Bloomberg Businessweek (North America)

On cks

Trumping Donald? The Donald isn’t alone in trying to capitalize on his famous last name. The U.S. Patent and Trademark Office is considerin­g several Trump-related applicatio­ns that came from outside the Trump Organizati­on.

-

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

The owner of a Connecticu­t car-restoratio­n business conceived the

as a way to support Donald Trump. The company sells coffee mugs, T-shirts, and baseball caps with a logo resembling Trump’s own, but it doesn’t sell actual fencing. Phoenix entreprene­ur

who has also requested trademarks for Sun Devil Champagne and Champagne Magazine, filed an applicatio­n for Trump Champagne. Trump coins—they come in silver and copper, priced at $25 and $5, respective­ly— “express the anger of the people who distrust politician­s and the badly broken U.S. political process,” California-based

said in a press release.

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>

1Each new record begins with a “lacquer,” the master disc sent by a record label. It’s dipped into a nickel solution; the nickel is peeled off the lacquer to become the “stamper,” which is fitted into a record press. QRP “plates” lacquers within four hours of receiving them because exposure to heat and humidity degrades audio quality.

65used to make the stamper (the grooved mold that gets “stamped” into soft vinyl) and the temperatur­e of the water used to flash-cool each newly pressed album. Most of QRP’S workers are former auto mechanics or heating and cooling engineers from Salina, with no background in acoustics or vinyl; Salstrom has had to teach them the intricacie­s of each phase of the process. The company is also working with its vinyl supplier to create a softer material that will pick up even more sonic detail.

Kassem wants to expand so that he can press even more records, but to do that he needs a bigger factory. Last year he and Salstrom drove to Chicago on a tip that someone was looking to sell 13 vinyl presses. Even though they were rusty and hadn’t been used in 20 years, Kassem strapped them onto a flatbed truck and hauled them back to Kansas. The first of them should be fully functional later this year; once they’re all restored, QRP says it will more than double its output. In the meantime, Salstrom says he’s reduced QRP’S backlog to just four to six weeks. The company has started taking new orders again—but only a few, and only by artists they like. “We don’t do rap, and we don’t do hard metal,” Kassem says. “What’s the point? If something is wrong with a metal record, you can’t hear it anyway, because it’s full of explosions.” Sometimes, they’ll turn down an order if it’s too big: QRP is about a third the size of the country’s largest pressing plant, United Record Pressing, in Nashville, which did Adele’s 25 last year. Lately, QRP has been churning out a lot of Pink Floyd

and Rush, and whenever an order for The company says

a Wilco album comes in, they take it, its capacity will more than double once because it’s Salstrom’s favorite band. the 13 presses Kassem

(The mail-order business still exists, bought in Chicago,

too—it handles about 500 orders a day.) this one included, are rebuilt. With all this business, Kassem has found himself in the same situation as before he started Qrp—his obscure reissues keep get ting delayed. “About once a month, Gary and I have to have a meeting where I tell him, ‘ My records come first,’ ” he says. “I’m the chef who started the restaurant. I don’t want to wait in line to eat.” <BW>

 ??  ??
 ??  ??
 ??  ??
 ??  ??
 ??  ??
 ??  ??

Newspapers in English

Newspapers from Canada