By using creative marketing, a Queensland adult cordial maker has gone from a market stall in Brisbane to national and international distribution.
|
Entrepreneur: Michael Bishop, Managing Director
Company: Alchemy Sodas, trading as Alchemy Cordial Company
Business type: Specialist syrup and cordial manufacturers
Founded: 1995
Employees: 7 full-time, 4 casual
Turnover: (2003 - 2004) $1M
Head office: Capalaba Queensland
Contact details: +61 7 3245 5046
Web site: www.alchemycordial.com.au
The Alchemy Cordial Story
Nobody likes to be a bad dinner guest. But when Michael and Gale Bishop were at a dinner party in January 1994, they politely declined their host’s offer to try some chilli cordial made to an old family recipe. It sounded awful. Their host pressed them to taste it - and they were blown away by the flavour.
|
Key learning points:
- Marketing - Market creatively; do not stick with conventional methods.
- Product value - Show customers how a new product has relevance to their lives. Give them ideas about how to use it.
- Advisers - Get professional business help if things are getting out of control.
|
|
Michael Bishop, now managing director of Alchemy Cordial Company, says: “We decided to turn it into a softdrink and make a million bucks out of it. Well, we turned it into a softdrink and lost everything we had.” Their project had flopped by Christmas 1996.
But the Bishops were convinced there was a viable product - and they started again. They had learned their lessons and Alchemy is now a successful boutique syrup and adult cordial maker. It has expanded its distribution from a lone market stall on the outskirts of Brisbane to the shelves of leading Australian retailers, including the department stores David Jones and Myer, and the supermarkets Woolworths, Coles and Aldi. In April, Alchemy shipped 25,000 bottles to the 220-store United States chain, Cost Plus. Michael says: “We invented gourmet cordials for grown-ups.”
To succeed, Alchemy has had to create a demand for its innovative product. But the crucial part has been achieving the right balance between marketing and distribution - making sure that marketing dollars are not wasted on people who cannot buy the product.
Michael says: “One of our early mistakes was doing huge PR on something that was only available in five shops.” Another problem was the product itself: their first version was a fizzy drink that didn’t sell. For their second attempt, the Bishops relaunched the chilli recipe as cordial, called Heat, along with Love, a rose-petal based syrup. That was on Valentines Day 1997.
The Bishops sold the cordials at the Cleveland market on the outskirts of Brisbane every Sunday. Michael says: “We went back to absolute grass roots. We had re-used wine bottles. The labels were photocopied and coloured in with textas.”
Shops in Brisbane began stocking the cordials after their owners and customers sampled them at the market. Michael says: “Much of our progress has come from amazing word of mouth.”
Alchemy got a foothold in Sydney in September 1997 when a customer sent a New South Wales distributor a bottle to try. The distributor got them into David Jones by November, which gave them national brand presence.
In February 1998, they appointed a distributor to handle sales in Queensland in order to concentrate on production and promotion of adult cordials. They decided to market Alchemy via trade fairs - and not just those for conventional food or drink products. Michael says: “We did Sexpo - our stall delivers oral pleasure. And then, as our product is all-natural, we fit comfortably in a gardening show - I was doing 30 to 35 trade or consumer shows a year.”
The Bishops tried other inventive ways of creating markets for their product. Alchemy sold its syrups to coffee suppliers as delicious add-on products. They also needed to educate Alchemy’s new users. Michael says: “We provide pumps, training techniques, promotional material - just selling a bottle of syrup to a cafe does not make good business.”
In 2002, the success of the business took its toll. Michael says: “I nearly died of exhaustion; Gale lost half her hair. We’d gone from an enthusiasm-based business to something more substantial and we didn’t know how to deal with it.”
They were selling more product but not making more money. In October 2002, they hired a business consultant, Trevor Holmes from Enact. Holmes made the Bishops think about where they wanted to be in five years and beyond, personally and with their business. He introduced planning, training and tracking systems into a business that had been as organic as its product. Michael says: “We used to send a box of receipts to the accountant and ask, ‘How did we do?'. We now have a clear idea of what is going on in every area of the business.”