The Patron Way: From Fantasy to Fortune - Lessons on Taking Any Business From Idea to Iconic Brand - Hardcover

Edelstein

Hardcover

ISBN 10: 0071817646 ISBN 13: 9780071817646

Publisher: McGraw Hill, 2013

Synopsis

The never-before-told story of Patrón Tequila--the brand that revolutionized an industry

How a billion-dollar business ascended from a forgotten dusty agave field in central Mexico

The Patrón Way details the unorthodox building of the brand, the extraordinary creativity and marketing ingenuity of Patrón's cofounder, Martin Crowley, and his life partner, Ilana Edelstein, and the way Patrón single-handedly transformed the face of the liquor industry. Edelstein was involved in every aspect of the business--from the brand’s iconic bottle to designing the sexy and attention-getting outfits worn by the famous "Patrón Girls" at promotions and parties to running the back office.

Patrón is a tequila so sumptuous--and so brilliantly marketed--that it has become the world’s leading ultrapremium tequila and has changed the way the spirit is experienced: what was once "gasoline" slammed back in a shot glass is now poured from an exquisite hand-blown bottle into a chilled glass and sipped to attain a "Patrón high."

Today, Patrón has grown to over a billion-dollar brand, and it is the largest generator of revenue of all tequila brands. Edelstein combines the dramatic story of the company’s rise to success in an astonishingly competitive and sometimes cutthroat industry with practical business lessons about R&D and brand building that business leaders can put to productive use in any industry.

A tale of love, sacrifice, celebrity, dizzying success, and ultimate betrayal, The Patrón Way reveals for the first time all the details behind the intimate relationship and marketing genius of the "power couple" that transformed the spirits industry.

PRAISE FOR THE PATRÓN WAY

“The Patrón Way is a good chronicle of a luxury brand's path to success. . . . Ms. Edelstein dispenses useful advice to aspiring entrepreneurs."
The Wall Street Journal

“Anyone desirous of making sense of tequila’s current status will be well served by chugging The Patrón Way.”
Slate

"There are some good lessons for entrepreneurs launching a product. No doubt, the rise of Patrón is something many would love to emulate. And Ilana Edelstein was there from the beginning and delivers an inside view of the story."
New York Journal of Books

"Business lessons echoing 'know who the true tastemakers are, and use them wisely' are sprinkled throughout the book. . . . most readers will appreciate the informal 'tell-all' style that reveals an emphasis on doing some paperwork to cement their role in any business they help grow."
Library Journal

“I can honestly say The Patrón Way by Ilana Edelstein was a delicious cocktail of innovation and inspiration with a twist of tragedy for a bittersweet finish.”
TequilaAficionado.com

About this title

About the Author

Ilana Edelstein met and fell in love with Martin Crowley in 1988, soon before Patrón Tequila was created. She is the founder of IE Financial Services, which provides a range of financial and retirement services to teachers. Edelstein is also the marketing consultant for EVOL, a new premium sugar-free, gluten-free distilled spirit company.

From the Back Cover

“This book can save your company.”
—George Antonakos, CEO & Cofounder of EVOL Spirits Co

Excerpt. © Reprinted by permission. All rights reserved.

THE PATRN WAY

From Fantasy to FortuneLessons on Taking Any Business From Idea to Iconic Brand

By ILANA EDELSTEIN, SAMANTHA MARSHALL

The McGraw-Hill Companies, Inc.

Copyright © 2013 Ilana Edelstein
All rights reserved.

ISBN: 978-0-07-181764-6

Contents

Foreword by John Paul DeJoria
Acknowledgments
PART I R&D
CHAPTER 1 Out of the Blue
CHAPTER 2 A Brief History of Tequila
CHAPTER 3 The Taste Test
PART II BRAND BUILDING
CHAPTER 4 Hollywood Star
CHAPTER 5 By the Seat of Our Pants
CHAPTER 6 The High Life
PART III SUSTAINABLE DEVELOPMENT
CHAPTER 7 A Rude Awakening
CHAPTER 8 Loose Ends
CHAPTER 9 Patrón Today
EPILOGUE No Regrets
APERITIF Marking the Patrón Way
Notes
Index

Excerpt

CHAPTER 1

Out of the Blue

Miles of dusty Mexican roads were getting monotonous. The love of my life,Martin Crowley, was just a few days into his monthly buying trip for his newcompany, Architectural Products Marketing (APM), and was sourcing exquisitelyhandcrafted tiles, carved stone, marble, ceramics, furnishings, and otherarchitectural pieces from dozens of out-of-the-way factories and quarries in thecountryside. The plan was to bring them back to sell to designers and architectsbuilding beautiful homes for the millionaires and billionaires living in BeverlyHills and along California's Gold Coast. APM's customers loved his unique andrefined taste, and he was doing a roaring trade.

Martin knew exactly where to find the best artisans in Mexico and was an avidcollector of objets d'art. He had an eye like no one I'd ever met and theability to envision how any piece would work in interior and exterior design andlandscaping. He was also a brilliant negotiator and could bargain down the priceso that the product was practically being given away. But doing that requiredhim to cover a lot of ground, and he was getting exhausted and lonely. To keephimself company, Martin had found a stone carved statue of a hotei—a bald,laughing Buddha with a big potbelly. This particular one had a missing toe, andMartin kept him on the car seat next to him. It must have brought him luck.

Whenever he went across the border, he always hired the same driver, Felipe, alocal guy who spoke English well and knew the terrain intimately. Martin didn'tspeak Spanish, and perhaps that was just as well, because when he did speak toanyone Latino, his English suddenly had a Spanish accent. On this particular dayof road travel, the pair found themselves in the mountains of Jalisco, about twohours from Guadalajara, smack in the middle of the country.

Lost in the passing landscape, Martin found himself flashing back to aconversation he'd had with his APM business partner and friend, the entrepreneurJohn Paul DeJoria, earlier that month. Martin and John Paul, or JP, as he isalso known, had been drinking shots of Chinaco Tequila when they beganspeculating about which tequila the aristocrats of Mexico drank. As two men ofcuriosity and taste, they had this type of conversation regularly. Martinpromised to check it out on his next trip to Mexico, and it just so happenedthat here he was, right in the heart of tequila country.

If he was going to find the finest tequila anywhere, this had to be the place.The highlands overlooking the valley of the Rio Grande provide the perfectconditions for growing blue agave—a plant from the lily family with a corethat looks like a giant pineapple, a pina. Harvested and processed a certainway, agave is distilled for the production of tequila. But more on that later.

FIELDS OF BLUE

Welcoming a distraction, Martin instructed Felipe to stop at every tequilafactory along the way to check out its product. They drove through miles andmiles of rolling blue agave fields. God knows how much tequila Martin ended upconsuming on this day trip. He lost count. But he was sober enough to rememberone extraordinary place.

As soon as he entered the factory, he knew it was different. It was rather smalland unusually clean, with wide open spaces and plenty of light and fresh air.Above all, there was a noticeable sense of calm. The property, situated near thehighest point of the region, consisted of sparse old adjoining buildings on theside of a hill overlooking a muddy creek. The distillery had been owned by thisfamily for generations, and they still made tequila the old-fashioned way,exactly as they had for 50 years. The place was a complete throwback. Thefactory had hardly been updated, and apart from a single customer in Japan,their tequila could not be found anywhere outside Mexico.

Its unique flavor was the result of the high-quality agave that was used and thelove, method, and care with which it was made. The only ingredient used waspremium Agave tequilana—Blue Weber agave—and nothing else. At thattime, few, if any, factories produced pure agave. Something would always beadded to dilute this expensive ingredient, or shortcuts would be adopted in anattempt to replicate the aged flavor, such as adding oak chips in the barrels toquickly create an oak color and flavor.

Martin took one sip of this tequila and knew he didn't need to visit any morefactories. Nothing could possibly top this. He bought a few bottles, wrapped upthe rest of his buying trip, and headed back to his funky little guest cottagein Hermosa Beach, California.

SPANISH FLY

People assume that Patrón has been around forever, but it was late in the yearof 1989 when Martin first discovered what led to this liquid treasure.

By then, we had been together only a few months, but it was one of those once-in-a-lifetime love affairs in which you connect instantly and on every level:physically, spiritually, and intellectually. We'd met in our middle years,already established and leading what we'd assumed were rich and full lives. Iwas a transplant from my native South Africa, having come to California in thelate 1970s to pursue a free-spirited, independent life and live close to mycherished sister and brother-in-law, Sharon and Len. After growing up in aparochial community and chafing under the restrictive rules of apartheid, Irelished my newfound freedom in America and saw opportunities to flourish aroundevery corner, eventually building a thriving financial consulting firm.

Martin was a native Californian who'd left his broken home while he was still inhis teens, seeking adventure in the Peace Corps, racing his sailing boat aroundthe world, and building a small hotel and restaurants. He was a consummateconnoisseur and entrepreneur who could turn any passion into a business. Notonly did he flow with endless brilliant ideas, he followed through and actuallybrought them to life. Possessing more drive and focus than anyone I'd ever met,this was a man with an expansive imagination and the extraordinary ability toturn fantasy into successful tangible reality. Finding our soul mates seemedinconceivable to us, since we had lived our lives without giving it one thought.It was the first time either of us had felt so truly and completely loved, andour world suddenly got bigger, brighter, and better in every way.

We'd met through a mutual friend at a wine tasting. Even in that firstflirtatious conversation we had, I learned so much from him about wine. Littledid we know at the time that sipping only the very best was to be the beginningof a major theme in our life together.

After that first encounter, we were rarely apart. At this point, we were not yetcohabiting, but we might as well have been. When he wasn't at my place on theMarina Peninsula, I was at his. When he traveled to Mexico, we spoke severaltimes a day. He'd been working so hard to build up his business and recover froma devastating bankruptcy. I'd missed him terribly and couldn't wait to see himagain.

When I walked in the door of his beach house, Martin didn't say anything aboutthe tequila, but he had a gleam in his eye. I could tell he had a surprise forme, but there'd be no getting it out of him until he was good and ready. We hadour usual reunion: incredible sex, twice; a gourmet meal Martin lovinglyprepared; and a bottle of vintage red wine between us. We were relaxed andhappy. It was good to have him back.

When I gently teased him for details about his trip, Martin gave me a sly smile,walked over to his still unpacked bag, and pulled out what looked like one ofthose dusty old decanters a pirate might have taken a swig from 200 years ago.

"Martin, there's a dead fly in the bottle!" I said, pointing to the deceasedinsect.

"I know. It's Spanish fly, the aphrodisiac," he replied suggestively.

"Really? Let's get it out. I want to try it," I said, knowing full well it wasnothing of the kind.

"Forget the fly, honey; you have to taste this tequila," he said, pouring someinto a brandy snifter and handing it to me.

"Please, baby, don't ask me to drink tequila. You know the mere smell of thestuff makes me gag."

It was true. As was the case with millions of others, a night of overindulgencein tequila years earlier had made me so sick that I wanted to die; it was thefoulest hangover imaginable, and I never wanted to live through it again. Icouldn't be anywhere near the stuff without heaving. Besides, hard liquor wasn'tmy thing; fine wine and champagne were my preference. But Martin's enthusiasmwas infectious.

"Come on, hon. I promise you, this tequila is different. You've never tastedanything like it."

"Okay, but I am definitely not downing all of that."

"No, you are not going to shoot it. Just sip it like a fine cognac."

Reluctantly, I put my lips to the glass. What struck me first was the lack ofnauseating, gasolinelike tequila fumes. There was a clean and intoxicating aromato the liquid. I took a tiny sip, and as with fine wine, I let it linger in mymouth for a moment before swallowing.

"Wow!" was all I could say.

For Martin, that was enough. He knew how much I had hated tequila, so I was theperfect control group for this experiment. His discovery had passed the Ilanataste test with flying colors.

A few years later, in an interview with the Los Angeles Times, Martin describedPatrón as so much more than just a taste; it was an experience: "It's a feelingyou get—it's different from drinking vodka or gin. It's more of apsychotropic effect, whether real or imagined."

Martin was able to make his discovery because he was open to what the universehad to offer. His senses were alive, so the moment he tasted the tequila, heunderstood perfectly the value of what he had found. Many others would haveenjoyed a drink, moved on, and forgotten about it, but Martin knew that what hehad in his hands was incomparable and that if he felt that way, millions ofothers would too.

To this day, Patrón is the only spirit I drink, precisely for that reason. Itspure and delicious high cannot be compared to anything else. This is not somehigh-octane beverage for college kids on spring break. It is so much morerefined. No matter how you choose to drink it—mixed as a margarita orsipped straight over ice with lime—you can taste the difference and alwaysexperience a cool, smooth finish. The burn that had become synonymous withtequila was gone. Patrón goes down clean and crisp, with no regrets the nextmorning.

THE GODFATHER

We spent the rest of the evening and the early hours of the morning dreaming upways this product could be marketed. As design junkies, creating and re-creatingwas something we loved to do together. Suddenly, we had a new project. Martincame up with the name, Patrón. He wanted a word that meant the same in all theRomance languages. Patrón means the good boss or godfather, the guy you go towhen you want to marry off your daughter. We liked the aristocratic, dignifiedway it sounded. The word was easy to pronounce, easy to remember, and portrayedthe idea of being the master.

We started modifying and redesigning the bottle. Our prototype was a rathercrude and somewhat deformed phallic design with an uneven, elongated neck thatwas at an angle and a glass stopper. Martin and I were enamored with perfumebottles and packaging and had amassed an extensive assortment between us, so wehauled them out of the bathroom and studied their shapes and labels. We weretaking the lead from the fragrance industry, which creates a sense of occasionthrough exquisite presentation. No one had ever spent that much on packaging inthe spirits industry—it almost matched the price of the contents—butas far as we were concerned, it was necessary for the exterior to capture andaccurately reflect what was inside. The brand needed a handcrafted look thatwould suggest that the package's contents were precious and rare. If additionalinvestment was required to create a sense of luxury worthy of Patrón, so be it.

I found a green ribbon and tied it around the bottle's neck while Martinsketched possible labels. He had a little golden honeybee among his hodgepodgeof trinkets (which I still have) and came up with the idea of using it as anemblem. Bees are magical creatures. Martin and I consciously tried to be in themoment, so "bee in the moment" wasn't much of a leap. It became one of ourmarketing taglines for Patrón. Purely as an afterthought, the bee also suggestedthat the contents of the bottle were irresistible, like nectar.

We knew instinctively that the packaging must creatively, truthfully, andprecisely reflect the quality and experience of the contents. For Martin, itwasn't just about marketing; it was his life's philosophy. Years later, lookingthrough some old papers, I came across a handwritten note from Martin thatperfectly sums up the significance he gave to beauty in all things:

The divine energy put into a true work of art is captured and then radiates backinto the environment. The more beauty we surround ourselves with, the more God'screative energy we are exposed to and can metabolize into our own being andsynergistically grow with the beautiful and loving energy.

He then signed it with a phrase he used repeatedly: "Truth and beauty arelovers."

Martin knew that design is so much more than just a look. It also has the powerto create a powerful emotion in the consumer. It's an approach that makes thedifference between iconic consumer brands such as Coke, Chanel No. 5, evenCampbell's Soup and just another product that gets lost in the crowd.

Once we were on a roll, there was no stopping us. We were both guilty ofsuccumbing to designer's disease. At one point, after hours of tinkering, we satback and looked at the little bottle, and Martin turned to me, sighed wistfully,and said, "Wouldn't it be wild if this became the top-selling tequila in theworld?"

The only problem was that neither of us knew a thing about the liquor industry.

NOTHING VENTURED ...

The next night, we went to dinner at John Paul DeJoria's house in Beverly Hills.People know JP mainly as the owner of John Paul Mitchell Systems. He's thehandsome, swarthy guy with the beard and ponytail featured in all the magazineads, along with his exquisite wife, Eloise, a blonde Texan beauty. But what manypeople may not realize is that John Paul is a savvy investor with a hand inmultiple business and philanthropic ventures. It's as if he has some sort ofsixth sense about what will succeed, and almost everything he touches turns toplatinum.

In John Paul's words, he was the "bank" in his partnership with Martin. Thissuccessful business marriage led to a friendship among the four of us, so wewere often at one another's homes dining or partying. One of the few conditionsJP asked of Martin was that whatever they did together should always be fun. Heunderstood perfectly that a brand is only as good as the quality of the peopleinvolved. He shared our deeply held belief that what separates a good productfrom a great one are the intangible but powerful forces of the human spirit. Forthis and many other reasons, I adore John Paul and Eloise.

Martin brought the mocked-up bottle of tequila to dinner with us, with the flyremoved of course, and poured John Paul a shot in a brandy snifter.

"Here it is, JP, the finest tequila in Mexico, and I believe with the help oftequila master Francisco Alcaraz, it can be made even better. I don't know whattequila the aristocrats drink now, but I do know what they'll be drinking in thenear future."

"Wow. Martin, you're right; this is it!" exclaimed John Paul. "We're partners.Go back to Mexico, get Francisco involved, and buy a thousand cases. Worst case,if it doesn't sell, we'll have the world's best tequila for ourselves and ourfriends and family."

A DEAL THEY COULDN'T REFUSE

Soon afterward, Martin went back to the factory with Felipe and made the ownersan offer. He would make a commitment to their entire production, providing allthe bottling and packaging materials, but they couldn't sell to anyone else. Wehadn't sold a dime's worth of tequila yet; his goal was to tie up the source.The family owners agreed to his terms. They must have thought Martin was acomplete madman, but who would say no to a 100 percent guarantee of sales?

Back in Hermosa Beach, we continued designing. Martin and I bounced more ideasoff each other in a creative frenzy, feeding off each other's imaginations as wetook one concept and then raised the bar to the next level and the next. We wereliterally consumed with creating something that would do justice to this superbproduct. Like proud parents, we pampered and reveled in our newborn. Our effortswere truly joint and completely intertwined; enhancing our baby was our singulargoal. There was no competing or even differentiating; we were just twoimpassioned beings, trusting their intent and creativity and surrendering toeverything in the process. As much as we recognized each other's imprint on ourprogeny, we thrilled and marveled at what the magical mixture of our creativeDNA had brought to life.

Little by little, our packaging evolved into the ultrapremium gift look you seeon the shelves today. By then, with the help of Ron Wong, a stellar graphicdesigner and friend, we'd already designed the labels, with wording, ribbons, abooklet, tissue paper, and a box. Ron also created a usable mock-up of thebottle for us. Fortunately, Martin was able to use his sourcing expertise tofind Cesar Hernandez, owner of the only remaining glassblowing factory in Mexicowhere they still used artisans to handblow each bottle. Perfecting our bottledesign was a lengthy process of trial and error. The bottles were made from 100percent recycled glass, not too dissimilar from the original hive-shaped bottle,with glass stoppers, like true decanters. Later, Martin added the punt at thebottom, as on wine bottles, and had the word Patrón embossed in the glass on theside.

(Continues...)

Excerpted from THE PATRÓN WAY by ILANA EDELSTEIN. Copyright © 2013 by Ilana Edelstein. Excerpted by permission of The McGraw-Hill Companies, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Edition details

• Publisher: McGraw Hill
• Publication date: 2013
• Language: English
• ISBN 10: 0071817646
• ISBN 13: 9780071817646
• Binding: Hardcover
• Edition number: 1
• Number of pages: 245