The business of 2020: the shift to a virtual world
This the second of our series looking at the business of mezcal in 2020. Part one, looking at the shift to retail, can be found here.
2020 was the year we all had to embrace living life online. It wasn’t like we weren’t already living digitally – most of us already moved a chunk of our lives into texting, email, and social media platforms – but, as the world around us closed down, the only way we could engage with one another was through a screen.
The immediate explosion of digital experiences was exponential and heady. Ahh, those early days, in hindsight we were so naive! There was a temporariness to it all, while time dragged on daily IG live interviews and Zoom happy hours kept time and slowly dissipated as people burned out, realizing this wasn’t a blip in time, but a far longer lasting state of being.
Creating takes a lot of energy, and as time dragged on, many people stopped because they ran out of time or -more frequently – motivation. For the people who remained, a more deliberate thoughtfulness went into how to create on digital platforms and to reach an audience: No where was this more present than in the world of food and alcohol where business was completely and disastrously impacted.
The digital content explosion
“It was very impressive to see how quickly brands were adjusting to these more digitally based relationships. It really went to the scrappy and dynamic mindset of mezcal,” said Francisco Terrazas of Mezcal Vago “There was such a huge influx using IG to get messaging out. But that also created a crowded space, with everyone competing for views and clicks during a timeline range and things began to get lost in the noise.”
IG Live soon dominated social media feeds. There were the cooking and cocktail demos, DJ dance parties, art shows, and happy hour talks. Some programming was fun and natural, other stuff was just plain insufferable. But as everyone raced to establish their presence, there was another issue – burnout. A lot of work goes into those one hour IG Live sessions, especially if you want it to stand out from the crowd. By summer, as it looked like things were easing a bit and restaurants began opening for outdoor dining, things shifted.
Some brands began to back off from IG/FB Live programming, and began focusing on more evergreen ideas or concepts that would translate well to YouTube and IGTV. Our own experience at Mezcalistas is in line with this. Initially we used our Mexico in a Bottle IG feed to feature cooking and cocktail demos, a live art show and a couple of DJ dance parties. We eventually became more deliberate with the content and began featuring takeovers, a Mexican Pop Up bar series and a series of city guides to drinking mezcal. Show de Vie, the spirits focused podcast from Mike Groener, did an 8 week run on IG Live/TV but then moved to a Zoom format, with the audio podcast version still available through Apple.
This is not to say that content creation on IG ended, in fact quite the opposite, it became more nuanced and a bit more strategic. More integration tools were added, sometimes to the annoyance of creators as we had to continually keep up with the changes. Brands that have been successful in developing programming share two things in common, consistency and focus. For Mezcal Vago, Terrazas created a weekly talk show on Samson & Surrey TV where he interviewed a range of people in the mezcal world, academics and art. Del Maguey created a few series including Tuesdays with Ron, Liquid Art interviews, and a monthly talk about the intersection of food and mezcal. Eduardo Belanzauran of Wahaka Mezcal has a Spanish language Friday series called Mezcaleando Punto Com that dives into mezcal and into the regulatory structure surrounding it in Mexico. Ilegal Mezcal features a Musician’s Breakfast series, Mezcal Amores has a holistics series. And that’s just the beginning, plug the word “mezcal” into the IGTV search bar and see how much pops up.
But the bigger question is whether people are looking for an educational experience on IG or is it really about branding and marketing. Mention the word “influencer” in a group and you will get a pretty polarized reaction, but influence they do, though like with many marketing programs, measuring exactly what the ROI is can be challenging. Plus, the sheer amount of content that has been created is mind boggling, is there even a way to search and catalog it? Or is it really just designed to capture a moment in time?
What has been interesting to see on IG is how the platform has leveraged shopping experiences and how brands and influencers have been able to jump on board. Ads are better in quality and matching to targeted audiences, and new integration tools enable you to purchase not only direct from these ads, but also from the profiles themselves, creating a true direct to consumer retail relationship, even, and perhaps most importantly, in the world of spirits.
Should we set up a Zoom?
Years ago in another lifetime, I worked for an online financial news service that had a side business producing corporate video conferences. As the dot com world imploded in 2001 and we journalists were shown the door that company re-focused its business solely on video conferences. Somehow it survived and is now getting preparing for its IPO with a valuation of $430 million dollars. Only one person from the newsroom exercised his options after being let go and it was not me: I also poo pooed friends who invested in Zoom when it first went public…
It is now impossible to imagine a world without Zoom. It has enabled us to navigate these times. It became how we kept up with friends, celebrated birthdays and weddings. And, of course, it became the butt of so many jokes. But for the world of mezcal, it was a lifeline and enabled a whole gamut of virtual tastings, trainings, seminars and more. Companies could build independent marketing campaigns from the data that they captured from registrations, generate real revenue through ticket sales, build merchandising opportunities, and continue all the social media broadcasting all from the comfort of home. And, while we all know that nothing can replace that in-person experience of sharing mezcal together, this was a pretty good fix.
Brands and distributors were quick to set up programs. “Our spirits specialist in Atlanta created a weekly one hour cocktail program,” said Monique Huston of Winebow. “He created cocktail kits with recipe cards and discounts. There was a monthly calendar and information cards that were included with takeout orders from a restaurant he partnered with. It was consistent, clearly defined and a huge success that is still going today.”
Huston herself hosts a twice a week gathering on Zoom that has become a close community beyond just talking spirits.
But the bigger takeaway is the changes that quarantine is creating for the future. While Winebow is using video for training sessions, Huston only sees audio and video education growing more important after we get out of this mess. When I asked her if she thought these virtual trainings would ultimately replace in person training she replied, “I think it will be a hybrid of the two. It will be important to keep the videos for reference. But most likely, the audio will be the most important part when we come back to the real world, as long as the content is able to work without the video. Then people could listen much like with podcasts.”
People accustomed to weeks on the road doing sales and trainings initially had a hard time adjusting to this new virtual way of business, but there is no doubt about how much it benefitted the bottom line for brands and distributors alike. It definitely contributed to 2020 not being the total financial disaster it could have been.
But perhaps the greatest part of Zoom is how it has opened up the world. We can now do virtual tours of palenques and speak directly with mezcaleros, as long as there is a strong enough cell or wi-fi signal. “Now everyone has Zoom and it is super easy to schedule staff trainings with distributors. Beto (Beto Morales, Maestro Mezcalero with Wahaka) can do a virtual tour,” said Raza Zaidi of Wahaka Mezcal. “This has reinforced our position – that our expressions represent ‘mezcal del autor.’”
Just the other night we had the privilege of hosting Maestra Mezcalera Berta Vasquez along with Felix Monterrosa and his wife and business partner Adriana Correa from their homes and mezcaleria in Oaxaca. Our single greatest frustration with Mexico in a Bottle has been how difficult it has been to get mezcaleros to the events simply because the visa process is such a nightmare. Zoom opens these and many more doors to come because, even if there’s nothing like meeting people in person, we’ll take a Zoom call any day of the week.
The new gatekeepers
As we’ve previously written, almost 80% of mezcal sales were driven by the on premise market. Most people encountered mezcal in restaurants and bars, their friendly local bar tender or server was the one who turned them onto that special cocktail or sip that set off a voyage of discovery and all consuming mezcal obsession that comes to dominate their lives. At least we hope so. But my point is that pre-pandemic, brands bridged limited marketing budgets by working directly with bar and restaurant staff both by telling them about specific products but also more generally educating them about the category of mezcal so that their knowledge grew and could be transmitted thirsty drinkers everywhere.
Once COVID hit that all changed. All those cherished bars and restaurants suddenly closed and the only way to sell mezcal was through the so-called “off premise” market which most people know as liquor stores. So, if you suddenly have to sell whatever you can through a retail store, the big question became “how do you tell drinkers about your bottle?”
PM Spirits, a self described provider of “geeky” spirits, understood they would have to shift their sales strategy. PM’s founder Nicolas Palazzi describes the conundrum this way:
“While retail is essential for selling bottles, no one is going to be able to educate themselves looking at a website… The name of the game is to reach out to the people who are actually buying stuff. Previously there were gatekeepers in trying to get into a bar or location. 2020 removed that and brands are able to reach people directly.”Nicolas Palazzi – PM Spirits
That’s easier said than done: Enter Facebook. The demographics of Facebook are older, which helps explain why greater integration between Facebook and IG was a core priority for Facebook in 2020. Mezcal brands have backed away from using Facebook as their primary tools for marketing, choosing instead to devote whatever marketing budget available to building a presence on IG, especially since it is now so much easier to cross post to other social media platforms.
While IG is so highly visual the actual conversation about mezcal tends to happen on Facebook which hosts myriad groups devoted to the topic. They run the gamut of hyperlocal to international, focusing on events, business and issues and, of course, who is drinking what. Generally speaking, these groups favor smaller brands and the ones that post about programs, events, and new releases. But just like IG one of the major issues is targeting limited resources. Figuring out where to spend your time on Facebook and how to engage is tricky.
Probably the longest standing mezcal Facebook group in the US is Smoked Agave. Members exchange information on bottles, prices, mezcaleros, mezcal politics, chisme (gossip), a whole plethora of insight into the world of mezcal. And while people post information about tastings, the group itself does not organize them.
One group that has been interesting to follow is the Texas Mezcal and Tequila Society. When the pandemic began there were roughly 500 members, today it has more than doubled in size. “When the pandemic began, we expected people who had been supporting the category to step up and lead programming, but that didn’t happen,” said Mike Groener, founder of the Texas group.”Consumers want to be connected to the source, and we saw an opportunity to step in and host tastings. People felt so at ease and empowered to be that connected to producers and owners that they put their money where their mouth was and after each tasting saw that people would buy bottles.” Their monthly tasting series is called The Exploration Series and is based on the group ethos to seek and explore the world of agave distillates.
The Mezcal Society is another Facebook group that has seen exponential growth over the past year. Created by Steven Sadri of Tahona Mercado, the focus of virtual tastings is on small batch mezcal. Additionally it is a great resource for information about agaves and where to buy mezcal.
New(ish) to our radar is a group that was initially called Tequila Talk but has now embraced the full world of agave distillates with its new name Tequila Talk (Mezcals, Sotols and Agave Spirits Too!). Founder Mark Cherney emphasizes an open and friendly discussion about bottles and brands and this is a great entry point for people new to agave distillates who might be intimidated by some of the other groups where discussions can get extremely geeky, and at times snarky.
The agave groups have been great sources of information when special releases become available with information about limited editions and how to grab them. Perhaps the most interesting development is that these groups are starting to source their own agave spirits: Some our buying batches and working with retailers to sell them directly to their members. Texas Mezcal and Tequila Society’s Groener launched a special batch from NETA Spirits: “We focused on making this a [Texas] statewide group and we were the first group to do a statewide release of a special batch.” We are not at all embarrassed to say that our special Mezcalistas collaboration with NETA on a micro release was inspired by this group. Additionally, through the Tequila Barrel Collection, an adjoined project with the Tequila Talks group, you can sign up to get info on special batch releases available only to them. There is no cost to join their barrel program.
These are just a few of the groups out there as there are city specific groups, and of course there are the Spanish language groups of Proy Nom 199, Mezcales y Mezcaleros and Amantes del Mezcal to name a few. This doesn’t even get into the conversations bubbling up on other platforms like reddit, Twitter, and god knows what else but something else is definitely happening out there. The emerging power of these groups has been a game changer for the smaller brands, with aficionados and consumers now in greater control of how information, and misinformation, gets disseminated. They were not immune from the style of discourse taking shape across social media, which is to say, increasingly political and divided. It is clear these groups aren’t going anywhere and will continue to play a role in 2021 in helping the consumer access information in the world of agave.