There's Profit In Niche. A Lot Of It. Ask Dirty Sue.

0:10Hello, friends. I'm Ray Lateef, and you're tuned in to Taste Radio, the leading podcast for entrepreneurs, makers, and innovators in the food and beverage industry. What if the biggest opportunity in your industry is something no one else even sees? In this episode, Eric Tkoski, the founder of pioneering cocktail ingredient brand Dirty Sue, unpacks how a simple gap behind the bar became a first-to-market product, a profitable niche, and a lesson in disciplined focus. From navigating skeptical buyers to scaling a single SKU for 20 years, ET breaks down the strategy, timing, and execution behind building a sustainable, category-creating brand.

0:59Hey, folks, it's Ray with Taste Radio. Right now, I am honored to be sitting down with ET, the founder of Dirty Sue. ET, it's great to see you. Great to see you. Thanks for having me on. And before we go any further, E.T. stands for? Eric Tkoski. Yes, but nobody calls you that. Maybe my mother. Maybe your mom, yeah. It's been a name, a nickname that's stuck with you for how many years at this point? Let's just say many, many, many. Fair enough. You're a young man, E.T. I wouldn't worry about it. That's right. Yes, yes. Your Instagram handle, though, is superhype1. Where'd that come from? Yes. My favorite band of all time, Led Zeppelin.

1:38their publishing company was called super hype and that's funny when i called it super hype my dad took issue with it because he felt like hype is bullshit okay and then when i qualified it by saying you can believe the hype in this situation i like that i like that so nice we kept it i think for them super hype was because they before they ever released a song they signed the biggest advance of any band at that time and people were just saying they must be a bunch of hype and then obviously Zeppelin came out and that was not the case. Super Hype is a great name. I like the name ET as well for a lot of different reasons.

2:13I really like the name Dirty Sue. Thank you. Dirty Sue to me, I'm trying to find a point of reference and it feels like there's a lot of different places where you might've pulled from to create this name, but where'd the name Dirty Sue come from? Yeah, when I came up with the idea to bottle olive juice, which wasn't a thing when I started of the brand, I really wanted dirty in the title of whatever name I came up with just because I wanted people to immediately associate with a dirty martini. And I don't know how many days, weeks, dirty, something, something dirty. And I was sitting in my apartment and I spied behind the sofa, my beach cruiser bicycle.

2:51So hashtag not married yet. My bike was in the living room and the bike, it's got like a wide frame and on the frame, whoever, you know, the company had painted a pinup girl like a World War II nose of a plane. And it said the Flying Sue. And I was like, oh, dirty Sue, that's catchy. And at the time, I thought the pinup girl would have been cool too. So I had a friend draw a pinup girl on an olive instead of the wing of a plane. And she was sitting on the olive saluting. And it just felt like a throwback, a little bit of Americana and nostalgia and the name was catchy. And my original thought was I wanted to change how people order at a bar.

3:32So instead of saying, I want a vodka, dirty martini or gin, dirty martini, you would just name your brand and say, I want to X32 and just kind of like Kleenex. So I wanted something catchy. And when I saw that, it kind of stuck. I love that. You wanted to create a brand name that could become generic is what I'm hearing. Yes, correct. Interesting. Interesting. And your background is actually in whiskey, or at least you spent a number of years as the U.S. ambassador for Jack Daniels. Yeah. Whenever I think about dirty martinis, I don't think about whiskey. I think about vodka or gin. So just talk a bit about your background in the industry and when you realized it was time to strike out on your own and get into entrepreneurship.

4:20To be honest, entrepreneurship was kind of in my blood. My dad was a CPA, but he had a very entrepreneurial mind and always had some type of either idea going or side business going. And even when I was a kid, my dad during tax season would come home late because, you know, that's when you work the most. And if it wasn't a grill, he wasn't cooking. So during tax season, my mom would keep a lot of frozen pizza from the local pizza place on hand. And my dad would come home and make himself a couple slices of pizza. And as a kid, you watch your parents do anything and somehow it annoys you. so my dad would sit there with garlic oregano crushed red pepper and scientifically put as many perfectly placed kernels of each spice and i was like why don't you just put them in the same jar and shake it on he's like that's genius yeah so as an entire family we came up with a product called pizza put on and his client at the time had done the fedex logo so he did the logo for the brand.

5:23And my mom was basically in charge of the company. And my dad built this device where you could pour all the spices in these columns and then pull a lever and it filled a bottle perfectly with the right proportions. And then for a penny a piece, my sister got to put the labels on the bottles, which maybe nowadays we could get out of doing that. But yeah, so we had that business for a while and there's no internet back then. And pizza places where my dad thought would be our wheelhouse all loved it. But they said, look, when we put crushed red pepper and oregano and garlic on our table, you can just tweak your pizza how you like it.

6:01If I put your product on my table, now my pizza is not good enough without your brand. So that was the pushback. And without internet and specialty stores like we have today, it just kind of went away until I was a senior in college and I was in my last marketing class for my major. And the teacher said like day one, you know, why do you guys think brands fail or make it? And like, I raised my hand, like, I tell you how our brand failed. And then for the rest of that class, she called me every class and said, ET, what do you think about? And everyone hated me. Like, yeah, it was the easiest day I ever got, but I did not make any friends by being a teacher's pet.

6:40Were you in business school? Yeah, well, undergrad, but I was a marketing major at Syracuse. I had an opportunity right after college to move out to LA. And that opportunity lasted about six months. And I found myself looking for work. And I was at a friend's birthday party at a lounge. And I was leaving. I kind of knew the bartender just from going in there a little bit. And I said, hey, you guys looking for any help? And he's like, doing what? I'm like, you know, the assistant to the bartender. He's like, a bar back? And I was like, sure, if that's what you're calling it. And he's like, we're pretty full, but come back with a resume.

7:17So I made a resume with all the bars I drank at in college and just said I work there. And the next day I went in and as luck would have it, their bar back, I don't know, got drunk the night before, messed something up and got fired. And I started work that night. You are a true entrepreneur. You see an opportunity and you take that opportunity and you take it with full gusto. If it doesn't make any sense, as in I have no experience, you know, as a bar back, well, how much experience do you really need? If you've been sitting at a bar, you see what bar backs do. Yeah, I mean, bar backing, it's grueling.

7:52But, you know, you have a few tasks. And if you're just doing well, you get the attention of the bartenders. And then they kind of take you under the wing and start training you. And that's what happened. And these guys, at the time, I thought they were ancient. They were probably in their mid-30s. And they trained me. And it was great. And then I went and got my first bartending job at this nightclub on Sunset. And it just kind of went from there. And the whole time I always had something. I was writing screenplays for a long time or trying to do this or that. But bartending was always like the anchor of my life.

8:25And as the cocktail scene shifted from just drinks, right, neon sugar filled drinks of the 90s, and we started getting into the 2000s, I landed my favorite bar. and I was able to get a job as bar manager. And I was on a brand trip with some bartenders from San Francisco and realized like they really knew a lot more about, even though I've been doing it over a decade now, they just seem to be way more in tune with where this movement was headed. They're already making their own bitters, using egg whites and cocktails and, you know, fat washing. And I'm like just listening and just kind of keep my mouth shut so I didn't, you know, sound like I didn't know what I was doing.

9:06I got back to LA and I said to my boss, I'm like, look, this is happening in San Francisco right now. You know, it might be a six and a half hour drive, but it's a 45 minute flight and there is the internet. So it's not going to be long before it hits LA. So immediately we just went to Fresh Juices and then I think I bought Dale DeGrasse first book and read up on that and just changed our first menu. I wasn't trying to change the bar into, you know, like a twisty mustache cocktail bar. but I figured at very least, whatever drinks we made should be the best version of that drink. If we're making a margarita on the menu, it should be the best margarita.

9:41If we're making an old fashioned, it should be the best. And it just worked for our space because it was a very regular driven bar, but also a lot of bartenders came there so they could come there and get a great cocktail. We weren't promoting ourselves a cocktail bar per se, but we did make great drinks. and that's when Dirty Sue came about. Dirty martinis, ever popular, right? So at the time, we kept the olive juice in a squeeze bottle and I was working by myself one night, so I only have myself to blame for this, but I set the bar up, put the squeeze bottle out, filled the olive tray and garnishes and all this different stuff.

10:21And mid-shift, we just got hit a little abnormally for the night it was with like 40 people at once came from, I think, a movie screening. And all of a sudden, I'm three deep and someone says dirty martini. So, you know, pour everything and I grabbed the olive juice bottle and it was empty. And then I went to the jar to refill it. And the jar had probably half full of olives and also empty of juice. So then I had to go to the liquor room, get another jar of olives and fight that thing open with my wet hands. It took me like 10 minutes to make a 45 second cocktail. And that's when I was like, no one bottles olive juice?

10:58How is that possible? And as soon as I got a break, I went online and Googled bottled olive juice and it didn't exist. And that's what started me on creating Dirty Sue. What year was that? 2003 is when the light bulb went off and I launched summer of 2004. So you've been at this for a while and clearly cocktail trends have evolved in the past 20 years, but I think premium has been the through line for the industry? That actually hurt me in the beginning because when I created Dirty Sue, premium was not the vocabulary of bars. You know, people still had actual rail vodka, you know, and gin and rum.

11:39They weren't using today like the worst vodka in a speed rack might have been premium when I was starting out. So that has evolved. But when I started Dirty Sue, First of all, it took me forever to find anywhere that could bottle olive juice because most of it is imported. And all these farms I contacted weren't really farms. They were just private labeling from other farms. And it took me about six months. And my very last phone call was a family-owned farm in California. And they grew California green queen olives, which aren't typically what we see in martinis in the U.S. but they were also the largest importer of Mediterranean Spanish olives on the West Coast.

12:26So I drove up there and tasted their brine and it tasted just like what was in an olive jar, which was totally fine, but I didn't think it was good enough to put in a bottle and say, this is something you should buy. And I talked to them for a long time about how we could premiumize olive brine. And they explain how olive brine comes to be and different paths we could take to try to make it a better martini. You still want the salt, obviously. That's why people love a dirty martini. But I wanted more of that olive umami forward flavor to really give it something special. So we tinkered and tinkered and tinkered and finally landed on what Dirty Sue became.

13:07And it was great. People loved it except bar managers, because bar managers looked at the bottom line and they said, why would I buy something I get for free? And me being, you know, a marketing guy and sales guy, I'm like, Hey, you know, if you're getting it for free, there's a reason that you're not getting charged for it. You know, how good could it possibly be? But they didn't care. That wasn't the world. This was the world of Cosmos and lemon drops and Jager bombs and stuff like that. Not there's anything wrong with any of that, but we weren't into cocktails yet. So a lot of bar managers put back, especially bar managers that never bartended.

13:45So what I started doing, I would hire friends of mine, other bartenders on like some Monday or Tuesday, and I would call it dirty day and I would give them all a roll of quarters and a list of bars and a couple of cases of dirty Sue. And I'm like, just go to all these bars and say, Hey, this is from the bar manager over here at Jones. This is his product. wants you to try it, no charge, see what your bartenders think. And once I got bartenders to get their hands on this bottle, convenience alone, they were sold because all they had to do is put a pour spout on it and not drain olive jars and not waste olives and not clean squeezed bottles.

14:21Then there's the bartenders that still, and some do it today, put the hand over the olive tray and the juice goes through your fingers for a true... That is disgusting. It's the worst. That's a dirty martini. Yeah. So it just kind of grew like that. And then I got my first distributor. And I would say of all that early stuff, my biggest mistake I made when I created my website, which is still relatively a new thing, an e-commerce site, it was written in 100 % flash. And I know nothing about technology like that, but it looked cool. And the guy that designed it was in my friend's band. So it just had a cool vibe.

14:59and we had our launch party and Christina Aguilera showed up to the launch party. She got in front of the step and repeat, took pictures, hung out, had a couple of drinks and it was amazing. And then that picture ended up everywhere and we were not set up to sell. I had one distributor in Southern California. My e-commerce was caveman-esque and it took me a long time to catch up. It was really a wasted opportunity that could have given me a lot more of a boost than it did. It's interesting. You know, as an early stage entrepreneur, you got to be prepared for failure, but really also be prepared for success.

15:37You never know when that opportunity is going to come and, you know, it's best to be prepared for it. And people always talk about luck as the intersection of timing and preparedness. And I think in your case, timing was there as preparedness, not so much, not so much. But I also talked to a lot of early stage folks about being ahead of the curve. And even though a few things fell into place, you were still, I would say, probably ahead of the trend. And while there was some buy-in from, say, bartenders in Southern California, you still had the rest of the country to consider and where to go from there.

16:13How did you map out your growth strategy once you realized that there was some demand for this, where there was some interest for this? How did you think about the next year and potentially years after that? Once I had that first hurdle, I said I need to be ready for growth. So the first thing I did, because I realized the internet was a real thing at that point, people were using the internet and buying on the internet. The first liquor store that ever carried Dirty Sue was out in the Inland Empire about an hour east of LA. And I knew they sold wine online because that you know wine was legal to ship so i called the manager and i was like hey how do you do it he's like oh we have a company we have custom boxes that have wine shippers and it doesn't break in transit and it's light and you can brand your name on it whatever you want to do so they had moved on they're a giant liquor store like what you know a total wine or a bedmo looks like today.

17:13And he's like, I'll give you the first guy we use, which will sell you more your quantity size and talk to them. And it was amazing, right? Because now I had custom packaging for Jerdy Sue, nothing broke in the mail. I knew how to do it. I got a UPS account, which I didn't know you can do to get better rates. You know what I mean? I just thought you just went on ups.com who knew you can negotiate. And once I got that in place and knew I could ship anywhere in the U.S. and still make money. That was step one. And then as I was growing Southern California, I was strategically looking at where I wanted to go.

17:49And the West Coast made the most sense because manufacturing in California, and I didn't yet have East Coast warehousing. And to make that, you know, not cost prohibitive for an East Coast distributor, we're in Southern California to Northern California, went to Nevada, Arizona, and we just started building that area. And then it started catching on. We started getting some press. Bartender creates product because that wasn't a thing back then. And those pieces started falling into place and, you know, just got a few really good hits that put me on the map. And I had the support of bartenders.

18:22As I mentioned, to learn how to modern bartend, I bought Dale DeGraff's book. And then I met Dale and he really liked Dirty Sue. And when his second book came out on the Dirty Martini page, he calls out Dirty Sue is the best you could buy, which if you're an actor, you know, Robert De Niro is saying, did a good job, you know what I mean? So it was pretty amazing. And it really let other people like, oh, well, if Dale DeGroff says it's good, I'll try it, you know? And other peers of Dale also kind of got on. So in that bar community, I really had a good reputation amongst that crowd as a quality product, different from what's in the jar, that you can trust, that's consistent, that's cost-effective, and easy.

19:13And then conquering the home market was next. Quick break. If this episode has you thinking about what's next in food and beverage, explore BevNet and Nosh Insider, our subscription platform with deeper insights from the BevNet team. Visit TASTERadio.com slash insider to learn more.

19:56come after them or the people that were like-minded? Yeah. Again, a little bit of an opportunity I kind of seized on. When I first started getting some press, and most of it was in bar trade magazines, but then every once in a while I get a blurb in a consumer publication, and someone emailed me through the website and said, hey, I'm a home dirty martini lover, and I have five jars of olives in my fridge, all the juice is gone. My olives are going bad. I feel bad about throwing them away, but I don't know what to do. Do you sell retail? And I never even thought of that as a viable market. Coming from the bar world, you know, it's a mixer also.

20:40In essence, you're mixing it with vodka or gin. And it was a$7.50. I'm like, wow, that's a lot of olive juice for someone at home. So I made a 375 and launched that as the retail bottle. And I was amazed at how many people had that same issue that woman had, where they were buying all these little supermarket-sized jars of olives and making two or three martinis and then having a jar of olives that were going bad. And probably making really terrible martinis at that. I mean, if you're not buying high-quality olives, you're getting really bad olive juice. Yeah, that really helped. And then I just realized that was a market.

21:19So I started putting a focus as much as I was on the on-premise in the liquor stores and that kind of world as well. And then obviously as Amazon grew, that only helped me because now people in states or cities where I wasn't distributed could get Dirty Sue. It's just crazy how the world has changed since I started, I literally, the first couple orders I got online for a case of Dirty Sue, I was buying a box from a UPS type store, not even a UPS store, like a mom and pop, so full retail, wrapping it in bubble wrap, stuffing them in a box with the old school peanuts. And if someone paid at the time, maybe$70 to get a case of olive juice delivered, I was spending about$110 to get it to them.

22:08Not a model I could sustain. Yeah. Sounds like your fulfillment has changed, has evolved since those days. Yes, quite a bit, quite a bit. One thing that hasn't really evolved too much, and I think in a good way, is your focus, right? You are focused on olives and olive juice in particular. You sell onions and you sell whiskey cherries as well, but the primary focus of your brand is olives and olive juice. There are a lot of different ways you can go. I'm sure investors would say, hey, Dirty Sue has built up this great brand name. You know, why don't you do this or do that? You could make a Tom Collins mix or you could make a margarita mix or all these different things.

22:48But it seems like you've been pretty intentional about staying in your lane. Am I right in thinking that? Yeah. I mean, I still think as good as Dirty Sue is doing, I have so much runway left. You know, there's so much room left, even just in the US where Dirty Sue isn't. So to just dilute the brand, to just throw something out with my name on it, seems like a sure way of failure, right? If you listen to anyone that's a business mentor, they say, focus, focus, focus, stick to what you're good at, do what you're good at, crush what you're good at. Tito is a prime example of that. I've met Tito in passing.

23:28We're not buddies, but I have a lot of friends that work at Tito's and have been there since day one. So I I hear the magic of what he did. And basically he took one item in a time in our taste evolution where flavors are everything. And he just stuck to one thing and said, I'm going to do this as well as I can do it. And he did it to the point where you can't walk into a bar or liquor store or home, basically, and not find a bottle of Tito's. That's the point, which just happened this month when he said, what's next? and he bought a bottle of tequila, right? So if you could learn anything from a guy who's super successful, focus on what you do.

24:12I didn't do olives at first. It was just the olive juice. And to be honest, I could have just stuck with that. But every single martini made with my olive juice has an olive. So it seemed crazy not to at least offer that as a brand extension because it made sense. E.T., there's one word that I haven't brought up and then you haven't brought up throughout this conversation. It's niche. What you are selling is relatively niche. There's only a handful of people that really buy olive juice and buy olive juice specifically for cocktails. But you can build a business with niche. You can scale niche.

24:49This is not going to be a business where all of a sudden, you know, you're sold as much as Jack or Tito's. But there's a real opportunity here and you've proved that opportunity out. So I guess the question for me is, how do you sell that vision to investors so that you can hire more people, so that you can expand production, so that you can be in more places, so that you can consider an innovation pipeline down the line? What has been the pitch when you start talking to investors? I assume you already have. To be honest, my pitch was 21 and a half years ago when I got my first three investors and my only investors.

25:23I've never gone out for more money since. And my pitch back then was, I'm not sure this is going to work, but I think it will. By the way, that's a great pitch. I think a lot of people that I've spoken to who ask for money from friends and family, the line should always be, you're probably going to lose your money, but there's a chance that you could do well. I explained why they might lose their money, which was no one's ever done this before. And there could be a reason I'm not seeing. but for my money from a guy standing behind a bar we're throwing away i don't know what they cost back then but a gallon of olives maybe it was back then 20 22 bucks and i would say we threw away a third of every jar of olives and probably 10 that we use we probably shouldn't have and that's not nothing for under ten dollar or 750 so if you're looking at half ounce of olive juice per drink for a typical dirty martini, that's 50 drinks in one bottle.

26:25If you're talking about extra dirty, three quarters of an ounce, now, you know, 30 some drinks in a bottle. Somebody wants the triple X dirty, now you maybe have 25 drinks in a bottle. There's no reason not to have it. And the value of dirty soup pays for itself. And this isn't a sales pitch. This is just math and science. A typical martini, right? Let's say you're going to have a nice premium martini at a great steakhouse you love going to, it's a three ounce pour of vodka. Okay. Maybe you're a gin drinker and maybe they put in a quarter ounce vermouth, but some vermouths cost as much as the vodka, right?

27:07Dirty Sue does not cost anywhere near a premium vodka. So the best olive juice on the planet costs way less than one of the great vodkas or gins on the planet. So if you, I love my dirty martinis, super, super dirty. Now the bartender's pouring two ounces of premium vodka or gin in the tin or glass, you know, if that's how you're having it. And then an ounce of dirty Sue. You just lowered the liquor cost of that drink tremendously. So the value of having a great olive juice for your, you're going to make dirty martinis anyway. so either you're going to throw away olives or you're going to use the best olives on the planet and it's going to make your drink a lot less expensive so there's really no argument at this point with everyone wanting the best you can have it makes sense and then if you're a bartender who's just lazy like i was pour spout and done that's such a better easier setup than messing with the olive jar.