Could Trump tariffs hinder vodka brand's US goal?

Huw Thomas
Business Correspondent, BBC Waleshuwthomas
BBC Two men in their twenties wearing black hoodies, featuring a gold Au logo, sit on gold chairs. Behind them the shelves are stacked high with gold vodka bottles.BBC
Welsh entrepreneurs Charlie Morgan and Jackson Quinn say the American market is essential to the company's growth

The threat of new US tariffs could take the shine off a Welsh vodka brand's growth plans.

Swansea-based Au became one of the UK's fastest-growing companies after its gold bottles thrived with celebrity endorsements from Jake Paul and Ronaldinho.

The £200m company, which employs about 100 people in south Wales, was founded by school friends Charlie Morgan and Jackson Quinn.

But Mr Quinn said any new import tariffs from President Trump would simply "speed up" plans to produce the vodka in the US for the American market, rather than exporting from the UK.

President Trump has announced a raft of new trade tariffs, and has hinted the European Union could be next.

He said the UK had been "out of line" but that the issues "could be worked out".

Mr Morgan and Mr Quinn first plotted the company's trajectory on a fast-food napkin, and are now attempting to conquer the USA.

They already have an office in Atlanta, Georgia, and Mr Quinn said they would have to go "back to basics" and be "as disruptive as possible".

It is notoriously difficult to tap into the US drinks market, with established brands dominating bars and supermarket shelves, and the lingering threat of tariffs may hit their ambition further.

Spirits fared poorly in UK exports to the USA last year, with trade in whiskey and gin declining.

The vodka trade is smaller, and the Food and Drink Federation reported a surge in the amount of American vodka being imported to the UK.

Reuters President Donald Trump is interviewed at night by reporters on the runway beside Air Force OneReuters
President Trump told the BBC a UK deal "could be worked out" on trade tariffs

The heavy traffic in vodka sales is currently coming across the Atlantic from the USA, but the founders of Au want to reverse that trend.

"The States is a huge one for us," said Mr Quinn, saying they needed to be as "disruptive" and "different" as possible.

"If we can crack that this year, that would be brilliant... I think we can truly be a global brand at that point," he said.

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Mr Quinn said the vodka was currently "shipped to the US from the UK, but the longer-term plan is to produce Au Vodka within the USA".

He said "any tariff increases would only potentially speed up our existing plans" to bottle its American product across the Atlantic.

The founders have also opened a new headquarters on an industrial estate in their home city of Swansea.

It is here they have turned an innocuous office block into a car park full of gold-wrapped cars, and a nine-hole mini golf course with golden obstacles and balls.

They will also be offering tours and selling vodka on site.

While it feels like a temple to their men's golden ambitions, they try to remain focused on how this all began.

Au A white restaurant paper napkin on a black backgruond. Using black pen, someone has written SALES 2020 at the top of the napkin. Beneath the headline is a table listing how much sales revenue the Au co-founders expected to make each month. Circled and underlined on the right of the napkin are the words "TOTAL £3M". The Au logo is drawn in the bottom right corner of the napkin.Au
The fast-food napkin which the co-founders used to predict their sales revenue, though in reality they made more than ten times that amount

"Remember, we sat in a McDonald's and just wrote [the plan] on a napkin," Mr Quinn said.

He remembered thinking "if everything goes our way, with the wind in our sails, we'd do £3m of sales which would be huge revenue for us".

"But then fast forward 12 months later, I think we did £38.4m," he added.

It was, Mr Quinn said, "a crazy, crazy twelve months".

Mr Morgan said the gold theme and a marketing blitz told just half the story of the drink's success.

"That only gets someone to try it once," he said.

"The next - and most important - part is, is the liquid any good?

"If the liquid isn't any good, then people won't come back the second and third and fourth time."

Getty Images Jake Paul wearing a black tshirt and standing in a sports stadium as fans wave and take photos with their phones.Getty Images
YouTube star turned boxer Jake Paul had a temporary tattoo of a vodka bottle to promote the brand

Celebrity endorsements helped drive the vodka brand from a start-up company to a viral trend.

YouTube star Jake Paul was paid £200,000 to display a temporary tattoo of a Au bottle on his body, with dozens of people then taking up an offer of £250 from the company to get their own permanent tattoo.

Tapping into the sportsmen, musicians and influencers who can market the product has been a key element of the brand's success, and which former Radio 1 presenter and international DJ Charlie Sloth has encouraged.

He invested in the company after seeing their early success, and has now moved to Swansea to help run the business.

"For me, this is just the beginning," Sloth said.

"We've jumped over the first two hurdles with great class and elegance.

"And I feel like now it's time for the big test, which we're on to now, which is the US."

Charlie Sloth in beige tracksuit stands in the Au vodka officers, with gold-wrapped vodka bottles behind him.
International DJ Charlie Sloth backed the company and has helped it win celebrity endorsements

Sloth said "as a British brand and a Welsh brand, I feel like we'll be the first to do it, and I'm super confident".

Mr Morgan said social media had been the brand's "superpower" that had helped the vodka to become a mainstay of Ibiza's bars and the wider holiday drinks market.

But Morgan has his sights set further afield.

"If you asked a 25-year-old target market consumer in America, would they know Au? Probably not yet," he said.

"So there's still so many more people who don't know about us. And I think we're still driven to try and take over the world a little bit more."