The Final Curtain

As most of you already know, today is the last day to enter our online Sweepstakes. Although it may be the final curtain for the Sweepstakes, things go on. The date for the draw of the winner still needs to be officially confirmed, of which we will notify everyone of, that entered, via email. The second bottle which is up to be won in the Sweepstakes, in addition to being signed and numbered and coming with a certificate of authenticity, will also come presented in its own wooden collector's case with signature engraving marking the release of the second bottle in the world of Mendis coconut brandy. So good luck to everyone and stay tuned as we have more exciting events and promotions coming leading up to our launch in late Fall.

Joining The Club

Mendis has been associated with some leading brand names over the past month and many more in the coming months. Mendis is a product of unparalleled excellence that no other alcohol product can compare to. We have spent years mastering this unique product and providing a brand that is the pinnacle in its industry. This commitment to development and craftsmanship will be very evident once we launch and consumers can view and taste this ultra-luxury product.

Anyway, today’s blog is not about discussing what you already know. Though every now and then I like to update everyone with what is going on with our actual business, today is one of those blogs. You may know Mendis was on E! and editorials on us in American Express and Rolls Royce Annual Desk Diary along with numerous other global luxury magazines. Now Mendis is taking to the skies with Middle East Airlines (MEA) in their in-flight magazine, Cedar Wings August/September edition. Mendis is being included in their editorial on the world’s most expensive things, of which Mendis is the world’s most expensive bottle of alcohol. We are very pleased to be included in MEA’s in-flight magazine which is published in 30,000 copies and will remain on board all MEA flights for a period of two months. So if your on one of their flights during August or September be sure to pick up a copy!

World's Most Expensive Things

So what are the most expensive things in the world? We all love luxury things, even if we can't afford them, it always nice to dream about having them. So here's the short list of the world's most expensive things, of which Mendis made it on.





Most Expensive Underwear: Victoria's Secret $15 million "Red Hot Fantasy" bra and underwear. The bra is made from red satin, set with 1,300 gemstones, including rubies and diamonds.





Most Expensive Shoes:Stuart Weitzman's $2,000,000 inspired ruby slippers from The Wizard of Oz, woven from platinum thread and set with 642 rubies







Most Expensive Hair Cut: Lee Stafford's $3,800 "couture cut" hair cut.







Most Expensive House: $140,000,000 Updown Court in Windlesham, North Surrey, England. The house has 103 rooms, 58 acres, a private helipad, five swimming pools.







Most Expensive Tea Bag: PG Tips' $15,000 hand-crafted 280 diamond incrusted 75th birthday tea bag.








Most Expensive Jeans: APO jeans $4,000 Diamond Button and Rivets jeans.







Most Expensive Watch: $11,000,000 24 complications gold watch.







Most Expensive Phone: Peter Aloisson's $56,000 Motorola covered in 1200 diamonds and featuring a keyboard soaked in 18-carat gold.






Most Expensive Nail Polish: The 'I Do' $55,000 polish with platinum dust in it.











Most Expensive Perfume: Arthur Burnham's $95,000 perfume, called Parfum VI, held in a 4 inche bottle made with platinum, 24 carat gold, rubies and diamonds.




Most Expensive Pen: Caran d'Ache made, $265,000 'La Modernista Diamonds' rhodium-coated solid silver pen, with 18-karat gold pen point and is pave-set with 5,072 diamonds and 96 half-cut rubies.






Most Expensive Work of Art: Pablo Picasso's $104,000,000 Garcon a la Pipe (Boy with a Pipe) masterpiece.







Most Expensive Car: Ettore Bugatti's 1930 Bugatti Type 41 Royale Kellner Coach with an asking price of $10,000,000


Most Expensive DVD player: Meridian Audio Ltd, $20,000 Model 800 DVD Player.





Most Expensive Bottle of Alcohol: Mendis $1,000,000 bottle, it is the first bottle in the world released under the Mendis name and category coconut brandy.

Market Trends, Part 2

In Market Trends, Part 1, I discussed the distilled spirits current market data and how companies use that to predicted trends in the industry. In Part 2, I want to look at an example at changes in the market and the role new small companies are playing.

Recently I read an article on Honest Tea, an independent beverage company that was established 7 years ago and has successfully carved out a segment in the U.S. nonalcoholic drinks market, which is worth about $105 billion a year. What is being found is consumers tastes and preferences are changing from the traditional soft drinks to non-traditional products and brands being introduced by smaller companies. Smaller companies are more agile, enabling them to adapt to consumer trends quicker than the cumbersome industry giants.

Charles Frenette, a former chief marketing officer for Coca-Cola Co. and Miller Brewing Co..states “Unfortunately, the consumer is not cooperating with big brands the way they have in the past,“ with many different drinks on offer now, “The consequence is they become more promiscuous -- people are now drinking dozens of brands.“

But the success of these new small start up beverage companies is not just coming from having a unique product, it is also in the way they market their brand. While the big industry giants that control the market, stick to their preferred T.V. advertising medium to get their message across to their consumers, new start ups are using non-traditional marketing means, such as the Internet and word-of-mouth, these mediums are more in touch with young consumers.

It’s the small new companies on the block that lead innovation, they are quick to adapt and due to them only carrying one or two bands will preserver with that brand longer. Generally large multi-national companies will inject millions into a new product and expect to see it catch on within a short time frame, if the product fails to take on in that short time frame they will scrap the brand and try something else. “Sometimes big companies don't have the patience to stay with something for year after year, when it hasn't caught on,“ said Gil Cassagne, chief executive of Cadbury Schweppes Americas Beverages. Where as a small company with only one brand on its books, will continue to promote the new product until it works or they go broke, as they have no other product to push. It is this mentality of small business that makes them succeed. “The beverage industry presents an interesting paradox in that it is highly consolidated ... yet time after time, small companies with entrepreneurial savvy and energy can still break through and create tremendous value,“ said Beverage Digest editor John Sicher.

I have talked with senior executives at several leading global beverage companies in relation to Mendis coconut brandy, while they agree Mendis coconut brandy is a very appealing product (that will take market share) due to its’ unique branding and taste, they don’t want to step out of their corporate box and try new products. They prefer to play it safe for fear of it failing and losing their job over it, so they go with the safe option, buy an already successful brand for multiply times its book value. The main thing is, small companies get the door shut in their face many times, before they find success, though perseverance and dedication pays off in the long run. Let negative feedback strengthen your will to go on, for we are all humans with individual thoughts, what one person thinks is insignificant in the grand scheme of things. It’s the collective thought that counts in the end and the buying power of the masses that determine whether a product is a success or not.

Market Trends, Part 1

Ever wondered how much alcohol is consumed in the U.S.? Well if you have, I’m here to tell you it is a sizable amount to swallow, with 1.5 billion liters (170.3 million 9-liter cases) consumed alone in 2005. The market is growing at around 2.8% based on an annual compound growth rate (ACGR) (around an additional 4.6 million cases per year) and projections are for the market to continue to grow at this rate until 2010.


The growth in consumption for 2005 was primarily among the Rum and Vodka categories, increasing by 6% and 4.4% respectively. The Rum and Vodka categories experienced the largest case volume gain of all distilled spirit categories, increasing by 1.2 million and 2 millions cases respectively.

Strong gains were seen in other distilled spirit categories in 2005 as well; with Brandy & Cognac increasing 0.7% to 10.2 million cases, while Cordials & Liqueurs increased 3.3% to 20.7 million cases and Tequila increased 9% to 9 million cases. Both Gin and Prepared Cocktail markets declined by 0.6% and 0.5% respectively. Vodka over took Whisky as the category with the largest case sales volume. Whisky dominance has diminished at the expenses of white spirits popularity and mix-ability. The Whisky sector experienced a slight increase of 0.2% to 44.5 million cases.

Tequila had the highest ad spending per case by distilled spirit category in 2005, with $4.19 per case being spent. This accounts why the category had the highest case growth rate. Brandy & Cognac had the lowest ad spending per case with only $0.85 spent on advertising per case sold.

In relation to new distilled spirits introduced, Vodka and Rum experienced the highest introduction of new products with 40 and 24 new brands respectively over 2005. In the Vodka category, over the past five years, almost 260 new brands were introduced in the U.S. alone. Brandy & Cognac and Canadian whisky experienced the least. Brandy & Cognac only had 2 new brands introduced and Canadian Whisky had none. The Brandy & Cognac sector is the least saturated sector in terms of new brands introduced and advertising spent.

This all said, past and current data does not indicate where new things are happening, like what will happen when Mendis coconut brandy is launched. Data (such as what is discussed above) is good to understand the market though it does not provide any indication as to where the next big product is coming from. Generally large multi-national beverage companies will rely on industry data to predict trends and where to grow their product portfolio, much like sheep following the herd. These companies will jump in and buy out leading brands in the hot new category at excessive premiums to the company’s book value they are buying, just to catch up with the market trend, due to their lack of for sight. So what does all this mean…check back tomorrow to read the conclusion of Market Trends, Part 2.

The End is Near

So as you all may know by now, we are selling the first production bottle ever made of Mendis coconut brandy for $1,000,000. There's a lot more to this bottle than just being the first production bottle released under Mendis coconut brandy V.S. category, though you can check it all out on our home page under the link bar titled "Click here for Mendis Million Dollar Bottle Sweepstakes". The reason I am discussing it today is because one very lucky person, very soon, is going to be the first in the world to own a bottle of Mendis coconut brandy and not just any bottle.

At Mendis we sat aside the first two production bottles, that were signed and numbered by the founder of Mendis, Mr. W.M. Mendis, whom founded the distillery back in 1947, so that makes it 60 years for us, not bad going. These two bottles are viewed as extremely rare and one of a kind collector items, never again will there be, or can there be, another first and second bottle of this brand under Mendis coconut brandy V.S. range.

The value of these two bottles is potentially priceless in the future, sure we disclose the face value of the second bottle at $32.95 for tax purposes for the winner, though thats face retail value not collector value. The true value will come into the bottle once we start selling the product and as the years go by so the value will increase - just ask yourself how much would the first bottle of Grey Goose be worth?

Anyway, if you want to stand a chance to win it then hurry up and enter. Good luck and stay tuned for the draw on July 17th that we will broadcast over the internet.

Channel Surfing Syndrome

Ever sat down on the couch in front of the T.V. and just channel surfed until you find something interesting to watch, then as soon as you find something, you get a surge of interest as you have found something that has captured your imagination? I view this as a very similar way to how we as consumers act as purchasers in retail stores, or wherever else it may be we are making a purchase.

Although the market is saturated in marketing across every industry and many consumers are brand loyal, capturing the imagination of consumers in that spilt second of boredom interest is a perfect opportunity to have them take second thought about their purchase and reconsider something else.

The main thing to be taken from this is that, even though big multi-billion dollar companies can spend millions on advertising and have strong brand loyalty they can still be challenged. A well planned strategic marketing plan by a new business that takes to the streets and uses it money wisely has a fighting chance to grab some market share. Those giant companies have become slow and have lost that innovation that made them big in the first place. This is why small innovative companies that are well structured with solid business plans, unique products and flawless execution can be a tremendous threat to big companies.

Consumers are always after something new and exciting, especially in the fast paced instant gratification society we all live in now. If a company can discover the point where to captivate their consumers by doing strategic brand building, product placement and market research, it can immensely help in meeting its goals.

I have spoken about our marketing campaign in brief over the last few weeks and today’s blog provides more insight to the reasoning why we selected our 3-tier marketing campaign structure. I firmly believe the place to generate sales is where the sales are to be made- in the stores. Irrespective of how strong a brand following a product has, a consumer can be enticed to try something new and unique if you give them the opportunity too.

I view the most fundamental key to brand and sales success lies within street level marketing, thus our strong focus on supporting retailers. How many times have you gone into a store to buy something and you buy something new just to try something different and add variety in to your life? It’s that whole “channel surfing” syndrome- the perfect time and place to grab a person’s attention. I believe that print is great for the long-term success, it adds to brand awareness. There are many brands that I’m very familiar with but have never and probably will never purchase. There’s a difference between knowing and brand and liking the product enough to want to buy it. When developing a marketing campaign knowing your target audience is one thing, knowing where and how to really capture your consumers in a set time frame is another. Marketing is not just about getting the word out there, rather more importantly it is about getting the word out there in a set time frame to realize your goals.

All Partying and No Work Kills a Brand

I speak regularly about how Mendis coconut brandy is a unique product within itself. However, being a unique product is not just a matter of having something different, it’s about having something different that no one else is doing, nor can do soon.

All too often you see a new product come out and it’s copied or already being produced by several, if not hundreds of other manufacturers. One of the greatest things about Mendis coconut brandy is that the global market for the product is confined to within the Sri Lankan market place currently.

Although as a company with a new category we had to spend tens of thousands on getting category approval, we see the money well spent as it has given us a unique product in what is otherwise a cluttered alcohol market place. Being the first to market on a new category is a big deal, though what is more important is providing an unparallel ultra-luxury product in a dormant marketplace.

We have read in reports and articles lately on new alcohol companies spending millions on marketing, yet to only have their brands end up in the brand graveyard, which is full of has-been alcohol products. You will see it get fuller as the vodka market enters a period of consolidation after record growth. The alcohol market is not about achieving mass distribution quickly (i.e. “Let’s distribute our product in all 50 states in four months!”), nor hitting all the top bars for promo nights with celebrities. Many new alcohol companies will spend $150,000 for the privilege of serving free drinks at a celebrity event. Afterwards, they will say the money was well spent because some celebrity was mentioned drinking their product. They don’t mention that the celebrity is drinking some other company’s free product at the next event. While I feel that promo nights do have their place, a company doing those events only invites false hope that the product is moving because the “in” people are drinking it on that particular night.

It takes hard work to make a brand work in this industry, that’s why you more than likely will not see me as President running around trying to make best mates with bar owners and celebrities. I am very down to earth and focused on cutting costs to make a business survive, pulling the long hours in the office to plan for the company’s success, I will even drive our promotion van around to help out. The true fact of the truth is, in this industry, the glamorous life is short lived and hard dedicated and researched work pays off. There is no easy way to success and sitting around in a bar for your products promo night trying to make buddies with the latest “in” people does nothing to help your brand.

In the end, successful brand building is developed through hard work involving; research and development, planning, logistics, marketing and advertising and last but not least selecting the best people to surround you as the head of a business to plan and implement all these factors. I value the people on my board and like to think my business and ethical morals are portrayed in them and how Mendis is run.

Priceless Bottle of Alcohol

I'm sure you have heard of buying fine wine as a collectable item, but never a distilled spirit. "Ultra-Luxury" alcohol as a collectable item is a new concept that we at Mendis bring to the distilled spirits market. In offering our first production bottle for sale, signed and numbered by the founder of our distillery Mr. W.M. Mendis (founded in 1947), provides a unique one-of-a-kind opportunity to own what will be a new offering in luxury collectable items.

You are not just buying the first production bottle of Mendis coconut brandy, but also the first bottle of an entirely new category "coconut brandy". There is a big difference between "coconut brandy" and "flavored coconut brandy", the latter being made from grapes into brandy, then artificially flavored with coconut essence, with the addition of preservatives.

The Mendis Million Dollar Bottle is a once in a lifetime offering, as there will never be another first bottle produced of Mendis coconut brandy V.S.. Mendis is developing an entirely new exclusive collector market for collectors of fine, rare one-of-a-kind items. The bottle doesn't come incrusted with precious stones or gold flakes in it, it's the simple fact it is the first and only bottle of its kind in the world.

We have had an extreme amount of interest in the bottle, though most of it is for the fact it is selling for $1 Million. However, when considering what it is we are actually offering, the true worth of the bottle is evident. To be the exclusive owner of a first production model is priceless. We at Mendis are making that a reality now for one person to treasure and realize how priceless our first production bottle will be in the near future.

The Next Generation of Risk

Generally one of the first things I afford myself when I get into the office in the morning is to catch up on world news. I’m not into newspapers and watching T.V. so I get the majority of my updates on current events from the Internet. Every now and then I will come across an article that catches my attention and will trigger some serious thought processing to happen. Such a situation happened the other day when I came across an article on a Deloitte study, entitled "Supply chain's last straw: A vicious cycle of risk”. “The report concluded that as companies cut costs to become more efficient - and more competitive globally - the more vulnerable they tend to become to lapses in the supply chain.”

I am no expert in supply chain management and generally when it comes to business I apply general knowledge and my education to the situation to problem solve. In reading about what leading global companies are doing came as no surprise to me. Cost cutting across the board at a company, in particular when it comes to raw materials, labor and production costs, leads to a shoddy product and problems with quality control as we’ve seen recently in the news.
When it comes to reputable companies, no names mentioned, making top of the line laptops or high-end consumer goods, then quality control is a pertinent issue. The act of creating the position for a senior executive exclusively to manage supply chain risks should go without reason for these large companies. Companies supplying consumer goods, which Mendis is also part of, have a social responsibility to its consumers and the public in general to make sure the product they are supplying is produced in a safe, clean environment, free from any harmful elements that threaten the well being of the public.

Generally, supply chain management issues are associated with, lost and broken product in transit, quality control, logistical issues (both technical and human), weather conditions, etc. I view quality control as the most important area for our business, or for any business come to that. Quality control is the area of a business that can spell disaster for a company if not done well.

As a business, quality control of Mendis is our first concern. It’s where we control the standard of our product and the purity of the product we provide. The placement of an executive from our board of directors to oversee quality control was one of the first matters we dealt with as a company. In the production of Mendis, we only work with the leading companies in their respective field for supply of product. For bottling we use only the finest glass from Europe, for production only the most reputable French company was sourced for our pot still. Everything from the raw material to the final bottle we package Mendis in is of the up most purity and quality, anything less would not carry the Mendis name.

It goes without saying as consumers, when we buy a quality brand name we naturally expect such, though more and more often in the media we are now hearing about foreign objects/substances getting into companies products. In a post 9/11 era companies need to take complete control and surveillance of their product from raw material to end product, a company’s longevity is so dependant upon the success of its products and customer satisfaction. All too often these offenses of breach of quality control are coming from large corporation, run by a board of directors more in touch with their bonuses than their clients.

At Mendis, as a family business, our brand is our life, the name comes from the founder of the distillery and we carry the name with great pride, we protect its image though our quality control. A mark on the Mendis name is a mark on the founding family and we take that seriously. When it comes to global corporations, there is no attachment to the brand like a family owned business, maybe conglomerates should start having some heart, if you take pride in your product you naturally care about your customers well being, then quality control is just as much a part of the brand as the brand is itself.

I Love New York

Over the past few days I have mentioned about how we are going about advertising and distributing Mendis coconut brandy, so I view it a natural progression that today I cover with you our launch state- New York and why we chose it. As mentioned yesterday, we will only grow Mendis at a rate whereby we can provide substantial marketing support to the Mendis brand within our distribution reach at any one point in time.

For our launch state we have decided to select New York as the very first state to have access to Mendis coconut brandy for a number of reasons.

1) Manhattan acts as a "captured market", as a large percentage of the population for New York City and surrounding areas pass through Manhattan. Therefore, New York City can be covered by concentrating marketing in Manhattan.

2) The NYC area is the top metropolitan area for distilled spirits.

3) Most of our team were either born or raised in New York (except for me being from Sydney, Australia) so it makes sense not only to have our launch but our HQ's here as well, .

4) Plus we agree with the age old saying about New York "if you can make here, you can make it anywhere".

From what we have found in the U.S. alcohol industry is that new alcohol companies will generally launch a new product in Florida or California. The main reasoning behind this is that these two states are two of only a handle of states that allow large liquor chains (i.e. Bevmo in CA). What large liquor chains enable is easy large scale retail store presence through one outlet. Instead of having to try to get your product in several hundred different stores separately and doing marketing to make those stores aware of your presence, large liquor chains in Florida and California offer one point of contact into several hundred stores. These large retail chains also tend to have an online store front and they try to keep an up-to-date inventory of all the new and best selling alcohol products, so these retailers are open to taking on new products.

In many other states however, it is a different story. Stores are usually small, overstocked and the owners of these typically family-owned liquor stores don’t have the room to stock every single new alcohol product that comes to market. They just want to have brands that people know and will buy. In light of understanding how the retail chains are operated in such states and how the owners view new alcohol products, we tailored a great deal of our marketing campaign towards them.

Our marketing campaign is very street based (Guerilla marketing), whereby we are active in the streets near our retailer stores through our Mendis promotion vans. In addition, we will be holding promotions in store to help create brand awareness for Mendis and drive sales for the retailer. This way we will be in touch with our customers and retailers. Another common form of promotions for launching a product is holding special VIP launch parties in bars. While, these events are fun for everyone attending, we feel that at this stage it is not the right form of marketing for Mendis.

This said, we will eventually be holding bar promotion nights. We have always said we are in this venture to provide a unique product for consumers out there and we want to stay in touch with them. Considering this, our bar nights are for our customers, you are our celebrities, not Paris Hilton. You won’t see us touting pictures of celebrities on our website, like a great majority of new alcohol companies do. But you will see pictures of everyday people having fun at our events.

I like to think that Mendis is not just a unique new alcohol product, but as a company we are changing the way how an alcohol company does business, how it relates with its customers and business partners, for this is what defines us and our product at the end of the day.

The Mendis Difference, Part II

In Part I of The Mendis Difference, I wanted to highlight how we developed Mendis coconut brandy and our image and brand philosophy. In Part II, I want to provide you insight into distribution and what critical role it plays to a product’s success in the alcohol industry. Business is like a fine oiled machine, one in which every part must work correctly or the engine will come to a standstill. So let’s look at what are we doing at Mendis to build Mendis for success and some mistakes we are watching out for.

At Mendis we spend every day analyzing all alcohol companies in the US and around the world. We review reports on their financials and review their spending patterns. We study alcohol market analyses to see what each category segment is doing and what the short and long-term trends are. What this enables us to do is single out companies that are doing well and why they are and also to see which companies are not performing well and what to watch out for. This process is a critical part in how we decide to go about promoting our product, where to spend our funds and how to set up distribution.

Many new start-up alcohol companies, in particular within the highly speculative vodka market, are going all-out in an effort to get their brand into any event or publication at any monetary cost. Many of these new companies have access to millions of dollars for advertising and like a person who has just won the lottery, rush to spend their easy earned money with little thought provided, sort of reminiscent of the late 1990's tech spending hay-days.

The best way to highlight major mistakes being made by new beverage companies is to provide direct reference to the past and present events. Though prior to doing that, let’s get some oversight into how the alcohol industry works from a distribution standpoint and the critical relationship between distributors and advertisement placement, these two go hand-in-hand when it comes to success in the alcohol market. The U.S. distilled spirits market has changed over the last decade in relation to the structure of the channel of operations of distributors and retailers. These changes are shifting the control of a brand’s market position and placement from the manufacturer to the distributor and retailer for the following reasons:

· Restrictions on advertising make point-of-sale in the retail stores presence increasingly important for winning market share.

· The U.S. market is a "specialist dominant" marketplace where small retailers account for 50-99% of spirit volume sales, depending on the state. This is because state laws and/or controls over spirit distribution distort the retail-chain structure towards numerous small scale operations, preventing large retail liquor chains.

· Due to consolidation in distribution there are fewer market players with more market control.

· "Distributors play a key role in determining where, and whether, a given brand will be sold. In most cases, the distributor has an exclusive territory for a brand".1

This shift of control means that now, wholesalers/distributors are a key factor in determining commercial success in the spirits market. Advertising must be tailored towards the distribution channels and strong channel relationships with distributors must be established.

So what does all this mean? Basically from a new alcohol company stand point, it is best to limit distribution to within a geographic area that, as a manufacturer, you can provide sufficient marketing support to the stores your distributors supply to, so the product will move. You can only grow your company as much as you have the resources to support it. If you expand your company’s reach beyond of what it can support, you’re setting your company up for failure. I believe there is nothing worse than supplying a product with no demand. I think against the grain on this and would prefer to have demand first and then supply that demand.

Manufacturers/importers (like Mendis and other beverage companies) at the end of the day really don’t control the sale of a product, in thinking so is fooling oneself. All we can do as an alcohol importer is understand how the market works, our place in the supply chain and what we are supposed to do, not what we want to do. In light of the above knowledge of how the market operates, our role is to work with distributors in our marketing placement.

One thing all new beverage brands need to realize is that 99% of the time, there is another one of them right behind to take its place. Even given the fact that we have no direct competition yet as a coconut brandy, we do not discount or take for granted the current position we are in and ready ourselves for the unknown. We spend countless hours researching and developing our business model, supply chain, marketing campaign, potential competitive beverage companies (large and small) and most important of all how the industry works. The absolute success or failure of a product can’t be predicted. If there were a magic formula, everyone would be following it. There aren’t any guarantees in life but as we go out in the marketplace we will put our best foot forward.

1- Aspects of Retailing Global Spirits Distribution, January 2000, Euromonitor.

The Mendis Difference, Part I

Since I have been discussing our marketing strategy over the past week, today I wanted to continue on this topic and provide you more of an insight into our image and brand philosophy. At Mendis we have spent the last 7 years on Research and Development for Mendis coconut brandy. It has definitely not been an overnight process. We took a hard look at the global alcohol market and said, “Where is there a gap in the market? What product do people want but is not being provided in the market today?”. These are the gaps that we saw:

1) While the vodka, rum and now recently tequila, sectors are growing, the brandy market had been essentially dead. While in the past 5 years almost 260 new vodka brands have come out, last year brandy had a great grand total of 2 new products.
2) Consumers don’t want just any run-of-the-mill product now-a-days. They want superior high-quality product produced using the finest methods, ingredients and materials.
3) People love flavor, hence the trend in flavored vodkas and rum. However, there is concern among consumers about artificial flavors, preservatives and additives that maybe added. With a “flavored” alcohol product a consumer has no idea what extra ingredients are in the bottle.

The reason why we chose brandy is because of 1) the alcohol category is one where the utmost attention to distillation and maturation is paid, 2) we knew that brandy had the potential to be reinvigorated but only with a truly outstanding product.

We wanted to bring to market a product that would be absolutely different to what anyone has seen. We succeeded in bringing that product to light- a clear brandy made from coconut.

To ensure the product has the highest-quality production and craftsmanship, Mendis Coconut Brandy is produced using only the finest machinery from France to distill the product. In addition, handmade casks are made by our in-house cooper from special local wood that enables us to mature a clear spirit, without any discoloring from the wood.

With what we, and now, more and more people are viewing as a totally unique and exquisite new alcohol product, we wanted to make sure the branding and packaging for the product embodied this. We spent countless hours, reviewing every single alcohol bottle shape in the market, what style worked and what didn't. In the end we came to the conclusion that the simpler the design, the more classic it was. I personally found the existing brandy/Cognac bottles as boring and old, even so much so to the extent they turned me off from buying them. We were extremely attracted to the vodka/wine bottle shapes, clean tall and elegant, what we considered a perfect match for our product.

You will note from our bottle to all marketing, branding and advertising that we create, will be simple, elegant with minimal clutter. We’re selling a premium one-of-a-kind spirit, not a half-dressed girl draped on the bottle. (I personally never understood why alcohol companies do that, yes sex sells, but almost half of drinkers are female… but that’s another story, see Cherise’s comments on our Brand Ambassadors here). Our product is our appeal. The Mendis bottle is definitely a style that will standout in stores next to the dreary brown brandy/Cognac bottles.

(Read “The Mendis Difference, Part II”, tomorrow)

Advertising Where?

Today I would like to provide some insight into how we are going about marketing Mendis coconut brandy. The general strategy of big beverage companies in launching and marketing a new alcohol product is to launch the product, then provide advertising support, generally in the form of print and digital media, such as magazines and T.V. respectively. However, over the past 5 years there has been a dramatic shift in the consensus of how best to get your product message across to consumers.

We view that the most cost effective form of advertising comes from the Internet, mobile advertising and in-store promotions. We view certain forms of print media as dying out for the alcohol industry. It is very hard to translate print media into actual sales, it is more for brand name recognition. The act of reading an article in a magazine then remembering what you read or imagery you saw up to the point of making a purchase is very low. As more and more people go online, the web offers a low-cost medium to get your message across to potential consumers. While the act of reading something online and making the consumer remember it until they make a purchase in a store is just as low as print media, it is a lot cheaper for getting the same effective brand recognition.

Mobile advertising is considered a very effective form of advertising, effective in relation to potential consumers viewing the advert and remembering it until they go to make a purchase. Mobile advertising is live in the streets, close to the store where consumers go to make their purchase. One of the negatives we view with mobile advertising though is the high cost associated with running a long-term mobile campaign. Renting several trucks and drivers and then getting the print advertising prepared and installed is very costly. We view a very effective way to get around this is to buy your own fleet of vans, this way we are not giving money away to some mobile advertising company for a 3-6 month mobile campaign, that at the end we have nothing tangible to show for it. For around the same cost as a 3-month campaign in Manhattan running several trucks, we can purchase 3 vans and have them detailed out in advertising. At the end of the 3 months running them around town, we own them outright and have free mobile advertising for the next several years. This is our reasoning behind why we are buying our own vans that we have been talking about.

Lastly, the most effective form of advertising around for the alcohol industry is in-store promotions - the last point of contact with the purchaser prior to making a purchase. Irrespective of all the print media and other forms of advertising the purchaser has been exposed to, in store promotions can compel a consumer to buy a product on promotion in store over their preferred product of choice. Combining the three mediums of advertising; In-store promotions, Internet and street mobile advertising offers a very effective and cost efficient promotional campaign. Even though we are dedicated to our 3-tier marketing campaign approach for building out the Mendis brand name, we will always be open to print media if we find a print medium that is in direct contact with out target market, such as the Rolls Royce Magazine. In the great words encapsulated in the James bond movie, "Never Say Never...".

Moving The Market

At Mendis we have been talking about how Mendis coconut brandy will change the alcohol market and we are not alone in this thought. In a recent article by researchandmarkets (http://www.researchandmarkets.com/reports/c27660), they discuss how the introduction of flavored brandy/Cognac has the potential to grow an otherwise dormant brandy/Cognac market, as consumers source sweeter flavored products. The main issue with brandy/Cognac currently in offering flavored products is that flavoring does not go particularly well with the stronger based brandy/Cognac spirit. In addition, brandy as a dark spirit it is not seen as mixable like vodka or white rum.

With flavored alcohol products, by law (in the US) if an alcohol product is not 100% natural they have to put the word "flavored" next to the category (i.e. coconut flavored brandy, or some variation of this wording), check it out next time your in your local liquor store. You will notice the word flavored on all vodka, rum and brandy products with fruit flavoring and trust me you don't want to know what they put in these products to get the artificial flavoring into these products and keep the taste fresh until it is opened to be consumed. Rest assured Mendis is going to change all this, Mendis coconut brandy is an all natural clear brandy made directly from coconut, there's no "flavored" wording on our bottle, unlike all other flavored alcohol products.