For a small company, Proximo Spirits has grand ambitions. The company was founded by Mark Teasdale and Michael Cheek in late 2007 when they purchased the Three Olives brand from White Rock Distillers. Teasdale, former managing director of William Grant & Sons North America, is the president and Cheek, former president of Brown-Forman Spirits Worldwide, has since left the company.

Proximo means “next” in Spanish—appropriate given Proximo’s goal to become the next big innovative spirits company in the US. In January, the New York-based importer and marketer added 1800 Tequila, Gran Centenario tequila and Matusalem rum to its portfolio after brand owner, Group Tequila Cuervo, did not renew its former deal with Skyy Spirits.

Despite the rapid growth since its founding less than one year ago and its goal to be a significant player in a relatively short span of time, Proximo’s vice president of marketing, Elwyn Gladstone, says the company does not plan to have a plethora of brands. “We don’t want to have too many brands so that we can focus on making a small number of them very large,” he says. It currently has five brands in its portfolio. Gladstone notes that Proximo is looking to acquire brands of scale—brands that the company can develop into big brands—as well as brands that are already substantial. Proximo’s logo represents a drop of spirit made up of eight different parts, each part representing one of the current or future brands the company will offer.

Growth will come through further acquisition and organic development of new brands—all within the fast-growing super-premium spirits categories, which even in the down economy in the US, continues to do well. “Traditionally, alcohol has been recession-proof—it is still consumed during hard times,” says Gladstone. “And even during these difficult times, we’re noticing consumers trading up to higher end spirits in new categories such as tequila and rum.”

Vodka, which he noted is the biggest spirits category in  the US, accounting for nearly one-third of all spirits sales, has been trading up to the higher end segment for several years. Proximo plans to grow its portfolio in a variety of spirits categories.

Three Olives, Proximo’s first acquisition, is one of the fastest-growing premium imported vodka brands in the US, says Gladstone, adding that distribution has reached more than 1 million cases. Three Olives, whose closest competitors include Stoli and Absolut, targets 23 to 30-year-olds. Three Olives is available in 16 flavors, the most popular being cherry and grape. One of Three Olives’ signature cocktails is the Cherry Bomb, a combination of Three Olives vodka and Red Bull. Three Olives Vodka retails around US$20 for a 750-ml bottle.

One Tequila, Two Tequila…
As Proximo’s executives scouted for brands for its portfolio, Gladstone reveals that they quickly realized that the main growth of the tequila market is within the super-premium and ultra-premium arena (US$20-plus). Given this, Proximo is putting 100 percent of its resources and marketing spend in this profitable segment. All of Proximo’s tequila brands are 100 percent agave, bottled in Mexico and at least 80 proof (40 percent alcohol). Proximo even employs two tequila maestros who took training (like wine masters) to learn different blending techniques.

So while the company is fostering the growth of small artisan tequila brands, its portfolio includes cachet brands such as 1800 Tequila and Gran Centenario. Proximo markets 1800 Tequila as the original “luxury” tequila. It is currently one of the top five selling tequila brands in the US and has distribution in places such as Chili’s and TGI Friday’s. In April, Proximo launched 1800 Select Silver, the first 100 percent agave, 100 proof Silver tequila (silver is non-aged tequila) and has embarked on an aggressive advertising and promotional campaign. It is 100 proof (50 percent alcohol) and retails for US$34.99 for a 750-ml bottle.

According to Gladstone and fellow Proximo executives, Gran Centenario is one of the most awarded tequilas in the world and is one of Mexico’s fastest-growing brands. Earlier this year, the brand introduced Gran Cenenario Leyenda, the first “Extra-Añejo” tequila, which has a suggested retail price of US$300 for a 750-ml bottle. Proximo launched a national print advertising, public relations and sampling campaign to introduce bartenders and consumers to the unique qualities of the brand. “Gran Centenario has quickly become a cult brand among bartenders and tequila connoisseurs,” says Gladstone. He adds that later this year Gran Centenario is rolling out a new tequila variation.

The latest brand is Maestro Dobel Tequila, which was created in-house by Proximo’s marketing team (the brand is owned by Juan Domingo Beckmann and a group of other investors from Mexico). Maestro Dobel is a blend of Reposado, Añejo and Extra Añejo that has been filtered to make it silver. The unique filtration system removes the color (leaving it clear) without extracting the flavor, which Proximo believes will be a key selling point. “A very significant sector of consumers are passionate about ‘clear’ or ‘silver’ tequilas for a variety of reasons,” notes Gladstone.

“Maestro Dobel shifts the silver tequila into a new gear because it has complexity from being aged in a barrel, which no other ‘clear’ tequilas can offer.”  Featuring a blend of different aged tequilas, Maestro Dobel is the first estate tequila. “Every year the agave is taken from a specific ranch so each year it will be different,” he says, adding that no one has ever offered varying blends of aged tequila before.

Every bottle of Maestro Dobel Tequila has a hand-crafted label and is hand numbered. It has a suggested retail price of US$79.99. Maestro Dobel targets the 30- to 40-year-old tequila connoisseur crowd. Proximo is currently testing Maestro Dobel in high-end, on-premise establishments in Atlanta, Chicago, Los Angeles and Milwaukee—which Gladstone says has the highest consumption of spirits per capita in the US. Maestro Dobel will continue to be rolled out gradually.

Gladstone points out that high-end rum also is a growing category. “Rum is no longer a spirit solely used for mixed cocktails—old rums for sipping are doing very well,” he says. “Trading up to higher-end brands is happening slower in the rum category than other spirits, but it is beginning to happen. No one thought it would happen in tequila, but it did.”

Proximo’s Matusalem Gran Reserva is a 15-year-old aged rum. It won the Best Rum Award in the San Francisco Spirits contest this year. Originally from Cuba, it is now made in the Dominican Republic and has a suggested retail price of US$29.99.

Spreading the Spirits Word
Proximo knows growth won’t come easy. “All of our brands are in highly competitive spirits categories and consumers have a lot of choices so our brands all have challenges in different ways,” offers Gladstone, “but as with all brands, the greatest challenge is developing consumer interest. That is, creating an overwhelming reason for consumers to buy your brands.” Proximo, he said, aims to distinguish its brands by being different in “what we sell, how we sell and how we promote them.”

Proximo is trying to promote Three Olives in fun ways, with heavy on-premise promotions. “It’s all about different flavors, packaging and advertising with Three Olives,” says Gladstone. The newest flavors, for example, are root beer, triple espresso and tomato. The ad campaign features print, online, out-of-home and possibly TV, and heavy national on-premise sampling.

Proximo is spending US$10 million in advertising for 1800 Tequila this year, across all of its varieties—Silver, Reposado, Añejo and Extra Añejo. The advertising and promotional campaign includes aggressive public relations programs and an ambitious national sampling effort to drive the margarita business. In its efforts to differentiate its brands, Proximo unveiled limited edition bottles of 1800 Tequila, called the Essential 1800 Collection. There are 1,800 bottles designed by nine different artists. “We commissioned the artists to create a piece of artwork, which we used in both our advertising, and as the basis for a limited edition set of bottles featuring the artwork on the back,” reveals Gladstone. Proximo also is supporting the Gran Centenario brand with heavy PR, advertising and sampling campaigns.

“Efficiency is gained by getting certain brands in certain outlets,” says Gladstone. “The brand has to match the consumer and outlet. The imagery of the brand is created by the outlets in which the consumer sees them.” With certain brands, the outlet and the limited distribution bring an air of exclusivity to the brand, he contends. Proximo hand-picked the top 50 on-premise accounts in each city for Maestro Dobel Tequila to target what Gladstone calls the “expensive watch, private jet crowd.”

Whether it’s a large-scale, well-known brand, or a small brand that can be grown from scratch into a big brand, Proximo is keen on expanding distribution for all of its brands on-premise as well as off-premise in a variety of retail channels, from liquor stores to grocery stores like Safeway and warehouse clubs like Costco, to mass merchandisers like Wal-Mart, depending on the brand. Keeping its portfolio small, explains Gladstone, will allow Proximo to focus closely on the individual needs of each brand, while continuing to grow the company into a major player in the spirits market.

VITAL STATS
PROXIMO SPIRITS
PRESIDENT: Mark Teasdale
HEADQUARTERS: New York, N.Y., USA
EMPLOYEES: 80
GOALS: To have a full portfolio of brands in two to four years.

 From Beverage World October 15, 2008