Investment Idea #5 - SGX

Markets are Volatile and Churning but Keep Walking...

Groceries and Marketplaces

The story of Johnnie Walker, the world’s largest whisky brand started when John Walker sold his father’s farm after the latter’s demise and used the money to open a grocery in Kilmarnock. Customers liked his youth and his attitude and often bought stuff from him. To entice customers to come back to his grocery more often, the young proprietor started blending whisky, seizing an opportunity to create something unique since the whisky quality back then was pretty inconsistent.

Walker’s whisky turned out to be superior in quality and taste and importantly, he made the quality consistent and sustainable because he devoted his time and passion into the venture. When his sons took over, the Johnnie Walker label was sold to ships’ captains and exported all over the world. Starting from the small grocery, Johnnie Walker today is sold in 120 countries and is also served to the Royal Household. The company behind the brand, Diageo, still holds the Royal Warrant granted in 1934.

We will talk more about Diageo someday.

The analogy to the main idea to be revealed in a few more paragraphs is actually John Walker’s grocery store. I have a Malaysian friend whose family operated the local grocery and daily needs shophouse in his local Malaysian town. It was the only place to get instant noodles, trading cards, ice-creams and the cool things that meant the world to kids back then, some thirty years ago. So we all hanged out there all the time. I can imagine John Walker’s Kilmarnock grocery store to be so much more if he blended good quality alcohol on top of selling daily necessities.

Everyone and his dog will be there all the time!

Groceries and marketplaces with their ability to draw in crowds helped built strong businesses especially if you are the only good, viable location in town. Even if there are neighboring competitors, you can carve out your niche much like John Walker and his whisky. As a go-to-marketplace with a differentiated niche, you have created a business moat and paved the path to glorious moneymaking!