Odin Deflates!

WHY THE LONDON CRAFT DISTILLING EXPO IS DYING

(and the harmful ongoings in our industry)

Introduction

This year was the last year we sponsored the London Craft Distilling Expo. Is that important news for craft distillers? Yes it is. On multiple levels. Not just because the expo is in sharp decline and because we won’t be part of it any more, but because the reasons behind the decline directly reflect on something that’s wrong, very wrong in our industry. So, let’s dive in deeper. Let’s examine how sharp the decline of the expo is, what the causes are, and how these causes bring to light something that’s been holding our industry back. Something is rotten in the proverbial Kingdom of Denmark. And before it can be dealt with, it needs to be exposed. A long post? Yes. Worth your time? I sincerely think so. Let’s start with the numbers.

The numbers

The previous time the London Craft Distilling Expo was organized, it had 300 to 400 visitors. This time only about 100 people visited. We counted 60 to 65 on the first day and the second day was significantly quieter, we heard. Of those visitors, about 40% was either an iStill customer, that specifically came by to see us, or people interested to see an iStill pre purchase.

The previous times the expo was organized, it hosted 30 to 35 exhibitors. This time only 17 companies made the effort to display their products and services.

So there you have it: the number of visitors more than halved, and so did the number of exhibitors. And since iStill withdraws its sponsorship for future events, we expect the expo’s income for next year (if there even will be a new event at all) to halve again. Given our absence, from now onwards, we expect the visitor numbers to drop even further in the coming years. Apart from our future absence, what causes this dramatic downfall?

Quasi-causes

Discussing the causes of the low interest with expo management taught us that they thought it was being caused by Corona. Interesting, but not true. After two years of not being able to meet, many distillers were yearning to see each other again. The many (relatively many) iStill customers that did visit us in London may serve as proof of that. We had more iStill customers at our booth than we saw new and future distillers, though. Quite contrary to the last event, a few years ago. Yet, based on our numbers, the show should have drawn twice as many visitors instead of only a third.

Macro-causes

We argued that Brexit played a big role. With the UK having left the European Union, the event is no longer European, with a continental reach, but British, with only national significance. Proof for this statement? In the past, half of the visitors came from outside the UK. This time we met one Swede and three Irishmen. The rest of the audience, visitors that is, was all British.

Talking to the visitors from outside the UK taught us that nobody wants to come, simply because no one wants to do business with the UK anymore. “Our colleagues from Ireland would have liked to come, but why should they? We don’t want to buy labelling machines, bottles, bottling machines or stills from the UK! It’s a pain, close to impossible, to buy anything here and then have it exported to the European Union!”

Most exhibitors said the same. “Why should we come back as no one comes anymore since they don’t want to buy UK stuff? What’s the sense of having a UK tradeshow if nobody shows up?” It is a conclusion that saddens me, since we have so many lovely British customers, and I strongly feel they deserve better opportunities.

But with the expo’s continental aspirations falling away, it is now a UK-based, national show. And that’s why the visitor numbers didn’t double, as they should have. And there’s more, of course, when we shift from the political to an economical perspective.

Both grain and gas prices have gone through the roof, lately, making it hard for any new distillery to come up with a business plan that shows a profit. But is postponing the opening of your business a reason not to visit an expo? Especially an expo with seminars and speeches, which are supposed to help you come to terms with today’s realities? So where were the hundreds of established and future UK distillers? Why didn’t they show up?

The value proposition

A transaction between two parties should be mutually beneficial. I sell you a still because I make money on the sale. You purchase the still because you can now make spirits that you can sell for a profit.

As a visitor, you go to an expo because you want to learn new info. You want to get answers to important questions like “How do we – as British distillers – deal with Brexit?”, or “What’s the long term perspective on the rising energy and grain prices?”, or “Given rising input costs, what can we do to save costs in other places?” Important, if not existential questions, that you, as a visitor and distiller, need to get answers to. Especially if you pay over 200 pound Sterling to be allowed to enter the expo.

You pay the organization and they value your money. In return you expect to get value added back as well. But did you? Did any of the important questions mentioned above get answered? No. No, instead it was more of the same. “Find faults in these drinks”, “Nose these drinks and be surprised”, “What to do when starting a distillery”, “How to make gin or rum”, oh, and a presentation on solutions to save the climate and environment, that did not mention our technology, even though our innovations, on themselves, reduce energy expenditure in the distillery with a whopping 70 to 75%!

The workshop “Nose these drinks and be surprised” was attended by seven people. Seven people only. Seven people that paid an additional 45 pound Sterling to have the privilege to nose and be surprised. That’s seven times 45 equals 315 pounds. Did the consultant that gave the workshop fly over all the way from Germany for that little money? We don’t think so.

But it gets worse. Two of the seven participants, customers of ours, were asked to simply join the class for free, so it wouldn’t look so empty. So “Germany” didn’t fly over for 315 pounds, but for only 225 pounds? I ask the question, since we now might conclude that the returned value of – let us say – 100 visitors paying a 200 pound entry fee, is repaid via a “workshop” that had a value of just 225 pounds. That’s 20,000 pounds of entry fee vs. 225 pounds of added value. How’s that for a value proposition? Easy and harsh conclusion: it sucks!

Okay, but there is another group of people that engaged in a transaction with the expo, and that would have loved to create value, right? The exhibitors! They also pay and expect something in return. What they expect in return? Well, at least satisfied visitors, preferably many of them, and most with a mindset of wanting to buy stuff. Did that happen? No, it didn’t.

First of all, 100 visitors is like only 25 to 33% of the 300 to 400 visitors from the expo’s previous edition. And – as stated above – most of these visitors were existing distilleries looking to reconnect. New distillers or distillers that were expanding, and needed new stuff, were the minority. We – as always – had the busiest stand. We always do. But even our booth was empty 50% of the time. When we looked around, to see how other exhibitors were faring, well, you could only see the staff that manned their stands, and occasionally, very occasionally, like maybe once every two hours, a visitor would show up.

Let’s do some math. I expect that the exhibitors paid about 40 to 45k to the expo, of which 15,000 pounds was paid by us. If the show had 100 visitors, of which 2/3rd showed up to reconnect and only 1/3rd was interested in purchasing new equipment … that means that the potential lead count – from the exhibitor’s perspective – was just 33. That’s 33 leads divided by 17 exhibitors, or less than 2 potential leads per booth.

And that number still needs to be compensated downwards, simply because those coming with purchasing power, didn’t come to purchase bottles AND stills AND labelers AND steam generators. Most come with a limited list of equipment needed. And of those, for example, interested in stills, well, these weren’t interested in iStill AND Mueller, mostly. Shall we conclude that this leaves less than one lead per booth available? An optimistic one. Too optimistic, because 40% of the visitors came for us. This means that 13 of the 33 leads, that we originally calculated, were there because they want to buy an iStill, leaving only 20 leads for the remaining 16 exhibitors.

Why? Why was there so little value provided to the most important group, the visitors? Why was so little value provided to the sponsors? I think I figured it out. In fact, I am pretty sure that I figured it out! But let us first see how the expo not only underdelivered on value creation, but how they even resorted to value destruction. I mean, how else would you call loosing your main sponsor for many years? Yeah, let’s dive into that topic first. We must drain the poisoned chalice first, if we want to get to the bottom of it all.

How to loose your main sponsor

This is how an expo looses its main sponsor:

  • The expo fails to put up the iStill banners that had always been part of our sponsorship package;
  • And stating “we didn’t have enough money” doesn’t make sense, with us paying 40% of sponsor fees;
  • The expo only puts our story and sponsorship and pictures up on their website the week before the event takes place;
  • So none of the expo’s website visitors, in the months previous to the event, got iStill exposure;
  • The expo didn’t put me on the “How to start a distillery” pannel, even though I have been participating for years;
  • The expo single-handedly and without consultation changed the name of my presentation, making it less disruptive and more “go with the flow”;
  • “Maximize your flavors with the extractor” got renamed to “A varied approach to botanical distillation” – REALLY!?!;
  • The expo changed words in our online and magazine story. Instead of the industry’s leading technology innovator, we became “a leading still manufacturer” – again, REALLY!?!;
  • Yes, really. They changed titles and texts without consultation – and not in a favorable way. Oh, and they didn’t inform us on the dwindling number of visitors either;
  • I mean, 15k should have bought us at least some expectation management, right? I think it should have;
  • Finally, you don’t add people to your expo staff that we kicked out because of scamming and breach of contract. Not if you want us to stay on board.

Why this matters? Well, it shows how little the expo cares for value creation for its paying partners and visitors. And our personal recount above shows that – in the case of our sponsorship – we are not just talking about limited value creation, but rather value destruction.

Why? Why no focus was given on adding value to those that pay? Why was a lot of value we tried to deliver basically destroyed? Doesn’t make sense, right? He who pays the piper calls the tune, so to say. In the case of the London Distilling Expo, however, the visitors and manufacturers paid the piper, but the tune was nothing like they wanted or cared for. So who called the tune?

The tune of Fear, Uncertainty, and Doubt

The expo is run by consultants. And since there is no binding and unified theory of distillation, other than Odin’s Holy Trinity, well, consultants are like that one-eyed man that’s king in the land of the blind. They don’t KNOW. They do not have an objective measurement to fall back on. They just know a little bit more than most starting distillers. And how do they sell their services, at least most of them? Via Fear, Uncertainty, and Doubt. They want to scare you, they will embrace any opportunity that makes you fear the road ahead, and they will not stop filling your head with doubt to the extend that … well, you need a consultant to help you out and that holds your hand now, right?

There are a few good ones (more on that later), but most consultants, at least in the craft distilling industry, sell their services through Fear, Uncertainty, and Doubt. How does that help empower the craft distilling industry? It doesn’t. Instead, it helps them sell consultancy services to you. Consultancy services that are questionable at best, and that are not founded in any real science. Services that are self-serving to the consultant at your expense.

The London Distilling Expo actually brings value. It brings value to the consultants that organize it. It offers them a platform to sell their services. Mind you: these consultants didn’t pay. You paid, we paid. We didn’t get much (if any) value. But the consultants that organize the event did get value without paying, so basically: at our expense.

Allow me to elaborate how bad most of the consultancy was, that I have seen over there. Allow me to share a few worst practices. Examples that make the hair om my back stand up. It is important that I share my stories, because these practices hurt you. And they hurt the industry on a fundamental level. Damage assessment precedes damage repair. Here we go.

Worst practices

How to make gin?

On a “How to make gin” workshop a student asked if the pannel (consisting of two consultants) could elaborate on the benefits or negatives of going for a single-shot vs. a multi-shot approach to gin making. In plain English: do I distill each batch of gin separately or do I distill a stronger gin essence that I now dilute with more neutral alcohol, in order to create more booze?

Curious to the answer she got? Here’s the answer she got. Mind you, it is a bit short. The answer the consultants provided her with was this: “It depends.”

And that was it. WHAT it depended on wasn’t discussed or revealed. Just this: “It depends.” Good luck with that answer! The student didn’t walk away with an answer, but with an even bigger question: “On WHAT does it depend?” I am pretty sure she felt her goal to start designing, producing and marketing her own gin slip away just there. Or maybe, just maybe … she could hire the consultants, because at least they knew, right? She needed an answer on an important question. The “it depends”-answer increased here uncertainty and doubt. I imagine she thought right there: “Fuck, I really need a consultant to pull this of!”

How to do your branding?

So I am in the pannel of “How to start a distillery” (yeah, had to ask for it) and the question came up like how should one do their branding. A fair question. I am no expert here, but I’d say bottles and labels and to have a bar or not, are important topics. But, hey, I am not an expert on branding, and there are other pannel members that might have worthy insights to share.

A German consultant, that apparently not only knows “all” about nosing but also about branding, picks up the mike and gives this answer (imagine a fat German accent): “Well, in relation to branding, well, the most important thing is … the most important thing is … that you fill your whole hall … your whole distilling hall … in fact your whole distillery … with YOUR passion!”

Like, WTF? Say what? That’s not advise, that’s a platitude. You are serving people that paid 200 pounds to get in … a platitude? Unbelievable to the point of it being unacceptable. What can any distiller do with this “advise”?

The couple that asked the question were between flabbergasted and mesmerized. I saw fear creep into their eyes. I saw doubt spread between them. I could see them look at each other in a manner that expressed that they were more lost now than they had been before asking their question. But luckily, there is always consultancy hours you can pay for to relief you of your fear. There is always a consultant willing to relief you of your money for that very service.

The medal judges are in high spirits!

On a forum discussion, I found myself seated next to a clownesk figure. I wanted to know what he did and why he was on the panel. He told me that he had come up with a great business idea, so that now he was a figure that looked like a clown with actually, for the first time in his life, a sound business idea. Really. His words. No lack of seeing through his own image, at least. All that was missing was a big, red nose.

So I asked the obvious follow-up question, since he still hadn’t answered my original one. I mean, clowns with sound business ideas … what’s their place on a forum intended to inform distillers? I asked: “What is your idea?” And he answered: “I am a spirit judge at IWSC and I am now gathering all judges, also outside IWSC, together in a company. The company helps distillers win medals. They approach us … or we approach them. And we say “do you want to win medals?” Well, and then they pay us and we give advise and they start winning medals.”

This is SO wrong on every level! A spirit judge should be independent. If he wants to make a business out of his art or craft, at least let him resign from IWSC or whatever other organization he judges for. Because that is how you keep things objective. And that’s how you prevent blemishing the reputation of a – so far – highly praised medal competition, that should be able to make their own sound decisions like if this is ethical, or at least if it is what they want! I mean, how is this going to work out, other than that the distiller that pays the most, will win the biggest awards?

How do you start a distillery?

“Well, that is an easy to answer question,” another consultant says. “You don’t. What you want to do instead is contract distilling. No need to start your own distillery. Big investment, risks … and I have a distillery in Cornwall and we do contract distilling and that’s what you need to do as well, because now you have no investments and I can even help you make a recipe!”

Wow! I mean, yes, contract distilling can be an answer to many questions related to starting a craft distillery. But is that the answer that stops all questions? Why is that even okay? Does expo management think this practice of blowing your own horn is acceptable? It does think that is okay, actually.

The expo is organized by consultants and the charming gentleman from Cornwall, that offers contract distilling services, is the newest addition to their team. Of course he gets a platform. Of course he gets to pitch his services to you. The methodology of “back and forth”, pro’s and con’s, of visitors learning via various, often contradicting answers and opinions, doesn’t help the consultants at selling their services. And as it doesn’t serve their cause, why make life difficult? The expo is not there to empower you. It is there to empower the consultants.

Psst … wanna do business?

The bad consultants that plague our industry always need a “ride”. They need, in other words, a “vehicle” that makes them money. If nobody outside of your country is interested in fruit brandy, you present yourself as being an expert in gin as well. Or rum. It just depends on what sells and where you think you can find customers for your “services”.

A preferred ride, that those bad consultants want to hitch, is cooperation with a still manufacturer. The idea is that the still manufacturer sells a still and the consultant can then help with recipe development and/or training. The consultant makes money and the still manufacturer might be happy because his stills come with the broader, wider solutions his clients are looking for.

We don’t cooperate with consultants, because, well, most suck. We don’t need a broader, wider package of solutions. iStill is the only still manufacturer with a science department, with a laboratory, with its own university, and with its own recipe development team. We provide the biggest source of distillation information in the world for free (yes, the iStill Blog) and we support a Facebook group, where many hundreds of craft distillers communicate and empower each other.

So, a consultant that used to work for a German manufacturer approaches us. Kinda stealthy? The other still manufacturer wasn’t supposed to know … but, but, she’d love to work for us, to consult with our customers. Makes sense. With a global market share of 35 to 40% on new still sales in the craft distilling industry, we are the biggest source of potential new customers for her.

She proposes she visits iStill HQ and we explain how the iStills work. I propose that she does the iStill University courses first, so that she knows what she talks about and so she can appreciate the level of understanding that our customers have (which in most cases is higher than hers, I am afraid). I thought that a good starting point for her. But she said: “Odin, I am already a well-known recipe developer! I do not need extra training!” Upon which I answered: “You do, but if you feel you don’t, please do not make the effort to visit us at iStill HQ. We do not need consultants. Our customers probably don’t need consultants. And I am pretty sure they don’t need consultants that are unwilling to do their due-diligence.” She’s probably still with Mueller, I guess.

Best practice

Not all is bad. Some consultants offer more than others. How you can distinguish one from the other? A lack of FUD and an eagerness to learn. Okay, that doesn’t mean they know all the answers, but an open mindset at least allows this consultant to grow and be – over time – of more importance to you. And I met an example (one example) of just that happening at the last London Expo!

A man approaches me at our booth. He asks: “Odin, I have been working in the alcohol industry for 24 years, of which the last five years as an independent consultant. How come I have never consulted with one of your customers?”

I told him that I could tell him, but that he might not like the answer. He answered that my answer was all the more reason for him to want to hear the answer. So I told him that we don’t do Fear, Uncertainty, and Doubt. I tell him that our goal is to empower craft distillers by teaching them how things really work. And once they learn that, well, they usually don’t need a consultant anymore. Most of our customers know more about the science of distilling than most consultants do.

Instead of being offended, he thought that marvelous! He is going to enlist for the iStill University. Even though he understands that it is not a way into “doing consultancy for iStill customers”, he is intrigued to learn more as it allows him to further hone his skills. He – in short – will become a better consultant.

Wrapping things up

I thought it important to share what I learned with you. What’s rotten in the Kingdom of Denmark? The many bad consultants that sell you their services through Fear, Uncertainty, and Doubt. They do not empower the industry, they hold it back.

Do you start to see why – and I am not even sure it was a deliberate or organized attempt – they destroyed the value we tried to add to the expo? We inform you that you can walk this walk alone, yet provide you with a network of fellow distillers. We teach you to empower you. We innovate to make your road ahead, as a craft distiller, steep and challenging though it may be, easier.

Empowered craft distillers are no longer triggered by FUD, and that’s pretty bad for business, if you are a consultant. iStill is the antidote to Fear, Uncertainty, and Doubt and this makes us an existential threat to those that want to take advantage of your insecurities.

Having consultants organize an expo, is the beginning of the end. They feast at your expense and at our expense. But no more. It’s done. Let’s close this book, once and for all, and put a lock on it. The idiots in the room will be sent to the asylum and are no longer allowed to take advantage of craft distillers. Not on my watch. I unsupport the London Craft Distilling Expo.

It’s the vultures that CREATE the carcass …

http://www.iStill.com