Ghost Tequila: How a small brand of tequila tripled its sales and beat a pandemic

While serving as a bartender at a Boston bar specializing in tequila, Chris Moran noticed the growing popularity of spicy cocktails and sensed a business opportunity. He launched Phantom tequila in 2016 - a small batch of double-distilled tequila finished with a “pinch” of bhut jolokia pepper extract before bottling. Ghost was facing the usual challenges of any tiny brand - increasing sales and brand awareness - when the COVID-19 pandemic began to shut down its main source of income: bars and restaurants. I spoke with Moran about how he handled this crisis with a rapid change in strategy and ultimately achieved 300% sales growth.

How was business at Ghost Tequila before 2020?

In the first two years, we ran into the same issues as any startup. We started with a small group and have seen great growth in Massachusetts. In 2019, we doubled our turnover and established ourselves in Texas and California. We were starting to attract talent. We hired Andrew Teubner who had run off the premises for Patron Tequila for years. We had planned to do more off-site (liquor stores and supermarkets), but in 2020 80% of our sales were on-site (bars and restaurants).

Then the pandemic strikes.

After so many starting problems, I panicked. I knew 80% would go down to zero overnight. Most of the smaller brands struggled. People went to the stores thinking they were just going to take their Tito and Jack Daniels and go out. But Andy has been in the business for a long time and understands the offsite. We told the whole team that we were going to remove all onsite spending and focus on offsite.

What did this imply?

One thing we took advantage of was that all of these companies wanted to save money and pulled out. So we doubled the marketing. Billboards were pennies on the dollar. We got 300 billboards across Texas, Massachusetts, and Rhode Island for next to nothing. We focused on social media, we did radio, we increased e-commerce.

We installed screens where we could and created sample programs. We called in an agency. We wanted to go from being a startup to being a billion dollar brand. Consumers had gotten so used to spicy cocktails that we gave them an easy option to enjoy one at home without having to make them themselves. Our message was simple: you love spicy cocktails and here’s one way to keep doing it. Our price point also helped. We’re a $ 29 bottle of good tequila that offers something very unique as well.

When did you see the strategy start to pay off?

We did not grow from March to April. April was still flat, but in May we started to set records. We ended the year with an 85% increase in sales.

Have you ever thought it was risky to start spending when other brands were more cautious?

Honestly, there wasn’t a lot of choice. We need to sell products and look at what the opportunities are. Always look for the benefits in the problems. There must always be a silver lining. Find it.

Have you had to lay off staff to help fund marketing?

We were lucky enough to complete a round table, we had no money problems and were able to keep our team active. We haven’t let anyone go because of COVID. We have a great team of people and it’s to our advantage to keep them.

We also had a huge cocktail competition that took place in April and 100 bartenders across the country made Ghost cocktails. They put their cocktails online, we put them online and reached over a million people and we raised $ 30,000 for a bartender fund. I am a bartender for life. It is important for me personally to help them when they are in difficulty.

Should a new brand start in bars before aiming for off-premises sales?

Some brands have done well with offsite launches. Right now, with tequila, you’re going to spend a fortune on marketing no matter what. Ghost hit Michigan shelves a few months ago, but we need to get people to know the brand to get it moving. We focused on the spot because if there’s a spicy cocktail on the menu, we can get it moving. It also allows us to come in and talk to bars about our product. It is economical but of quality. Tastes like good tequila but with a tang.

Where do you see the business heading now?

On-premise is now back in full force. We will end the first half of 2021 up 300%. Most of my time now is in Mexico to speed up the supply chain. It’s been an exciting and challenging time - it’s great to talk about procurement as your problem.

And we’re now planning to go 60/40 offsite, which is healthy. Summer has been a good time for us, we are part of the beach and house party experience. We have not let go of the marketing. We don’t do giant poster campaigns, but keep a strong social presence. We’re opening a few more markets - and since we’re called Ghost, we have an edge for Halloween and the fall season. And next year we are going national!