New market – infusion kits

STAR (Situation, Target, Action, Results)

Situation: 

In 2022, I was offered to lead the export business at Hot Rod Distiller. The main export product is alcohol flavoring kits.

I agreed.

Cocktail infusion kits   - 26 product positions

*Initial media files for promoting

Target:

The first goal was to enter the US market in e-commerce, promote products among clients and with the well known product attract existing B2B players.

Action:
 
I did a Market Analysis, and noticed that this is a fairly new product for the market in many countries. It is impossible to calculate the demand for a product that is not yet on the market. 
 
Mentioned similar products were slightly different. 
However, we decided to have a go and entry the market as it is. In order to collect feedbacks and data.

Difficulties:

  • Specific niche:  Home&Gardens – Home Distilling – Experienced distillers
  • Limited selling channels (Misconception for phrases “flavorings’’ / ‘’cocktail making kit’’, Legitimacy)
  • Immature market of flavorings for alcohol
  • There was no ‘’marketing’’ in terms of descriptions and selection of photos.

About ‘’Misconception for phrases’’ | These items were taken by people in the USA as a ‘’cocktail making kit’’,  and G ads Pay Per Click  – 3,5$. It was far away from my perception of cocktail kits.

Entry market strategy  | B2C | e-commerce using warehouse and marketplace

We sent around 2000 packages to warehouse with the FMB service.

Posted products on Etsy, eBay, and website. 

Updated the product in terms of marketing for marketplace requirements.

Result: There was a huge gap between expectations and the final results

We sold more than 30 packages, but we did it via the wrong channels and to the wrong segments. Majority of clients were interested in the gift to colleagues for a New year or Christmas. It had nothing to do with the home distilling. 

Collected feedbacks were mostly about service and shipping. I faced the lack of data to make conclusions.

The experiment actually lasted 18 days. There were problems with delivery from the warehouse, so we had to pause all promotion activities.

Our initial expectations were too high. We planned to enter the US market using local marketplaces. We achieved the tactical  goal "start selling". However, it was far away from the strategic goal (enter to the market; B2B sells to distributors).

We accidentally squeezed into "gift baskets" segment. On Etsy, obviously not experienced moonshiners were sitting😆

Regarding selling on the website and eBay, the results are also disappointing.

Since there is no alcohol flavoring market as such, it was useless to set up ‘’search advertising’’.

Sure,

We could adapt the product, making the outstanding package, and photos oriented on segments searching for gifts, however, after several discussions, CEO made the decision to cancel all activities on marketplaces and focus on B2B sales.

B2B USA:

All businesses were informed via email and phone calls. The answer was the same: 

‘’We are good with the assortment that we have’’. “We are overloaded and don't have time for the new products’’

By the way, none of these companies dealt exclusively with ingredients for moonshine. All of them sold equipment for the production of beer.

B2B results:

  • B2B USA: Companies: 7 / Interested: 1 
  • B2B Canada: Companies: 11 / Interested: 1
  • B2B Poland: Companies: 8 / Interested: 3
  • B2B Romania: Companies: 3 / Interested: 1

    The result in the form of a contract was achieved only after 10 months.