EDMONDS, Wash. – Traveling abroad six years ago, Kris and Kali Kelnero encountered canned cocktails and thought, “we could do that.” After years of work and planning, the couple opened Kelnero cocktail bar in downtown Edmonds in February 2019 and, eight months later, contacted business advisor Janet Toth for help with their next step: Kelnero Beyond ready-to-drink (RTD) cocktails in cans or bottles.
Toth is with the Washington Small Business Development Centers in Snohomish County. Administered through a cooperative agreement between the U.S. Small Business Administration (SBA) and Washington State University, the Washington SBDC is a network of more than 30 advisors in more than two dozen communities across the state working to help owners and entrepreneurs who want to start, grow or buy/sell a business. SBDC advising is confidential and is provided at no cost to the client.
“Kris and Kali are planners,” Toth said. “They were on task. They already had a lot of their information in order to move ahead on the RTDs.”
But then, “Covid happened,” recalled Kali Kelnero. “Our strategy shifted from thinking about the future to NOT thinking about the future – for the sake of our own sanity.”
A tested recipe for navigating safety and health rules
Their pre-Covid work on the RTDs, said Kelnero, was all about acquiring permits – a complicated and slow process involving both state and federal regulating and licensing bureaus. Because most canned alcohol drinks are made with wine or malt liquor (essentially a higher-alcohol version of beer), the couple’s expansion into RTD cocktails containing hard liquor is novel.
“It’s a new type of venture,” Kelnero said. “Even state agencies don’t know how to handle it much yet. Having someone like Janet to answer our questions and help us find contacts was important through the months, maybe even a year, that we pushed through licensing.”
Toth’s help with navigating government agency unknowns was to prove invaluable again, as the Covid-19 pandemic hit most small businesses with shutdowns in March 2020.
With assistance from federal stimulus money and loans, “the Small Business Administration was the purse strings to help small businesses through the pandemic,” Kelnero said. “It took on a bigger role in the lives of all the small business owners I know.
“For Covid assistance, Janet was our conduit to the SBA – a reliable resource for helping us understand the most up-to-date information in a changing situation. Her advising has been a support during this sometimes-discouraging year.”
The sweet cherry amid the Covid bitters
Though the vagaries of Covid interrupted the timeline for Kelnero Beyond, it also provided a test kitchen for the concept of RTD cocktails.
“We were closed for a month,” Kelnero said. “The bar gave us a venue to start figuring out how to create bottled cocktails before we launch a company.” When Kelnero cocktail bar and other eating and drinking establishments reopened for takeout only, the state had made provisions for alcohol drinks to be included in the carry-out fare.
“The Kelneros reconfigured their business to stay successful,” Toth said. “Instead of people coming in, they put out cocktail recipes on video and bottled cocktails for customers to take away. They could test their product, while they also kept staff employed and kept their vendors working during the pandemic.”
Make that a double
With Covid concerns apparently waning, the Kelneros intend to pursue Kelnero Beyond RTD cocktails – though perhaps not a soon as they might have expected. Among the other “fly by the seat of our pants” surprises that have altered their plans during the past year have been what Kali Kelnero calls her “twins.”
“We found out we were pregnant literally days before we were approached by friends asking us to buy their shop,” Kelnero said. The couple’s first child is due in July, while their wine bar, Vinbero, opened in June just a few blocks from Kelnero cocktail bar.
“When the pandemic ends and our family and work lives are more settled,” Kelnero said, “we will have more time to consider Kelnero Beyond. In the meantime, becoming more established with Kelnero and Vinbero just buys us more brand power.”
Ready to go when its ready-to-drink
When the time comes, Kelnero said, Toth will continue as a key ingredient in their Kelnero Beyond business blend, especially when it comes to scaling up and obtaining financing to expand.
“Having Janet as a guide to navigate that process will save us a lot of time and increase our odds of success,” Kelnero said.
In the meantime, Toth checks in regularly with the Kelneros and is ready for the time they will need more specific advising for Kelnero Beyond.
“Clients come in for one thing, but then SBDC advisors become mentors for all kinds of things – a resource these small businesses can count on,” Toth said. “We are like friends you may not see for six months or a year, but we still have that relationship. When they need me, I’ll be here.”
By Cynthia King, for the Washington SBDC
Learn more about Kelnero cocktail bar at https://www.kelnero.bar.
Learn more about the Washington SBDC at https://wsbdc.org.