If it’s weird, it must be Greenbar.
That could be the tagline for Los Angeles’ first post-prohibition era distillery, Greenbar Distillery, according to its owner. Since 2004, co-founders Melkon Khosrovian and Litty Mathew have built a reputation for producing flavorful spirits, liqueurs, prepared cocktails, private label products, and, more recently, non-alcoholic cocktails made with their own dealcoholized spirits.
By making their own unique spins on classic backbar items with natural and organic ingredients, the company has become a go-to for major grocers looking for “weird” and unique private label products, amounting to 40% of its business. During the pandemic Greenbar switched from bars and restaurants as a major source of revenue into canned products.
We asked Khosrovian about how their flavor expertise helped them transition into non-alc, what selling-points hit with buyers, and where they find levers to keep their prices competitive. Answers have been lightly edited for clarity and length.
With all your experience building flavor in spirits, what lessons did you learn applying that to RTDs or non-alc cocktails?
You have to think of these things from the ground-up as their own thing, even something as simplistic as a gin and tonic. It isn’t really just gin and tonic because most people don’t drink gin and tonic out of a can: a glass is involved, there are ice cubes, there are botanicals. Which is very different from a cocktail where you have to somehow produce really beautiful smells from a tiny opening in a can.
The chemistry of these canned cocktails is very different from normal cocktails, both in terms of longevity and how it tastes, so we had to break things down and rebuild them as RTDs not as a cocktail.
What does that mean in terms of building production capacity?
We learned quickly that if you don’t make any liqueurs, you’re not going to be able to make good cocktails, because most of the flavor of a cocktail or what makes one cocktail different from another isn’t the base alcohol, it’s the modifier and we make a boatload of modifiers. And that helped give us a little bit of a leg up, because we can make things that tasted exactly the way we wanted them to and modify our bitters of liqueurs for an exact cocktail.
So that was one of our big lessons: that if you wanted to play in the RTD world, create a portfolio of the liqueurs and bitters, otherwise, you’re going to be stuck with flavors from flavor companies, which never taste good. So either you are then selling your stuff for a lot of money without a premium taste, or you sell it for less money but you can’t make a profit.
How do you balance putting out esoteric offerings with more mainstream flavors, and have there been any surprises?
We often do mini focus groups or sometimes I get feedback from employees who are not on the production side to test how something lands. But for example, we make a non-alc Bitters and Soda cocktail line that anyone working in the industry would recognize as a common call, but not necessarily your average consumer.
Our Burnt Orange of that line is made with lapsang souchong tea, which gives it some smoke and I’m not sure that would’ve tested well as smoke is not everyone’s cup of tea, but it’s one of our better selling ones because a lot of people who like scotch or mezcal gravitate towards it. But then we offer a non-alc Rum and Cola and a Gin and Tonic, as those are easier for everyone to wrap their heads around.
What is the conversation like selling the non-alc cocktails to retailers at this point, how are you helping to direct where to put them on the shelf?
It’s interesting because they often fight among their own buyers about what section the products should be in. But it really brings up the question, what is the purpose of a cocktail? We settled on the cocktail occasion being to transition people from work mode to relax mode.
So these products compel you to slow down— they are highly carbonated and they are interesting enough to make you want to drink them slowly to get all the complex flavors. So that’s why we tell our retail partners that they should be in the same section as alcohol, because they do the same thing as liquor and they are used in the same way.
With buyers, how do you defend a non-alc cocktail that’s priced nearly the same or more as an alcoholic one?
It takes a long time to talk it through. We try to express that people like cheap RTDs because they get them drunk (maybe they start to taste good after a while), but with non-alc cocktails, customers have to really enjoy the taste in order to drink them, which means we make them with high quality ingredients and that costs more.
Once retailers do a trial, it ends the conversation. I think they’re seeing that these products garner a higher price-point because the clients that are looking for this stuff are more sophisticated. Everything is organic, complex, close to a cocktail, and that’s highly desirable.
On that note, everything is organic and high quality, and yet your prices fall below competitors, especially among RTDs, what has enabled that?
We are heavily automated and solved for scalability early, and we are very practiced at making flavorful things, so we can make a lot with not too much. All of our products are the same—before the pandemic 80% of our business was in restaurants and bars, and we were able to do that because we met that price point required.
We had to make something that was going to make them money and allow them to make something customers will pay more for. As a little company, you have to deliver more than you charge. We have to out-deliver on quality and value, so we do it through innovation in terms of production and flavor development.