One morning in the summer of 1996, a man named Sidney Frank called up his No.2 at Sidney Frank Importing Co., and told him he had finally figured out the perfect name for his new vodka venture: Grey Goose. Nevermind that at the time there was no bottle, no distillery, and no vodka to take on that name, Frank had a vision.
A mere 8-years later that vision would be sold to Bacardi for $2 Billion, and the ‘ultra-premium’ vodka sector the brand created would be the fastest growing in the spirits business. So how, exactly, did it all happen?
Born in 1919, Sidney Frank grew up poor in rural Connecticut, just a farm boy who had dreams of breaking the cycle of his family’s poverty. An astute student, he was accepted into Brown University, where he rubbed shoulders with the scions of some of the East Coast’s richest families. Though ultimately he wouldn’t graduate (though he did donate $100 million to Brown after the sale of Grey Goose), he had found an avenue into a world of elites that would start him on his road to success.
Through friends at Brown, Sidney Frank met and married Louise Rosenstiel, whose father was then the chief of Schenley Distilleries (a spirits-industry powerhouse). Frank went to work in the family business, and showed a knack for it. After the untimely death of his wife, and a subsequent rift with the Rosentiel family, Frank decided to set off on his own, founding Sidney Frank Importing Co.
SFIC wasn’t any quick path to riches. Frank experienced a lot of financial hardship, often buying luxury assets when business was good, only to turn around the liquidate them to keep the company afloat during hard times.
Still, like many great men, he dug in and kept trying to find that elusive ticket to success. Little did he know he would find it while strolling from bar-to-bar in a part of New York City then populated almost entirely by German immigrants. There he spotted bars lined with people drinking something called Jagermeister, a 70-proof, odd-tasting liqueur from their homeland. Though it seemed to have a small market (German immigrants), it was also a reliable one. So Frank tracked down the European rights holder and secured the ability to distribute it in America.
It was an investment that didn’t do much but keep the lights on, until for unknown reasons, college kids in Baton Rouge started drinking it like water. To this day no one knows the real reason – college kids just being goofy, perhaps – but it was the start of something big. Frank saw an opportunity and started stocking liquor stores in college towns, buying up billboards and populating them with ads making light of the products, err, ‘unique’ taste. He even pioneered the concept of having teams of attractive salespeople dispense free shots and merchandise in bars and at events. What seems ubiquitous now was, at the time, pure innovation.
The gambit worked. Jagermeister became a sensation and with it, Sidney Frank and his company became the stuff of liquor industry legend.
So, in 1996, flush with Jager cash and looking for a new market, Frank turned his attention to Vodka. As an industry veteran, he often marveled at the sheer number of brands that populated store shelves: this was a neutral spirit, after all. How could all these brands carve out a piece of the market against historic companies like Smirnoff and Absolut?
That’s when Frank realized the magic that this neutral spirit represented: with a twist of marketing it could be anything. Vodka was less about the place it was made, or about the ingredients, than it was about identity. The kind of vodka you drank said something about you. And in the go-go era of the dot-com’s, he wanted his vodka to say ‘LUXURY’.
So with that, Frank decided that his new vodka wouldn’t compete with the current players by undercutting, or even matching their prices. He was going to double-down and charge way more than they did. His primary branding tactic also happened to equate to pure profit; a gambit that was just crazy enough to work.
He decided on the name Grey Goose because he used to sell an obscure French wine under that name decades before. It was also this since-folded wine brand that inspired him to go to France, where vodka production was nearly nonexistent. There were plenty of cognac distilleries that were sitting idle as that particular spirit fell out of fashion, and Frank seized on the excess production capacity. American consumers wouldn’t know if French vodka was good or bad, but they would know that other luxury items come from the country all the time. He could piggy-back on the reputation of their fine wines, champagnes and couture fashion houses. Plus, it was almost double the price of the current premium vodkas, so it MUST be good.
As much as Grey Goose was a product of Sidney Frank himself, it was also very much a product of the time. The late 90’s saw the dot-com boom and the stock market surge. People were awash in cash and looking to spend it. Luxury for luxury’s sake became the unquestioned ideology of America. It was an ideology that Frank rode to immense riches.
After only 8 years on the market, Bacardi came calling looking to get a piece of the action to the tune of $2 billion. Though the exact amount Frank himself cleared isn’t public knowledge, one can rest assured that he became a very rich man. Even long-time secretaries at SFIC got their due in the form of $100 000 bonus checks.
Today, the ultra-premium vodka market is rife with competition. One only has to step into any bar or club to see Frank’s mark on the industry: frosted glass bottles, street teams of attractive employees dispensing shots of mysterious liquors, and those enormous back-lit bottles being walked through a club to the VIP section. Luxury for the sheer sake of it.
