Tiffany Loh: Hey Ilana, thanks for joining me for breakfast.
Ilana Edelstein: Thank you for having me, it’s an absolute pleasure to be here.
Tiffany: We’re at Catalina in Rose Bay to talk about your new book. Tell me, how did you start Patrón?
Ilana: My late partner and I, Martin Crowley, weren’t in the liquor business, but it was just something that we came across and it’s one of the lessons in my book, actually is be aware of what the universe puts in your path, be ready to take advantage.
Tiffany: Where did you get the money to start up the business?
Ilana: We were very fortunate because John Paul DeJoria became a partner – he’s the guy from Paul Mitchell Hair Care. He wanted to be a part of it and said that he would be the bank. The amount it took to launch Patrón was a pittance compared to when corporates brands are created. They spend millions and ours was not even a million.
Tiffany: How much is the business worth now?
Ilana: Well today it’s a billion dollar a year business.
The biggest challenge would have to be the distributors. They don’t have necessarily the same vision, the same passion. Our second distributor Jim Beam never believed that it would ever be more than 100,000 case brand per year.
Tiffany: Wow, it sounds like a great business to be a part of, why are you no longer with them?
Ilana: John Paul and Martin had a buy/sell agreement wherein whichever one died first, the other one had first right of refusal. So when Martin died, John Paul bought Martin’s share.
Tiffany: And you’re still on friendly terms with him, which is great.
Ilana: Very good friend, yes, and I get free supply.
Tiffany: Oh, I want to be you.
Ilana: Don’t come knocking on my door now.
Tiffany: Why write the book?
Ilana: Well I didn’t write it for 10 years after I left and anyone that knew my story nagged me to write the book because you couldn’t make up a story like this. There is something to be learned, there’s cautionary tale for other business women and I certainly didn’t cover my own tush.
Tiffany: When you started Patrón, what were your biggest challenges?
Ilana: The biggest challenge would have to be the distributors. They don’t have necessarily the same vision, the same passion. Our second distributor Jim Beam never believed that it would ever be more than 100,000 case brand per year.
Tiffany: How did you make it a popular brand among celebrities?
Ilana: You have to create a brand that appeals to them and instead of chasing them. They’ll come to you. We had to educate the whole population – no one had certainly paid $50 a bottle. We created a new category – the ultra-premium category – organically the celebrities jumped on-board. It was a lifestyle, the packaging, the marketing, the sales-force. Everything about it had to be high-end, top-shelf and not related to anything that anyone had in their mind about tequila before.
Tiffany: What strategies did you use?
Ilana: We had no idea how it was done in the liquor industry. I assumed that the very first liquor convention would be much like the car conventions that there would be sexy girls lying all over the place. So we rushed out got a girl, I designed a costume, within the first day you couldn’t get close to our booth. Of course the next year and to this day, it’s full of girls.
Tiffany: In your book you talk about flying by the seat of your pants. What does that mean?
Ilana: In any business of any size you’re always going to run into problems, the key is to overcome it and how do you do that? If you apply logic, creativity and honesty you will always be able to overcome it.
Tiffany: What’s next for you?
Ilana: I have been approached to consult on several different products, one is an Australian scotch.
Tiffany: Thanks for having breakfast with me.
Ilana: I guess we should have a shot of Patrón then, huh?