#116: Smirnoff – What a roller coaster ride…

Two entrepreneurs, Russian Revolution, Prohibition, A-1 Steak Sauce, Grey Poupon mustard, two buddies having drinks over a failed business and a book turned movie. Dave Young: Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s Sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is… Well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those. [Waukee Feet Ad] Dave Young: Welcome back to the Empire Builders Podcast, Dave Young here alongside Stephen Semple, and we’re talking about more famous brands, and you told me what the brand is that we’re going to talk about, and they’ve probably been eclipsed in recent times, but man, these guys were the bomb for a while. Smirnoff’s brand, mainly a vodka brand. Stephen Semple: Yep. Dave Young: And this goes back to… I don’t know how far back. You’re going to tell us, I assume, but this was the vodka that my dad and his friends drank in the 60s. Stephen Semple: Yep, and it’s a fun story because the story of Smirnoff is really a story of two entrepreneurs, Russian Revolution, Prohibition, A-1 Steak Sauce, Grey Poupon mustard, two buddies having drinks over a failed business and a book turned movie. Dave Young: Oh, wow. Let me pop some popcorn and pour myself a glass. Stephen Semple: Yeah, sit back, relax. It’s going to be a little bit of a ride, but you are talking about how big they are. How big they are, in 1982, they were sold to R.J. Reynolds for $1.4 billion, and they are still the best-selling spirit globally with 27,000,000 cases sold a year. Dave Young: Amazing. Stephen Semple: There’s six bottles sold every second. So boom, six, boom, six, boom, six. That’s how big they are. Dave Young: There’s some thirsty people out there, right? Stephen Semple: Yeah, they are a monster. So we’re going to start with Heublein. So Gilbert Heublein, who is a second generation business owner, and he was a president of the family business, Heublein, which was a maker of mixed drinks. And so they were making mixed Manhattans, pre-mixed Manhattans and things along that lines. And the family got into the liquor business quite by accident. So the family had a successful restaurant in Hartford, Connecticut, and in 1875, they accepted a large order of pre-mixed martinis and Manhattans for the annual foot guards picnic. But the event got rained out, so the event was rained out, and they had all of this product leftover. And when they went to dispose of the drinks, they discovered that the drinks were, surprise, shelf stable because of all the alcohol in it. Dave Young: Oh. All right. Stephen Semple: So they started to sell pre-made drinks out of the restaurant, and this became so successful that they ended up building a distillery to satisfy the demand. Dave Young: Wow. And this was when? Stephen Semple: Oh, this was back in the late 1800s. Dave Young: Okay. Stephen Semple: So at this time, G.F. Heublein takes over the family business, and they also start developing interest in other packaged products such as sauces. And in 1903, he buys the right to A-1 Steak Sauce for the North American market. Later in 1936, he buys Grey Poupon mustard. So they have A-1 Steak Sauce and the Grey Poupon mustard, but back to Smirnoff. So Heublein has