The Future of Franchising


Our Stories July 26, 2014 No Comments.

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Subway. 7-Eleven. Dunkin’ Donuts. Pizza Hut. McDonald’s.

These are not just huge brands, they are also really popular franchises. Now, can you think of an alcohol brand that has entered the world of franchising?

Don’t worry, we couldn’t think of one either.

The world’s second-largest distiller, Pernod Ricard, is about to change things, though. They are obviously a big company with a huge reach, but consumers are also showing that’s not necessarily what they want right now. It’s all about craft spirits, going local, and supporting “the little guy.” Pernod is getting smart and trying something a little different by working with the smaller craft distilleries and entering into a mutually beneficial relationship. These entrepreneurs around the world are going to get a chance at real distribution and profit, while Pernod will be able to make it seem like they’re a lot smaller than they really are.

The vodka’s brand is Our/, and the first version came out last year as Our/Berlin. Our/Berlin is produced by Pauline Hoch and Jon Sanders in a former garage and they mix Pernod’s flavorings with bulk alcohol and tap water. They paid nothing for the franchise, but they do use their own contacts and marketing efforts to build the brand and they are responsible for selling themselves. The duo has secured contracts with 150 bars, cafes, and stores and their 350-ml bottle runs a little over $17.

Our/Detroit is coming out this summer and there will be ten other city labels that will appear at some point down the road; future cities include New York, Austin, London, and Nashville. Pernod will support the partnerships until they make money and then they will take 80 percent of the profit. They are not, however, going to pretend that they aren’t the “big guy” behind the “little guy.” Their name will be added to the Our/Berlin label soon and also appear on all future labels for other cities.

Pernod doesn’t anticipate a major boost in their overall sales, but they do see potential to make a decent profit because people are generally willing to pay more for small-batch spirits.

 

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