In Vodka Veritas
Donald Trump’s failed booze brand offers clues to his dealmaking
“Trump steaks,” said Donald Trump. “Where are the steaks? Do we have steaks? We have Trump steaks.” The billionaire Republican presidential candidate was giving a victory speech in Florida in early March, after the Michigan primary. Behind him were American flags; beside him, a display table piled high with Trumpbranded merchandise for sale. “We make the finest wine, as good a wine as you can get,” Trump said of the dozens of bottles of Trump wine. “I supply the water for all my places, and it’s good—but it’s very good,” he said about the shrink-wrapped cases of Trump water. Trump mentioned Trump Vodka, too. But there’s no Trump Vodka on the table for the TV cameras to zoom in on.
One week later, on St. Patrick’s Day, J. Patrick Kenny, the creator of Trump Vodka, is sitting in his New York office, sipping a Diet Coke and explaining what had gone wrong. Not even he has a bottle of the stuff left. “There used to be one here, but it’s gone,” Kenny says. “The company cratered.” Trump Vodka had problems, from distillery to bottling to finance. Even so, it would be just another celebrity’s doomed foray into liquor if it weren’t the project of a potential president. With no political résumé to speak of, the only way to evaluate the capabilities of Trump is by once again poking around in his exploits in commerce. Like his bankrupt casinos, closed college, and other dead-end brand journeys, Trump Vodka was a flamboyant exercise in failure. Trump, naturally, insists it was a triumph, though good luck finding a bottle today. Its slogan was “Success Distilled.”
Kenny, a hefty man who walks with a cane, was working for the global liquor giant Seagram in the 1980s when he had an epiphany. He watched TV commercials starring Bruce Willis, then at the zenith of his Moonlighting-era charms, twirling in one of them around a hot Southern porch, singing about wine coolers into a bottle he held like a microphone. Somehow, Willis made the beverage seem tempting. “I saw the star power,” Kenny says. “I saw the role it could play.” He left Seagram in 2000 and helped create a website for adolescent girls called Sweet16, which counted Britney Spears as an investor, but the Internet bubble burst a few months later. In 2002 he started another company, Drinks Americas, with the idea of shaping specific beverages around celebrities. A mutual friend, former Bloomingdale’s head Marvin Traub, took Kenny to pitch Trump.
The mogul’s real estate and casino business had surged in the 1980s and almost toppled in the early ’90s. After Trump rebounded, he often licensed his name to other people’s buildings and merchandise, giving his fans Donald Trump the Fragrance and Trump pinstripe suits. Then there was golf, resorts, books, a couple of towers. Trump was a perfect candidate for Kenny’s line of branded beverages. The pair’s first meeting took place in Trump’s office, then in its Apprentice heyday.
“As he was saying, ‘I’m going to negotiate the s--- out of you,’ klieg lights went on and television cameras started filming,” Kenny says. “I was like, ‘Wow, our moment of greatness.’ ” Trump lent his name in exchange for about half the profits, with minimum royalties of $2 million by November 2008 and more to come later.
Trump didn’t seem to mind that shares of Drinks Americas had been selling for less than a dollar each. (Kenny had executed a reverse merger with
a company that made jalapeño mustard to get it listed.) That put it in the penny-stock corner of the market. Even when listings there aren’t bogus or close to collapse, as many are, they’re long shots. Drinks Americas wasn’t filing reports to regulators on time. It wasn’t a glamorous operation. The phone number for its office in Connecticut had belonged to a pizza parlor, and callers would get upset when they couldn’t order calzones.
Trump Vodka joined a Drinks Americas product roster that included Willie Nelson’s bourbon and chef Roy Yamaguchi’s sake. The drink was announced publicly at the end of 2005. “By the summer of ’06,” Trump said in a news release, “I fully expect the most called-for cocktail in America to be the ‘T&T’ or the ‘Trump and tonic.’ ” But Drinks Americas had yet to find a distillery to make the booze. Kenny vowed in the same release to search the globe to develop “the very best super-premium vodka.”
Rene Vriends managed a small distillery in the Netherlands called Wanders. Business was slow, but when he got a chance to get in on Trump Vodka, he said something different. “I introduced myself as the best vodka producer,” Vriends says. “I have a big mouth. I’m just like Donald Trump.” He got the job. “We had a big problem because we didn’t have the tanks for that,” Vriends says. He started producing what he could.
Meanwhile, back in Trump Tower, where Trump lives and works, there was another complication: The vodka’s namesake wouldn’t drink it. Trump, a teetotaler whose late brother was an alcoholic, told Don Imus on the air in 2005 that it was a contradiction. “I know it’s like tobacco companies making cigarettes and then advertising ‘Don’t smoke,’ ” he said. “But it’s a legal product, and if I don’t sell it, someone else will.” He told Larry King in 2006 that he wasn’t a big fan of imbibers in general. “You see them being carried out of an office, they’re totally bombed, and you totally lose respect for them,” he said. “So I’m not a proponent of drinking.” Trump told King that he’d donate some vodka profits to addiction research.
Investors didn’t mind. “It was just a laugh among men, that’s all,” says Bruce Klein, then chairman of Drinks Americas. “I don’t drink lemonade, but we sold a lot of sparkling lemonade.”
Trump did get involved in the bottle’s design, meeting with Milton Glaser, best known for creating the “I NY” logo. “I knew he was a wheeler-dealer,” says Glaser, now 86. “He came to the office, he sat down, we talked a little bit about what he wanted.” The bottle Glaser crafted resembled a skyscraper, with four sides and the neck as a spire, although it also resembled a broad-shouldered athlete, wider at the top than at the base. Two sides were transparent, two were golden, and there were capital T-shaped logos on all four.
Glaser can’t vouch for what was inside. Neither can the distiller. “I don’t know if it tasted so good,” Vriends says. “I’m not a vodka drinker.”
When cases of Trump Vodka made it from the Netherlands to New York in October 2006, they were unloaded by men in black tie and white gloves. There were promotional parties in Manhattan, Miami Beach, and Hollywood, where attendees included adult-film actresses Stormy Daniels and Tera Patrick. “It’s a smooth vodka, it’s a great-tasting vodka,” Trump said at the January 2007 party in L.A. He called it “very high-level, very high-style.” Kim Kardashian was there, a few weeks before the sex-tape leak that would vault her to fame.
A bottle of Trump Vodka cost about $30, more than Absolut, Svedka, or Smirnoff. C.J. Eiras, a distributor, says drinkers need a reason to spend that much. “Why do people like Louis Vuitton?” Eiras says. “Who is Louis Vuitton? He’s probably some French guy from 200 years ago. … It’s brand recognition, and recognition is of ultimate importance in the marketing of goods, period.”
That February, Kenny announced a $100 edition of Trump Vodka, with a 24-karat gold-leaf label. “We think clubs looking to distinguish themselves and market to a very special clientele will be thrilled to have the bottle sold in their establishments,” Trump said then, via a news release. “The Trump 24K gold is now truly a super premium gold standard!”
At first, the marketing worked. Drinks Americas reported sales of 40,000 cases of Trump Vodka by the end of January 2007, for $4.3 million. Later that year the company announced an expansion to Russia, promising an initial 10,000case order worth more than $1.5 million. “Tremendous,” Trump said in a press release. An ad for that market, made in the post-Soviet sensory-overload style, sent gold-hued cutouts zooming across the screen: Trump, a tiger, a buxom woman, plus Vladimir Lenin and the words “MONEY MONEY MONEY” in faux-Cyrillic. The ad ends with a Trump Vodka bottle thrusting skyward in a lightning storm, as little T-shaped hail pellets rain down. The audio track is For the Love of Money, the theme song from The Apprentice.
Drinks Americas announced it was moving bottle production to China from Europe and cutting costs. Trump skipped Trump Vodka–sponsored festivities at the 2008 Super Bowl, recording a video message instead. “Have fun, but not too much fun,” he said, “and enjoy our great vodka.” Brody Jenner
from MTV’s The Hills guest-bartended. Paris Hilton attended, and so did Dennis Rodman and Khloé Kardashian, a few months before taping their season of The Celebrity Apprentice. A party photo shows a blonde licking a gigantic block of ice that says TRUMP VODKA. Another shot shows a topless young woman with the drink’s logo on her chest. TMZ said afterward that she was 17 years old and serving vodka. “We are appalled,” a Trump representative said at the time. “Given the circumstances, we can only guess that she crashed the event to seek publicity.”
Maybe the best piece of publicity came from a favorable review. Spirit Journal awarded four stars, calling it “intensely breakfast cereal-like and biscuity,” which is praise. Even so, the vodka started to stall. In the six months before Halloween 2008, as the U.S. financial system was teetering on the edge of collapse, Trump Vodka did just $805,000 in sales, down by half from a year earlier. Drinks Americas warned shareholders that it had lowered the price of Trump Vodka; that a new 1.75-liter bottle was less profitable; and that distributors in California and Chicago had “issues.”
Just before Christmas, Kenny announced the company was having a difficult time with its lender, Sovereign Bank. “When you spend all this money, and it’s not returning what you need, obviously you’re starting to show losses,” says Fred Schulman, an investor in Drinks Americas. “And, yeah, the bank pulled the credit.”
In April 2009, Celebrity Apprentice viewers watched Trump “fire” Khloé Kardashian because she’d flown back to California to take classes assigned after a DUI arrest. In the New York Post, a Georgi Vodka executive offered to hire her. Trump told the paper his rival’s meddling was a compliment. “It just shows how well Trump Vodka is doing,” he said.
Trump Vodka was not doing well. “We couldn’t buy the glass because we didn’t have the money to buy the glass,” Kenny says of the bottles. “If we couldn’t buy the glass, we couldn’t produce it. If we couldn’t produce it, we couldn’t ship it.” The chief financial officer quit and wasn’t replaced.
The original glassmaker, Bruni Glass, run by Roberto Del Bon, sued over unpaid invoices. He melted half a million Trump Vodka mini-bottles, he says, casting them back into the fire. Other lawsuits over money came from a salesman, a vendor, and eventually, in March 2011, Trump himself. He said he wasn’t paid the royalties he was promised, and he wanted $4.8 million plus interest.
Trump Vodka sold 184 cases in the three months before Halloween 2010, or two a day. The Dutch distillery went bankrupt that year. Drinks Americas announced in 2011 that it was selling about half of itself to a company connected to Federico Cabo, who ran beer and tequila companies in Mexico. Kenny resigned a year later, and Cabo became chief executive officer. The company that made Trump Vodka was now promoting drinks with names like Mexicali and Chili Beer.
“When do we beat Mexico at the border?” Trump said when he announced his presidential run last year. “They’re laughing at us, at our stupidity. And now they are beating us economically. They are not our friend, believe me.”
In the U.S., Trump Vodka is dead, except for bottles that show up on EBay and, every now and then, in the back of random liquor stores. And yet, far away, Trump Vodka lived on. At the height of the 2008 financial crisis, Kenny struck an agreement to have the liquor sold in Israel. Trump complained about it in his lawsuit, saying it was unauthorized, and he announced his own deal for Israeli sales in 2011. The Jerusalem Post reported this month that Israel’s ghost incarnation of Trump Vodka, made in Germany, ended up finding a once-a-year holiday niche as a vodka that’s marked as kosher for Passover—though the reporter said three sampled bottles weren’t actually kosher.
Drinks Americas said in one of its most recent filings that its settlement liabilities, which include Trump Vodka royalties, were $1.5 million. Klein, the former chairman, holds no grudge about the whole thing. “I smile every time I talk about it,” he says. “I’m smiling right now.” Between the announcement of Trump Vodka in 2005 and Kenny’s exit in 2012, the stock fell 99.9 percent.
Although there was never any vodka in Trump, there was a lot of Trump in the vodka. Admirers saw the business’s flaws as virtues. Selling vodka despite despising drunkenness? That’s not hypocrisy, Klein suggests, just flexibility. Partnering with a small group that lacked basic funds? The man believes in the American dream, Schulman says.
Trump may not be the person to blame for Trump Vodka’s bad timing, overmatched distillery, topless teenager, melted mini-bottles, retreat to China, or lost credit. But in his office a decade ago, after making sure the cameras were rolling, he chose to do a deal with people who didn’t have the money or experience behind them to win.
Trump declined to be interviewed, but his spokeswoman, Hope Hicks, e-mailed a statement from Trump about Trump Vodka. “It was a successful product, which continues to be popular abroad, and ultimately morphed into expanding my interests in the spirits industry,” Trump said. “I now own the largest winery on the east coast, Trump Winery in Charlottesville, Va., formerly known as the Kluge Estate. It is an unbelievable piece of property and a tremendously successful business—a deal which you really should be writing about.”
He remains sober. “I’ve never had a drink,” Trump said at a town hall this year in New York. “I’ve seen so many brilliant young children of wonderful parents destroyed.”
It’s getting late on St. Patrick’s Day in New York when Kenny, who now does consulting work, says he still feels proud of Trump Vodka. “Yeah, yeah,” he says. “I mean, within the context of what you can feel good about.” <BW>
Trump Vodka puts in an appearance at the Millionaire Fair in Moscow in November 2007