Interview: How Patrón Stays Small-Batch Despite Its Large Size

Patrón Tequila has used artisanal production techniques well before that trend swept through spirits and marketing. The brand has long positioned itself as ultra-premium and has become a giant of the top-shelf. Still, the company remains loyal to its craft roots.

I recently spoke with Patrón’s Chief Marketing Officer, Lee Applebaum, about the company sticking with small-production methods, its target customer and what’s coming next in the pipeline.

BD: How can you be considered craft tequila at your size?
LA: We’re small-batch, but large-scale. It’s really expensive to make tequila the way we do, but it’s also very important. Cost is not in the discussion. It’s about quality and craftsmanship.

As a general rule, as brands achieve scale, they lose a lot of handcrafting. They begin to look for efficiencies. That’s particularly true if it’s a publicly traded company (which we are not). And this helps explain the understandable misperception that large brands cannot also be small craft.

Lee

Lee Applebaum, Patrón’s Chief Marketing Officer

There’s no legal definition of ‘handcrafted.’ We produce millions of cases and have a 70% market share of U.S. ultra-premium tequila. But we still produce everything in small batches. Our copper stills are just as small as brands that only do a couple thousand cases. We don’t have larger production mechanisms. We just replicate our small-batch production many times over. We have rows and rows of small stills. There are 1,300 men and women working at our distillery, and only 130 people in the balance of the company.

BD: How do you communicate this to the consumer?
LA: We’re being ultra transparent about it. We add it to all of our advertising. We’re actually using Oculus virtual reality to take people inside our distillery. And this isn’t some video we put together. This is an unedited tour. We’re increasingly inviting media and the press to our facility. We want people to have a very open view of what’s going on. This lets other people tell our story for us.

There have been legal battles over companies using certain terms to describe their production. We don’t take this lightly. We believe that we use these terms appropriately. And we believe we have the right to do so and have the production processes to back them up.

BD: Who is the target consumer for Patrón?
LA: We tend to look at the world more in terms of behavioral qualities and lifestyles. So we have these two categories: Bros and Knows.

The Bros are not just guys. They’re any consumer interested in the swagger and aspirational aspect of the brand. It’s a badge of value walking up to the bar and ordering Patrón. Same thing with gifting a bottle of Patrón. And these people run the economic gamut. After all, our bottles range from $45 to $7,000.

The Knows are the customers who are first and foremost interested in our authenticity and story. These are people who want to know how we make it and what we do for sustainability.

Our marketing is geared towards those two types. The good news is that they’re not mutually exclusive. Many Bros want to be perceived as Knows. It adds substance to their style, which is where our brand really delivers.

BD: What’s next for Patrón?
LA: We have a limited-edition, wood-finished expression that’s coming out next year. I can’t tell you the finish yet. Partly because we’re still holding our breath and making sure it finishes right. Until the last minute when it comes out of the barrels it can still change and mature – tequila is a finicky spirit.

In general, we’re interested in a lot of wood finishes moving forward, including Scotch barrel-finishing. But we’ll never be a brand that releases a new expression or flavor every month or year. You don’t get to be a world-class spirit that way. Our innovation will never be led by marketing. We’re led by our distillery. They innovate and then we find a way to market these new products.

Kyle Swartz is associate editor of StateWays Magazine. Reach him at kswartz@epgmediallc.com

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