Growing Loko!

Andy Ferguson

The man who built Red Bull in Scotland is back in the trade after a decade in Spain and is working his magic on another brand he believes has a huge future: Four Loko.

By Antony Begley

It may come as a surprise, particularly to younger retailers, to learn that when Red Bull first hit the shelves in the UK, the first shelves it hit were in Scotland. Since then, it has gone on to secure legendary status and remains an absolute must-stock in every convenience store.

The story behind that journey is a fascinating one and the man who arguably played a bigger role than anyone else in giving Red Bull its wings in Scotland was an Edinburgh gent by the name of Andy Ferguson. That tale begins way back in 2000 when Andy and the team at his distribution and marketing agency, Liquide, were given the daunting task of taking an entirely unknown product and effectively creating an entirely new product category with it.

‘Never heard of Red Bull’

“In early summer 1999 I took a random call from my brother who told me that I needed to speak to a guy called Harry Drnec who needed help distributing a product called Red Bull,” recalls Andy, the son of two former leading lights of the Scottish hospitality scene. “I’d never heard of Red Bull and I’d never heard of Harry but I was in distribution at the time so I gave him a call. He eventually became my mentor and a very dear friend and I still have a photo of him on my desk to this day. Anyway, I thought he was looking for help on warehousing and logistics but it turns out Harry wanted help with marketing too.

“I did a meeting in London and a meeting in Austria and, long story short, by August I had been anointed as exclusive distributor for Red Bull before I even had a company to service the agreement. I then set up Liquide and we started trading on 1 January 2000. The rest is history.”

The rest may indeed be history but the journey that Andy embarked on the for the next decade was remarkable in all sorts of ways – and the lessons he learned on it are proving to be very useful to him all these years later with another brand that Andy believes has the potential to explode: Four Loko.

“In 2000, there was Lucozade and that was about it as far as energy went,” explains Andy. “We had this new, weird-tasting drink that did things no other drink did – and it was really expensive. Over £1 a can at the time, which seemed crazy to a lot of people.

“Our early focus was in the on-trade where, historically, brands were built. But we rapidly moved into the off-trade too and within a couple of years we had eight people. A key hire was a guy called Fwad Afzad because his family had convenience stores in Edinburgh and he really understood retail. The types of people you needed in the off-trade were completely different to the people you needed for the on-trade.”

Hard sell

So did it have wings from day one? “No, not at all,” laughs Andy. “The first couple of years were really hard. Nobody knew the product or knew what it was or what to do with it. We effectively had to bring people to a new style of drinking, totally change consumer perceptions and create new distribution models. You didn’t drink Red Bull, you used it. You didn’t use it because you were thirsty, you used it because you needed stimulation. It was a hard sell, believe me.”

Hard as it was, after a few years Andy and his team smashed it out the park.

“I knew quite early that it was going to work,” he says. “I was extremely confident, but the day it really sunk in was when I learned that the latest data showed that Scotland had the highest per capita consumption of Red Bull of any country on the planet. That was a special day.”

In the end, however, Andy became a victim of his own success when Red Bull chose to take the distribution and marketing of their product in-house.

“It’s the nature of being a distributor,” comments Andy with a wry smile. “We worked on a rolling three-month contract and there was always the risk that you would get a call out of the blue one day telling you that the contract wouldn’t be renewed. That call came in 2007. The brand was moving into a different lifecycle.”

So Andy hopped on a plane to Spain where he was to spend the next decade of his life. Why Spain?

“Mostly for the sunshine and the golf,” he laughs. “I had made a bit of money and I’d worked my nuts off for the previous decade. I set up a product trading company based in Gibraltar and it did well with brands like Fiji Water but the global economic crisis of 2009 put paid to that. Then I set up a distribution channel for a company doing TV and internet distribution in Spain which went really well. And then I got the phone call. The brand owner was taking it in-house!”

Health scare

History having seemingly repeated itself, Andy chose to return to his early career by helping friends and associates run bars and restaurants – but his life was to take another dramatic turn before long.

“One day I noticed a tiny little blood clot in my urine,” he says. “I dismissed it because I was only 48 and feeling fine but mentioned it to my doctor in passing the next time I was in for a check-up and he had me do all sorts of tests. They had some concerns but said they would follow up next time in my annual check-up.

“I ignored it and carried on with my life, but then I had a seizure. Nothing to do with the little blood clot. It was caused by a massive 5cm brain tumour which, thankfully, turned out to be non-cancerous. I had surgery to remove it in Spain and, despite the 47 staples in my head, I left the hospital with a new lease of life, super upbeat. I even had a large G&T on the night I left the hospital!”

Andy continued to recover well and was in fine spirits when he moved back to the UK. “I was feeling great, and then I learned that when the doctors in Edinburgh were repatriating my medical records from Spain, they learned about the blood clot in my urine. A load more tests later and it turns out I had prostate cancer. Lots of it. But it was an early detection so I just accepted it and tried to stay positive. They removed my prostate in Edinburgh and I’ve been clear ever since. And living through that kind of stuff gives you a zest for life, I can tell you!

“All I can say to anyone else is, if you notice anything odd, get it checked out immediately. Early detection is the key. Take action now.”

Opportunity knocks

With a newfound lust for life, Andy’s latest challenge soon presented itself. At the end of 2020, fast-growing Belfast-based distribution and marketing business Red Star had gotten hold of the distribution rights for the US Four Loko brand and wanted to bring it to Scotland.

“I was asked to have a look and see if I fancied it,” says Andy. “I said ‘probably not’ but that I was happy to have a chat. I had the meeting then did a drive around Glasgow, Edinburgh and Dundee and was astonished to learn that, other than Dragon Soop, the RTD category was pretty much as I left it in 2007. I knew straight away there was an opportunity.”

Red Star has a strong track record of bringing US disruptor drinks and snack brands to the UK and is growing at 178% a year as a company. “They’re a fantastic company and the team that Clark and Ryan have really deliver amazing work across their portfolio,” says Andy. “Really switched on and they understand retail. They’ve built a great reputation and there’s an endless string of brands coming to their door. They say ‘no’ far more often than they say ‘yes’, that’s for sure.

“I’m working with them on a number of brands but a key driver at the moment is Four Loko. It’s an 8.5% bold-flavoured RTD in 440ml cans. No PMP, no multipack. Critically, it’s a vodka-based drink with no energy or stimulant ingredients.

“I was given the challenge of launching the brand in Scotland under a sales agency agreement. There was no distribution to speak of but from coming on board in February 2020, I managed to get listings in Filshill, United Wholesale Grocers, United Wholesale Scotland and Spar Scotland within months.”

The upshot? “You have to remember that is from a standing start, a brand-new product. Within a couple of years we’re now the number five RTD in GB convenience, even though to date the majority of the sales have been in Scotland – but for sure, that is changing fast. The IRI figures also show we’re the number two brand in Scotland and we have the fastest-selling RTD SKU in GB convenience. We also have another five SKUs in the top 10.”

To put that in some sort of context, Andy says that only Au RTD has added more value contribution in the last 52 weeks, again bearing in mind that Four Loko is mainly only in Scotland.

“We’ve only got weighted distribution so far of 16.2%,” he adds. “Au has 54% distribution. And if you look at the value we add per distribution point, we’re adding £784k worth of sales compared to Au’s £289k. In other words, Four Loko is delivering three times the value with one third of the distribution.”

History repeating

In a clear echo of his Red Bull achievements of yore, Andy was recently able to celebrate that fact that per capita consumption of Four Loko in Scotland is now the highest of any country on earth. He’s only gone and done it again.

On this sort of trajectory, Andy’s only puzzling question is why more retailers aren’t stocking it. “For me, it’s a no-brainer,” he says. “It’s flying where it’s stocked and it’s only going in one direction. Where we get distribution, we drive huge sales growth. It’s that simple.”

Launched originally with four flavour variants, the range now extends to nine – with more NPD planned for next year.

“We’re very conscious of the fact that flavours and NPD drive sales in this category, so we’re adding exciting new variants next year,” he says. “But we’re also conscious that retailers don’t have elastic shelves so in time we’ll be removing some lines from the UK market to make room. But in my opinion, the key challenge will be to encourage retailers to grow the space they dedicate to the RTD category, not just to re-range within the space they’ve got.

“Range evaluations are, however critical. If you want to maximise the profit you make from every facing, you need regular range reviews to weed out under-performing products. But space for RTDs needs to grow, I believe.  There’s a clear demand for it from consumers because drinking habits have changed since Covid, underlined by the cost-of-living challenges. Drinking at home is a massive opportunity and RTDs are core to that. The space dedicated to the category in-store needs to reflect that.

“As for Four Loko, it’s not your everyday drink. We like to think of it as a signpost, a statement of intent, the perfect way to get a memorable evening off to a flyer: every can is the start of an amazing story, as we like to say.”

The next chapter of the Four Loko story has yet to be written but if Andy has his way, it’ll be another blockbuster.

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This publication contains images and information relating to tobacco products. Please do not view if you are under the age of 18 years old.

This website contains images and information relating to tobacco products. Please do not view if you are under 18 years of age.

This website contains images and information relating to tobacco products. Please do not view if you are under 18 years of age.

This publication contains images and information relating to tobacco products. Please do not view if you are under the age of 18 years old.