Page 13 - Chase Case Study Final

For Chase the most important people to win over are retailers.

“We had to get retailers on board. So we had to get the quality wine

merchants and people like Waitrose to taste the vodka.”

From March 2011 - Chase Vodka – the only English potato vodka – will
be distributed through 280 Sainsbury’s outlets this came on the back of
an agreed deal with Waitrose to sell the product in all of its 230-plus

stores, up from 80 initially.

Quality is an intensive business. So far at least, there is no shortage of
buyers. In its first year, sales from Chase Distillery reached £140,000.

2011 - By July 2011 the distillery was shipping 5,000 bottles a week at
up to £38 each. The plan was to increased output to more than
6,000(£38 per bottle) bottles, taking turnover up to £3m.

Where Chase could produce about 5,000 bottles a week Smirnoff

produce about five million. Competition therefore was not going to be on
bulk sales or price but rather on differentiation, an artisan product.

Each bottle costs £18 to produce but this does not necessarily translate
into a healthy profit margin as Chase commented:

"There are five people between us and the retailer, and each of them

takes their cut, the profits get sucked out. After [the first three] hard
years we're only turning over £2m-£3m a year, we're just about to start
breaking even and are targeting a 10% profit margin this year.”

The drinks industry has made it very difficult for new brands to find their
way behind nightclub bars and on to supermarket shelves. Drinks
companies pay thousands of pounds to be included on nightclubs' drinks

menus and even more to be included in special promotions. About 250
vodka brands are launched each year and only about three of them
survive.

Chase had to educate the market and persuade consumers to try an
upmarket vodka like Chase Vodka. “In bars people now tend to ask for
their spirit by name. Our target market is mid-20s to mid-50s, people
who want to buy something that’s high-quality, smart and savvy.”