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BlogSpirits & Wines
Introduction by: Peter Marshall
This week’s interview is with John McDonnell, International Managing Director of Tito’s Handmade Vodka. He is a straight shooter when it comes to industry issues and the spirits category and always brings original and insightful perspectives. It’s a very compelling read.

Peter Marshall (PM): John, Tito’s Handmade Vodka is an extraordinary success story. Can we start this interview covering some of the history of this all-American premium vodka brand?

John McDonnell (JM): Sure. In the mid-1990’s, sixth generation Texan Bert Tito Beveridge constructed a pot still made from spare parts and put it inside a small shack he built on a plot of land in rural Austin, Texas, and that’s how Tito’s Handmade Vodka was born.

Today, our corn-based, gluten-free vodka is available in 140 markets around the world and it’s still distilled in Austin with the same commitment to quality and authenticity as the day we started those 25 years ago. This year proudly marks our 25th anniversary!

I’ve known Tito –  and yes, his surname really is Beveridge! – as a matter of fact going on for 20 years. I helped him open up 19 states in the U.S., and I’m honored today to manage international and duty free markets for this fast-growing, consumer-focused brand.

PM: So what, then, are the key differentiators for the brand?

JM: We make a truly fantastic vodka and we sell it at a fair price. But that’s not the only reason why consumers, retailers and bartenders have so strongly embraced Tito’s Handmade Vodka. Our commitment to integrity and community is every bit as important as the vodka itself. 

Through our Love,Tito’s” programme, we support important causes and organizations across the world. From animal wellbeing – that’s our Vodka for Dog People initiative – to hunger relief, to environmental protection, to LGBTQ+, to racial equity. In many ways we’re more of a charitable organization that just happens to produce and sell very good vodka!

PM: Given that, it’s an extraordinary fact that Tito’s is a top-selling brand in the USA, and yet it is a ‘craft’ brand. Surprisingly, it does not have a presence in all markets. So where do you see the brand’s growth coming from in Travel Retail and why?

JM: Tito’s is strong in Travel Retail in the Americas, and I’m pleased to say that our business is growing solidly in other regions, too. Where I see significant opportunity particularly is in Dufry and Heinemann locations in Europe, where Tito’s was delisted during the pandemic. Now they’re faced with empty shelf spots, it’s the perfect time to focus on a vodka like Tito’s. This is a brand that has very strong – and growing – consumer awareness and appeal.

PM: So do you think there is a strong case that travel retailers should pay more attention to craft brands, that the spirits category be re-imagined to better accommodate changing consumer needs and expectations?

JM: Absolutely, 100%. I was recently in a duty free store in a prominent airport in Europe and I couldn’t believe they had three wall bays of gin, yet only one bay of vodka – the largest international spirits category in the world. Why are retailers so overly focused on craft gin, a category that’s a quarter of the size of vodka? If some of these stores gave just a fraction of the attention to vodka that they do to gin, they’d see how much consumers truly are interested in discovering and purchasing vodka brands. 

PM: Moving on, how do smaller, independent brands like Tito’s compete with the multinational brands’ budgets?

JM: Yes, it does mean that we have to pick our promotional spots very carefully. But retailers have a role to play here, too, to recognize which brands are in high consumer demand – regardless of whether or not they are part of a large multinational portfolio. Tito’s Handmade Vodka is the 5th largest international brand in the global spirits industry. Our consumers look for Tito’s when they travel. Doesn’t it make sense that a duty free retailer would want to feature this popular vodka in their stores?

PM: Let’s talk about digital. Digital convenience is arguably a commercial imperative nowadays. Do you think the travel retail industry is in the right place and at the right pace to stay connected and to stop losing younger customers?

JM: No. I think in terms of digital convenience we’ve failed as a channel. I can arrive at any city in the world and with a touch of my phone I can order and pay for an Uber to whisk me to my destination. I don’t need to worry about local currency or navigate language barriers – the app does it all for me. 

So tell me why we don’t have a similar solution for consumers who want to purchase our products in duty free? According to m1nd-set research I saw recently, travellers on average look up from their phones only four times while they’re at the airport – to check in, to go through security, to get something to eat and to board the plane. So why aren’t we capturing them on their phones to shop duty free?

And when I say we, I mean everyone in Travel Retail – confectionery, beauty, wines and spirits, and especially our friends at TFWA and IAADFS. We should all be working to solve this, particularly as e-commerce has come to define and mould our way of life today.

PM: As you said earlier, the brand’s philanthropy is another pillar, where Tito’s gives back to the community in so many ways. The Food For Friends programme is an excellent example here. Can you take us through why each of these elements is so important for you?

JM:  Thank you for mentioning the Tito’s Food for Friends initiative. It’s a programme we’re quite proud of. In markets across the globe we work with our Tito’s distributors to help provide and fund meals for people in the food/beverage/hospitality industry and others in the local community who are in need – especially those who were and still continue to be impacted in many places by the COVID pandemic. And speaking of the pandemic, during the height of COVID, we pivoted to producing hand sanitizer to give away to anyone who needed it.

As I mentioned before, our commitment to community is truly core to who we are, and it’s genuine. It all tracks back to Tito himself and his generosity of character.

PM: Looking specifically at what Tito’s itself is doing in the market, what initiatives have you taken and will you be taking to further help stimulate sales within Travel Retail?

JM: We have a busy calendar of travel retail support this year, including the introduction of our duty free exclusive Tito’s 25th Anniversary red, white and blue bottle bags to celebrate U.S Independence Day this summer.

Also, to celebrate the World Cup, at Qatar Duty Free we’re featuring a Tito’s futbol bottle jersey. We also have a full schedule of tastings in duty free, taking us into the rest of the year. 

PM: Well, John, if you asked me about Tito’s, I would say that it’s a modern craft vodka that tastes great – taken straight or with a mixer. You raised this point earlier and it’s right. Price is a factor and it is well priced. Uniquely, it’s also a vodka that originates from Texas not from Eastern Europe. It embraces today. What might you add to that?

JM: You’re right. Eastern Europe isn’t the only place that makes great vodka! With Tito’s – and this is really central to our success – you are paying for the quality of the vodka, not a fancy bottle or label.

PM: One last question. If there are two things you wanted to say to the trunblocked.com readership, what would they be?

JM: Thank you, Peter. I appreciate the opportunity to share with you and your readers a little about Tito’s Handmade Vodka. Travel Retail is certainly an important channel for us and we’re grateful for the support.

So, if there are two things to sum up what the Tito’s consumer is interested in, I would say this. First, digital convenience. We need to solve this as an industry. We owe it to our customers to make their shopping experience as convenient as possible. Second, corporate/social responsibility. Our consumers, like those of many brands in this channel, are more likely to support companies and brands that are using their resources to make our planet a better place to live. Consumers want to purchase products from companies that support the communities where they live and the causes that matter to them.

 

Peter Marshall

Founder: trunblocked.com/Marshall Arts

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