Diversifying your business away from your bar could be the thing that saves it, says Daniel Crowther of Hedonist in Leeds (and many other related businesses).
Over the last year the goalposts have moved. Not just monthly but at times weekly and daily – to the point we have had to reassess what we as businesses are even aiming at. The solution is to create more goalposts!
When I established Hedonist over five years ago with my partners, we wanted to ensure the business was never solely reliant on one source of revenue. Our backgrounds were in bars and brand marketing and one of my partners, Bruce Lerman, had experience in large scale events. We used this experience to create revenue streams that were completely independent of each other. So not only Hedonist Bar but Hedonist Drinks, a creative brand agency and Hedonist Events, an event production and activation business.
This meant that if one source of revenue dried up (which it has, for obvious reasons), the other channels could still be flowing to keep one or more arms of the business afloat. It also ensured that our customer base was not just direct-to-consumer, but we also had a business-to-business arm.
Diversify, Deliver, Develop
During the pandemic, diversifying your offerings as operators can be the difference between survival and not. In its basic form, diversifying could mean at-home delivery – as many bars have done. Or the creation of merchandise that leverages your brand, which is not a new thing – think Hard Rock Café – but a worthwhile revenue stream regardless of the pandemic.
Having multiple facets to a business is not easy and, at times, you can stretch yourself too thinly, unwittingly becoming a jack of all trades, master of none. To guard against this, it’s helpful to assemble a team balanced with different skill sets so you can seize opportunities as they present themselves.
Re-think and re-imagine
Rather than reverting to the old model of growth through increasing opening hours or launching new venues, in my experience, it can be better to concentrate on your existing business, but diversify its functions. New revenue streams, while at the same time reinforcing and strengthening your core brand, increases its longevity, helping to drive future revenue.
Look deep into what your bar is; the operation and ideals that go into it and see what other sectors, be it within or external to hospitality that you can grow into. The spirits industry has hired bartenders for sales and brand ambassador roles for years because they utilise similar skill sets. Can a bar brand not think along the same lines?
The post Covid bar should now not only think about the products they serve, but the services they provide and how they can grow into untapped areas of the market. When we started Hedonist Bar we carefully looked at what we were doing and what was needed in the industry. We quickly realised that our everyday tasks had parallels within the world of trade marketing.
A great example of this is when you create drinks for a menu. Your drinks need to be accessible, creative, forward-thinking and usually work to a brief: you have to use X product, with Y and use Z amount. This is the exact same approach spirit brands use to create a ‘Perfect” or “Signature Serve’, so why not use your bar and its reputation to offer that same service to a brand who may not have the expertise and/or industry knowledge to do so themselves?
Pivots that become permanent
At the start of the pandemic, myself and business partner Jon Lee decided to add another arm to the business, The Liquor Studio. The business was set to be a creative drinks space and photography studio to supplement the brand agency services as well as a becoming a northern hub for industry trainings and events. We also wanted to create an experiential space for spirit enthusiasts to create their own spirits and learn from independent industry experts.
Covid changed our plans and we had to quickly pivot the business model overnight and think about how we bring those services we offered in person to people at home. This led to the creation of GIN-solation, a product where people can create a bespoke gin online that we blend at The Studio and post direct to their homes. This became massively popular and 12 months on, we have naturally developed into spirit production, as well as expanding our services into commercial and consumer online experiences. As we come out of the pandemic, we intend to offer both approaches to our services.
Just over five years into owning my own business we have a bar, a creative brand agency, photography studio, creative drinks space, event business and an at-home offering. I could never have imagined this when I started in this industry over 10 years ago, with the sole dream of just opening a bar.