139: Arturo Lomeli: Building A Luxury Brand

How do you build a luxury brand? Arturo Lomeli, CEO and Founder of Clase Azul Spirits, an award-winning luxury tequila brand from Mexico, reveals the secret to their success.  Refreshingly transparent, Arturo shares their rocky start; how their foray into the tequila market began with zero sales for the first 3 years, which led him back to school in 2000 for a master’s degree in marketing.

It is there that Arturo Lomeli learned the importance of creating value and uniqueness in the marketplace and after graduating, he conceived of the idea for Clase Azul Tequila Reposado – a very unique spirit sold in a beautiful, ceramic bottle made by local artisans in Mexico. These bottles are treasures that customers keep and use as decorative pieces long after the tequila has been enjoyed.

Today, Clase Azul sells its award-winning tequila around the world and has been featured in the Wall Street Journal, CNN, Forbes, Robb Report, InStyle, Food & Travel, Luxury Latin America, The Ellen Show, Influential, and many more.

Beyond simply making money, Arturo believes that success is about happiness, integrity, changing people’s lives and providing opportunities. With that in mind, he and his partner chose to establish their factory in a small community in Jalisco, Mexico, where they support the local artisans and employ 120 people, providing them with free breakfast and lunch, as well as daycare, since 80% of their staff are women.

Their most expensive bottle of tequila sells for $30,000, with all the proceeds going to a non-profit organization that Arturo’s wife runs, that further supports the local artisans.

On the subject of pricing, Arturo emphasizes the true cost of discounting and how important it is to compete on quality and not on price when building a luxury brand.  He also intimates the value of growing your inner spirit while you build a profitable business – the two should go together, and Arturo has proven that they can.

Key Takeaways

1) Luxury is not about what others are doing, it’s about yourself and what you really believe. It’s not about comparison and competitive positioning, it’s about uniqueness.

2) Luxury is not always associated with an expensive price.  A product or service can be expensive and not luxury. The term luxury comes from those things that have a lot of the energy of the people involved in the process.

3) You have to be patient – you cannot rush it and must enjoy what you do, not just when you are making money.

4) Discounting your product simply to increase initial demand, hoping to sell at a higher price later never works.

5) 90% of the companies in Mexico that fail do so because they did not project cash flow.  You can run your business for a while without profit, but you cannot run your business without cash flow. Profit is like food – you can survive without a bite of food for 3-5 days. Cash flow is like oxygen, you can’t go 2 minutes without it.

Favorite Quotes

“We don’t outsource our culture.”

“Grow your spirit and develop your business at the same time. They can and should go together.”

Clase Azul Spirits

Clase Azul is world renowned for its superior quality and rich flavor profile. The attention to quality begins with the selection of the finest organic agaves and extends to the spirit’s decanters, which feature handcrafted artwork from Mexican artists, and are meant to add an additional layer of sophistication to the experience of Clase Azul.

Clase Azul sells bottles ranging from $100 to $30,000 each and has been served at some highly exclusive affairs, including movie premieres, the Screen Actors Guild Awards and celebrity parties. It’s most expensive offering features a ceramic bottle studded with items like amber and 24-karat gold. A collection of 15 of these luxury bottles were created to celebrate Clase Azul’s 15th anniversary.

In 2016, the company sold 234,000 bottles of Clase Azul, with U.S. sales up 46% from the previous year.

http://claseazul.com