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The craft spirits market is exploding, valued at $21.4 billion in 2023 and projected to grow by 28.4% annually through 2030. 🌟 But with opportunity comes fierce competition. ❓ How do you differentiate your brand in a crowded market? ❓ Which distribution channels will maximize your reach? ❓ What’s the secret to getting your product onto crowded shelves? We’ve compiled proven strategies to help craft spirits brands navigate these challenges and thrive in this booming industry. From pinpointing lucrative markets to creating a go-to-market plan that aligns with your unique story, this guide is packed with actionable insights (and real-life case studies 👀). 📖 Read the blog now and position your brand for success: https://lnkd.in/ekV_BZVD #CraftSpirits #ArtisanalSpirits #GoToMarketStrategy #SmallBatch #BrandGrowth #DistributionStrategies #Premiumization #SpiritsMarketing

The global whiskey market is experiencing a remarkable surge, with projections indicating a robust compound annual growth rate (CAGR) of 5.56% through 2031. However, with this expansion comes a reshaping of industry dynamics. A key advantage for many modern whiskey brands lies in their ability to operate without being vertically integrated. In an era where premium and bespoke offerings are becoming increasingly coveted, this flexibility has emerged as a crucial competitive advantage. Brands that embrace this model can focus on perfecting their products and marketing strategies, entrusting specialists with distillation and aging processes. This approach not only lowers overhead costs but also ensures a swift response to market shifts. Another pivotal force driving the whiskey sector is bourbon tourism, particularly along the Kentucky Bourbon Trail. Distilleries in this region are benefiting from significant boosts in revenue, with tourism injecting millions of dollars into local economies annually. For whiskey brands, success now hinges not just on the product, but on the immersive experience they offer—fostering brand loyalty and expanding awareness in an increasingly competitive market. As the whiskey industry continues to evolve, we can expect these factors to influence pricing strategies and competition. The future will likely see a shift toward bespoke offerings, enhanced experiences, and a heightened focus on premiumization as the primary drivers of success. Vertically integrated brands will face obstacles as they navigate these changes, while non-vertically integrated producers and bottlers stand to benefit tremendously, leveraging flexibility and specialization to thrive.

UNITED SPIRITS EARNING CALL TRANSCRIPT Q1 FY25 IMFL and Prestige Segment: United Spirits is progressing steadily with brands in this segment, focusing on growth and market engagement. Antiquity Brand Activation: The brand's photography challenge campaign engaged around 140,000 people, boosting its consumer equity. Royal Challenge American Pride: A 375ml "hipster format" was launched in key markets, outpacing its segment. Royal Challenge (Mid-Prestige): A 360-degree campaign reached 65% of its target audience, with a limited-edition RC Play whiskey introduced during the cricket season. McDowell's No.1: The "Yaaron Waali Baat" campaign, featuring Kartik Aaryan, helped renovate the brand in key markets. McDowell X Series: A new premium range of vodka, gin, rum, and dark rum was launched with positive consumer feedback and plans for national distribution. Johnnie Walker & Premium Brands: Strengthened market presence with a Euro Cup 2024 partnership and focused on growing Don Julio's premium Reposado variant. Startups Investments: United Spirits invested in V9 Beverages (non-alcoholic drinks) and Indie Brews & Spirits (coffee liqueur) as part of its premium portfolio strategy. Union Budget Impact: Excluding extra-neutral alcohol (ENA) from GST was beneficial for the industry, reducing potential tax litigation. M&A Strategy: The company invested in early-stage non-alcoholic and liqueur companies to create future growth opportunities, supported by Diageo. Rural Market Growth: Positive signs ("green shoots") in rural markets, especially due to improved monsoons, could lead to potential growth in lower prestige segments. Premiumization Trend: Consumers are opting for higher-quality drinks, reinforcing United Spirits' focus on premiumization. Cost-Saving Initiatives: Initiatives like mono carton elimination and the supply agility program are contributing significant savings to the company. Trade Spend & Margins: Temporary reduction in trade spending boosted gross margins, but this may normalize in future quarters. UK Free Trade Agreement (FTA): If the UK FTA happens, it could reduce costs and pricing for global brands, leading to potential savings in bulk Scotch purchases.

𝗞𝗹𝗶𝗿𝗼 𝗳𝗼𝗿𝗺𝘀 𝗙𝗼𝗿𝘁𝗶𝘁𝘂𝗱𝗲 𝗦𝗽𝗶𝗿𝗶𝘁𝘀 𝗚𝗿𝗼𝘂𝗽 😍 Kliro Capital Partners and its subsidiary, Intercontinental Brands (ICB Distillers), have launched Fortitude Spirits Group, a new spirits distribution and distilling company. Following the acquisition of ICB in July 2023, Kliro Capital Partners has created a new company to look after its growing portfolio. Fortitude Spirits Group – guided by seasoned industry professionals and with a substantial production investment – is said to be well-positioned to collaborate closely with strategic industry partners. The collaboration aims to generate value across production, brand building, and distribution. The new company will be divided into three divisions: Fortitude Spirits, dedicated to brand creation; Fortitude Drinks UK, distributor of the company’s spirits and third-party brands in the UK; and ICB Distillers, expanding its production capacity to distil, blend and bottle the group’s brands, as well as private label and third-party products. Fortitude Spirits Group operates a British Retail Consortium-accredited production facility in Middlesborough, which can deliver six million cases per year. Currently producing more than 400 SKUs each year across multiple spirits categories, the company works with all UK supermarkets, wholesalers, cash and carry stores, and managed pub groups. The new brand identity was designed by the brand and experience agency Household, which worked collaboratively with the team to bring Fortitude to life. AlI Pountney, design director of Household, said: “ICB is charging forward into a ground-breaking new chapter, and we couldn’t be more thrilled to be part of the journey. “Collaborating closely with Paul (brand director) and the team, we crafted a bold brand platform and vibrant identity that paves the way forward. Breaking free from worn-out industry clichés, the identity illuminates ICB’s unmatched expertise, passion, and innovation within the spirits industry.” Key appointments Rozel Rosé Vodka is one of brands produced by ICB Distillers While waiting for news on the appointment of the company’s new CEO, Fortitude Spirits Group will be led by long-time industry professionals. Warren Scott, chairman of Kliro Capital Partners and Fortitude Spirits Group, is also the founder and CEO of Quintessential Brands Group, and has worked as an investment banker for 25 years. Scott said: “Fortitude Spirits Group will offer a unique service to customers, brand owners and consumers. Fortitude Spirits Group will strive to discover new sources of category growth across every price point, break new boundaries in spirit creation and be a pioneering partner to guide customers and brand owners towards the shared spirit of success.” Nick England will be the managing director of Fortitude Drinks UK. England has held several senior sales positions at Carlsberg UK and Mars. His wine and spirit experience was forged at Treasury Wine Estate and William Grant & Sons.

Constellation Brands (STZ.N): STZ Announces Deal to Divest Svedka Brand Source: CITI (Industry News Update) December 4, 2024 CITI'S TAKE This morning, STZ announced it had reached a deal to divest its Svedka vodka brand to global spirits company Sazerac, with the transaction expected to close in the coming months. While the deal is relatively small relative to STZ's total topline (we estimate Svedka represents ~LSD% of company net sales, and ~1% in US scanner data), we note that the brand comprises over 75% of STZ's total spirits sales and ~11% of the company's W&S segment sales in Nielsen. STZ believes the move furthers its goal of aligning its W&S portfolio with evolving consumer preferences and growing market sectors, with a focus on the higher-end wine & spirits segment. The company will provide more detail on the transaction later today during its planned investor conference presentation. We view the transaction favorably as it removes an underperforming brand from STZ's portfolio, further reducing the size of the W&S segment. Valuation We believe STZ’s current valuation of ~16.5x CY’25E P/E offers an attractive entry point, not reflecting the company’s growth profile. We value STZ with a 20.5x CY’25E P/E multiple, slightly below the average of beverage peers, resulting in our $305 target price. Risks Potential reasons the stock could materially underperform our target price include: (i) U.S. consumer weakness and/or consumer trade-down within STZ’s portfolio; (ii) delays in STZ’s capacity expansion plans; (iii) significant increases in import/export duties or other taxes on alcoholic beverages; (iv) limits placed on beer production by the Mexican government; (v) a resurgence of COVID resulting in a negative impact on the on-premise business; and (vi) sizeable increases in STZ’s input costs.

As we continue to power Next Century Spirits to double and triple digit growth, it has come with its fair share of ups and downs especially with the destocking at both the wholesaler and retailer level. Therefore, it's crucially important to put the current lag in the marketplace into perspective. We are fresh off a "sugar high" created by covid which fueled 10 years of premiumization and retail growth into a two-year window. The sky isn't falling, the market is just normalizing. The article below by The Spirits Business and author Ted Simmons highlights some of the green shoots that remain, in what is still a robust market to build brands in. It will just take time, skill and the correct deployment of capital.

The World's Biggest-Selling Rum Brands Revealed: Find Out Which Rum Reigns Supreme. #TopRumBrands #GlobalRumSales #BestSellingRum #RumMarket #SpiritsIndustry #RumLovers #RumTrends #TopBrands #LiquorRankings #MarketLeaders

Thoughts on the "Cognac Market": There's no "Cognac market", the stuff is trending down and making it cool/relevant is going to be real hard. It's misleading to use this term because Cognac in the US is dominated by a few brands - Hennessy, Remy, Courvoisier, Martell, possibly D'Usse - which effectively create their own distinct markets. They happen to be selling a distillate that's a brandy with the Cognac appellation. Major Cognac brands have been super successful in their marketing efforts over the past several decades. That success is mostly about brand recognition/image and associated partnerships; very little emphasis is put on the actual product itself. This marketing prowess has led to consistent growth for these brands and shaped up the perception of a "Cognac market". Now in recent years, several events have disrupted the market: Initially, taxes introduced during the Trump administration impacted sales, followed by the COVID-19 pandemic, which led to initial uncertainty followed by crazy spending/irrational booze buying patterns. In 2023, the market saw a significant downturn, with cognac sales in the US dropping by 50+% in the US (inventories too high, inflation, tightening of credit, conservative buying patterns on the consumer front...). This caught many large brands off-guard. The question became: what is the strategy put in place to get back on track? Being closer to the customer and more active on social media is likely part of the plan. But who is the customer? How to reach out to her? What to tell her? How to make a product that is (too) anchored in tradition feel cool? Why should the customer care about that VSOP? Whisky, R(h)um etc...have been coming up with new fresh releases every seven minutes. Cognac, not so much. Being more relevant in the US is probably a question that a lot of brains back in France are losing sleep over.

The global growth of Tequila presents exciting opportunities for innovation, prestige, and international expansion, especially as US growth slows. Consumer education remains critical in international markets, but with intensifying competition, differentiation becomes paramount. How do you think brands can stand out in this increasingly crowded market? Share your thoughts! 🌎🥃 #TequilaGrowth #Innovation #BrandDifferentiation #GlobalExpansion

TRIALS TRIALS & SOME MORE TRIALS! 🥃 In the premium whiskey segment, Woodsmen Mountain Whiskey is priced at the very TOP-end of the segment. We're (currently) at a 15% premium to Pernod's Blenders Pride and Diageo's Signature. But why should one pay the premium? Woodsmen is Made with Himalayan Malts - is FLAVOURFUL with no-bitterness Made with Himalayan Water - is SUPER SMOOOOOOTH Doesn't contain ANY artificial flavours - (most premium whiskies do) is ALL NATURAL, just like the Himalayas 🏔 is SUPER approachable and light-bodied Truly made keeping the taste-buds of the consumers of today in mind But why should you believe this? Ultimately it's the taste of the whiskey that matters. And hence, we simply follow the "LOL" strategy 👅 LIQUID ON LIPS. Over the last 2 months, we did over 25000+ trials at over 20 Popups! There's no better way. Taste it to believe it. Every week, we're out and about. It can be 500 folks at the Piano Man Bar, 200 folks at a startup or co-working space or 10,000 folks at a JLN concert. We enjoy making everyone taste Woodsmen and we love talking to our consumers :) It's a straight, direct feedback - in most cases people love the taste of Woodsmen and even if a few have a different palate, you get to understand your consumer better, who you want to talk to and perhaps who not to. Either way, you learn and improve and WIN! What would you do if you were running a whiskey brand and going up against incumbents while premiumising the segment? Would love to hear some great ideas for the marketing team :P