved a 35% return rate for customers to its website.
“We have not had any problems with customers dropping off. It’s a good compliment that they’re enjoying the product and experience along the way,” says Manning.
That means Monday Distillery is spending less on digital marketing ad buys, as people are already coming back.
Of course, online companies that rely on social media to get the brand in front of people are content-hungry.
With Manning locked into product development and Farley working on logistics and distribution, they tell me their first hire will likely be a content creator to fill the never-ending demand for social media content.
