After spending Christmas with my family, just as I had the year before, on December 30, a one-ton refrigerated truck stood in front of Club NOVA in downtown LA.
The truck was wrapped in an image of ripe pink peaches along with the words “The One, Peach Light Soju,” making it clear that it was a vehicle for some kind of event.
When I went inside the club, Black Eyed Peas’ “Pump It” was pounding from the DJ booth under red lights, and a large banner hung beside the stage.
[Free Sampling – The One, Peach Light Soju]
Transparent bottles were lined up on the tables. It was a “Holiday Tasting Night” event hosted by Unity Spirits. Young people were usually short on money, enough to begrudge even the cost of getting into a club or buying drinks, but when they heard they could get a glass of alcohol for free, no one hesitated.
“What’s this supposed to be?”
“Peach... soju? What’s soju?”
“No idea. Some Asian liquor, apparently. Who cares? It’s free.”
The expressions of those who took the first sip changed in an instant.
“This is alcohol? It’s just juice.”
“But there’s a little kick at the end... I can feel it.”
“Hey, this is good. Give me another bottle.”
A line formed in front of the table.
Young women held up their glasses, laughing as they dragged their friends over.
“Just take one sip. It’s really good.”
“This is actually alcohol?”
“They say it’s thirteen percent.”
“Mmm! It’s delicious. I’m going to get drunk if I keep drinking this!”
The clubbers enjoying the music gradually began flocking toward the event table, drawn in by the liquor filled with peach fragrance, and before long, it was packed. And Unity Spirits’ Malcolm Lee stood in a corner, watching the scene with a glass in hand.
Beside him, the club manager spoke in admiration.
“How much is it per bottle?”
“We haven’t decided yet.”
Strictly speaking, it wasn’t that they hadn’t decided. It was closer to not being able to decide. Golden Grain Soju House had begun promotional events before deciding the supply price for the fruit soju.
Fruit soju was different from vodka. Since Absolut, the vodka that had already taken hold of the American market, had formed a fixed market price, “The One” couldn’t raise its price even if it wanted to. If it did, it wouldn’t be able to compete against other vodka companies.
But fruit soju was different. There were no other fruit sojus with an established market, so it wouldn’t matter much even if the price was set high.
The reason they couldn’t decide the price now was because they were still debating whether there was any need to sell it cheaply.
“I want to put it on our bar menu. I’ve never seen a reaction like this before. If I order now, when would it arrive?”
Malcolm burst into laughter. No matter how good a liquor he brought in, he had never experienced a reaction this desperate. It wasn’t even a famous liquor but an unfamiliar Asian drink, yet the club manager was practically pleading, a mad gleam in his eyes.
“Hmm... probably next weekend?”
“Isn’t that too late?”
“The factory that makes this liquor is small.”
“Where the hell is it?”
“It’s a brewery in Sacramento. The owner originally ran a rice farm. But rice was so cheap that it didn’t pay, so he built a brewery. What came out of that was ‘The One,’ which we’ve been supplying since last year.”
By now, “The One,” a Korean-style vodka with a subtle and distinctive grain aroma, had become fairly well-known among young people. Naturally, the club manager knew the drink well too, and while it certainly had demand, it didn’t possess the explosive power this fruit soju had right now.
“I figured it was the same company because of the name, but it’s a really small place, huh? Okay, but don’t make me wait too long. People who enjoy drinking don’t have great memories.”
He meant that if it was released too late, today’s promotional event wouldn’t mean much. Malcolm chuckled and nodded.
“I know, I know.”
But Malcolm knew the club manager’s words, though spoken in urgency, weren’t true. Even people who enjoyed drugs wouldn’t forget a fruit soju like this so easily.
He was certain that after today’s promotional event, the people who had come to the club would go to school and talk about the fruit soju.
“So get it to me as fast as you can. As soon as you bring it in, I’ll stock as much as possible. Fifty... no. I’ll take one hundred cases.”
At the words “one hundred cases,” Malcolm’s eyes widened in surprise as he looked at the club manager.
“One hundred cases?”
“Yeah, one hundred cases. Don’t tell me the distribution price is going to be something like three hundred dollars a case—twelve bottles—right?”
“Well... no.”
“This is just my wish, but I think it’ll be hard to sell the liquor for more than twenty-five dollars a bottle. You know the most expensive drink we have right now is around twenty dollars, right?”
“I know.”
“Don’t make it too expensive. I want to sell as much as I can.”
“I’m planning to have that kind of meeting with the supplier.”
Malcolm nodded and smiled in satisfaction as he watched people continue crowding around the event table.
The event was a success. The fifty cases they had prepared ran out quickly, and people shouted that they would pay, so sell them the liquor. Women in particular, after tasting the fruit soju, avoided the existing liquors that were only harsh and asked when it would be released.
After finishing the promotional event, Malcolm went straight to Golden Grain Soju House in Sacramento the very next day.
With the contract he had prepared in hand, he arrived at the brewery, only for his heart to grow heavy at the sight of a car leaving the premises. He was sure it was a competing distributor leaving after negotiating ahead of him.
“Welcome. Please, have a seat.”
The thick peach fragrance hanging in the brewery air made Malcolm’s resolve even firmer.
Malcolm sat down in the small, cramped office attached to the brewery, and the two co-founders sat across from him.
“I heard you held a promotional event in LA. How did it go?”
At Jacob’s question, his eyes sparkling, Malcolm put on the glib charm particular to Black men.
“It was perfect. I’d say everyone in the club fell for this liquor. It reminded me of the chicken my mother made for me when I was young. Just like I kept thinking about that crispy, juicy chicken, this fruit soju is going to become an indispensable drink for young people.”
“Hmm...”
Satisfied with Malcolm’s answer, Jacob met my eyes. His eyes were already shining with hope, as if success were right in front of him.
“When I heard the contract terms before, to be honest, I thought they were a little lacking. Something about them was...”
Seeing my negative expression, Malcolm spoke urgently.
“That was only a sort of example. I wasn’t really suggesting we go with that contract. As I told you before, I intended to hold the promotional event, see the response, and then present proper contract terms.”
No. At the time, he had liked the fruit soju and presented contract terms, only to back off for the moment when he met with a negative response.
The promotional event was something we would have had to do for publicity no matter which distributor we chose, so we had simply had the distributor handle it instead.
“Is that so?”
“We’ve already become a team through ‘The One,’ haven’t we? One team. If only Unity Spirits tries to profit, our team won’t last long. Both Unity Spirits and Golden Grain Soju House need to see the maximum benefit.”
“Oh...”
“Listen closely. Jacob? Brian? We can offer Golden Grain Soju House the perfect partnership. No other company besides us will be able to provide this level of service.”
Even before bringing out the contract terms, he widened his already large eyes even more, raising our expectations.
“What kind of services are you considering?”
When Jacob asked, Malcolm took the prepared contract out of his briefcase.
“First, Unity Spirits will take exclusive distribution rights not only for the West but also for the Midwest. In return, we’ll cover one hundred thousand dollars in advertising and promotion budget. That includes magazine ads in Food & Wine, LA Weekly, SF Chronicle, and the like. If sales exceed two million dollars, we’ll increase the advertising and promotion budget to two hundred thousand dollars, and if sales exceed five million dollars, we’ll cover all advertising and promotion costs no matter how much they are.
On top of that, in the first year, we’ll allocate two hundred fifty thousand dollars for TV and radio advertising. We’ll be investing two hundred fifty thousand dollars from the start. Impressive, isn’t it?”
“......”
Jacob looked at me, slightly startled, but... I didn’t budge and kept staring at Malcolm. At that, Malcolm spoke as if he wasn’t finished.
“That isn’t all. Unity Spirits will separately support one hundred fifty thousand dollars for tasting event budgets at fifty clubs over the course of one year. And investment in publicity like this isn’t the end.
Second, we’ll fully cover logistics costs. From LA to Sacramento, Portland, and Chicago... we’ll handle all transport. Well, you may think that’s only natural. But the third point will surprise you.
Third, if bottling production volume increases, we can outsource the bottling line to a Unity-affiliated factory. That’s in preparation for when the quantities grow. How is it? This is Unity Spirits.”
“......”
“I don’t know how other companies appealed to you, but there probably isn’t anywhere that will support you as much as we do.”
I hadn’t particularly tried to look into other companies, but even if I had, I doubted any would have said they would spend that much in promotional costs.
Magazine ads, TV, radio, and even club promotions—an advertising investment nearing five hundred thousand dollars at once was a considerable amount, equal to half of “The One’s” annual profits.
“Sounds good.”
Only then did Malcolm grin broadly and rub his hands together.
“We’re a team, after all. So what wholesale price are you thinking?”
“We’ll set it at ten dollars.”
At the words “ten dollars,” Malcolm flinched.
“Ten dollars? Ah... could you lower it just a little? Even the vodka, ‘The One,’ was eleven dollars.”
He meant that if even the vodka had been eleven dollars, ten dollars for fruit soju was too expensive.
In fact, what he said made sense. “The One,” being vodka, was a pure distilled product, so while the manufacturing process was simple, it took a lot of energy and time and suffered large ethanol losses, resulting in a low margin relative to unit cost. But fruit soju used an already distilled base—vodka concentrate—by diluting it, so there were no additional production costs. Instead, flavoring and syrup ingredient costs were added, but even so, the cost was relatively low at four to four and a half dollars.
On top of that, production speed was three to four times faster and short-term inventory turnover was high, so looking at it that way, the retail price should have been lower. Yet we had set it higher, which left Malcolm flustered.
“I believe the target customer base is different, and so is the level of loyalty. So I think it’s fine to raise the unit price.”
“Of course, but if you look only at factory operating efficiency, fruit soju is far more profitable, isn’t it? Let’s think long-term. At ten dollars, it becomes difficult to run events. If we’re going to sell it to retailers at fifteen-ninety-nine or sixteen-ninety-nine at least, ten dollars is too much.”
“Then how much do you want?”
He hesitated for a moment before speaking.
“Let’s make it eight dollars and fifty cents.”
“Hmm...”
“If you can do that, we’ll promote it with real efficiency. ‘The One Peach Light Soju’ will be spread throughout supermarkets and clubs across the West and Midwest.”
Jacob and I looked at each other, then nodded. Jacob grinned and immediately stood, offering him his hand.
“Let’s make it work.”
“An excellent choice. It seems this team will keep going.”
Malcolm shook hands with me as well, then asked,
“It’s Peach Light Soju for now, but you’re preparing other flavors too, aren’t you?”
“Of course. Lemon, cherry, grape, pineapple... we’re thinking of all of them.”
“Oh—lemon, cherry, and pineapple all sound interesting. But for that to happen, the brewery’s facilities will need to be a little more...”
Jacob, who had already taken all of his concerns into consideration, said,
“We were planning to gradually expand the facilities anyway.”
“That’s a relief. You’ll have to expand to at least twice your current size. Even then, there’s a strong chance you won’t be able to meet demand. If I were you, I’d take out every loan I could and expand the facilities first. From now on, twenty-four hours a day won’t be enough.”
After thoroughly frightening Jacob like that and drawing up the contract, he left the brewery.
Jacob, who had already reached a certain understanding with me about facility expansion, called in an expert for expanding the brewery and at the same time began full-scale Light Soju production.
And in 2007, just as Malcolm had predicted, Golden Grain Soju House began to catch fire.