Skyy Spirits LLC

International Directory of Company Histories, Volume 78 (2007) by Ed Dinger

Skyy Spirits LLC

Skyy Spirits LLC

1 Beach Street, Suite 300 San Francisco, California 94133 U.S.A. Telephone: (415) 315-8000 Fax: (415) 315-8001 Web site: http://www.campari.com

Wholly Owned Subsidiary of Davide Campari-Milano S.p.A. Founded: 1988 Employees: 80 Sales: $74 million (2004 est.) NAIC: 312140 Distilleries

A subsidiary of the Italian beverage company Davide Campari-Milano SpA, Skyy Spirits LLC produces America's second-highest selling super-premium vodka. Skyy Vodka is known for its thorough distillation and filtering process, which the company claims removes most of the impurities it says are responsible for the symptoms of a morning-after hangover. In addition to its original vodka, the San Francisco-based company offers Skyy90, created specifically for use in martinis; flavored vodkas that include Skyy Melon, Skyy Berry, Skyy Vanilla, Skyy Citrus, and Skyy Orange; and Skyy Cosmo Mix, used to make Skyy Citrus Cosmopolitans. Skyy also distributes Cutty Black whisky and Miller's London Dry Gin.

ORIGINS OF SKYY VODKA

Skyy Vodka was created by Brooklyn-born millionaire and maverick inventor Maurice Kanbar. A mechanical engineer by training, he would hold more than 36 successful patents on a wide variety of products. The foundation of his fortune, when he was still in his early 20s, came from the 1960s invention of the D-Fuzz-It Sweater Comb, used to remove "pills" of fabric that form on sweaters. Other Kanbar inventions included the Safetyglide hypodermic needle protector cap and a cryogenic cataract remover. In the early 1970s he also launched the first East Coast multi-screen movie theatre: the Quad Cinema in New York City's Greenwich Village. It was in 1988 that Kanbar was inspired to create Skyy Vodka after suffering from a headache caused by after-dinner cocktails. He talked about his hangover with a physician friend, who told him that the symptoms might have been caused by congeners, natural toxins that are produced during the distillation process in making spirits. Kanbar told the Toronto Star in a 2001 interview, "I said to myself, 'If someone would create a dependably pure vodka that wouldn't give me a headache, I would drink it.'" Sensing a business opportunity, he began conducting research on congeners and the distillation process.

Kanbar began searching for a distiller to work with on his idea for a purer vodka. "They thought I was nuts," he told the Toronto Star , adding "I finally found a distillery to distill it four times. They said they would do it if I paid for it beforehand." Following distillation, Kanbar had his vodka subjected to a three-step filtration process to remove odor-forming compounds. After patenting the process Kanbar tried to sell it and move on to other projects, but once again he was met with skepticism. "There were already strong vodka brands around," he told Beverage Industry in a 2000 profile. He explained: "Nobody felt it was a real proposition—that people really cared about impurities in their vodka."

Kanbar decided to invest his own money and market the vodka himself. In 1992, working out of his San Francisco apartment, he began selling the vodka in a clear stock bottle, essentially going door to door to bars and restaurants. It was while gazing out of his apartment at the beautiful sky above San Francisco that he hit upon the brand name "Sky," because it connoted purity and balance, like the vodka he had produced. A second "y" was added to the name to help it stand out and for trademark purposes. He then began using a cobalt blue bottle, which referenced the name and was also more stylish than the clear glass bottles used to contain competing vodkas.

SKYY VODKA INTRODUCED IN 1993

With all the pieces in place, Skyy Vodka was introduced in 1993 and rolled out nationwide a year later. It enjoyed exceptional success in large part because of timing: the economy was on an upswing and younger people were rediscovering the cocktail, eschewing the spritzers and wine coolers of the 1980s. In 1994 Kanbar attended the 1994 Wine and Spirits Wholesalers convention in New Orleans, at a time when Skyy had a presence in only a handful of states through commissioned brokers. He approached some national distributors about carrying Skyy Vodka but they asked to wait until the convention was over before meeting with him. In the meantime, regional wholesalers who had heard about Skyy Vodka's success in California approached Kanbar and sought to represent the brand in their markets. By the time the national companies got back to him, Kanbar had cobbled together his own plan for national distribution. In 1994, the company had sold an impressive 190,000 cases of Skyy Vodka and was poised to enjoy even stronger growth.

By that point, Kanbar had reached his limit as an executive, preferring to create enterprises and then turn them over to someone with more management skills. He recruited his 27-year-old nephew, David Kanbar, owner of a small New York mortgage business, who sold his company and moved to San Francisco, where Skyy was still just a three-man operation working out of his uncle's apartment. They soon decided that they needed the services of someone experienced in the liquor business. Two executives did not pan out but the third did. He was Anthony Foglio, the chief operating officer and president of IDV North American, the spirits division of Grand Metropolitan plc. Foglio brought along his right hand man, Keith Greggor, and together they were instrumental in taking Skyy Vodka to the next level. Sales grew to 375,000 cases in 1995 and 585,000 cases in 1996.