Ghost Tequila: How One Small Tequila Brand Tripled Sales And Came Out Ahead In The Pandemic

While bartending at a tequila-focussed bar Boston, Chris Moran noticed the increasing popularity of spicy cocktails and sensed a business opportunity. He launched Ghost Tequila in 2016 — a small batch, double-distilled tequila finished with “a pinch” of bhut jolokia pepper extract before bottling. Ghost was facing the usual challenges of any small brand — increasing sales and brand awareness — when the COVID-19 pandemic started shutting down his main revenue source: bars and restaurants. I spoke with Moran about how he handled this crisis with a quick shift in strategy and eventually achieved a 300% growth in sales.

How was business at Ghost Tequila prior to 2020?

In first couple of years, we experienced the same problems any startup has. We started with a small group and had great growth in Massachusetts. In 2019 we doubled the business, and moved into Texas and California. We were starting to attract talent. We hired Andrew Teubner who had run off-premises for Patron Tequila for years. We had plans to do more off-premise (liquor stores and supermarkets), but in 2020 80% of our sales were on-premise (bars and restaurants). 

Then the pandemic hits. 

After so many start up issues I was panicked. I knew that 80% was going to go to zero overnight. Most small brands struggled. People were going into stores thinking they’re just going to grab their Tito’s and Jack Daniels and walk out. But Andy has been in the business a long time and understands off-premise. We told the whole team we’re going to pull all on-premise spending and focus on off-premise. 

What did that entail?

One thing we took advantage of is that all these companies wanted to conserve cash and pulled back. So we doubled down on marketing. Billboards were pennies on the dollar. We got 300 billboards across Texas, Massachusetts and Rhode Island for next to nothing. We focussed on social media, we did radio, we bumped up e-commerce. 

We got displays up where we could and did samples programs. We hired an agency. We wanted to go from being a startup to looking like a billion dollar brand. Consumers had gotten so used to spicy cocktails and we gave them an easy option to enjoy one at home and not have to craft these things themselves. Our message was simple: you love spicy cocktails and here’s a way to keep making them. Our price point helped too. We’re a $29 bottle of good tequila that also offers something very unique.

When did you see the strategy start paying off?

We didn’t grow from March to April. April was still flat, but by May we started setting records. We finished the year up 85% in sales. 

Did you ever think it was risky to start spending when other brands were being more cautious?

Honestly there wasn’t a lot of choice. We have to sell product and look at what the opportunities are. Always look for the advantages in problems. There always has to be a bright side. Find it.

Did you have to let any staff go to help finance the marketing?

We were fortunate to have just finished a financing round and weren’t hurting for cash and were able to keep our team employed. We didn’t let anyone go because of COVID. We have a great team of people and it’s to our advantage to keep them. 

We also did a huge cocktail competition that ran in April and got 100 bartenders across country making Ghost cocktails. They posted their cocktails online, we posted them, and reached over a million people and we raised $30K for a fund for bartenders. I’m a lifetime bartender. It’s important to me personally to help them when they are struggling.

Does a new brand have to start off in bars before aiming for off-premise sales?

Some brands have done well with off-premise launches. Right now with tequila you’re going to spend a fortune on marketing no matter what. Ghost hit the shelves in Michigan a few months ago, but we have to let people know about the brand to get it to move. We were focussed on on-premise because if there’s a spicy cocktail on the menu we can make it move. It also lets us go in and talk to bars about our product. It’s economical but high quality. Tastes like a nice tequila but with the spiciness. 

Where do you see business headed now?

On-premise has now come roaring back. We’re going to finish up the first half of 2021 up 300%. Most of my time is now in Mexico accelerating the supply chain. It’s been an exciting and challenging time — it’s great to talk about supply being your problem. 

And we expect to now go to 60/40 off-premise, which is healthy. Summer was a good time for us, we’re a part of the beach and house party experience. We haven’t eased up on marketing. We’re not doing giant billboard campaigns, but keeping a strong social presence. We’re opening a few more markets — and since we’re called Ghost we have an advantage for Halloween and the fall season. And next year — we’re going national!

Source: Forbes