Capturing Three Tiers of NonCustomers for a Craft Bourbon Brand

Growth in the craft bourbon category has been strong in recent years. While the industry as a whole is seeing its numbers reduced to some degree, there are pockets of strength. Even with growth, the time it takes a craft spirit brand to reach profitability is varied and the formulas for success are difficult to create time after time.

To this end, our group feels it’s wise to explore a growth path based on an intentional strategy. In Blue Ocean Strategy terms, this means exploring a company’s noncustomers. Significant growth and a move into a blue ocean of uncontested market space will generally come from serving a group of noncustomers who have been intentionally identified and targeted with appropriate messaging. When the combination of lower cost of production and higher value to the consumer takes place then magic happens. In this post, we’ll explore these noncustomers and discuss how to find them and then how to perhaps share the brand narrative and introduce these noncustomers to the newly exposed brand to these new markets.

There is a worthy comparison to make at this point. It’s a classic Blue Ocean Strategy example and it’s used in the Blue Ocean Strategy books as well as in certification training.


The wine industry was overcrowded, highly competitive, and increasingly squeezed at the distribution and retail stages of the supply chain. Even though the industry was intensely competitive, wine manufacturers have systematically competed along the same set of factors that have hardly changed over the last few centuries.

In July 2001, Australia’s Casella Winery introduced [yellow tail] into this highly competitive US market. Small and unknown, they had expected to sell 25,000 cases in their first year. In fact, they had sold nine times that amount. By the end of 2005, [yellow tail]’s cumulative sales were tracking at 25 million cases. [yellow tail] soon emerged as the overall best selling 750ml red wine, outstripping Californian, French and Italian brands. This case examines the strategic move executed by [yellow tail] that made it the number one imported wine and the fastest growing brand in the history of the US and Australian wine industries.

In part, this success was due to the fact that the maker had reduced its cost of production and most importantly found ways to make wine accessible and far less intimidating. It was moved to the end cap and in most stores moved to the beer aisle where the distributors were schooled that the guys going to the liquor stores buying beer would easily find it available to take home to their girlfriends or wives or out on a date. With the higher and more easily explained value prop, significant numbers of previously intimidated wine drinkers moved to Yellow Tail and sales exploded.

So let’s set the stage appropriately for this discussion with a quick glance at what noncustomer means for the typical craft spirit brand.

The market for American whiskey grew 6.4% in volume in 2017 to reach 23.2 million 9-liter cases. Bourbon’s volume increased 6.7% last year to 20 million cases. Canadian and Irish remained on fire, as did most imported whiskeys (save for Scotch’s relative slowdown).

There was additional growth in 2018. Let’s assume that 60% of those 9-liter case sales were retail sales. About 1,150,000 consumers buying an average of one bottle a month could be said to make up the retail market.

The primary point? A great year for a growing craft distillery would be 25,000 cases. Everything above that number is considered noncustomers. So literally millions of noncustomers exist for a typical craft brand. This may seem obvious but as in the case of Yellow Tail, there may be customers ready to explore the brand if the marketing is tweaked to appeal to those noncustomers.

The image below is a Blue Ocean Strategy graphic depicting the three tiers of noncustomers.

Reading from left to right, our first category is obvious. These are your families, friends, local fans and so on that have been with you from the brand’s start. They are loyal because they like you. They know your story and are part of the history of your brand.

TIER 1 noncustomers are those that have tried your brand. They buy it occasionally. They are migrating back and forth but you’ve not done anything spectacular for them in a way that makes them loyal or regular buyers. As soon as the next shiny object comes along, they will buy it for a period of time.

TIER 2 noncustomers have heard of your brand but are not loyalists to you or others. They are brand loyal to a competitor due to some specific competitive factor and are consciously NOT buying your brand.

TIER 3 noncustomers are clearly identified. These customers have no clue about your brand. They don’t know you exist. There are methods for capturing the attention of these “market-making” crowds.

Take a look at this graphic as an example of the potential of noncustomers of your brand. The market is getting more fragmented- smaller brands have been gaining share. Smaller brands have been gaining share. The non-top 5 brands gained up to 12 percentage points over a 20 year period and up to 6 percentage points in the last 5 years. Source:

What this tells us is that in the midst of increasing competition and varied product lines, the majority of the spirits market buyers are consuming a lot of “out of the top five” brands. Yellow Tail’s history attests to the fact, you don’t have to be number one, you just have to be special in the niche chosen.

So how does one find this noncustomer in cost-effective ways? The traditional ways of finding these noncustomers in the spirits industry remain tastings, samplings, and sponsorships of events, some advertising, etc. The efforts to actually KNOW who these people are and what they want are poorly executed in the spirits space.

New methods of identifying and sampling these noncustomers have been developed by Victory Spirits with their Vsite technology and Shared Spirits with their sampling, tasting, and activation technology services.

Shared Spirits provides a compliant way to host in-store tastings where the attendee is deployed a complimentary on-premise drink experience or coupon in states where it is legal to do so. Equally important is the ability to identify who the specific noncustomer is when Vsight. Vsight technology allows Shared Spirits to market to bourbon buyers who have visited the whiskey aisle of a specific store.

The image above depicts data derived from mobile handsets captured after a visit to a Midtown Atlanta spirits and wine store. Not only were these visits to the store but this data showcases visitors specifically to the bourbon aisle.

This intel allows forward-thinking brands working with Shared Spirits and Victory Spirits to target a huge crowd of noncustomers with a narrative around their brand, inviting them to events and experiences.

If a craft spirits brand brings appropriate funding to the marketing effort, finding noncustomers is now possible. Marketing and personalizing messaging to these new markets will deliver growth in a predictable way.

The pathway to being a future Tito’s or Casamigo’s is more predictable than brand histories depict. If thoughtful spirits brand leaders approach the market with a Blue Ocean Strategy mentality and the right technology success is at hand.

For more information on approaching the growth of brands with Blue Ocean Strategy, reach out to Sherman Mohr, Certified Blue Ocean Strategist and Co-Founder of Shared Spirits Marketing.