Soho Cocktail Club: ready mixed drinks for a £650 million market

"We have done the hard work so bartenders don’t have to" says co-founder Paul Scarratt, who brings 27-years of industry experience to his startup
BizAge Interview Team
Soho Cocktail Club co-founder Paul Scarratt

Why did you found Soho Street Cocktails?

I co-founded SSC with my business partner, Grant Walker to try and solve problems that we identified for both the On Trade and Home consumers. The cocktail market in the UK and globally, is experiencing unprecedented growth. The UK market value is estimated at being in excess of £650m with more than 10m consumers driving this growth. The predicted CAGR of ready to drink, including cocktails is 15% which makes it the fastest growing drinks sector outside of Gin.

The problem in the On Trade - Cocktails traditionally take time to prepare and serve. The art of the mixologist is being able to combine the best ingredients, in the right quantities to create an incredible drink. This often means that customers are waiting more than 2 minutes for each Drink to be made, creating a bottleneck. This bottleneck translates to lost revenue, lost drinking time, and frustrated customers.

Our solution - We have done the hard work so bartenders don’t have to. We have carefully and painstakingly sourced the best ingredients and have expertly combined them in one convenient, carbon efficient and easy to use package. The bartender simply pours, shakes, and serves to deliver a high quality, taste-first cocktail in less than 20 seconds. SSC provides 100% consistency to consumers, zero wastage for the operator and market leading margins without compromising the ‘theatre’ of cocktail preparation. The problem at Home - dozens of ingredients, confusing recipes, a lack of the skills and knowledge needed to create a great tasting and looking cocktail, often leaves consumers frustrated. Existing canned Cocktails provide convenience but are severely lacking in taste and are often laden with way too much sugar! Our solution Soho Street Cocktails solves the problem. No need for dozens of ingredients. All you need is Ice, a Cocktail Shaker and Glasses. Then simply pour, shake, and serve to enjoy the ultimate bar-quality cocktails at home.

Tell us about the product range

Our range is focussed on Classic, popular cocktails, executed excellently. The current range consists of a Cold Brew Espresso Martini, A Passion Star Martini (Pornstar), Raspberry Daiquiri and a Piña Colada. The range is soon to be enhanced with the addition of a Strawberry Daiquiri and a Cosmopolitan.

All our cocktails are Vegan and Gluten Free and contain no artificial flavourings or colourings. We only select the highest quality ingredients: Our Cold Brew Coffee is from an eco-roast facility; our juices and purées are NFC (not from concentrate) which means we do not extract the natural water contained in the fruit, and we only use the highest quality spirits. All this means that our range of cocktails deliver a taste-first proposition that are equal to if not better than most cocktails made from scratch.

What's the story behind the name?

Soho has been at the forefront of cocktail innovation for many years with the likes of the Espresso Martini and Pornstar Martini both having been created in London by mixologist legends Dick Bradsell and Douglas Ankrah. Soho Street Cocktails pays homage to the creativity, fun and decadence of venue’s such as Fred’s, Dick’s Bar at the Atlantic, The Colony Room and many more. Our use of iconography and the street names of Soho gives our consumers immediate brand recognition and familiarity as well as providing timeless and classic design.

Drinks is a hugely competitive sector. What will give you an edge?

Great question! I have worked in the drinks Industry for more than 25 years for both brand owners and distributors, so I think I have a reasonable handle on the ingredients for success. We believe we have created a great looking brand, with some popular cocktails. We have also spent a lot of time analysing our margin chain for both the On Trade and Retailers and we think we have got that just about right. We package our products in carbon efficient, easy to use pouches and have a high focus on sustainability. But the most important factor that differentiates us is taste. Our range over delivers quality and taste at their price-points. You can do all the above and have a great opportunity for success. But taste and value for money are key, if you fail this test you do not create range of products that has longevity and stimulates repeat consumer and customer purchase.

How important is the sustainability angle?

Quite simply, it’s massive. You ignore sustainability at your peril. We are already doing our bit on the Carbon front. Our pouches are more than five times more carbon effective than a glass bottle according to LCA studies. It would have been far easier for us to package our bottles in glass but we chose, what we believe to be, the best and most effective Carbon conscious solution. Our pouches are recyclable but we are looking to introduce an unprecedented sustainability solution within the next two months that will be a first in the drinks Industry. Rest assured we are not doing this to jump on a band wagon. Sustainability in both our products and packaging is a core principle at the heart of our business.

Tell us about the manufacturing side of things

Our production is completed at a BRC (British Retail Consortium) AA rated production facility. This is the highest level of Food Safety production that we have in the UK. Our drinks are genuinely Craft. Every recipe starts on a very small scale in our development kitchen. We make a couple of litres and test, tweak and refine until we are happy with the final product. Once we have signed off the recipe, we send the raw ingredients to our contract packer who blends and packages the product on our behalf.

The result? Soho Cocktail Club Pornstar Martini - pour, shake, and serve

How do you market Soho Street Cocktails?

This a massive subject and is integral to the success of our business. In our case, whilst we do have marketing expertise, we do not have the time or human resource to fully focus on this whilst we are in the early stages of our development. Our approach has been to outsource both PR and Marketing to specialist agencies who we work in partnership with to develop awareness of our brand to our target audiences. We are using PR, Press and Social Media activity to drive this now. The most important part of this process is to develop a Plan and Strategy and to do research, lots of it! Outsourcing to trusted partners really works for us. I have seen some brands try to do everything in house, which is fine if you have the resources and expertise, but you can quickly see money dwindle from your marketing budget without any tangible return. Our PR, Marketing and Social partners mirror our ethos and have completely bought in to what we are trying to achieve. They work to clearly defined objectives and plans and provide us with daily updates.

There’s no magic wand you can wave at marketing. You must clearly define your strategy, develop robust, researched plans, and then execute, excellently. We are undergoing a major re-design of our website and are using incredible copywriters to improve our tone of voice and how we communicate to our customers. Ours is a consumer driven marketplace and we need to appeal to our audience straight out of the box. If we fail to do that, we will get lost in the crowd regardless of how good our products are.

How do the financials work?

Our model is relatively simple, we make stuff and sell it for a profit. If only it were that easy..! We carefully and diligently vet our suppliers and benchmark the costs with a detailed procurement process. We regularly review market pricing (as well as quality) to ensure we really understand our competitive frame of reference. Ours is a contract production model, so our costs are built up by Wet ingredients (juices, purées, coffee, alcohol) Dry ingredients (pouches, outer boxes) Contract production (mixing, filling and packing costs) and then Transport and Warehousing. Any variance or miscalculation of these costs can have a major impact on our bottom-line profit. The largest part of our cost build is Duty which we pay immediately upon release from the production site.

The proceeds from our fundraise will be spent: 69% Production, 19% on staffing resource and 12% on marketing.

We will deliver profits that are consistent with a manufacturer whilst still delivering a margin chain to our distributors and retailers that is as good as it gets in this market.

What investment do you have?

I was truly humbled by the two recent fundraises that we have completed. In total we have raised £670k from private investors using the government EIS scheme. The trust that our investors have placed in our management team, products and vision is something that we take very seriously. We have a duty to them to ensure that we put smiles on their faces and make every penny of that investment count! The fundraise is being used to upscale our production to meet demand and recruit some fantastic people into the business. Will we need more investment? Possibly, at a future date, the extent of which depends on how we deliver our distribution and sales objectives.

What is the route to success for you?

Our success is based on distribution and rate of sale. Our two primary objectives are to continue our rapid growth in the On Trade and develop meaningful and high growth with Direct to Consumer trade. Our model is not predicated on gaining multiple retailer listings but we are in active conversations that could prove to be very interesting.

We believe we have great export opportunity in Soho Street Cocktails but we do not foresee this coming to fruition until late 2024.

Where do you want Soho Street Cocktails to be in five years time?

In 5 years we want to be recognised as the leading UK producer of high quality, taste-first ready to drink and pre-mixed cocktails, that over deliver flavour and quality at their respective price-points. We want to be known for being leaders in sustainability who utilise innovative and the most efficient packaging solutions. We will continue to have a business culture that is supportive, nurturing and focussed on employee well-being and that (obviously) delivers maximum returns to our shareholders.

Written by
BizAge Interview Team
November 28, 2021
Written by
November 28, 2021