In this episode of “End Of Day Drinks,” VinePair’s editorial team is joined by Steven Grasse, founder of Quaker City Mercantile — an independent advertising agency and distillery that specializes in strategy, marketing, design, and branding for the alcohol industry.
Grasse’s time working in the tobacco industry provided him with the knowledge and experience to launch two of the world’s most successful spirits brands: Hendrick’s Gin and Sailor Jerry Spiced Rum. Tune in to hear about Grasse’s extensive work rebranding some classic beer labels, as well as his latest venture, the experimental Tamworth Distilling.
Or Check out the Conversation Here
Tim McKirdy: Hey, everybody! This is Tim McKirdy, staff writer at VinePair, and welcome to the “EOD Drinks” podcast. Joining us for today’s episode, we have Steven Grasse, founder of Quaker City Mercantile and the brains behind some of the world’s leading spirits brands. Welcome Steve, and thanks for joining us.
Steven Grasse: Glad to be here.
T: As always, I’m pleased to also be joined by members of VinePair’s editorial team, including executive editor Joanna Sciarrino, senior editor Cat Wolinski, associate editor Katie Brown, and assistant editor Emma Cranston.
All: Hey, everyone. How’s it going?
T: Steve, your track record shows that if I were launching a spirit brand tomorrow, you’d be the guy that I come to take that brand viral and ultimately make it a huge hit. Your previous or ongoing hits include Sailor Jerry, one of the world’s most successful and best-known rum brands, and Hendrick’s Gin, the label that pretty much ushered in what we might call the ‘Gin-aissance’ and the huge popularity the category enjoys today. Before we discuss those stories, I’d love for you to tell us how you got involved in the booze business and explain exactly what Quaker City Mercantile is?
S: Sure. We’ve been in business for 31 years. Prior to 2008, we were Gyro Advertising, Gyro Worldwide, and we got our start in the tobacco business. For about 20 years. Gyro was the agency for Camel, Winston, Salem Kool, and American Spirit. We were pariahs in the advertising business. We never entered advertising award shows, so we used our excess money to create our own brands. One of those brands we created was Sailor Jerry. We created Sailor Jerry as a T-shirt company. One of the few clients we had besides R.J. Reynolds Tobacco was William Grant & Sons, and we worked with them on Glenfiddich and they came to us and said, “we’d like you to create a gin and a rum for our portfolio.” We came back to them with Hendrick’s for gin, and for rum, we came back with Sailor Jerry. I thought creating a rum brand called Sailor Jerry would help sell more T-shirts. It’s interesting because we were smart enough to own the rights to Sailor Jerry but Hendrick’s we did work for hire. We’ve been with Grants now for, I think, nearly 28 years. We’ve been with him ever since. Even after we sold Sailor Jerry in 2008 to Grants, we’ve remained with them doing all the marketing for both Sailor Jerry and Grants and almost every other brand that Grants have.
T: That’s so interesting as well because it’s only 2021. I think that we’re almost in an era where we completely have forgotten about the tobacco advertising industry. I imagine there were some crazy budgets and a lot of things that you learned during that experience and influenced your later work. Is that the case, or am I completely wide off the mark with that one?
S: Well, we always say that tobacco was like the marketing Marine Corps, because you couldn’t use any traditional marketing or advertising. You had to find ways to get your name out and do things in a very non-traditional sense. I think with the tobacco industry, it was like being a pirate in the sense of having crazy budgets for photo shoots, and half the stuff they would never use. It was a very interesting time. One of the reasons why we stopped working with R.J. Reynolds was towards the end, after we sold Sailor Jerry, tobacco had rightfully gone under FDA controls. And all those crazy “Mad Men” days, prior to FDA involvement, it just became a game, basically working for a pharmaceutical company.
T: You caught the tail end of the Don Draper days of tobacco.
S: It was also the other movie. “Thank You for Smoking” is very similar to that, too. It’s interesting. It was morally ambiguous to do work on this, but at the same time, we learned how to get brands or get the word out without any visible means of support by being in the tobacco industry. The other client we had besides Grants and R.J. Reynolds was Puma sneakers. We took them from being a $30 million, nothing brand up to the point where they sold to Gucci for $7.8 billion. They were a brand where we could do anything we wanted, but they had no money.
T: It was the opposite of the tobacco industry.
S: Yes. We had to find ways of creating excitement and drama for Puma without having the advantage that Nike had. Tons of television, an outlet.
T: I was just going to say it sounds like you have both ends of the experience there, almost the yin and yang of advertising. No money, but you can do whatever you want, and all the money in the world and you can do nothing. It’s a very formative experience for a professional.
S: We are the Harry Houdini of marketing, because we could escape out of anything to get anything done without having to ever do television or print.
T: That’s awesome. I want to talk not exclusively about Sailor Jerry and Hendrick’s. But for me as a drinker and someone who loves alcohol, from a branding standpoint, they seem like two very different concepts. I was wondering if you can give us an idea of the timeline and a bit more in-depth info on how both of them came about. It’s my understanding that Sailor Jerry was first. Is that correct? Also, how did you really grow that brand in the beginning?
S: No, they were created, literally presented, the same day.
T: Oh, on the same day. Wow.
S: We presented them both on the same day. I think it’s interesting when we first launched Sailor Jerry, it hit with a magnificent thud. It did nothing. Even to the point where Grants was going to kill it and hand it back to us and say “this brand isn’t doing anything.” However, what happened with Sailor Jerry was interesting. Pre-internet, we also had the clothing company, and we would have all these bands stopped by our store. We would load them up with cases of rum, and they would drive to the next city and spread the word. That was always a very early form of viral marketing or word-of-mouth marketing. What also happened with Sailor Jerry, which was really good timing, was Diageo was being formed at this time. When Diageo formed, Schieffelin & Somerset and Paddington forming together, there was suddenly a bunch of distributors that lost the distribution rights for Captain Morgan. Suddenly, all these distributors were hungry for a replacement, and Sailor Jerry happened to be there, ready to go. Usually, brands grow in New York City, San Francisco, the places where the influence is, but Sailor Jerry grew spontaneously out of Madison, Wis. It was our first big city where it exploded. Things don’t really explode in Madison, Wis., but it gained a foothold. Then, it spread through Minnesota, the Dakotas, all the Rust Belt areas. Even to this day, I think 98 percent of Sailor Jerry’s sales are off-premise. It’s a very different business model than the rest of Grant’s portfolio. That’s the story of Sailor Jerry. Do you want to hear more about Hendrick’s?
T: I think Joanna is going to jump in now with a question.
Joanna Sciarrino: I am going off with what you said about Sailor Jerry and how you presented both Sailor Jerry and Hendrick’s on the same day. They clearly had success with different markets. Was that your intention when you presented those brands?
S: No, I would say what’s interesting is, I don’t think there is any intention. I think the ideas were very strong. Hendrick’s launched first in the U.S. before it was in Europe. Again, it was met with mild success in the U.S., but where the brand took off was in the U.K. For brands to work, you need to find a champion within the organization who really takes it under their wing. With Sailor Jerry, for instance, when I said it took off out of Madison, Wis., that’s because there was a salesperson at a brand and a distributor in that region that really embraced the brand and took it over and said yes. That’s what happened with Hendrick’s in the U.K. At the time, there was a brand manager named June Hirsch, who really took Sailor Jerry under her wing in London and pioneered a lot in taking our brand world that we created and bringing it to life with these outrageous experiential events. The brand started taking over. The brand was created in the U.S. with Scottish provenance, but it became big in London and then came back to the U.S.
T: I think that’s incredible to note as well because it definitely feels within that time the gin category has really evolved. Can you recall what it was like back then and maybe even gin’s reputation? I feel Hendrick’s really played a role in making gin more accessible to people or changing the image where people previously had notions of it. Gin and tonics weren’t even that popular back then. Is that something you can remember?
S: Oh, yeah. Back then it was just Beefeater and Tanqueray. That’s all that was on the market. Hendrick’s, it’s interesting because obviously the liquid magic of Leslie Gracy, the master distiller for Grants, mixed with our naivete about what gin should be. I think Grants wasn’t in the gin business, so they were very open to it being something different. But when it hit the market, there was nothing else like it. It was totally unique.
T: Can you tell us as well — because I know you have a great story about how the idea for that brand was born and a specific trip to Scotland that you took yourself? I think that’s fascinating and also speaks to the kind of the work that you do in launching brands.
S: I was asked to go to Scotland with Sir Charles Gordon Brown, the owner of Grants, and he wanted me to come to see his gin palace. I’m thinking it’s going to be a palace, right? We fly to Dufftown, see the Glenfiddich Distillery. Then, I drove with him in a camper van through Scotland to Girvan. Girvan is an industrial town on the outskirts of Glasgow. We get there, and it’s the dead of night, I’m sick as a dog, right? He’s kept me up every night eating haggis.
T: That wasn’t making you feel better?
S: I’m like, “OK, so show me this gin palace.” It’s a little garage with these two ancient stills in it. So it’s not a palace at all. I guess it’s what they call it, where they make gin. With these two ancient stills, the Carter Head and the Bennet still over in the 1840s. I see it, and I instantly think of Jules Verne. This starts a whole stream of consciousness with Jules Verne equals Victorian apothecary, Victoriana. That then sends us on a stream of consciousness where I sent my assistant to go find antique poison bottles, because we knew that we wanted it to feel like it came from an apothecary shelf rather than being a spirit, based on the idea that it felt like a Jules Verne story. It’s how we create all of our brands. It’s inspiration, story, stream of consciousness that somehow all end up making sense in the end.
T: That Hendrick’s bottle is just very iconic and really does stand out on the shelf, and I’m sure even more so then than it does now.
S: We also create very intuitively. It’s informed intuition, meaning that I spend the majority of my day researching arcane information. I’m a total history nerd. All the ideas that we pull from come from me reading old books and things like that. For every client we work with, the ideas don’t come from trends. We don’t follow what’s going on in the market. We really create things based on this notion of history and informed intuition.
Katie Brown: Going back to what Tim mentioned earlier about how iconic the actual bottle itself is, especially for Hendrick’s. In your opinion, how important is design aesthetic for the actual bottles that you’re creating? You once said that you like to make things ugly on purpose. I’m curious as to what that means to you, and why is that? Do you still feel that way?
S: Oh, totally. We purposely don’t enter awards shows, because it influences the work you do. I think you end up creating things for your peers, rather than creating something that is authentic to the idea of the product. Again, something like Hendrick’s, the idea was when I thought of Jules Verne and Victorian apothecary. This is pre-internet, so doing research was a little more difficult. I also spent a lot of time in antique stores going through and finding old bottle forms and knowing what their intended use was. Also, when we created Hendrick’s, I didn’t know how gin was made. I asked Sir Charles, how do you do it? Well, there is this basket, and botanicals go in there. It really gives you this idea of, when you think about it, apothecaries. And the origin of spirits were therapeutic. It starts leading you down this stream of consciousness where it led us to Victorian poison bottles. The idea of the Hendrick’s bottle fits the idea of the brand. It becomes the epicenter, a nucleus from which the rest of the brands pours out. That’s always the key. The bottle needs to be the epitome of the brand idea. When I say it’s ugly on purpose, it needs to fit the overall concept of the brand. And to achieve that authenticity, it can’t be trendy. It can’t be of the moment. It needs to be of the period that it emanates out of, if that makes sense.
K: When you mention brand authenticity relating to the bottle itself, I’m so curious because Sailor Jerry is sourced from the Caribbean, right? But the bottle itself has a Hawaiian feel.
K: What’s the story behind that? Do you still feel that that brand is authentic?
S: It’s authentic to itself, because the whole thing started as a clothing company. I always like to talk about bands, because I always market myself, my agency, and my brands as if they’re bands. I’m a big music freak, but if you think about it, I always like to bring up the example of Led Zeppelin. Their music is more or less Southern blues, but then they start singing about Tolkien, Gollum, and dragons. And somehow it all makes sense, it all works together. It’s this weird mash-up of different influences that create something totally unique. Sailor Jerry’s totally that, because Norman Collins was the godfather of American tattoo, tattooed the entire Pacific Fleet during World War II Hawaii. On top of that, we layer all of this punk and garage music. The whole thing doesn’t quite make any sense, but it totally does when we mash it up into something totally unique. It’s authentic to itself, and to its intent.
T: Some of the other work that you do, beyond creating brands, is also what you would describe as resurrecting brands or rebirthing them. Can you tell us about some of the work you’ve done there and what that looks like as well? Because you’re not starting from a blank canvas in that instance.
S: Our greatest example is Narragansett Beer. It’s funny, my client from Puma, Tony Bertone said, “you need to meet this guy, Mark Hellendrung, who’s trying to resurrect Narragansett.” We all met together in Boston, and in the course of a two-hour lunch at Legal Seafood, we mapped out the entire brand. The trick with resurrecting an old brand is you can’t make things too authentically “old” all the time. When I talk to my wife about history, I literally see her eyes glaze over, and she fades away. If I’m really interested in the book I’m reading, I know I can’t talk to her strictly about the book. I need to bring another element into it. With Narragansett, for instance, the lager can, which feels like it’s always been around, it’s actually a mash-up of two or three different areas of Narragansett classic packaging. We tend to take things from the past, mix them up, and it’s all authentic, but it’s still new at the same time. I think that we make history digestible for the average person in a way that intrigues them and brings them into it, as opposed to scaring them away.
T: Let’s talk about some of the other work that you’re doing now. You have another distillery project that is far, in some respects, from the mainstream. Some of the things that you’re doing there might not strike someone as something that’s going to be this incredible hit like a rum brand or a gin brand. Can you tell us about the work that you’re doing at Tamworth?
S: Yeah, so Tamworth, is it a business, or is it a performance art project? I mean, it’s profitable, so I think it’s a business. In Tamworth, what we wanted to do was — after we sold Sailor Jerrys — I wanted to not just be a guy who creates brands and then finds a distiller who has to make it for me. I wanted to actually own my own distillery and create things, meaningful things, from scratch. Tamworth is actually a larger experiment. The big idea in Tamworth is, can a small distillery revitalize a small rural community? Tamworth, N.H., is in Carroll County, N.H., which is I think one of the poorest counties in all of New Hampshire. Tamworth Village itself is very small, and they’ve always had a problem keeping young people staying in town. The first chance people would run away and go live in the city. In Tamworth, I think, we have 20 employees, and they’re all from the town of Tamworth or adjacent towns. We’ve also been able to work exclusively with local farmers to supply our grains and botanicals. We always say it’s a test kitchen for our bigger clients and projects. So up there, we’re really experimenting with how far we can take things with them. We’ve done things like Deerslayer, which is a venison-infused whiskey. We’ve been working with creating gins using wild hops and all sorts of interesting ingredients. We have a whiskey made of beaver castoreum, which is the anal gland of the beaver. We have a cordial made of black trumpet mushrooms and blueberries. Here at QCM, we have full-time historians who work with us, because we’ve learned a lot about the TTB rules. And there is something called the GRAS list. What’s interesting about spirits versus other categories, even beer, there are very few ingredients on the GRAS list. Our experimentation is limited by what the government says we can and can’t put in spirits. When we have a full-time historian on staff, if we can prove ethnic or historical usage of an ingredient, then we can lobby the TTB to allow us to use it as a flavor. There are all sorts of weird things that we do to try to see how far we can push where the realm of spirits can go.
T: I definitely think the venison-infused whiskey is not the average spirit that you come across on the market. You said you run a profit, so it’s a business. But ultimately, you also mentioned that it’s a think tank for your bigger projects. Is that the end goal, or is it a more creative outlet? What do you see as the end goal there?
S: Well, it’s interesting, because it seems weird to say we’re not driven by profits, because we are. There’s a much bigger component for us because we’re enjoying the ride, the story, and the ideas that we create. Creativity is why we do it. It makes money because we enjoy doing it. I guess I could build a giant rectifying plant in Tamworth and then source the liquid somewhere. But really, we’re having a lot of fun. What I think is amazing is, I really thank the Grant family for giving me this opportunity for 28 years of that stability. I think when we sold Sailor Jerry, it gave us the financial stability that we can do a project like Tamworth, and really enjoy where it’s taking us. There is a burden to make a profit up there, but the greater burden is to have a fantastic story to tell in the process. That’s really the purpose. I gladly work for my corporate clients in Philadelphia to be able to do what I’m doing. That’s what motivates us.
J: Steve, to that end, Aaron Goldfarb recently mentioned in an article that Tamworth produces the most gins of anyone on planet Earth. With all of these experiments and all of this creativity, how personally invested or attached are you to these creations?
S: I’m very invested in the ideas and stories, and it’s so fun for us to come up with a concept of it. They’re led by a story I want to tell or they’re led by an ingredient or a process. I’m an enlightened despot, so I allow other ideas in, but ultimately, it’s going to be what I approve of. I think we’re very aggressive in what we’re doing, because again, we want to see how far we can take it. I only get frustrated that we can’t be faster with far more ideas than we have to pass through.
J: Just a follow-up to that, then. I know you’re motivated by profits, of course, but also by creativity. Is the goal to have any of these ideas catch fire?
S: In Tamworth?
S: No. We purposely set up Tamworth in a control state. It’s counterintuitive, but we’re big fans of control states. Because I have one buyer, and that one buyer has a local mandate to buy my product. So I want to be the biggest thing in New Hampshire, which I think is the third or fourth biggest buyer experience in the world. Well, I’m already the biggest. Eventually, the other thing that’s interesting with this is, I’m a creative risk-taker, but I’m financially risk-averse. We don’t borrow money. To build the entire distillery, we did not borrow a single dollar. To take this to the next step, we’re currently scouting more land because we need more barrel houses. We need a place to build a bigger strip still. We have scouting land, and then we’ll buy it in cash and then we’ll build with cash. Again, the Grant family is a good teacher. They’ve been doing it for generations. I think that what I am attracted to by the spirits category is that they take a generational approach to it.
T: That’s wonderful. To the Tamworth end looking forward, Steve. You mentioned that you have some of these positions on staff that are historians. I don’t know whether most distilleries would have them on staff, maybe some that have stretched back longer. I think some of the bourbon distilleries do because they want to know more about their own brand history rather than ingredients. I remember having spoken to you before, you mentioned these TTB guidelines, and maybe the ultimate goal is to one day have a distillery in a country with no laws, so that there are no limiting factors. I’m not sure whether that is a possibility. But as a final question, I wanted to ask you, what does the future look like? What’s on the horizon for you, for Tamworth, and new projects coming up?
S: I think it is funny. What if you built a distillery in a country that allowed you to use different ingredients? It’d be very interesting. For the future? I mean, we look at things for so long. Sailor Jerry was fascinating when we did that because every year my account would say “shut it down, you’re losing money.” I would say “one more year, one more year.” It’s interesting because, with Tamworth, there’s no exit strategy, because we don’t want to sell it. We just want to keep going with it. I think the future would be repeating the experiment I’ve had with Tamworth in other communities. Because the transition of positive agricultural-based jobs and tourism has had a profound impact on this small, rural town. Wouldn’t it be great if I could do this in other communities? I noticed Bill Gates, you are now America’s biggest farmland owner, give me a call and we could do something together.
Cat Wolinski: Hi, Steve, this is Cat. I know that you have written a few books and you mentioned being a bookworm earlier. What’s happening with your next book, and why are you writing it?
S: We have two books coming out. One is a cocktail book for Art in the Age and that one has just been put to bed and looks fantastic. That’s called the “Cocktail Workshop.” I wrote that one with Adam Erace, who’s a writer in Philly, and Lee Noble, who was my star mixologist. That was going to be based around the Art in the Age brand. Then, the second book is called “Cultivating Curiosity.” I’m working on that with Aaron Goldfarb. I met him when he wrote an article about how to make sports brands go viral.
C: Wasn’t that for VinePair?
S: Yeah, I think it was. It’s interesting, I made good use of my time during Covid because at first, I said “I’m going to work on another book.” I wrote a proposal, and then I handed it to my agent. She said, “Who would you like to work on with this?” I said “I think I’d like to work with Aaron.” I do weekly calls with Aaron, I just got off the phone with him to talk to you guys. I think we’re almost towards the end of our process.
C: Wow, that’s awesome. He must have been a very charming interviewer.
T: Aaron Goldfarb, for those folks listening who may not be familiar with the name, is a regular VinePair contributor, writer-at-large. Check out his work, it’s fantastic. I’m looking forward to reading the book myself. Knowing Aaron and hearing a little bit about how you work, Steve, I’m sure it will be fascinating.
S: Our creative process is interesting. We’re not a typical ad agency or marketing firm. We approach things in a very organic, artistic way of working. I’ve always said there are only so many people in the world that will ever hire me, because who will understand me? Right? My job is to find every single one of them. The book with Aaron is my attempt to explain that. To go through and try to articulate this process that’s been very successful, what it’s been.
T: From the conversation today, it sounds really fascinating. Looking forward to reading more there.
S: When we get hired by people, we don’t really pitch anyone. We don’t do pitches. You give me the gig, and then you understand that I’m going to create something for you.
T: I believe your mantra is to “say yes to everything.”
S: Within reason.
T: Yes, within reason. Well, Steve, thank you so much for joining us on the show today and giving us a glimpse behind the scenes at the creative process of these brands that I’m sure so many people have enjoyed and know. It’s been really fascinating. Thank you so much for your time today.
S: Sure thing, thank you. Thanks for arranging it.
T: Also, thank you everyone for joining us on the show today.