I remember visiting the London Craft Distilling Exhibition some 5 or 6 years ago. It was our first visit and we were the odd man out of that show. Most people didn't know what we were or did. Some were told: "Here's the future of craft distilling walking in". Many still manufacturers had heard about us already. Via their sales forces, that were loosing more and more deals to a sorta new company from the Netherlands. New tech. Looks like a rocket to the moon. Darn, they are winning market share at a relentless pace! Maybe go over there, meet 'm, and figure out what they are all about?
The owner of a German still manufacturer came by our booth to check us out, that year. He stated that he'd had heard of us and that we were supposed to be the future. He told us he didn't get it and could we please explain where all the iStill fuss was about?
We could and I did.
Among other things, I informed him that we were building stills out of stainless steel, since that lasts for decades. Our visitor stayed silent for at least a minute, consuming what he had just heard. And after that minute, he started laughing out loud. So much so, that tears started running down his cheeks. It took him quite a while to compose himself.
"You guys," he said, "you will never, NEVER be competitors of ours!"
Surprised by his answer, I asked him why.
He answered: "If you build stills that last forever, you'll never sell a new one! Heck, you won't even get orders for replacement parts!"
I asked him why we'd want orders for replacement parts, when we could build those parts so well that they would basically never need to be replaced.
And he answered: "Because that is how you make money! And as I now see that you will never make money, for sure, you will never be our competitor!"
He was pretty convinced he was right. I was pretty convinced he was wrong. We always play the long game. We sell a roadmap to success instead of an antiquated tool. We don't take quick wins, since they usually come at the expense of long-term goals. We were there to offer the craft distilling industry an alternative, a toolkit to take market share from Big Alcohol. We are here to stay and continuously support our customer, so that they grow ... and order new iStills.
Today, just some 5 or 6 years later, we have become the biggest supplier of craft distilling equipment in the world. What our "competitor" forgot in his analysis, that day he visited our booth in London, is that we were already living in an open economy, where people talk to each other. A still that lasts forever vs. a still that needs replacement parts on an almost continuous basis? What do you think the customer wants! Who do you think benefits most from what model? What do you think would suit your best interests?
Last year, our turnover was twice as big as their turnover. Last year, given our hyper-efficient, batch-oriented production lines, we delivered four times more stills than they did. Total net boiler volume provided by iStill? We outpace them 10 to 1! Total LPA (liters per annum at 100% ABV) produced in-house (vs. outsourced)? I am estimating that our customers produce 20 to 30 times more actual craft distilled product.
Their prices are coming down on a continuous basis. And not because they want to. Did a 500 liter traditional still once sell for 200k (yeah, like 6 years ago), it now goes for 100k. Margins of traditional equipment manufacturers are falling from a cliff, yet they are still twice as expensive to buy and three times as expensive to run. Did I already mention the exploding material costs they are facing?
We are playing the long game and loving it. Open price policy vs. a closed price policy. Training and education vs. "good luck, and now go figure it out yourselves!" A focus on long-term relationships vs. a sales-driven push model. A focus on the craft distilling industry and how we can serve it to the best of our abilities vs. a desire to maximize short-term profits.
Oh, and - as material and labor costs rise - we keep our prices level, since our growth gives us more economies of scale, allowing us to put even more pressure on the manufacturers of traditional equipment. Relentless. Always innovating. Never stopping. Next year, our numbers will be higher again. And theirs will be lower again. It's what's called a disruption. Or a paradigm shift. Or the renaissance of craft distilling.
Why do they loose ground so quickly? They play the short game. Why does iStill take over the market at such a fast speed? We always play the long game. And we are loving every minute of it ...
Add your comment