When people think of the Caribbean they often think of beautiful beaches, warm people, and fruity drinks. Daiquiris, pina coladas, and mai tais are at the top of the list. But it’s actually bitters that have become a key export for Trinidad and Tobago. Angostura Bitters, probably the most recognizable brand of bitters in the world, is based there. Today it’s a prominent part of the nation’s economy. Its history indicates that it was founded in a very Effectual way.
Dr. Johann Siegert was a German soldier and surgeon with a taste for adventure. After medical school, he served as an army surgeon during the fight against Napoleon. When those battles were over, he set sail for South America to participate in the wars for liberation there. He established himself in Venezuela in the early 1800s.
While in Venezuela, in the city of Angostura, Dr. Siegert had troops under his care who suffered from stomach ailments. Seeking a tonic to ease their discomfort, he experimented with locally available ingredients. Local AmerIndians supplemented his knowledge and ingredients with some of their practices. He spent years of trial and error experimenting with versions. Eventually, he came up with a concoction that seemed to work. It eased stomach pains and was pleasant for the troops to ingest.
Word of Dr. Siegert’s tonic spread. In 1824 he began to sell it outside of his command. Six years later, he established a distillery to increase production and maintain consistency.
As Dr. Siegert grew older, his sons (Alfredo and Luis) became more actively involved in the venture. Venezuela was politically unstable in the latter half of the 1800s, so they looked to move their operations. Trinidad and Tobago lie just off the coast of Venezuela, and were part of the UK. They chose to relocate there.
As a territory of the UK, Trinidad offered a lot of connections to people from overseas. The brothers began marketing the “Angostura bitters” to royal visitors from Europe. They also kept in contact with their military networks and sold it to troops from the UK. The bitters were particularly tasty when mixed with their Navy gin rations. It tasted good and had a medicinal effect. Liking it, they brought it back to the UK with them. There, the bitters were incorporated into various cocktails and other drinks and spread beyond the original military audience.
Angostura bitters began to develop a broad following for its tastes. At the same time, it gained recognition for its look. The label is big – out of proportion to the size of the bottle. The story is that the two brothers shared responsibilities for production – with one making the bottle and the other making the label. Unfortunately (or so it seemed initially), they didn’t communicate well and when the two parts came together, they didn’t fit. But they had deadlines to meet, so the oversized label was pasted on the diminutive bottle. This could have been a disaster, but the brothers turned it into a positive by using the distinctiveness of this mismatch as a cornerstone of their brand identity.
Looking back at this narrative, we can see several elements of Dr. Saras Sarasvathy’s entrepreneurial theory of Effectuation.
1. Pilot in the Plane Principle: The future is what you create, not what you predict.
The rise of Angostura Bitters could not have been predicted. It was shaped at every step by Dr. Siegert and his sons. Dr. Siegert did not begin testing bitters to create the next great global bitters brand. He started small, used the resources and networks that were accessible to him, and grew from there.
Business planning, market research, and forecasting became important tools for its growth as a company, but only after the brothers had created a market and knew that they had a product and customers.
2. Bird in Hand Principle: Start with who you are, what you know and who you know.
Dr. Siegert had responsibilities as a combat surgeon. He began his venture by looking for solutions to problems that were within his trained profession. He used ingredients from Venezuela because that’s where he was located. And he learned from the native population because he had access to them and their deep knowledge of local herbs and their medicinal properties.
Had Dr. Siegert stayed in Germany and never ventured to South America, Angostura Bitters would likely not have been created. It was not inevitable.
3. Affordable Loss Principle: Only invest what you can afford to lose.
Dr. Siegert made these bitters in quantities needed to satisfy his troops’ medicinal needs at first. As they liked it and requested it outside of illness, he began to make more. When he realized that there was a market for it, he began to sell it. As people bought it, he set up a distillery to increase production.
He did not jump the gun and build before he had a market.
4. Crazy Quilt Principle: Obtain stakeholder commitments to grow.
When the Siegert brothers moved their operations to Trinidad from Venezuela, they were able to leverage a broad network of stakeholders with ties to the UK and Europe. This included both troops who would introduce it to their peers back home as well as the aristocracy, who could introduce it to their social strata.
Also, it is said that the recipe is only known by a handful of people in the company. Even the Trinidadian customs officials traditionally did not inspect the contents of the shipments coming to the company. This required a partnership with government officials. Had the company not been able to gain this stakeholder commitment to secrecy, it might not have been able to protect its recipe and thus maintain its lock on the bitters market.
5. Lemonade Principle: Turn disadvantages into advantages.
The Angostura label creation and bottle design is a prime example of this. They took what could have been a one-time production error and have kept it as a key part of their brand identity for a century.
Angostura Bitters is known the world over. It has a distinct look and a distinct taste that has made it a bar essential. But it’s path to creation was not distinct – it followed the same trajectory exhibited by successful entrepreneurs worldwide – Effectuation.
--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC