How Renais is trying to make ultra-premium gin popular in the U.S.

0:04Hello, everyone, and welcome to the Modern Retail Podcast.

0:30many fames, but Alex has been leading this company for a couple of years. It just raised some money, I want to say like a few weeks ago, if I'm not mistaken, and has spent the last six plus months expanding into the US after some pretty big expansion internationally. Renee is really interesting because it follows, I don't know if it's a trend yet, I'm actually looking into this because I'm really fascinated, but there are spirits business who are really focused on sustainability in their ingredients. And Alex will probably say this more eloquently than I will, but it does an upcycled thing with the point of distillation, I believe using wine grapes, specifically Chablis grapes, if I'm not mistaken.

1:04And it's really cool because it takes something that was already used, in this case, a stomped on grape, and then makes it into another product. And that's one of the main points of a company like Rene. I want to talk about how that's been going, how it started, all the plans. And then I know that there are big plans for the future, all that jazz. But Alex, how are you doing? Fantastic. I'm very well, thank you. What an introduction. Oh, thank you. I try to do a lot of research and I'm sure I botched some of it, but I'm always interested specifically in the spirits industry. But let's back up.

1:33Let's start with, can you just talk about the genesis of Rene? Was my description somewhat correct? Yeah, you were pretty bang on, I have to say. I mean, we've used lots of different terms to try and describe what we're doing, but there's not a really easy or direct way to describe our our distillation process. So we use upcycling sometimes in other places, it's recycling, repurposing. You know, I suppose the essence of it is, is the grapes get the juice extracted for the winemaking process. And as someone who grew up working around vineyards and has spent a lot of time in the winemaking community, seeing the length that the whole region goes to, to make sure that those grapes are as well looked after as possible and are the highest possible quality.

2:20It just felt so odd to me that at the end of that process, they would be discarded. So in essence, what we do is we collect those grape skins and we ferment them because there's enough residual sugar left over. And we distill that into a grape spirit. You know, the main advantage of that is what you distill from in the world of spirits as a huge bearing on the character and the flavor of, you know, the quality of the spirit that you get at the end. And in this case, grape spirit is beautiful and delicate and delicious. Yeah, absolutely. And there are a few, like there are other companies that I've been aware of.

2:55A friend of mine actually has been making a vodka company that's based out of coffee bean husks, which is a really interesting one. And so, but like your background, I was doing some research, like you worked at Diageo before this. So you've been thinking, and it sounds like you grew up on vineyards. So you've been thinking about spirits and alcohol and distillation for a while. Yeah, absolutely. I made my career straight out of university into the world of hospitality and drinks. There was a period where I wasn't sure at all what I wanted to do. You wanted to drink? Yeah, well, certainly that was the backdrop.

3:32I mean, I think when you grow up and you have a dad as a winemaker, especially in France, there's a culture of kind of, I think, destigmatizing alcohol and you might enjoy a little glass of wine with dinner from quite an early age. But certainly I always felt very passionate about the industry and loved it. And yeah, eventually I made my way up to Diageo, where I was working on gins such as Tanqueray and Gordons and, you know, some of the very big old prestigious brands. And I kind of missed the thing that first got me interested in the world of drinks, which was French winemaking. and I kind of had this itch that I needed to scratch in terms of, I think the best drinks brands, be it in wine or whiskey or whatever, they tell a story and they tell a story about the place that they come from and the people that make them and the ingredients that go in and why they do all that.

4:27And that's the story that I wanted to tell, but building on my family's own experience in the world of French winemaking. Yeah, no, I was like the materials that I've read about you guys, you talk about terroir, which is something that you read about in wine, but maybe I'm wrong. I'm not deep in the world of gin, but you don't really read about terroir gin. Am I wrong about that? No, I think you're bang on. And it's funny because a lot of spirits brands really try and lean into this word terroir. And it's not even a word that has a good English translation. And really what we mean is we kind of mean the environment.

5:05There's all of these different variables in winemaking which encompass the word terroir which really shape the flavor profile of a wine which can mean that a wine that's produced 500 meters away from another one in Burgundy is a completely different appellation with a different kind of flavor profile it varies year on year depending on the weather and I think it's just the thing that makes wine so fascinating and so cool and yeah increasingly spirit brands try and lean into this idea of producing a product which reflects the environment from from where it came and that's really been my goal with with rene is you know can we take some of those things that make wine so compelling literally incorporate the terroir into a gin and tell a story with it and gin is a great vehicle for complex flavors in spirits because the botanical makeup is really up to you.

6:00You know, there's a lot of limitations within other categories, but, you know, gin is really a bit of a blank canvas and consumers these days as well are used to complex flavors in gin. So it's a great option for what we were trying to do. Yeah. And so can you talk about just the building up of how you were able to make this work? I know that when you're trying to use a new ingredient as part of the distillation process, It's a lot of trial and error, at least I don't know in your case, but I've talked with others who said it's difficult to do that at scale. So how long did this take? Where did the idea stem from and how did it ultimately work?

6:36Yeah, so there are other great spirits on the market that were out there doing it. So I knew that it was being done or it could be done. And for me, the project started with a case of kind of traceability. I just started talking to the vigneron and the people who were working, as you rightly say, in Chablis, where my family had been making wine for the last kind of 30 odd years. And said, well, where are they going? Where do the grapes go once we've pressed them? Can I trace them? Can I figure out what's being done with them? I managed to find there's a distillery out there who we could get them sent to.

7:15Well, actually, we work with two different distilleries in France. it's not a straightforward process to distill grape pomace as it's called all the way up to 96 % which is what you need to do in order to make a grape vodka and gin by definition is really just a kind of a juniper flavored vodka so we had to work with two different distillery partners in France and then we import it back to the UK but the beauty is you know they do all the hard bit I suppose. And nailing the recipe took a very long time, because it was a very complicated thing that we were trying to do with the flavours. But, you know, once we figured out that we could effectively, you know, buy in this beautiful French grape vodka, you know, we were we were off to the races.

8:01Oh, the one thing that I should clarify, sorry, in your initial description of what we do, you mentioned Chablis grapes. And it's important to share that the grapes that contribute to the base spirit that we make are actually drawn from lots of different regions in France. However, we do use specific botanicals from Chablis. But in terms of the grape vodka or spirit that we use, those come from a number of different neighboring regions. But crucially for me, they use all of my dad's grapes. That actually was my next question, which is, In terms of the flavor, how much does using the pressed grapes impart flavor on it and how much of it is just the botanical process where it's additive after the fact?

8:48Yeah, so it's a good question. So by definition, vodka, at the point that you get it once it's been rectified up to 96%, it's supposed to be flavourless. So it has to be neutral. So it's called either like, you know, 99 % of vodkas and therefore gins are distilled from grain. And the base ingredient is neutral grain spirit, or for us it's grape spirit. But what you do get is character, which sounds a bit more kind of woolly or ethereal or whatever. But the best example I can offer you is the difference between bourbon and scotch. Bourbon being distilled from corn, it does have that slightly kind of sweeter, you know, tasting notes to it, whereas scotch distilled from malted barley has those slightly toasty, more biscuity flavours and so on.

9:34So it's this slightly imperceptible, but when you know and you taste it, you know, we talk about it in terms of character. And yeah, grape spirit, when I think about the profile of the sorts of gins that I like, which are kind of lighter and fragrant and citrusy, and you think about all of those qualities and character, you know, grape lends itself wonderfully to that. in terms of the botanicals that we use to flavor the gin that you know it's everything in terms of the flavor it has a huge bearing on the flavor profile we blend a little bit of chardonnay grape juice into the gin which is actually where the color comes from we incorporate limestone from chablis kimmerijian limestone which is this kind of famous soil shelf which the region sits on which imparts this mineral profile to the to the wine and we embellish the gin with a little bit of rock salt, which kind of gives that extra salinity and minerality.

10:31So we very choicefully pick out the botanicals to tell the flavor story that we want in the product. Makes sense. So talk about the initial launch. What was the idea for distribution and how it was going to go once you figured out you had a viable product? And was this always a joint project with your sister? Yeah, yeah, exactly. To answer both bits, I think both Emma and I as second generation winemakers wanted to find a way to contribute or kind of carry on our family's legacy in in in doing that to touch on it briefly it's a family project in many ways between me and my dad and emma although emma emma and i are the ones formerly who started the company like spiritually i suppose my dad is is kind of there because you know he's the one who you know planted the vineyards and has worked his way up to become something called a pilier which is kind of it's sort of like the highest there's like a guild of winemakers in chablis and he now sits at the kind of highest level and it's it's a big part of our of our family so yeah so we were both on board from the get-go in terms of wanting to tell that story after we were happy with the product and realized that we had a viable product and something that we thought tasted really good and fulfilled an opportunity within the gin category that wasn't being addressed, our distribution strategy really was, I'm a big believer and lover of the on-premise, or to take that out of drinks jargon like bartenders.

12:05I think the power of getting a well-made drink from someone who knows what your product is and can tell the story and produce something beautiful with it is great. I think that's where brands are still built in terms of the world of drinks. And my priority has been getting Rene in the hands of some of the best bartenders across the UK and now Europe and now the world and patiently building our distribution strategy. I don't think you can build a brand by immediately flinging it into supermarkets and that kind of thing. I would love to see it moving well in the right places rather than everywhere all at once, if that makes sense.

12:44Yeah, that makes a lot of sense. Wait, one question I have, and this is sort of a field, but is your father from the UK or is he French? So he's, he's a long story. He was, oddly, well, he was born in Wales and then brought up in Iran and then worked as a lawyer in France for a number of years, but his parents are English. Okay. So he's English, but Emma and I were born out in France and I suppose we have a big connection to there. Is it rare to have a British or, you know, non-French Billier in the Chablis region? I wonder, like, I imagine like that's a very like family of hundreds of years. Incredibly.

13:22It also tells the story as to why, I mean, it's incredibly difficult for someone who's not a local to start making wine. Yeah. The way that we got into that was dad had befriended all of the local winemakers and they all got together and found a plot of land which they knew could be cultivated for the purposes of winemaking and he bought that and then you know had to plant it himself and so on but yes you know rightly so the Burgundians and Shiblisians are like very protective of their land and so on and so yeah over the next 30 years dad you know would go every year and work and promote the region and so on and then just gradually made his way up through these ranks of these people called the Piliers or the Confrérie it's the kind of guild of winemakers and yeah there's only 22 of them and he's the only English person.

14:14Wow well congrats to your dad. Yeah I think yeah he's very proud of that and very sweetly back in October of this year every year the mayor of Chablis picks a person to come and join the conférie in a kind of public initiation ceremony. And this year, I was picked on behalf of the work for Rene. So, you know, to be welcomed in by the winemaking community in a very kind of public way, like that was a very cool moment for me and my family. That's very cool. Congratulations. Yeah. And it also involves drinking like a massive kind of goblet of wine in front of like hundreds of people and just trying not to embarrass yourself.

15:01Yeah, that's always the tightrope when you're doing public drinking and you're with a big vessel, I imagine. Exactly. So you mentioned the strategy with on-premise, which makes a lot of sense. A few, I want to say a few weeks, maybe a few months ago, we had the Spirit or the liqueur brand Mr. Black on, and they've been very focused on on-premise, which makes sense given the rise of espresso martini. But also, given that that is a more unique and like liqueur that has a very specific thing with gin, it strikes me as a little bit more difficult in the sense that like, yes, martinis are huge, but also you have incumbents like Tanqueray, like Beefeater, all of those.

15:43how have you gone and also like just just to hone this point more like i imagine you and probably me and some other people are able to talk intelligently about the difference in flavors of gin but i imagine if a lay person was given two different martinis they wouldn't know which one was tankeray and which one was renee though maybe they would but like how have you gone about trying to figure out doing this branding project with on-premise so that it actually gets a brand as a newcomer? It's a good question. And I think, you know, some of the headwinds that we face is, you know, is both, you know, going up against the likes of, you know, the big boys, you know, hundreds of years old brands who are, you know, very well embedded in what they do and in the minds of consumers, as well as the fact that particularly in the UK, we have such an abundance of gins.

16:35I think we have more gin distilleries per capita than like anywhere else in the world. We've got more than 300 gin distilleries in the UK, I think, at last count. And I know that's not the case in America. I think gin is less kind of, you know, commonly drunk. But I think the reason that we're able to get cut through with Rene is that although there's been a lot of innovation in gin, and there are a lot of gins out there, there's very few in what we would call the ultra premium segment of the category. So if you look at tequila right now, if you look at, you know, even vodka, but certainly whiskey, and so on, they have very well established brands that sit above that$50 price point in the minds of consumers.

17:19And people happily pay that and spend it because they know that there's this quality association of the product and they like what they like and so on. But if you think about gin, to my mind, there's really one gin brand who sits well above that kind of$50 price point. So we really are innovating. We're doing something new. There's lots of headroom for the category there. And excitingly, the data is showing that ultra premium gin is one of the fastest growing spirit segments, especially in the US. And our goal is to just be the most compelling product within that, addressing that opportunity. to.

17:59Yeah, I want to get into the US expansion in a few minutes. But I also so the UK makes a lot of gin. Internationally, especially in Europe, it seems like the cocktail culture is still a little bit behind. And I imagine if you're like, if you're focused on things like martini, or actually, I don't know, like, what are you seeing in terms of when you go to different countries like France, et cetera, what is the demand specifically for a high-end spirit that often is used in nicer cocktails? Because I feel like there now are many more cocktail bars, especially in France, but other places than there were a decade ago, but it's still not the same as, say, the UK or London and the US.

18:40Would you agree with that? Yeah, I think London, rightly so, is still seen as one of the cocktail hubs globally. There's a number of other great markets internationally who are doing great stuff now but even the um I think it was the I can't remember which position within the French government he said it might have been the um the minister of hospitality or whatever said we want to send over our bartenders to go learn about cocktail bartending from London and the UK and certainly pre-Brexit it still used to be the case that you know different bartenders from all over Italy and France and so on and so forth would come to the UK to learn about cocktail making.

19:18I think to your point, you know, there's lots of markets within Europe who have big gin consumption culture. Spain is a great example. Italy is also pretty big on their gin as well. When it comes to really high end or ultra premium spirits, you've got to look at the trends within spirits, you know, more broadly, which is that premiumization is the big thing. People generally are consuming less alcohol these days, but they're trading up. So the volume and the share is all shifting into higher value products because I think to the consumer at home, they're saying, you know, I'm going to probably not drink, I don't know, let's call it like two bottles of spirits a month or whatever.

20:02But I would like to have one bottle of something quite special that maybe I have as my treat. And that trend of premiumization is what's steering all of the industry at the moment. And we're seeing that reflected more and more in every market. And are you seeing, because I've noticed this anecdotally, and this is just in New York, I've not tested this internationally, but I feel like more people are ordering premium, cleaner cocktails. I'm seeing an influx of dirty martinis at my local bar. Is that something that you're noticing in your numbers? Yeah, martinis are having a moment right now. And there's all of these really interesting twists or takes on a martini.

20:43And yeah, to your point, the martini is great for us because there's nowhere to hide for the gin, for the product. It's a great expression of a cocktail that lets you really taste what the product's about. It chills it down a bit, dilutes it a little bit, but really you're just tasting the spirit. And that's why, yeah, we love the martini serve for Rene. I kind of built it around making the perfect martini. So yes, we see a lot of consumption of those sorts of cocktails. But at the same time, moderation is also a trend within cocktail consumption at the moment. And a lot of people are opting for spritzes and slightly lower ABV serves, which maybe take like a 25 mil shot of alcohol, like a little bit of wine or whatever and soda and lemon juice.

21:30And those sorts of cocktails are also doing very well. And we also sit very nicely in those sort of longer, more refreshing style of drinks as well. Got it. You've entered the U.S. I think July is when you started. The article that I read mentioned that it was available direct to consumer in California, if I'm not mistaken. I imagine that has expanded a great deal now. So where are you at in terms of U.S. distribution? And is on-prem still the main focus for this expansion? Yeah, so we right now are available, I think it's in 34 states from our direct-to-consumer proposition. Direct-to-consumer is a very recent addition to the US drinks market.

22:14It's only recently been allowed and there's still some grey areas in there and it's all quite interesting. But yeah, so we're available to ship directly. I think it's to 34 states from our website. and so far we've seen great pickup in terms of returning customer rate and adoption of the brand. And physically now we're in California, we're in New York, and we're in Florida. And I think for the moment I want to prove our point and really get the right sort of pickup and adaptation in those states and kind of focus on building the brand out there. Yeah. So is that just you finding the restaurants that you're most excited about and going there and saying, hey, try this gin, add it to your menu?

22:59Yeah. So I'm actually in New York right now. I'm so sorry. It's so cold right now. Are you OK? Yeah, it's a shock to the system. I mean, I came from California where it was sunny and beautiful. But also, you know, they're going through a horrible situation in L.A. right now. But it's yet to go from that straight into like a blizzard has been has been quite a lot. But actually, I had like a great evening the other night. It was snowing outside. And I went to this great bar called the Dead Rabbit where they have like live musicians and fiddlers. And fight out, right? Yeah. And we just kind of cozied up with my pint and was like, this is this is awesome.

23:40But yeah, I spend a lot of time in each market, you know, trying to build relationships with, you know, the trendsetters and makers within each market in the on-premise. And we also obviously rely heavily on our distributors with the networks that they have to help us push the product into the right places. Got it. And so now that you're in, like many states, direct to consumer, you're in sort of the major hubs, I imagine, city-wise for other points of distribution. What is your focus for this year? I think two weeks ago, or as of the recording, two weeks ago, you announced a fundraise of about$5 million, which it said focused specifically on U.S.

24:18expansion. Is that correct? Yeah, so it's about five million pounds, so maybe six and a little bit of dollars. And yes, it's a capital-intensive market, the U.S. I think just to resource up and get the right kind of boots on the ground and so on is an expensive process. And our priority is really, as I said, not to try and be everywhere all at once, but to make sure that we're getting the right traction and keep building on what we're already seeing. We're already on cropping up on cocktail menus across some of the best spots in each of those markets. And it's really just building on that success and making sure that we've got the right resource to get after it.

25:05But at the same time, we're in, I think, 12 other countries internationally now. And we've got we've had distribution deals for another kind of 10 or so in the pipeline. So a lot of that capital as well is just going into building what's what's quickly becoming a sort of global machine. And what is your biggest market? Is it the UK? Yeah, I would say it's kind of split by by channel. But the UK, I would say, is our biggest market at the moment. From an e-commerce perspective, the US will quickly take over the UK. But we also have e-commerce across Europe, which is doing really strongly as well.

25:44So yeah, the UK will be our biggest market at the moment. And the goal in the UK will be to start pushing into retail like this calendar year, basically. So you have a bunch of different irons in the fire specifically this year. You have the focus on UK retail. You mentioned new markets probably to launch. You have US being a major focus. I imagine that means a change on the marketing side. Will marketing get more expensive? What are you thinking about? Yeah, I think when you start pushing into retail, you kind of need to shift your focus in terms of marketing away from that very specific niche of people who I was trying to appeal to in the on-premise and online and work towards a broader consumer pool.

26:30So you'll probably look at different advertising channels for us with different messaging and so on as we start pushing into kind of national retail in the UK. So, yeah, you'll expect to see some different sorts and kind of types of marketing for us. Got it. And we're almost running out of time. I have a couple more questions. But one thing I just noticed that, at least on your LinkedIn, I know it as Rene Gin, but you call it Rene Spirits. Should we expect to see an expansion beyond Jyn? Beyond that, is that the ultimate plan? It's a good question. I think we wanted to keep it open-ended. I don't have any particular plans around launching any different kind of sorts of spirits at the moment.

27:12I suppose all you can say is that the way that we produce the spirit opens up the avenue to do other sorts of things. But for now, I think there's a specific story that we wanted to tell with the Jyn. and that's our kind of focus and our priority. And yeah, so no immediate plans to share there. Okay, got it. And so just wrapping up, you've mentioned a bunch of different things, but is there anything else in the next year that you're planning on doing or any big initiatives that we should keep an eye on? I would say we've got some really exciting market launches coming up. We had such a good response from the French market and we tee off with our distributor called Maison Villever in France.

27:55this January, Canada in this quarter as well, along with markets like Spain and Dubai, which has a great kind of luxury hospitality scene. So there's a lot of exciting international market launches teed up for us this year. And now I would say that's probably all I can share with you at the moment. But yeah, some other bits of innovation and exciting stuff towards the back end of the year. All right, can't wait to hear about it. Alex, this has been so much fun. Thanks for joining. Thanks for your time. I appreciate that.