Bringing Innovation to Established Product and Conducting Targeted Marketing Helps New Company Gain Wide Reputation

The tale of entrepreneur Nicholas Pelis demonstrates the importance of commitment when starting a new company. Finding the needed funding usually works out as long at the founder remains driven. For Pelis, no sacrifice was too large to achieve business success.

After 13 years working in the liquor industry for several major brands, Pelis moved from San Francisco back to his native New York. There, he was closer to family and friends, who provided some financial support for his new business – Denizen Rum. Pelis also funded the company by using money he obtained from selling his home.

Denizen Rum is a blend of spirits from Jamaica and Trinidad that delivers the taste of dark rum but the mixing ability of white rum. Despite the position of rum as the second largest selling spirit in the US, Pelis found that it is not a big focus of the industry. Most rum producers were distilling out flavor and color to compete with vodka, the top selling spirit. Pelis decided that neglect of the category was an opportunity for launching a new company. By introducing a little innovation, he created a product to attract rum buyers. His concept was a product with the bold flavor of dark rums combined with the mixability of market-dominating white rum.

Pelis raised a total of $300,000 from friends. To this he added $110,000 received from selling his house. Despite a new baby on the way, he and his wife moved in with her parents. This was an irresistible money-saving technique to Pelis with his startup business still on the launch pad.

The new enterprise began with trips to Caribbean distilleries by Pelis. After identifying the raw materials for his new concoction, Pelis traveled to Amsterdam, where he found a blending house able to consistently produce the taste he desired for his rum.

Marketing a new product is always challenging, especially for a liquor manufacturer. These businesses cannot sell directly to retailers or bars and restaurants. A wholesaler is required for distribution. The two largest wholesalers have nearly 90 percent of the market. Pelis gained some credibility for Denizen by starting a sales team that delivered  to ambassador bars in New York City. Bartenders and critics raved after the brand was introduced in 2011. One year later, an agreement with a national distributor promises to propel Denizen into wide circulation. Pelis is projecting substantial profit within five to ten years from expanding sales volume.