How Jimmy’s Cocktails’ D2C Pivot Helped It Build Brand Stickiness & Aim $3 Mn Revenue In FY22

Everyone loves a flirty cocktail (or a fruity mocktail, if they are teetotallers), but drinking at a bar entails a hefty price that may not suit every pocket. An affordable alternative is to make cocktails at home, however, given the complexity and the need for exotic ingredients, very few people are able to enjoy such concoctions.

Ankur Bhatia had the same dilemma when bar-hopping in Mumbai sometime in 2018 and enjoying fancy cocktails with his friends. When the party moved to a smaller bar that dot every street of Mumbai, he noticed there was a distinct drop in quality and variety in what they had to offer. While trying to recreate the same cocktails at a friend’s place, he realised that they could not match the flavours they had bought off the menu.

For instance, 75% of alcohol consumption in India takes place at home, but cocktails are not one of those categories, said Bhatia. Interestingly, cocktails remain one of the highest sales drivers at top Indian bars, contributing up to 30% of the revenue, or more than INR 2,000 Cr. But they are only available in 3K-odd top bars out of 30K licensed establishments. 

So, three things are quite clear. Consumers were enjoying cocktails in bars, so a ready demand existed. Tier 1 consumers had access and were paying high prices, but beyond the metro cities there was no access to this format. And home consumption of Cocktails is not happening, either. 

Bhatia sensed an opportunity. He already had a go at entrepreneurship as a cofounder of Times Internet-owned media platform MensXP but left it in 2011 after a five-year stint. Also, he had worked for Chicago-based alco-beverage MNC Beam Suntory for eight years and was aware of certain industry trends and data. And so along with his friend, Nitin Bharadwaj, set up Jimmy’s Cocktails in September 2019.

In July 2020, the mass-premium cocktail mixer brand based in Gurugram debuted with six non-alco products, designed to be consumed as mocktails or mixed with a spirit to make cocktails at home. Their initial offerings were classics like Bloody Mary, Cosmopolitan, Mango Chilli Mojito, Margarita and Sex on the Beach. 

The cost per bottle is INR 99, and each flavour is available in 250 ml glass bottles. While the content of each bottle can be used to make two cocktails, the company claims to be both nutrition- and ingredient-conscious. Its mixers are low-calorie, contain no artificial sweeteners and are made with the best ingredients sourced from all over the world. 

The name itself has a nice ring as a bar call, but this has an interesting backstory. “We went for Jimmy because Jack, Jim and Johnny were already taken,” said Bhatia. 

He was referring to popular alcohol brands Jack Daniels, Jim Beam and Johnny Walker that have a high brand recall. Bhatia wanted to follow suit and decided on a name that would remind people of those famous alcohol brands. 

Today, the startup is well on its way to clock a $3 Mn revenue in the second year of its operation — FY’22 — Bhatia told Inc42.

What Was Swirling Round The Concept

The trio knew it would not be easy to make a mark in a market where drinking cocktails has always been associated with bars, and thousands of top-end establishments are serving top-of-the-line drinks. On the other hand, Jimmy’s was betting big on convenience, affordability, and flavour craftsmanship, but it must change consumer mindset to thrive on its USP. 

“One thing works in our favour, though,” said  Bharadwaj, cofounder and head of Retail operations, at the startup, “is that the top 3,000+ bars that serve cocktails are located in Tier 1 cities. That has always made cocktails an urban affair. While the majority of our current customer base is currently in metros, we have a large head-room for growth as we expand to non-metros by offering them the same quality of drinks (the splash of a good mixer with one’s choice spirit is the secret) that’s available in an expensive bar.” 

Jimmy’s piloted its products in September 2019 as Bhatia was keen to gauge consumer reaction and receive feedback before going for a hard launch. According to his research, around 95% of beverage sales in India take place in brick-and-mortar retail stores. So, he wanted the brand to be off-line and retail-first, and a six-month pilot took place in and around Gurugram. The official launch was planned for March 2020. But by that time, the pandemic had struck, and the series of lockdowns made it difficult to push the offline strategy. 

In sync with the new normal, the company morphed into an online-first direct-to-consumer (D2C) brand almost overnight and officially launched in July 2020. Within a short period, Bhatia noticed that the brand was selling across 400 cities in India via its website, far surpassing its target for offline presence. The pandemic not only boosted online sales but helped the brand test the waters beyond Tier 1 markets as initially planned by the founding team.

The company received a significant brand awareness and sales boost during the lockdown periods when Bars shut down and liquor consumption was relegated strictly at home only. Having an ability to deliver their product directly to consumers’ homes proved to be a critical success lever.  

Today, Jimmy’s Cocktails sells its products on its website and via online marketplaces and grocery and food delivery platforms like Amazon, Flipkart, Swiggy Instamart, Zepto and Blinkit (previously Grofers). It also has an offline presence across 45 cities and 5,000 retail outlets. The brand witnessed a monthly order volume of 380K bottles in December, out of which offline sales account for 75%. The rest is equally split between its dedicated website and online marketplaces.

The company has recently started exporting its products to Australia, South Africa, Nepal and Mauritius. But overseas, these products are sold through physical retail only.

Making Of The Mixers

For Jimmy’s Cocktails, creating intricate flavours is the core of its business. And making the right flavours in-house begins with procuring top-notch ingredients locally and globally. For instance, cranberries that go into its Cosmopolitan mixer are sourced from Denmark, but the Alphonso Mango that makes their Mango Chilli Mojito is sourced from India. “Our mixers are made with fewer calories and zero artificial sweeteners. To achieve this we use only the highest quality ingredients with their natural sweetness,” says Bhatia.

Then again, the brand’s head of product is Yangdup Lama, a renowned mixologist and owner of Delhi-based Sidecar that features among the world’s 50 best bars. “Together, we have crafted a method to deconstruct and bottle complex flavours erstwhile only possible by a bartender from a top bar,” explains Lama. The company is among the few beverage startups which manages their entire supply chain end to end and manufacturing in house.

The startup has an exclusive lease agreement with a manufacturing plant in Nashik, a strategic location, as some of the best fruits are produced in nearby areas. Its bottling company is also located there, making packaging relatively hassle-free.

Shipping Made Hassle-Free By 3PL Enabler

Like most D2C brands, Jimmy’s Cocktails eventually opted for a third-party logistics (3PL) service provider to ensure quick and efficient delivery. It started with independent courier partners but tied up with Delhi-based 3PL player Shiprocket in August 2020 to streamline and run its pan-India distribution network. 

“What sets Shiprocket apart is the user-friendly platform and great customer service. The team makes sure that our customers are informed about their orders at all points of the purchase cycle,” said Bhatia. In fact, the brand has witnessed a 400% growth in the D2C side of operations since partnering with Shiprocket, the CEO added.

“Ours is an impulse-buying category where fast delivery is critical to the business. A little delay may result in cancellation, given the nature of the product (One can always go out and get a drink and experiment with it instead of waiting too long.) Shiprocket has helped us solve that problem,” says Bhatia.

More Focus On Offline Retail, B2B Collaboration

According to Bhatia, there is a common misconception that the startup is building a new category. But cocktails have always been served by bars — where it is an INR 2,500 Cr business, said Bhatia — while Jimmy’s is trying to bring a variety of delicious mixers at one’s fingertips to ensure low-effort and low-cost cocktails. The aim is further expand distribution to ensure the product is available to consumers at arms reach across the country.

During the first and second wave of Covid when all bars were shut, the company came out with a digital ad campaign that told people how they could make a cocktail at home in three simple steps — ice it, spike it, Jimmy it. A campaign that urged the consumers to ‘bring the bar home’. 

The company has been consistently running these campaigns for more than 12 months to change the association of bars and cocktails to having a drink at home, spiked by Jimmy’s Cocktails. Nevertheless, it is preparing for a change when the world returns to near-normalcy, and people start crowding liquor shops and bars. 

In recent months, the brand took part in music festivals in Hyderabad, Bengaluru and Mumbai, where alcohol was served. It is also promoting shop-in-shop points across offline retail stores for better discovery. It will add eight more SKUs in 2022 and is working on several collaborative launches with major spirits conglomerates. According to Bhatia, the company’s fast growth over the past two years has enabled these partnerships.

Despite a bigger market focus after its online pivot two years ago, the company is not planning any ATL campaign. “Instead, we will stick to our digital performance marketing and in-shop visibility thrust. It’s because we believe that our brand name, packaging and product do the hard work for us, and we need not spend too much on marketing. Jimmy is a very sticky name. And in fast moving consumer goods, the brand that comes to your mind first is always the leader of the segment,” added Bhatia.

Over the years, India has witnessed a significant rise in alcohol consumption. A report by the IWSR Drinks Market Analysis says India is the second-largest consumer of spirits behind China. Further, per capita consumption has recorded an 8.7% jump, from 5.7 litres in 2016 to 6.2 litres in 2020, says the World Health Organization.

Jimmy’s Cocktails is not the only company tapping into this opportunity. India’s newfound love for fine spirits has ushered in a new wave of D2C cocktail mixer brands such as Bengaluru-based Swizzle, Delhi-based firms & Stirred, and Sepoy & Co, all trying to capture the fast-emerging mixers market. 

The long-term impact of Covid-19 is bound to disrupt the bar culture. With social distancing and other restrictions introduced from time to time, Jimmy’s and its ilk to help change consumer behaviour and cement future growth.