Room 116 points to a great article in New York Magazine about Sidney Frank, CEO of the Sidney Frank Importing Co. The piece describes Frank’s Gatsbyesque rise, and how he created Grey Goose vodka from thin air.
In this story, the name came first—as it so often does when image is the paramount concern. Frank recalled he’d once sold a Liebfraumilch named Grey Goose back in the seventies. These were German white wines that were briefly hip but faded into oblivion. “I remember there was always something in the name that had magic with the consumer,” says Frank. (It may also be that Frank liked the name because he already owned the worldwide rights to it.) Frank gathered his lieutenants at the company’s New Rochelle headquarters. “Go to France and come back with a vodka,” he said. So they met with cognac distillers, whose business had slowed. The stills were switched to vodka, and at last there was an actual product.
But why France? Doesn’t vodka come from Russia, or perhaps, in a pinch, Scandinavia? “People are always looking for something new,” says Frank. It’s all about brand differentiation. If you’re going to charge twice as much for a vodka, you need to give people a reason.
Frank could see that there was a product missing from the shelves. Here were all these vodkas, in the $15-to-$17 range, vying to be the premium brand (with Absolut mostly winning). Frank just sidestepped the fray altogether and charged an unheard-of $30 a bottle. The markup amount was pure profit. “He was the first person to see,” says an executive at rival Bacardi, “that there was a superpremium category above Absolut, if you had a good product story.”
By the way, Frank recently sold Grey Goose to Bacardi for $2,000,000,000 in cash. According to Forbes, the sale–the largest in liquor-business history for a single brand–solidified his spot in the booze business pantheon. It also landed him on The Forbes 400. His personal proceeds from the deal, plus a 75% stake in Sidney Frank Importing, make him worth at least $1.6 billion.
Uh hum…I think I’ll have a Smirnoff and Cran.