By Joseph Wakelee-Lynch, Editor of LMU Magazine, Loyola Marymount University
Loyola Marymount University (LMU) alumnus Carlos Soto is the founder and CEO of Nosotros Tequila, a 100 percent agave tequila produced in Tequila, Mexico.
Soto earned his Bachelor’s degree from LMU’s College of Business Administration in 2016. What began as an idea sparked by a senior-year class assignment eventually developed into a start-up company. Since then, Nosotros Tequila – built around the concept of bringing people together – has grabbed headlines, earning attention from Forbes and KABC-TV. Soto discusses his journey in this Q&A, previously published in LMU Magazine.
JW-L: How did Nosotros start?
CS: The premise started in a business class during my senior year. The assignment was to come up with a business idea in three days that had nothing to do with technology. I went out that night, had a few tequilas and got to thinking: “I did this tonight, so how many other people in L.A. went out today? There has to be money in this.”
A few months later, I took two weeks out of school, went to Guadalajara in Mexico, visited a couple of distilleries and brought some samples back. At that point, I asked Michael Arbanas ’17, also a business major, to be CFO of the company. We developed some formulas and had a few tastings with alumni to see which was better. There was one clear winner. Then I applied for trademarks. By graduation, I had everything in line, but no product. I had to make a decision: Am I going to put everything into this or am I just going to forget about it? So, I went to Bank of America and took out a loan. Here I am, two years later, and still working.
What was the hardest thing about the first few months?
Staying motivated. I went to 14 outlets before I got my first account; my first yes. It’s about persistence. I took out a lot of loans and maxed out a couple of credit cards. There were a lot of ups and downs but I feel that I learned more [through that experience] than I would have in 30 years in an investment banking position. The coolest thing about doing your own thing is you get out of it what you put into it. If you don’t put everything into it, you’re going to crash. If you do put everything into it, you get a lot back from it. It’s very fulfilling.
Are you aiming at the U.S. market or the Mexican market, or both?
For now, the U.S. market. The United States is the number 1 consumer of tequila in the world. One-fifth of that market is in California. Of the California market, one out of every four bottles is sold in Los Angeles. So, we are at the heart of the tequila market in the United States.
What are your thoughts about competition?
I’m not too worried about competition. There are barriers to entry to the market, so I’m not going to have a distillery with more money pop up next to me. Thankfully, my first language is Spanish, which makes things easier.
Do tensions in the U.S.-Mexico relationship have an impact on your business?
Definitely. The current U.S. administration has spoken about putting tariffs on Mexican products, everything from avocados to appliances. At the same time, if there is a tariff, everyone in the industry will feel it. The person who is going to be hindered is the consumer, because the producers are going to pass the cost along to the final consumer.
What’s the most helpful lesson you’d offer other potential entrepreneurs outside of the tequila market?
First, make sure that there is a market. If there is a market, it’s easier to find your specific niche. Second, the product is very important: Understand what you’re going to do and the quality of the product. Know your value proposition. You won’t be able to sell something that you don’t understand yourself. And, third [until you reach success], be ready to eat crap.
Drinking is a social experience. Nosotros is about bringing people together, creating experiences. The full name is La Historia de Nosotros, the story of us. Nosotros Tequila is about bringing people together and creating experiences and stories.
Why the worm?
What worm? There’s no worm. That’s an American myth. Someone started doing it in Mexico, and it was a great hit in America. There’s no need to put a worm in tequila. That’s a marketing ploy.