In May 2020, the three cofounders of Kinsip House of Fine Spirits (Kinsip), a craft distillery...

   
 

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In May 2020, the three cofounders of Kinsip House of Fine Spirits (Kinsip), a craft distillery located on a farm in Prince Edward County, Ontario, Canada, felt a great sense of accomplishment. Kinsip had a varied product mix that included light and dark spirits, a broad variety of bitters, and cask-aged maple syrup. However, for the previous few weeks, the distillery had been working hard on a completely different product. In March 2020, the business had retooled to produce hand sanitizer in response to the shortages resulting from the outbreak of the COVID-19 pandemic. Motivated by a desire to help the community, Kinsip had initially provided its first batches of hand sanitizer for free to help protect front-line workers in the area. Producing hand sanitizer had required a considerable amount of effort and production adjustment, but Kinsip had risen to the challenge. As a distillery, it already produced ethanol, something that was also a key ingredient in the composition of hand sanitizer, for its regular products. In addition, Kinsip's production and bottling expertise enabled it to meet the needs of the community quickly and effectively. Before long, Kinsip had added hand sanitizer to its list of products for sale to the public. The three Kinsip cofounders were already pleased with the quality of their consumable products and the experience the distillery provided to consumers, both at the farm and through wider distribution. With the development of an excellent hand sanitizer, they wondered about next steps. Should they make hand sanitizer a regular Kinsip product offering? HISTORY OF KINSIP HOUSE OF FINE SPIRITS Background and Product Mix Sarah Waterston, along with her brother Michael Waterston and his spouse Maria Hristova, had always loved visiting Prince Edward County (PEC), a southern Ontario locality known for its many farms and wineries. During their visits to the area, they appreciated and enjoyed the quality of PEC's fine local products. Among the family members, Hristova was a third-generation distiller with a lifetime of expertise in the development of fine spirits. Having developed a discerning palate while growing up in a family- owned European distillery, she could appreciate the unique quality that local ingredients brought to flavour profiles. Hristova and her family members soon recognized that particular quality in PEC's 66 Gilead Distillery. Set on a beautiful farm in the town of Bloomfield, near the popular Sandbanks Provincial Park, and named for its address, 66 Gilead Distillery was the only producer of fine spirits in the area. Page 2 9B21A017 When 66 Gilead Distillery was put up for sale in 2016, the three family members seized the opportunity to become business owners. After acquiring the business, the next step was to give the distillery a fresh new name. Initially, the three owners considered the name "Kindred" for their venture to reflect their family connections. Eventually, however, the business's name evolved to "Kinsip House of Fine Spirits" to emphasize the fine nature of its products. The distillery promoted values of family, community, and fine craftsmanship through a statement on its website: "Kinsip is rooted in an appreciation of family and the fulfillment found in building community. We craft products together that reflect and accentuate the quality of the moment. Life is worthy of celebrating the small moments as well as the grand."¹ Kinsip defined itself as a craft "grain-to-glass" distillery, borrowing from "farm-to-table," the popular phrase for locally sourced food ventures. Wheat, grain, rye, and barley used in production were cultivated on the farm's 80-hectare fields, which created a business distinction that very few distilleries in Ontario could claim. Kinsip was also one of very few cooperages² operating in Canada. Kinsip had purposefully aimed to create distinctive spirits with unique flavours in its distilling, which took place on the premises. The cofounders had established community relations and procured various elements for their spirits including juniper, black currants, lavender, and maple syrup-from local producers. Kinsip had further distinguished itself by becoming a "verified artisan distiller."³ Artisan Distillers Canada (ADC) verified a business as an artisan distillery if it was independently owned, produced a limited volume (less than 100,000 litres) of ethyl alcohol, and used its own techniques to ferment, blend, infuse, or age its own brands of spirits and bitters. Of the 178 craft distilleries listed on the ADC website, 81 were verified artisan distillers. Among the 28 Ontario distilleries listed on the ADC website, Kinsip was one of nine verified artisan distilleries and the only one located in PEC.5 The next verified artisan distillery was located 192 kilometres away, in Johnstown, Ontario. The closest non-verified artisan distillery was 124 kilometres away, in Peterborough, Ontario. Eventually, Kinsip's product line evolved to include 11 different spirits such as rum, whisky, gin, brandy, and vodka (see Exhibit 1). Kinsip also offered a selection of non-alcoholic products such as bitters and maple syrup aged in whisky barrels. During the tourist season of May to October, Kinsip welcomed visitors for tastings and tours of the facility. Kinsip sold its spirits directly to consumers both from its premises at the farm and through online shopping. Its products were also available across Ontario through the government-owned liquor and wine retailer Liquor Control Board of Ontario (LCBO). As well, Kinsip sold its bitters and maple syrup through 30 boutique outlets, most of which were located across Ontario, and through several locations in Quebec and Alberta (see Exhibit 2). For sales promotion, Kinsip packaged some of its product into attractive and convenient gift sets. As well, the distillery offered loyal customers club membership status, which provided certain priority privileges (see Exhibit 3). For customers who preferred shopping online, Kinsip offered free shipping on each online order over CA$50.8 Page 3 9B21A017 HAND SANITIZER Initially, Kinsip had produced hand sanitizer to supply local hospitals with a product for use on hands and on surfaces within health care facilities. Therefore, Kinsip formulated its sanitizer in a more convenient liquid spraying format, rather than a gel. Health care workers were provided small bottles of the hand sanitizer free of charge from several of Kinsip's initial batches. The distillery then expanded its distribution of this essential product during the COVID-19 pandemic across the community, making it widely available for sale to the public (see Exhibit 1). Kinsip added the phrase "For Difficult Times" on the hand sanitizer's label to remind users that the product was part of a community effort to keep everyone safe (see Exhibit 4). Early purchasers of the Kinsip product consisted mainly of essential workers who frequently interacted with people and could not conduct their work from home, such as delivery people, truckers, and others. By mid-March 2020, over 100 Canadian artisan distilleries had accepted the challenge of producing hand sanitizer. Kinsip was one of 20 such distilleries located in Ontario" (see Exhibit 5). As a sales promotion, Kinsip offered 120 millilitre (ml) bottles of hand sanitizer free of charge with all online orders of spirits and maple syrup (see Exhibit 6). Safety and Recalls Like many other producers of hand sanitizer during the COVID-19 pandemic, Kinsip consulted the World Health Organization for direction on the product's formulation, which included glycerol, hydrogen peroxide, and ethanol. In April 2020, due to a supply shortfall in hand sanitizer, Health Canada permitted producers to use technical-grade ethanol in the composition of the product. However, technical-grade ethanol could pose a health risk because of its impurities. By comparison, food-grade (or pharmaceutical- grade) ethanol was much purer and safer for sanitation involving skin contact. Therefore, in June 2020, Health Canada issued a product recall for all non-compliant hand sanitizers that included technical-grade and industrial-grade ethanol. Kinsip and other artisan distilleries, as producers of consumables, had used only food-grade ethanol in their product, so they were not subject to the Health Canada recall. Pricing Most artisan distillers who produced hand sanitizer priced their products competitively (see Exhibit 7). Kinsip priced its smallest container at $0.09 per ml, which was considerably higher than the average price of $0.04 per ml. However, Kinsip's larger containers were more competitively priced. Its one-litre bottle was priced at $0.023 per ml, which was lower than the average price of $0.029 per ml. Kinsip's four-litre jug was priced at $0.014 per ml, which was also lower than the average price of $0.016 per ml. In addition, Kinsip offered free shipping anywhere in Canada on all online orders over $50; some other artisan distilleries also provided free shipping locally. However, most companies applied standard shipping fees to all of their orders, which meant that a customer order of $100 from the nearby city of Kingston, Ontario, could cost an additional $30-$40 in standard shipping. raye 4 JDZIMUTT Projected Demand Prior to the outbreak of the COVID-19 pandemic in early 2020, the global hand sanitizer market was projected to grow from US$1.2 billion in 2019 to US$2.14 billion by 2027, at a compound annual growth rate of 6.2 per cent during the forecast period of 2019 to 2027. However, after the outbreak of the COVID-19 pandemic, analysts revised the expected annual growth rate of the hand sanitizer market up to 45.7 per cent for 2020.¹² Hand sanitizer had grown to become an estimated US$200 million industry. Public awareness about increased hygiene standards for preventing viral outbreaks led market analysts to project continually increasing demand.¹3 With the potential for COVID-19 safety practices to extend over longer periods, the use of hand sanitizer was expected to become a standard practice in the future for all public spaces. KINSIP CUSTOMERS Most Kinsip customers became acquainted with the distillery's products during tasting tours, which operated between May and October. Therefore, the success of the tourism season in the PEC region had a direct effect on Kinsip's potential online sales, which resulted from tourist visits and tasting tours. As the only distillery within the PEC region, Kinsip welcomed a wide range of visitors, including motorcycle groups, vacationing families, and young retirees on weekend excursions. Most visitors came from three major urban centres Montreal, Toronto, and Ottawa-which were located within a two- or three-hour drive from PEC. Kinsip attracted various customer segments, but according to its own research, two main demographic groups tended to dominate during the summer months and in the early fall season. During the summer months, when children were out of school, the Kinsip site was popular with young parents especially women aged 25 to 45-who visited PEC for week-long holidays with their young children. Kinsip estimated that this segment comprised 40-60 per cent of visitors to the farm. The parents and children enjoyed touring the facilities and sights, which included numerous chickens running freely in the farm's open yard. These visitors tended to prefer clear spirits and purchased products to consume during their summer vacations and back at home after the holidays. During the early fall months of September and October, frequent visitors to the Kinsip site were mostly weekend tourists who wanted to stock up on products for winter, including early Christmas gifts. Kinsip estimated that 30-40 per cent of these customers comprised dual-income couples aged 50-65. These consumers tended to be knowledgeable about spirits, enjoyed entertaining at home, purchased a wide range of products, and would buy cases of spirits in single purchases, rather than single bottles. While exploring the PEC region, customers would visit the Kinsip distillery to relax in the picturesque farm setting and appreciate Kinsip's urban-styled tasting bar. In stark contrast to the farm setting, the tasting bar featured a contemporary white design with copper accents. The three Kinsip cofounders intentionally chose a design that projected clean, slick urban features to counter the farm's rural, country setting. Many customers used the term "farm glam" to describe the unique design that the three Kinsip cofounders intended to portray. The term "farm glam" seemed to portray a stylish design within a picturesque country setting that customers could indulge in and treat themselves. Many Kinsip customers saw their visits as pleasurable, high quality experiences that featured unique local products. Online sales were mainly derived from these personal experiences. Online customers tended to be people who had already enjoyed Kinsip products during tasting tours onsite. Other online shoppers had been referred to the Kinsip products by loyal clients. Page 5 PRODUCT MIX 9B21A017 Kinsip invited its customers to practice restraint and to savour its products to appreciate the complexity and uniqueness of each one. The business produced 11 different spirits, including rum, rye whisky, gin, brandy, and vodka. Each product was combined with unique flavours derived from locally sourced ingredients such as lavender, juniper berries, black currants, pine needles, and maple syrup. The connection of the spirits to the local sources was reflected in the names of many products, such as Maple Whisky and Woodland's Whisper Pine Vodka (see Exhibit 1). Kinsip's non-alcoholic products also emphasized unique sensory experiences. For example, Kinsip's maple syrup was aged in whisky barrels to elevate a common Canadian product to a more sophisticated level. Kinsip's bitters not only featured locally sourced jalapenos, lavender, and maple syrup, but also incorporated coffee and chocolate from craft businesses located in Toronto. By contrast, Kinsip's hand sanitizer was marketed as a purely utilitarian product with a minimalist descriptive label (see Exhibit 1). The phrase "For Difficult Times" was added to the product's description to suggest Kinsip's role in protecting the community during the COVID-19 pandemic (see Exhibit 4). However, as the pandemic wore on over time, it was less clear whether the phrase continued to resonate with customers. The format of Kinsip's hand sanitizer used in hospitals allowed it to be sprayed on surfaces, which provided an advantage over gel formats. However, some customers who expected hand sanitizer to be in a gel format were confused by the spray version. Nevertheless, feedback from customers indicated that they appreciated the product's quick drying quality, which meant it did not leave a sticky residue. Some early users even reported that the product smelled like gin, which they considered a positive attribute. The three Kinsip cofounders were proud of the quality and purity of their hand sanitizer. They also hoped that it served as a reminder of the firm's commitment to the community. However, it was clear that the sanitizer provided a sharp contrast to other items in Kinsip's list of products. It was the one product that did not seem to fit with the otherwise fine quality consumable spirits. The three owners wondered how to market this one special product to enhance its fit within the distillery's product mix. Did the hand sanitizer constitute an opportunity to reach a broader consumer base? Page 6 Alcoholic Products Product Type Product Name Juniper's Wit Gin White Spirits EXHIBIT 1: KINSIP HOUSE OF FINE SPIRITS-PRODUCT LIST (IN CA$) Liqueur Still's Whisper Vodka Woodland's Whisper Pine Vodka Kinsip Maple Whisky Dark Waters Rum Dark Spirits Juniper's Wit Barrel- Aged Gin Cooper's Revival Canadian Rye Whisky (Kinsip is home to one of the very few cooperages left in Canada). Kinsip Brandy Heartland's Hearth Single-Malt Whisky Description Blend of herbs and botanicals including locally sourced juniper, lavender, and hops. Hand-crafted grain-to-glass vodka, twice distilled in a Kinsip House of Fine Spirits (Kinsip) custom copper still, using 100 per cent Ontario wheat. Country Cassis Saffron Liqueur Hand-crafted grain-to-glass vodka, triple distilled in a Kinsip custom copper still, using 100 per cent Ontario wheat and pine needles. Bold, spicy Canadian rye aged in recoopered red wine barrels. Hand-crafted barrel-aged whisky, finished in barrels that have aged maple syrup. Delicate honeysuckle blossom, citrus notes, and tea leaves layered with creamy caramel and butterscotch overtones and vanilla on the nose. Barrel-aged "grain-to-glass" gin hand-crafted with a unique blend of herbs and botanicals including locally sourced juniper, lavender, and hops. Refined brandy made from Prince Edward County grapes aged in charred French oak casks. Kinsip's first Ontario "grain-to-glass" single- malt whisky; fermented and distilled on site; 100 per cent malted barley aged in a cask brought back from Scotland and finished in one of Kinsip's own brandy barrels for a uniquely Canadian expression of a single- malt whisky; 222 hand-numbered bottles. Created using local black currants and Kinsip's aged brandy. Made with local saffron grown locally by True Saffron. 9B21A017 Volume Price 750 ml $39.95 750 ml $39.95 750 ml $39.95 750 ml $59.95 375 ml $32.95 750 ml $59.95 750 ml $49.95 375 ml $29.95 750 ml $99.95 375 ml $34.95 375 ml $34.95 a) Describe the situation facing the company (based on SWOT analysis). What are the main opportunities/threats/strengths/weaknesses? b) Clearly identify the major strategic issue facing the company. c) Conduct a STP analysis to figure out who is the target market for the company? What are the company's consumer profiles? How has company positioned the brand? d) In what way does the introduction of hand sanitizer leverage existing customer relationships and/or build new ones? e) If you were in charge, would you have launched this strategy? Why or why not? If your answer is yes, what would you advise the company in terms of the rebranding of the hand sanitizer? If your answer is no, what would you advise the company to do instead? In May 2020, the three cofounders of Kinsip House of Fine Spirits (Kinsip), a craft distillery located on a farm in Prince Edward County, Ontario, Canada, felt a great sense of accomplishment. Kinsip had a varied product mix that included light and dark spirits, a broad variety of bitters, and cask-aged maple syrup. However, for the previous few weeks, the distillery had been working hard on a completely different product. In March 2020, the business had retooled to produce hand sanitizer in response to the shortages resulting from the outbreak of the COVID-19 pandemic. Motivated by a desire to help the community, Kinsip had initially provided its first batches of hand sanitizer for free to help protect front-line workers in the area. Producing hand sanitizer had required a considerable amount of effort and production adjustment, but Kinsip had risen to the challenge. As a distillery, it already produced ethanol, something that was also a key ingredient in the composition of hand sanitizer, for its regular products. In addition, Kinsip's production and bottling expertise enabled it to meet the needs of the community quickly and effectively. Before long, Kinsip had added hand sanitizer to its list of products for sale to the public. The three Kinsip cofounders were already pleased with the quality of their consumable products and the experience the distillery provided to consumers, both at the farm and through wider distribution. With the development of an excellent hand sanitizer, they wondered about next steps. Should they make hand sanitizer a regular Kinsip product offering? HISTORY OF KINSIP HOUSE OF FINE SPIRITS Background and Product Mix Sarah Waterston, along with her brother Michael Waterston and his spouse Maria Hristova, had always loved visiting Prince Edward County (PEC), a southern Ontario locality known for its many farms and wineries. During their visits to the area, they appreciated and enjoyed the quality of PEC's fine local products. Among the family members, Hristova was a third-generation distiller with a lifetime of expertise in the development of fine spirits. Having developed a discerning palate while growing up in a family- owned European distillery, she could appreciate the unique quality that local ingredients brought to flavour profiles. Hristova and her family members soon recognized that particular quality in PEC's 66 Gilead Distillery. Set on a beautiful farm in the town of Bloomfield, near the popular Sandbanks Provincial Park, and named for its address, 66 Gilead Distillery was the only producer of fine spirits in the area. Page 2 9B21A017 When 66 Gilead Distillery was put up for sale in 2016, the three family members seized the opportunity to become business owners. After acquiring the business, the next step was to give the distillery a fresh new name. Initially, the three owners considered the name "Kindred" for their venture to reflect their family connections. Eventually, however, the business's name evolved to "Kinsip House of Fine Spirits" to emphasize the fine nature of its products. The distillery promoted values of family, community, and fine craftsmanship through a statement on its website: "Kinsip is rooted in an appreciation of family and the fulfillment found in building community. We craft products together that reflect and accentuate the quality of the moment. Life is worthy of celebrating the small moments as well as the grand."¹ Kinsip defined itself as a craft "grain-to-glass" distillery, borrowing from "farm-to-table," the popular phrase for locally sourced food ventures. Wheat, grain, rye, and barley used in production were cultivated on the farm's 80-hectare fields, which created a business distinction that very few distilleries in Ontario could claim. Kinsip was also one of very few cooperages² operating in Canada. Kinsip had purposefully aimed to create distinctive spirits with unique flavours in its distilling, which took place on the premises. The cofounders had established community relations and procured various elements for their spirits including juniper, black currants, lavender, and maple syrup-from local producers. Kinsip had further distinguished itself by becoming a "verified artisan distiller."³ Artisan Distillers Canada (ADC) verified a business as an artisan distillery if it was independently owned, produced a limited volume (less than 100,000 litres) of ethyl alcohol, and used its own techniques to ferment, blend, infuse, or age its own brands of spirits and bitters. Of the 178 craft distilleries listed on the ADC website, 81 were verified artisan distillers. Among the 28 Ontario distilleries listed on the ADC website, Kinsip was one of nine verified artisan distilleries and the only one located in PEC.5 The next verified artisan distillery was located 192 kilometres away, in Johnstown, Ontario. The closest non-verified artisan distillery was 124 kilometres away, in Peterborough, Ontario. Eventually, Kinsip's product line evolved to include 11 different spirits such as rum, whisky, gin, brandy, and vodka (see Exhibit 1). Kinsip also offered a selection of non-alcoholic products such as bitters and maple syrup aged in whisky barrels. During the tourist season of May to October, Kinsip welcomed visitors for tastings and tours of the facility. Kinsip sold its spirits directly to consumers both from its premises at the farm and through online shopping. Its products were also available across Ontario through the government-owned liquor and wine retailer Liquor Control Board of Ontario (LCBO). As well, Kinsip sold its bitters and maple syrup through 30 boutique outlets, most of which were located across Ontario, and through several locations in Quebec and Alberta (see Exhibit 2). For sales promotion, Kinsip packaged some of its product into attractive and convenient gift sets. As well, the distillery offered loyal customers club membership status, which provided certain priority privileges (see Exhibit 3). For customers who preferred shopping online, Kinsip offered free shipping on each online order over CA$50.8 Page 3 9B21A017 HAND SANITIZER Initially, Kinsip had produced hand sanitizer to supply local hospitals with a product for use on hands and on surfaces within health care facilities. Therefore, Kinsip formulated its sanitizer in a more convenient liquid spraying format, rather than a gel. Health care workers were provided small bottles of the hand sanitizer free of charge from several of Kinsip's initial batches. The distillery then expanded its distribution of this essential product during the COVID-19 pandemic across the community, making it widely available for sale to the public (see Exhibit 1). Kinsip added the phrase "For Difficult Times" on the hand sanitizer's label to remind users that the product was part of a community effort to keep everyone safe (see Exhibit 4). Early purchasers of the Kinsip product consisted mainly of essential workers who frequently interacted with people and could not conduct their work from home, such as delivery people, truckers, and others. By mid-March 2020, over 100 Canadian artisan distilleries had accepted the challenge of producing hand sanitizer. Kinsip was one of 20 such distilleries located in Ontario" (see Exhibit 5). As a sales promotion, Kinsip offered 120 millilitre (ml) bottles of hand sanitizer free of charge with all online orders of spirits and maple syrup (see Exhibit 6). Safety and Recalls Like many other producers of hand sanitizer during the COVID-19 pandemic, Kinsip consulted the World Health Organization for direction on the product's formulation, which included glycerol, hydrogen peroxide, and ethanol. In April 2020, due to a supply shortfall in hand sanitizer, Health Canada permitted producers to use technical-grade ethanol in the composition of the product. However, technical-grade ethanol could pose a health risk because of its impurities. By comparison, food-grade (or pharmaceutical- grade) ethanol was much purer and safer for sanitation involving skin contact. Therefore, in June 2020, Health Canada issued a product recall for all non-compliant hand sanitizers that included technical-grade and industrial-grade ethanol. Kinsip and other artisan distilleries, as producers of consumables, had used only food-grade ethanol in their product, so they were not subject to the Health Canada recall. Pricing Most artisan distillers who produced hand sanitizer priced their products competitively (see Exhibit 7). Kinsip priced its smallest container at $0.09 per ml, which was considerably higher than the average price of $0.04 per ml. However, Kinsip's larger containers were more competitively priced. Its one-litre bottle was priced at $0.023 per ml, which was lower than the average price of $0.029 per ml. Kinsip's four-litre jug was priced at $0.014 per ml, which was also lower than the average price of $0.016 per ml. In addition, Kinsip offered free shipping anywhere in Canada on all online orders over $50; some other artisan distilleries also provided free shipping locally. However, most companies applied standard shipping fees to all of their orders, which meant that a customer order of $100 from the nearby city of Kingston, Ontario, could cost an additional $30-$40 in standard shipping. raye 4 JDZIMUTT Projected Demand Prior to the outbreak of the COVID-19 pandemic in early 2020, the global hand sanitizer market was projected to grow from US$1.2 billion in 2019 to US$2.14 billion by 2027, at a compound annual growth rate of 6.2 per cent during the forecast period of 2019 to 2027. However, after the outbreak of the COVID-19 pandemic, analysts revised the expected annual growth rate of the hand sanitizer market up to 45.7 per cent for 2020.¹² Hand sanitizer had grown to become an estimated US$200 million industry. Public awareness about increased hygiene standards for preventing viral outbreaks led market analysts to project continually increasing demand.¹3 With the potential for COVID-19 safety practices to extend over longer periods, the use of hand sanitizer was expected to become a standard practice in the future for all public spaces. KINSIP CUSTOMERS Most Kinsip customers became acquainted with the distillery's products during tasting tours, which operated between May and October. Therefore, the success of the tourism season in the PEC region had a direct effect on Kinsip's potential online sales, which resulted from tourist visits and tasting tours. As the only distillery within the PEC region, Kinsip welcomed a wide range of visitors, including motorcycle groups, vacationing families, and young retirees on weekend excursions. Most visitors came from three major urban centres Montreal, Toronto, and Ottawa-which were located within a two- or three-hour drive from PEC. Kinsip attracted various customer segments, but according to its own research, two main demographic groups tended to dominate during the summer months and in the early fall season. During the summer months, when children were out of school, the Kinsip site was popular with young parents especially women aged 25 to 45-who visited PEC for week-long holidays with their young children. Kinsip estimated that this segment comprised 40-60 per cent of visitors to the farm. The parents and children enjoyed touring the facilities and sights, which included numerous chickens running freely in the farm's open yard. These visitors tended to prefer clear spirits and purchased products to consume during their summer vacations and back at home after the holidays. During the early fall months of September and October, frequent visitors to the Kinsip site were mostly weekend tourists who wanted to stock up on products for winter, including early Christmas gifts. Kinsip estimated that 30-40 per cent of these customers comprised dual-income couples aged 50-65. These consumers tended to be knowledgeable about spirits, enjoyed entertaining at home, purchased a wide range of products, and would buy cases of spirits in single purchases, rather than single bottles. While exploring the PEC region, customers would visit the Kinsip distillery to relax in the picturesque farm setting and appreciate Kinsip's urban-styled tasting bar. In stark contrast to the farm setting, the tasting bar featured a contemporary white design with copper accents. The three Kinsip cofounders intentionally chose a design that projected clean, slick urban features to counter the farm's rural, country setting. Many customers used the term "farm glam" to describe the unique design that the three Kinsip cofounders intended to portray. The term "farm glam" seemed to portray a stylish design within a picturesque country setting that customers could indulge in and treat themselves. Many Kinsip customers saw their visits as pleasurable, high quality experiences that featured unique local products. Online sales were mainly derived from these personal experiences. Online customers tended to be people who had already enjoyed Kinsip products during tasting tours onsite. Other online shoppers had been referred to the Kinsip products by loyal clients. Page 5 PRODUCT MIX 9B21A017 Kinsip invited its customers to practice restraint and to savour its products to appreciate the complexity and uniqueness of each one. The business produced 11 different spirits, including rum, rye whisky, gin, brandy, and vodka. Each product was combined with unique flavours derived from locally sourced ingredients such as lavender, juniper berries, black currants, pine needles, and maple syrup. The connection of the spirits to the local sources was reflected in the names of many products, such as Maple Whisky and Woodland's Whisper Pine Vodka (see Exhibit 1). Kinsip's non-alcoholic products also emphasized unique sensory experiences. For example, Kinsip's maple syrup was aged in whisky barrels to elevate a common Canadian product to a more sophisticated level. Kinsip's bitters not only featured locally sourced jalapenos, lavender, and maple syrup, but also incorporated coffee and chocolate from craft businesses located in Toronto. By contrast, Kinsip's hand sanitizer was marketed as a purely utilitarian product with a minimalist descriptive label (see Exhibit 1). The phrase "For Difficult Times" was added to the product's description to suggest Kinsip's role in protecting the community during the COVID-19 pandemic (see Exhibit 4). However, as the pandemic wore on over time, it was less clear whether the phrase continued to resonate with customers. The format of Kinsip's hand sanitizer used in hospitals allowed it to be sprayed on surfaces, which provided an advantage over gel formats. However, some customers who expected hand sanitizer to be in a gel format were confused by the spray version. Nevertheless, feedback from customers indicated that they appreciated the product's quick drying quality, which meant it did not leave a sticky residue. Some early users even reported that the product smelled like gin, which they considered a positive attribute. The three Kinsip cofounders were proud of the quality and purity of their hand sanitizer. They also hoped that it served as a reminder of the firm's commitment to the community. However, it was clear that the sanitizer provided a sharp contrast to other items in Kinsip's list of products. It was the one product that did not seem to fit with the otherwise fine quality consumable spirits. The three owners wondered how to market this one special product to enhance its fit within the distillery's product mix. Did the hand sanitizer constitute an opportunity to reach a broader consumer base? Page 6 Alcoholic Products Product Type Product Name Juniper's Wit Gin White Spirits EXHIBIT 1: KINSIP HOUSE OF FINE SPIRITS-PRODUCT LIST (IN CA$) Liqueur Still's Whisper Vodka Woodland's Whisper Pine Vodka Kinsip Maple Whisky Dark Waters Rum Dark Spirits Juniper's Wit Barrel- Aged Gin Cooper's Revival Canadian Rye Whisky (Kinsip is home to one of the very few cooperages left in Canada). Kinsip Brandy Heartland's Hearth Single-Malt Whisky Description Blend of herbs and botanicals including locally sourced juniper, lavender, and hops. Hand-crafted grain-to-glass vodka, twice distilled in a Kinsip House of Fine Spirits (Kinsip) custom copper still, using 100 per cent Ontario wheat. Country Cassis Saffron Liqueur Hand-crafted grain-to-glass vodka, triple distilled in a Kinsip custom copper still, using 100 per cent Ontario wheat and pine needles. Bold, spicy Canadian rye aged in recoopered red wine barrels. Hand-crafted barrel-aged whisky, finished in barrels that have aged maple syrup. Delicate honeysuckle blossom, citrus notes, and tea leaves layered with creamy caramel and butterscotch overtones and vanilla on the nose. Barrel-aged "grain-to-glass" gin hand-crafted with a unique blend of herbs and botanicals including locally sourced juniper, lavender, and hops. Refined brandy made from Prince Edward County grapes aged in charred French oak casks. Kinsip's first Ontario "grain-to-glass" single- malt whisky; fermented and distilled on site; 100 per cent malted barley aged in a cask brought back from Scotland and finished in one of Kinsip's own brandy barrels for a uniquely Canadian expression of a single- malt whisky; 222 hand-numbered bottles. Created using local black currants and Kinsip's aged brandy. Made with local saffron grown locally by True Saffron. 9B21A017 Volume Price 750 ml $39.95 750 ml $39.95 750 ml $39.95 750 ml $59.95 375 ml $32.95 750 ml $59.95 750 ml $49.95 375 ml $29.95 750 ml $99.95 375 ml $34.95 375 ml $34.95 a) Describe the situation facing the company (based on SWOT analysis). What are the main opportunities/threats/strengths/weaknesses? b) Clearly identify the major strategic issue facing the company. c) Conduct a STP analysis to figure out who is the target market for the company? What are the company's consumer profiles? How has company positioned the brand? d) In what way does the introduction of hand sanitizer leverage existing customer relationships and/or build new ones? e) If you were in charge, would you have launched this strategy? Why or why not? If your answer is yes, what would you advise the company in terms of the rebranding of the hand sanitizer? If your answer is no, what would you advise the company to do instead?

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