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Babco Europe CEO Aims to Grow Market, Restrain Self

Source: Reuters
26/10/2009

New York, Oct 26 - The head of the small company that owns Agwa de Bolivia, a liquor made from coca leaves, wants to increase sales of his herbal tonic in the United States, but also restrain himself when drinking it.

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Mark Wilson, chief executive of alcoholic drinks company Babco Europe, said all the cocaine is removed before the leaves are boiled down into a 60-proof liquor and bottled, or else the drink would never get regulatory approval.

Yet an upbeat euphoria remains for those who imbibe, he said, due to other alkaloids in the plant.

"If I drink Agwa I will be quite energetic and I will stay up quite longer than I normally should," said Wilson by phone from Spain. "And definitely, sometimes I can find myself saying 'I want to be careful the next time I drink Agwa'."

Agwa de Bolivia is a green liqueur with a distinctive taste that Wilson called "weird but nice," due to its mix of ingredients such as guarana, ginseng, African mint, rosemary and lavender.

Like cocaine, known for its analgesic properties, the drink even tingles on the tongue, said Wilson. He helped found Babco after working for IDV, which is now part of London-based Diageo Plc, the world's biggest spirits group.

Babco is hoping to capitalize on consumers' growing interest in energy drinks and exotic, tropical ingredients such as acai, stevia and coconut water.

A bottle of Agwa costs about $36 at retail. Wilson said Babco is currently selling about 30,000 nine-liter cases worldwide, which makes the drink's total market at retail worth about $9.7 million.

Wilson hopes to reach a million cases within five or 10 years. By comparison, industry data shows that Grand Marnier sold roughly half a million cases in the United States last year, while Cointreau sold about a quarter of a million cases.

NICHE PRODUCT

Despite the company's big dreams, there are skeptics.

"Like elderflower liqueur picked by men on bicycles wearing lederhosen, it's a quirky, niche product," said Frank Coleman, spokesman for the U.S. Distilled Spirits Council, an industry trade group. "There will always be an opening in the broad U.S. market for that. Whether it will get any traction is probably doubtful. It depends on its mixability."

Unlike other herbal liqueurs, which include Jagermeister, Sambuca and Pastis, Wilson said Agwa works well in cocktails, such as mojitos and margaritas.

It appears in a frozen avocado and mezcal cocktail at Latin eatery Macondo, on Manhattan's Lower East Side. The restaurant's events planner, who identified herself only as Catalina, said the drink is as popular as any other on the menu.

Babco's other brands include the apple-flavored Mickey Finn Liquor and Bad Angel, a wild strawberry frappe liqueur. Its annual revenues are now in the range of 7 million euros to 8 million euros ($10.5 million to $12 million), Wilson said.

Once Agwa reaches full distribution, Wilson said he could see Babco bringing in 100 million euros ($150 million).

In addition to a handful of bars and liquor stores in the United States, Agwa is sold in Australia, Russia, Britain and Slovenia.

The drink has already endured labeling problems and was once banned in New York. As a result, Wilson plans to grow the brand through a strategy of slow and steady marketing direct to consumers, such as tastings and other events.

"Anything as way out as this takes a little bit of hand-to- hand promotion," Wilson said. "You need to build a relationship with the consumer so that they understand the product in the right way."

For example, Agwa will appear at New York City's upcoming Halloween parade in Greenwich Village. A group of people in traditional Andean costumes will be at the festivities with a llama and dancers on roller-blades giving out coca leaf leis.



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