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Business Observer Monday, May 28, 2018 3 months ago

Entrepreneurial family takes big shot in alcohol-based ready-to-drink market

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Ashley Zalkin capitalized on what she believes is a quench for a better pre-made shot.
by: Beth Luberecki Contributor

Event planner Ashley Zalkin knows how to have a good time. And it was while she was preparing for one of those moments of revelry around three years ago when she came up with her boozy business idea.

She was making 400 Jell-O shots for her 25th birthday. After hours of work she asked her roommate why no one made a prepackaged version of the over-21 party treat. “Then it hit me, that lightbulb moment,” she says. “Why isn’t that a thing yet? So I called my parents up and said we need to get on this; I think I just found what I want to do for the rest of my life.”

She and her mom, Laura Zalkin, started putting together a business plan and studying the market. Her dad, Bruce Zalkin, an entrepreneur in the antique toy business, and sister Alex also came on board. After a product development phase in which they all got a crash course in manufacturing and packaging, the Original Jel Shot Co. officially launched in November 2017.

After just half a year in business, Original Jel Shot Co. products are available at more than 200 retail and bar locations in seven U.S. states and the Bahamas, as well as online. The company has produced more than 1 million shots to date. (Officials decline to disclose revenue figures or projections.)

Available in six flavors — banana, cinnamon, root beer, watermelon, raspberry and peach — they sell online for $29.99 for 20 shots or $39.99 for a party tray of 30 shots. Locally, you can find them at places like McCurdy’s Comedy Theatre in Sarasota and the Brass Tap in Tampa, and at liquor stores across Florida. Potential new flavors include strawberry jalapeno, watermelon mint and various seasonal offerings. The company may also experiment with other alcohols like whiskies. 

But wait, there’s more. The company, based in Myakka City in southeastern Manatee County, is poised for even more explosive growth through a new partnership with original "Shark Tank" TV judge and As Seen on TV founder Kevin Harrington and Gerry David, former CEO of Celsius fitness drinks. The latter’s products, and company, once received an organic online promo from Khloé Kardashian, so David bring some serious marketing muscle to Original Jel Shot.

“It’s really a unique product,” says David. “To me, it has so much sizzle. I’m excited because it fills a big need out there in the marketplace. They’ve got all the right ingredients for a very successful business.”

Quality First

Those ingredients include some changes from traditional Jell-O shots. The Zalkins originally set out to make something with a gelatin base. But their development process led them to an alternative that’s vegan and gluten-friendly. (Traditional gelatin is made with animal byproducts.)

They also use a sugarcane neutral grain spirit similar to a white rum as the alcohol instead of the more customary vodka. “It has a nice sweet factor to it instead of the vodka, which we believe has too much of a bite,” says Laura Zalkin, 53, who serves as the company’s vice president of sales.

A willingness to pivot when needed has proved an important factor in the company’s growth. When the original business name the family devised just wasn’t working, they regrouped and came up with Original Jel Shot. And when they couldn’t find a manufacturer in the U.S. that could produce a product with the texture they wanted, they headed to Taiwan, which has more experience with plant-based extracts, which form the base of their shots.

The family spent two and a half weeks at the factory that produces the ingredients for the shots to ensure the quality met their standards. “We wanted to make sure every flavor was perfect and that nothing tastes like a chemical,” says Laura Zalkin.

The company works with several other factories in Taiwan on the packaging components for the products. “It takes so much to make this,” says Laura Zalkin. “And we’re probably going back to Taiwan again this summer.”

To get the product into stores, bars and nightclubs, the family used what Laura Zalkincalls a “feet on the street” approach. Demos have proven key to their success. “We have to educate everyone on the product, because this is the only one like it in the world that exists,” says Ashley Zalkin, who heads up the company’s events department.

'This has potential to have explosive growth. But you’ve got to have everything right before that happens, because you can actually succeed yourself right out of business.' Gerry David, Original Jel Shot

Original Jel Shot Co. launched in New York first because that was the first place the family was able to develop a relationship with a clearinghouse that would allow the company to sell alcohol. That clearinghouse connected them with another in Florida, where the firm now has about 120 accounts.

On May 1, it started working with a distributor in New Jersey, which takes on a lot of the sales legwork now. “They did as much sales in New Jersey in 15 days as it’s taken us since November of last year in Florida,” says Laura Zalkin. “It is a massive difference.”

The Zalkins hope Harrington and David can help boost distributor relationships even further. “Now that we have the partners coming on board, we’re going to take this much bigger much sooner,” says Bruce Zalkin, 53, the company’s president.

That partnership came about when Bruce Zalkin and Harrington got connected through mutual friend Butch Patrick, the actor who played Eddie Munster on the TV show "The Munsters." Harrington and David both have an ownership stake in the company, though terms of the partnership were not made public.

Next Steps

Having a unique product should help Original Jel Shot Co. stand out. The company’s management team is also drawing on past experiences and connections to grow the business. Bruce Zalkin, for example, has spent years in the antique toy business, and the insight he’s gained there has proved relevant for growing Original Jel Shot Co. Both require the need to have a pulse on the market and to follow trends closely, he says.

Ashley Zalkin previously worked as an event coordinator, so she knows how to throw a good party to promote the brand. And chief marketing officer Cathy Jamison’s time as head of marketing for FOX Sports Sun has served as valuable background experience.

Also working in the company’s favor: trends in ready-to-drink alcoholic beverages, a $5.2 billion U.S. market, according to 2017 figures from market research firm IBISWorld. According to a January report from Persistence Market Research, the global market for RTD and high-strength premixes is predicted to grow at a compound annual growth rate of 4.5% from 2017 to 2026. And a December 2017 report by market intelligence agency Mintel found that 26% of RTD alcoholic beverage drinkers in the U.S. consumed more of the products in 2017 than they did in 2016.

Kevin Harrington and Ashley Zalkin have high hopes for the Original Jel Shot.

“Millennials are buying [RTDs],” says Ashley Zalkin, a millennial herself at age 28. “We want something that’s right now. We don’t want to buy five different things and go to five different stores to make one drink. We’d rather just pick it up, open it and go on our way. We came in right at the perfect time.”

The fact that Original Jel Shot products don’t have to be refrigerated makes them more portable for sales calls and easier to store than something that needs to be kept cold. Awards and accolades also don’t hurt. Original Jel Shot Co. was named the best new product at the 2017 ECRM On-Premise Adult Beverage EPPS People’s Choice Awards and received awards for taste at the 2018 Wine & Spirits Wholesalers of America convention.

Lots of likes

Of course, challenges exist. Original Jel Shot Co., for example, has more work to do to get all the necessary infrastructure in place before it can expand much more. “This is one of those products that I think has the potential to have that explosive growth,” says David. “But you’ve got to have everything right before that happens, because you can actually succeed yourself right out of business.”

David and Harrington will help the company secure financing, make connections with distributors and other contacts and develop an effective marketing plan.

“What I look for are products that are innovative, unique and have excitement to them,” says Harrington, a St. Petersburg resident. “Gerry and I like to get involved with things at the beginning, because then we can be part of the framework of it. The beautiful part of this is all of the development, the manufacturing, the packaging, the names — that’s a lot of the hard work. Then guys like us can come in and take those years of development and put the marketing plan together and start selling and generating revenue.”

Before he retired, David led the turnaround efforts at Celsius. In about five years, the company went from a stock price of 20 cents a share, traded over the counter, to moving at $7 a share on the NASDAQ. He believes some of approaches he took there could be used at Original Jel Shot Co., like the use of creative, geotargeted digital marketing.

“You have to be really intuitive about who your consumer is for this product,” he says. “At Celsius we pulled back from all the traditional advertising and used other techniques. A lot of that can be applied here, because it’s the same type of thing.”

Social media played a big role in Celsius’s turnaround. When Khloé Kardashian shared her love of the product with her social media followers without being hired to do so, for example, the beverage company reaped the benefits. “You would pay $200,000 to get her to do that if you paid her to do that,” says Harrington.

The Original Jel Shot Co. has almost 1,300 followers on Instagram, and Ashley says most of them are “real and strong” followers. She’s been approached by influencers asking for product to taste and share online with their own followers.

 “There’s a lot to come,” says Ashley Zalkin. “My goal is that when you walk into a bar you’re expecting the Original Jel Shot when you ask for a Jell-O shot.”

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