A Sweet Success Story
After a devastating March, this family business flipped its business model and April saw sales skyrocket to 822% over the same month in 2019. Now, New Orleans Beverage Group is hoping to help their struggling restaurant partners survive.
While 2020 has rained economic hardship on many small and family-owned businesses, it has created unexpected opportunity for others. Some of these organizations, like grocery retailers, have found themselves in the right industry at the right time. Others have pivoted toward new strategies that enabled them to not only survive the pandemic but flourish.
One of these fortunate businesses is family-owned New Orleans Beverage Group, which owns the popular El Guapo line of cocktail bitters and syrups. As bar and restaurant closures decimated the company’s wholesale business, CEO Christa Cotton redirected sales to consumers stocking their at-home bars. This strategy, along with other savvy moves, has paid dividends for the company in the form of skyrocketing sales.
El Guapo’s bitters are made by hand and are zero-proof, non-GMO and gluten-free. The company’s entire product line (which also includes syrups and mixers) is high fructose corn syrup-free, but the bitters specifically are no sugar added. The 10 flavors sold on ElGuapoBitters.com for $19 each are diverse: from Chicory Pecan, Crawfish Boil and Gumbo bitters to Summer Berries, Polynesian Kiss and Love Potion No. 9. Cotton grew up in a small farming community in Southwest Georgia where her grandfather was a farmer, so she notes the company manufactures with the seasons.
“When Ponchatoula strawberries are in season, we’re making strawberry syrup and summer berries bitters,” she said. “We work with farmers in Ponchatoula to source berries and make sure we’re doing as much as we can to keep our money and our production in the local economy.”
This past April, just as the company’s sales began hitting new heights, Cotton was announced as one of only six women chosen as this year’s Les Dames d’Escoffier International (LDEI) Legacy Award recipients. Cotton specifically received the Mexico Fine Spirits Award from Jose Cuervo in Mexico. Established in 2009 and generously supported by The Julia Child Foundation for Gastronomy and the Culinary Arts, LDEI is an organization of women leaders in food, beverage and hospitality whose mission is education and philanthropy for the good of the global community.
Cotton spoke recently with Biz New Orleans about El Guapo’s banner year and the company’s efforts to support independent restaurant partners who are facing a tougher road.
What’s the family story behind El Guapo?
I really got started in this industry during college. My family owns commercial real estate around the Southeast, including a lot of the Rouses grocery stores here in New Orleans and all over. In 2005, during my first semester of college [at Auburn University], Katrina hit, and I ended up helping my parents restore coastal properties that had been decimated. We had multiple properties [that] had to be revamped and fixed after the storm.
My dad decided that as a family we needed to diversify because we almost went bankrupt going through that whole process. He saw an article in the Wall Street Journal about a distiller in Atchison, Kansas, who had just opened a craft distillery. This was before the real boom of craft distilling and craft brewing in America. He drove himself to Kansas and hired this guy as a consultant, and I spent my last half of college helping my parents open Thirteenth Colony Distilleries, which was Georgia’s first legal distillery. It was a dream job for a 21-year-old.
Once I graduated in 2010, I wanted to learn more about marketing and had the opportunity to work in New Orleans at Trumpet, the ad agency. My main client was the Louisiana Office of Tourism, so I worked on state advertising campaigns, focused on food and music, and built a lot of strong relationships with chefs, restaurants, hospitality groups and festivals. But I missed making things.
Ultimately, I had the opportunity to buy the trademark from El Guapo. I was hesitant to do it, but, after sitting down with my family and going through the numbers with my parents, they said, ‘If you don’t do this, we’re going to.’
That was the push that I needed to buy the trademark in July 2017, and I started New Orleans Beverage Group, which owns the trademark, but now we also own and operate an acidified foods manufacturing facility and are able to co-manufacture, co-pack and private label for other brands. Our products are currently available in 28 states and four countries, and we are in the process of expanding our work here in New Orleans.
Brian — my life partner, business partner, all things partner — is a CPA and wanted to be a part of this, so he left his job to be here with me, and he’s really helped me build this into where we are today. He’s our CFO, and we have a 2-year-old daughter, Flora.
How has 2020 been for business?
I clearly remember being at dinner with my mother on March 8, when my phone rang. It was our buyer from Costco. Last year, I pitched Costco in Dallas and we were in the midst of rolling out our products in 24 stores across Texas, Oklahoma and Louisiana. In one phone call, a quarter of a million dollars was wiped off our projections for the year. They literally pulled our spaces from the store because they needed the room for extra toilet paper.
Immediately, we were trying to figure out what to do with this inventory. It probably took me a good two to three weeks to get over the initial shock. March was bad: We didn’t have very many orders, all of our restaurant partners were closing, and I was really concerned about what was going to happen.
Before the pandemic, maybe 60 to 65% of our business was wholesale and distribution, and the remaining percentages were retail sales. We didn’t put a heavy emphasis on retail sales because the bread and butter of our business was B2B.
We invested a lot of our resources into beefing up our e-com presence through our website, also through Amazon, and ultimately, we flipped our business model. We went from majority wholesale to dominantly direct-to-consumer e-com fulfillment. As soon as we made that switch, we saw our sales skyrocket. Looking at our numbers in April, I think we were up 822% over April of 2019.
It has evened out a lot, but that initial pop of sales going crazy was really good for our brand exposure. It was great for us to have a way to talk with our consumers.
How has this year pushed you creatively as a company?
We are trying to find economical solutions to problems we’ve never experienced before. Our team is very creative, and we’ve been able to do a lot without spending a ton of money to get things done. Capital is hard to come by these days. Trying to do all these things while keeping your revenue and capital in a good spot, while your numbers are going crazy and you can’t really go out and raise money, has been an interesting experience, but somehow we’re making it work.
We’ve spent a ton of time on our recipe blog. People are searching online. They want interesting cocktails that they can make at home but don’t take a million ingredients. We’ve had a lot of customers ordering gift boxes for virtual happy hours or birthdays or big celebrations that people can’t get together for anymore. Social media has been really important to us throughout this whole process.
Through the pandemic, we have had Fortune 500s, universities, all sorts of partners reach out to us wanting to do virtual events. We’ve done virtual conferences, team building exercises… We put together and ship cocktail kits, and then we teach a virtual experience where we incorporate trivia or history of cocktails and a Q&A session. They have been extremely popular. Now, a lot of our business, in addition to e-com, is virtual events. Before the pandemic, we had never done a single virtual event.
How do you plan to maintain those gains once life returns to normal?
I don’t think we really know what that new benchmark will be. I don’t think our company will, for at least the medium term and maybe even the long term, ever go back to being 60 to 65% wholesale. I think retail will be a more integral part of our business and a bigger percentage in our revenue than wholesale, at least for the medium term.
I think emphasis on direct-to-consumer is something we will continue in the future, because now we have loyal customers that are buying from us online in regular intervals. We have people that religiously purchase once a month, and I don’t see that going away, even as the pandemic gets better. Retail partners will always be important, but that component of online shopping is something we just have to integrate into our business and keep up and running.
Are you still able to collaborate with your restaurant partners?
It’s sad because so many of our restaurant partners are independent restaurants that are really struggling. We’re trying to figure out ways to help. It’s a double-edged sword because we’re doing great, but the partners that had supported us and that we love so much are really going through a hard time.
We talk with chefs every day about ways to get into the consumer, packaged goods space. Even if it’s not with us or with a product that we can make, we’re trying to connect chefs with the right manufacturing partners to get a product on the shelf and get revenue coming in the door from a hot sauce or a king cake, whatever the case may be.
I feel like as a business owner, rising tides raise all ships, and a lot of these chefs have been champions of our brand. It’s our time to advocate for them and help them in any way possible. We are also working on some co-manufacturing products with local brands and chefs here in town, and holiday ideas to partner with chefs on cocktail kits. The majority of the revenue from that goes back to the chef or to the restaurant so that they have a holiday sales item to push to their customers, bringing revenue in the door at a time when they’re struggling.
When it comes to drinking, we do partner with as many local distilleries as we can, but we offer non-alcoholic options and alternatives on our social media and our blog. You can search “zero-proof cocktails” and find several options for ways to have an interesting drink that doesn’t necessarily have to be alcoholic, because we don’t think that you should be out there having four or five cocktails every single day.
What can customers look for as the holidays approach?
We have holiday-specific products: our holiday pie bitters and a sweet potato syrup that has won a Good Food award. We also have Creole Orgeat, made with pecans that my uncle grows. Those products are great for milk punches and Old Fashioneds.
On a personal note, how has it been juggling parenthood with business during a turbulent time?
Impossible. I think, like most working moms, I feel like I’m always failing somewhere. We’re at least able to support all of our business partners because we order takeout an embarrassing number of times per week. There’s just not enough hours in the day. From an employer perspective and a work-life balance perspective, it’s also making us rethink how we want our company to be structured and what we can be doing better as employers in the future.
What does the future hold for El Guapo?
It’s funny, when I started this, I wrote five goals on a piece of paper. We’re dangerously close to getting four of the five completed by the end of the year, so maybe I need to dream bigger. We’re trying to expedite a growth plan that is smart and sustainable. We want to build an actual factory. We want to figure out how to make some of these partnerships and opportunities that we’ve gotten from COVID-19 into permanent relationships.
We want to be great employers, and we want to figure out how to grow to become the size of the business that we want to be, but also keep our values, brand and personality the same. As you grow, things change, and you can’t always hold onto all of that, but these are conversations we’re having internally. We’re trying to be smart about the opportunities that we capitalize on and trying to build the best strategic plan for growth in the future, beyond COVID-19.
Makes one cocktail
- 3 oz bourbon (we used @13thcolony)
- .5 oz El Guapo® Creole Orgeat
- 8 dashes El Guapo® Holiday Pie Bitters
- 1 large rock of ice
- 2 Luxardo cherries, yard flowers and leaves, to garnish
In a lowball, combine bitters, syrup & bourbon. Stir to combine and place one large rock in glass. Garnish with cherries and any other desired accoutrements. We chose yard flowers & a tropical leaf… because optimism.
[For more recipes, visit ElGuapoBitters.com or on Instagram @elguapobitters]