How MOTH is Mixing Up Cocktail Category Rules | Rob Wallis, Moth Premium RTD Cocktails

13:32Fiona:Yeah, so RTD is quite a unique category and this is going to be a really unhelpful piece of advice to other categories. There is an almost permanent four for three mechanic in the RTD category across all brands, across all supermarkets, basically. And so if you go into that, it is not difficult to trial a new product. So if you've got, if you're usually a somebody else drinker, you can pop them off in and one of them's free anyway. So that trial mechanic is really interesting. But for us, I think it was just being so startlingly different on shelf. When we went to do the branding with an amazing agency called Pentagram, we sat down with them, we said, everyone in the category costs two pounds.

14:07Fiona:Everyone in the category is in a 250 mil can. Everyone is 5%. Everyone's full of sugar. Everyone's got ingredients you wouldn't use in a bar. And everyone's shiny. And everyone is colorful. So we will be strong, not sweet, half the size, three times the strength, matte and rough. And every single thing that we could do on the outside of the packaging to represent how different the inside was in the liquid was a choice we made. And so to be so different in a category that it's just colour, colour, colour, look at me, look at me, definitely helped us. So investing into brand more than anyone in RTD had done.

14:40Rob Wallis:So how did you know how to do all of that? Are you just clever? Or did you arrive to that over time?

14:46Fiona:Prior to Moth, we did little glass bottles for three years. So we kind of did our own MBA. So three years of hand filling, hand labelling. We were in Selfridges and Harrods and Dalesford and COVID turned up and closed every account we had. And so we'd done a lot of work for the last three years about what worked and what didn't work, loads of what didn't work. So we had lots of learnings there. And then I think in part, it was my co-founder, Sam, who's from that film and design background. He went and met every single agency that he could. I think he did 17 full pictures, proposals, went through to everybody.

15:16Fiona:And I remember we chose Pentagram. We sat down in the front room there. And I think we talked for probably three or four hours and just about everything we've done for the last three years. What mattered to Sam and I personally, what we actually cared about the brand. And as founders, you'll have come across this. Like, it's really hard to know what's important because to you, everything is 100 percent important. Like, is it the fact it's vegan? Is it the fact it's high strength? Is it the fact it's spirits that, you know, is it you cannot pick through the weeds because it's your baby and it's so difficult.

15:42and so working with them to hear you know they were like well what you really want to do is

15:48Fiona:connect people and it's about the stories you tell over a cocktail and it's about that connection that it brings and it's the moth to a flame kind of thing we all come together around a cocktail and that sociability so what you really care about is making people happy and building that social connection and after three years of doing this we went oh it's that it's that isn't it and

16:06Rob Wallis:that's the sign of an amazing agency it is also the sign of a great coach by the way or a mentor to anyone listening out there. That's what your coaches and your mentors should be able to do when you get them on a call is to be able to bring you back to the one thing that really is going to shift the dial, make the difference. So really good, really good shout there, Rob. Once you came to that and you're on shelf and you're in the four foot three and the rate of sale obviously was proving that, you know, people were trialing, they were repeating.

16:33Fiona:Yeah, so RTD is not a very loyal category. People just bitch and match and do whatever. Whereas for moth, we have a very loyal consumer because a lot of people in the RTD category, if they buy moth, they only drink moth. I'm an example of that. There's no other RTD I drink. And there's lots of other people like that.

16:46Rob Wallis:Totally incremental, right? Bringing a new shopper, a high value basket shopper, probably someone slightly older, maybe?

16:53Fiona:Absolutely. RTD is a lot of time, 18 to 21. And we go a lot past that.

16:57Rob Wallis:In terms of category story, you're able to go into the buyer and say, look at your shopper profile. You've got 80 % of your value is bought on deal and it is bought by these people who are shoppers that are lower value shoppers. Whereas if you stalk us, these are shoppers who are older, that spend much more in the supermarket, that are more valuable strategically to Sainsbury's or whoever. And it is not stealing share from your category. It's growing your category. That's what we mean when we say a great category value and a great category story, right? The reason I'm kind of illustrating that out is for sometimes founders, even in CPG, like established CPG, people coming up through the ranks, They don't necessarily know what people mean when they say a category story.

17:40Rob Wallis:What's a category story? But that is the category story, isn't it?

17:43Fiona:Yeah, and we had to learn that. We didn't know. We didn't know what category it was. We didn't know any of that. But you're right. I think we latched on very quickly to the importance of category. We hired for it quite quickly. And for us, I think learning that piece of what your buyer doesn't just want to know about the liquid. They don't just care about the brand. They want to know what you're doing for the whole category, which as a young brand is really intimidating because you go, I don't know. Oh, I bet he's started, you know. But we knew that for Sainsbury's and Tesco's. But I think it is the vision of a good buyer at the start that when we went into Waitrose, we had none of that and they still listed us, which is amazing.

18:15Fiona:Totally.

18:15Rob Wallis:And the other thing, and just to like, this might be slightly geeky and boring for people who aren't into this level of category detail. But say, for example, if I think of myself, so I go into my Tesco superstore on a particular shopper mission. It's a basket mission and it's a Friday night, friends coming over mission, right? Which anyone who understands shopper will be thinking, okay, you know, that's cool. What does she mean by mission? anyone who doesn't they'll be like what does it mean I'm not going in for my weekly shop or my every two weeks shop for the kids school food I'm going in because I'm having four of the girls over for dinner once the kids have gone to bed so I put eight moths in the basket right and I also go and buy the poshest crisps I can find and I buy the Tesco finest poshest dips now I'd probably be going to M &S if I had an M &S nearer and my entire basket instead of coming to like 12.50 is probably going to come to about 55 quid for that evening and because Moth is the centre of that Moth is creating that occasion that's incremental value that Tesco has made as a result of that incremental mission that I wouldn't have had if Moth was not there so not only for the category buyer but for the actual whole of Tesco it is stealing share from Marks & Spencer's because usually I would have gone to Marks & Spencer's to do that shop and I suppose that's one step beyond just making your buyer happy it's making the entire supermarket happy

19:32Fiona:and I think it's quite a unique thing about RITD if you want a margarita, an alternative to the moth margarita is making a margarita yourself.

19:39Rob Wallis:Such a good point. And so for us,

19:42Fiona:you're probably not that likely to do that. You would probably go and shop a lower margin category of you might buy a bottle of gin and some tonic or you might go and buy wine. And so this is the big difference we're finding between the UK and the US and this blows my mind every time. In the UK, we are selling the idea of you can have a cocktail. In the US, you're going to have a cocktail, it should be moth. So in the UK, it's like if you went to dinner on a Tuesday night and you went out with a friend and they ordered a margarita, you'd be like, oh, special Tuesday. Is this is this something special?

20:11Fiona:It is a totally genuine, no thrill switch in the US to go from a beer or glass wine to a margarita. OK, does not register, doesn't raise an eyebrow. So in the UK, we've got to say you are worth it. It's a special occasion. A Tuesday can be a special occasion. Have a margarita. You know, on our advent calendar last year, we had a line somewhere that was like, margaritas on a Monday. Aren't you on the naughty list? Question mark or something like lovely bit of copy. Because it's just it's not the same cocktail culture. So it is. Yeah, there's the category piece, but there's also the cocktail piece.

20:41Rob Wallis:So talk to us about that then, because this is where understanding consumer attitudes, mindsets that drive behaviours in different countries are so important. People say, oh, well, you know, you just take your you just take what works in one market and you just put it into the other market, you know. So when did you realise that about the States?

20:58Fiona:First or second trip, like research trip, honestly, just going in, the average US supermarket has more cocktail ingredients than a proper specialty store in London. And London is a global cocktail city. Like it is one of the best places in the world to order a drink. And so going in there, you went, oh, this is just in the blood. This is different. And obviously it's interesting being a UK brand, bringing cocktails to the US, it's an interesting thing. So we obviously don't trade on the fact that we're British. We say we're a global brand and we're just doing the right thing by the category and by liquid and all the rest of it.

21:25Fiona:But yeah, it's just, I remember just it being on, margaritas on every menu. Here in the UK, margaritas on some menus.

21:32Rob Wallis:You look like a global brand. And actually when you said that in my head, I just went, ta-ching, Diageo acquisition target. You know, like you look like you've been designed to be the acquisition target for a massive global conglomerate. And I'm not saying you have been, by the way, but I think it's actually really clever as I think about it now, because if you can imagine yourself in the portfolio or in the brand house or the stable, as they like to call it, of your future acquirers, they're not going to necessarily shrink away, are they, in the future? I'm thinking out loud here, sorry.

22:06Fiona:No, no, I'm sorry, not a problem at all. I think from my perspective, the decision to be global is one we sort of stepped into. Because the design was so good from phase one, from Pentagram, we haven't had to change the essence of the brand, which is amazing, because if you, you know, if you don't do it quite right, you have to keep iterating and redoing it. Whereas because we work with Pentagram, we haven't had to. And they have a very global lens. They have New York, Austin, global offices, which I think definitely would have played a part in their thinking. But for us, it's, you know, we're not a geographically specific cocktails aren't British, cocktails aren't American.

22:38Fiona:You know, if we were a gin brand from London, you'd stick a little Union Jack on and off you go, right? But that's not us. Cocktails are a universal thing from Tokyo to London. So it did make kind of just natural sense as a category to be inclusive in that way.

22:54Rob Wallis:If this episode is inspiring you to think about new ways that you can drive growth for your business, don't forget to click follow or subscribe on your favorite podcast app and even leave a review. Your small gesture has a big impact on me and my business and will be truly appreciated. So how do you do brand engagement then outside of the shelf? Do you need to even?

23:15Fiona:Yeah, I think you do, but I think it's timing it. So, you know, a vanity out of home campaign of half a million quid when you've got six stores would be a bold choice. But when you're in, you know, 5 ,000 supermarkets like we are, it's right and necessary and you need to build that brand awareness. And I think we can be in a bit of a bubble whip. We got one HQ in London and one in New York, but it's in London, we think everybody knows what a spicy margarita is. And surely, you know, you leave and it wouldn't be like that. But actually, you go outside and people pick it up now because it's moth, not necessarily because they've had a spicy margarita, which is again, another change but in terms of our very social forward do a lot of stuff on socials um because it's you know cocktails are visual and exciting and social i mean surely it's perfect right um and then brand partnerships where else we appear in the uk as i said like being in an honestberg or a frankamanka is as good a brand introduction as you could possibly hope for right that's amazing if the first time you have it is alongside an amazing sourdough pizza in a cool restaurant

24:11Rob Wallis:great isn't that really clever starting backwards what do we want people to experience this what's the perfect serve and the perfect pairing and then find the partners as a result of that. I love this. You guys are such naturals. So were you surprised? I suppose I didn't realise that you'd had your three years mini MBA before, you know, with the bottles and labelling the bottles beforehand. Was that called, Martha? Was that called something different?

24:31Fiona:That was called Bouvet, which is French for drinker, which is understandably unspellable, but useful as one of the things we got wrong. But I'm so glad we did for the first three years. But that was all self-funded as well. So no team. It was just Sam and I like didn't pay ourselves. really, really tough, but really exciting.

24:48Rob Wallis:And you decided that you wanted to have a company where people, where you and people loved to work. It felt good about working in, right? And the culture was really important to you guys. Talk to us about that. And how have you brought that alive?

25:00Fiona:So it's developed into like, obviously, a sort of culture of 50 something people now. But at the start, it was just Sam and I wanting a job that was a positive impact on our lives. And somewhere we wanted to turn up to work every day. We both had, in the past, had jobs and bosses that meant that were, you know, limiting or stressful or you didn't, you know, you disagree with the way things were run or whatever. And that's not because we were sort of these, you know, handcuffed entrepreneurs desperate to break out into the world. It's just because that's life, right? Like so many jobs are just like that day to day and you've got different priorities and that's fine.

25:29Fiona:But I genuinely believe that work can be a positive impact on your life. And I genuinely believe that a culture that is kinder means you want to turn up on a Monday rather than dreading it means you can win commercially. You know, it's not a it's going well so we can afford to be nice to people. It's if you're not nice to people, it will never go well commercially. Or if it does, it will be short term because you'll burn out and be miserable. So it started as a as a sort of let's just turn up to a place that we love to work. And it grew from there. And we hired a head of people who really bought into the mission.

25:58Fiona:She's amazing. And she's, you know, doubled the number of people in the business. But the culture has stayed the test of time and that test of scale. So it's a huge credit to her as well to hiring people who want that kind of thing.

26:09Rob Wallis:So what's it like to work at Moth? Give me a feeling or a day or what's it like in the office?

26:15Fiona:Yeah, I mean, the aim is to ruin every other job you might have by making it the best place you'll ever work, right? Are you serious? 100%. This should be the best place you'll ever work. And that is the aim, number one aim. And if you go off and start your own business, I mean, amazing. Obviously, I can't say anything because it's what I did. Like, we'll support you. That's so cool. And people move on and do different things. But genuinely, this should be the best place you'll ever work. And that is a kind, collaborative, low ego, you know, for a long time sales was the smallest department. And I think it's one of those things where, you know, it's a very egalitarian culture.

26:45Fiona:We're very ops led because we're hard to make. So having real equality and engagement between the departments, we have values that we're really keen to stay aligned to. One of them is to be the perfect host. Like if you're having people over for dinner, how would you act? You know, it's anticipating what people need. It's being generous. It's being kind. is pouring the extra glass. All these things are just like, what would you do if you were hosting friends? And that grows and scales and all that kind of stuff. So yeah, I mean - It's just lovely. Yeah, it's the best. You can win by being nice.

27:12Fiona:I really believe it. And that's sort of, I am very anti the whole hustle culture and grind and expecting people to work till 3am. And that's how you win in startups. I just, that just doesn't work for me. I don't think, I know I couldn't do it. So I don't think it's fair to expect everyone else to do it.

27:26Rob Wallis:I totally agree with you. I totally agree with you. I'm cut from the same cloth, I think. the world should be a nicer place and well done. Well done for doing what you're doing. And I think that's really inspiring. This should be, this is ruin any other job you ever have. That's like really inspiring that you want to do that. So that costs, there's a cost associated with that, right? But that's okay because it's an investment and it's the kind of place you want to work. So talk to us about product then. What is so special about what goes into the can and how do you make sure that it stays that special over time?

27:58Fiona:I think it is probably genuinely the hardest thing in FMCG and startups and scaling is quality and consistency. To continue that is the biggest challenge. And it's one of those things you can never rest on your laurels. It's never done. It's never finished. It's continuous improvement. So I think from us being our first time I was in operations, she was ex-innocent and still with the business, doing an amazing job and leading that operations function. I think it is an obsessiveness with quality and a not being, if you're going to build a brand that is solely based on this is the best margarita you'll have in a can, and it will be if you try it again in six months, and it will be if you pick it up in a different retailer or a different country, recognising the challenge of that and what the investment and the scaffolding you need to put around that as a problem is, as how massive it is, I think is the only way to do it.

28:45Fiona:If you just think it's going to be fine and you think a manufacturer will care as much as you will, you are wrong.

28:50Rob Wallis:And at the moment, you're using a co-manufacturer partner.

28:53Fiona:Yeah, we do. We use several, yeah.

28:54Rob Wallis:Okay. And would you ever consider building your own?

28:57Fiona:So Jade, who came from Innocent, they were just building the factory in Rotterdam, which is 355 million euros, I think, to have their own factory for the first time. And hearing the horror stories of that as a process from a brand that we respect so much and love and has been bought by Coke did sort of give us pause of maybe that's not for us. And also, you know, when we started, it went faster than we thought. If we'd have built our own factory, it would have been too big for it on day two. And so it gives us that real scalability to be able to continue to scale and to be nimble and to be light.

29:31Fiona:But to mean that we have to bring procurement and operations and things that mean co-manufacturers are well supervised, well looked after. We have a good relationship. That's where we invest rather than building a factory.

29:41Rob Wallis:OK, and process as well. I mean, making sure that there's constant relationship building and NPD and all of that stuff. I feel like that has to sit under you guys, right? Because they're good at what they're doing and you've got to be good at leading the charge. Before we came on the call, you were telling me we were talking about AI and the changes that are going to come. You were saying that you actually have appointed an AI champion within the Moth team. So talk to us, how did you come to that decision and what are your thoughts on how AI is going to change how we work in CPG?

30:11Fiona:Yeah, I mean, we have a lot of investors who are obviously looking at AI as a market and are sort of asking us constantly, what are you doing with it? And I think we needed to have someone that looked after it because it can be an amazing tool in the right hands and can be a disservice in others. So I think from our perspective, we're looking at it. We're looking at ways it can make us more efficient as a business. But I think we're also quite clear on things it's not going to do for us. It's not going to replace because we're in a very human industry. Food and drink is about as old school as it gets.

30:37Fiona:Right. We've been doing sitting around the fire for 30 ,000 years, keeping the night away with a drink. Right. So this is still a very human thing, still something that I think people will see through instantly if you're trying to remove that human part of what we do. But that doesn't mean there aren't internal processes and ways we do things that could be way better and make the humans at Moth have an easier, better, quicker, more efficient life as part of their work. So it's a really challenging balance. And that's why we appointed someone to make sure that it's looked at properly and taken seriously, because there are ways that it'll fire us into the future.

31:07Fiona:And there are ways that will disconnect us from the consumer, which isn't the idea.

31:11Rob Wallis:That's incredible. So that person, you know, I suppose it has to be kind of exploratory at the beginning. Do you decide on areas like, OK, so ops efficiency or, you know, people management, or do you just let them off to find out what they find out? Surely you have to harness it somehow.

31:25Fiona:Yeah, it's difficult because you could do so much, right? So we went and got a survey from everybody. How would you or how do you already use it? And where's it helpful? Where's it unhelpful? And we sort of gathered all that into one place and then started to go, well, prioritise. What do we think actually is going to make the biggest difference? What makes the boat go faster, right? What actually moves the needle here? and what can you do without sort of totally disturbing everybody or disconnecting from the consumer and all the rest of it. And we're literally in that process of prioritization at the moment.

31:49Fiona:So trying to work out where we use it as a tool rather than let it sort of massively change the way we, you know, connect with the consumer or make the product or all the rest of it.

31:57Rob Wallis:Yeah, and then I suppose it's like over time, you'll be able to see very quickly what the return on investment is. Because if that person focuses themselves, their time, their hours, it's really easy to see, okay, well, we know what they cost us. what return are they delivering in terms of reduction in cost and revenue driving I imagine if you're able to do marketing in a different way or demand generation in a different way it'll be really easy because you started at the beginning to see whether it's worth investing more in over time or which areas are showing the the the best return on investment it's really clever

32:28Fiona:well done you for jumping on it I wish it was my idea well whoever's idea it was they should be patted on the back um absolutely and I think for us it's that we don't know what we don't know and And that's sort of a general theme of Moth from the start, right? There's so much that we don't know. And going into this with a huge degree of naivety is a superpower at some points and a massive problem at others. And it's just trying to use it as a superpower rather than a kryptonite.

32:50Rob Wallis:So what's next for Moth for the next three years? What do they look like?

32:53Fiona:So the UK is, although we're now, as I said, that biggest cocktail brand in RTD and grocery, we're nowhere near done. We really believe there's so much headroom to go after and there's new channels. And, you know, we're so excited by the opportunities, you know, with the likes of Honest and Frank Manker in the last year. like what's happened with that as a brand it's just been amazing they've been such incredible partners um and then the us yeah we are so early into that journey if the uk is a sort of walking talking toddler the us is a little baby that we're looking at and it's growing so fast and needs constant attention and all the rest of it and tries to get up and falls over and doesn't and then starts talking and so all of these things uh but i think the big focus for us is that continued you know winning the uk and building a home market that's really secure and exciting and then with the US, just that opportunity to scale.

33:39Rob Wallis:Did you say to me that your co-founder's now in New York full-time?

33:42Fiona:Yeah, so he moved out there. So we're both back and forth all the time, but really important to have at least one of us in each of the markets.

33:47Rob Wallis:What's that like? So since February, I suppose you would see each other before every day and I'm sure you're still on WhatsApp or you're still on Google Meet or Teams or whatever it is, but that's like you both now have almost, I don't know, there's a separation as well as a togetherness. How does that feel and look like for you guys now?

34:04Fiona:I mean, it's a big adjustment. we've been friends since we were 13 we've already lived 10 minutes away from each other as kids we lived together at uni we lived the road away from each other when we moved to london when i first went back so this is like the biggest step i moved to switzerland for a bit in the middle before moth but this is probably like the biggest separation for us since what in 17 years maybe as friends so it is a a huge adjustment but there are positives to it like i have having someone on the ground and having when you when you're on calls with with the us having them know that you have a team and a founder in the US, the commitment that that shows to them and the confidence it gives them from Sam being there is you can't underestimate it.

34:42Fiona:So it's weird from a personal level of like not having my best mate in the office every day. But from a professional level, it is different. And you have to be much more conscious in your communication and do all the rest of it. But it is amazing to have that and the team be out there and led by him and inspired by him. And, you know, he's such a huge part of the culture from when we started making sure that we don't just have the US as an outpost. It has that same moth identity, that same moth culture. I don't think we could achieve that without one of us there.

35:08Rob Wallis:Do you guys have a coach that you see together and separately?

35:11Fiona:Yes, we have lots of amazing advisors. Our chair is the ex-CMO of Diageo, Andy Fennell, who we speak to every week. He's amazing. We also have Matt Frost, who used to be head of grocery at Waitrose, a huge part of our journey. So those two we speak to every single week, both together or if there's specific stuff separately. So yeah, look, this is our first business. The people in the team and the people that advise us is the only reason we're here, right so we don't underestimate or undervalue what they what they bring to us well rob thank

35:37Rob Wallis:you so much for coming on brand growth heroes today i am really delighted to learn more about moth i'm super impressed i i mean i do mean that genuinely like i am super impressed at the kind of maturity the way in which you guys approach things uh from people to you know taking making decisions of where to play and and how to win uh it's it really is truly inspirational so thank you so much for for coming on the show today and sharing all of that with their the Brand Growth Heroes listeners.

36:02Fiona:Thanks so much for having me. It's been great.

36:04Rob Wallis:It's been brill. Thank you.

36:08Rob Wallis:Since recording that episode, I got a delivery of moth cocktails to my house. And my God, I didn't actually believe that the difference could be so wild. But let me tell you, you know when you drink back a drink, if you're not a spirits drinker or a cocktail drinker and you drink back a drink and you get that like, whoa, that's what I got you know the alcohol content the balance the flavour it felt like I was drinking real passion fruit coolie that's the one I've tried so far I'm dying to try the espresso martini but I've got to wait till next weekend Rob and team thank you so much for sending me those drinks if anyone hasn't tried them I highly recommend you do links in the show notes in the post below and yeah what a great case study of clever thinking, bravery.

37:00Rob Wallis:The US expansion is going to be absolutely huge. Wishing you guys the very best of luck. And for all of those listeners who've enjoyed this episode, please do click follow, like, share the episode, send it to a founder or to a fellow cocktail lover who'd like to listen. And thank you so much.

37:25Rob Wallis:As always, thanks again to my tech guru and sound engineer Jip Bougain of Ballot Groove and my podcast producer Catherine of Social Cues.