When you think of who owns your favorite alcoholic beverage brands, you might think of celebrities like Matthew McConaughey with his Wild Turkey Longbranch Bourbon or David Beckham and his partnership with Haig Club Scotch.
Or, you might think of well-established whiskey brands that are owned by larger parent companies. The two best selling American whiskey brands – Jack Daniel’s and Jim Beam – are owned by Brown-Forman Corporation and Beam-Suntory, respectively.
Even though owning whiskey, bourbon, and other spirit brands does attract power and money – and for good reason – it’s not an exclusive club only for celebrities and large corporations.
In fact, the IWSR Drinks Market Analysis expects craft spirits’ compound annual growth rate (CAGR) to increase at least 21% by 2025 – a drastic number compared to non-craft spirits’ projected growth (4%). Additionally, the IWSR projects at least 265 new distilleries will open by 2025.
For entrepreneurs and spirit-lovers alike, this may be music to your ears. Some alcohol industry experts even believe the U.S. is “entering a golden era of opportunity and profitability.”
But, what does it mean to own your own alcohol beverage brand? What would this entail? The most straightforward answer: It depends! And this is because, in this exciting and ever-evolving industry, you have options when it comes to ownership:
- Open Your Own Distillery
- Contract Distilling
- Invest in a Distillery, Brand
- Enlist the Help of Brindiamo Group
Open Your Own Distillery
While opening your own distillery is the obvious approach to own your own spirit brand, this dream is reserved for those who truly want to go all-in! You will not only need to find a location to build – not to mention establish qualities that will differentiate your product from competitors – but also secure a significant amount of capital for everything from your equipment and licenses to staff and marketing.
Because banks are hesitant to lend to distilleries due to the risks involved, many distillers find themselves in a predicament if they don’t already have large sums of cash to invest in their brand; this is especially true if you do not expect a large profit for several years. Some owners resort to raising money from friends and family, but strategic introductions with adult beverage investors is the path that shows the most promise. Trust us!
At the same time, opening and owning your own distillery is enticing for a reason. You are intimately involved in the process, success, and tasting of your brand and product. Networking with other distillers to discuss the business and industry is another fun perk (and incredibly important aspect) of owning a brand. And, of course, it can be very profitable!
Did you know that you can own an alcohol brand without owning a distillery? Maybe you have a name and narrative in-mind, or a unique beverage concept, but perhaps you don’t want to produce the spirit yourself or deal with the up-front costs.
Also known as contract distilling, with this approach, you can launch a startup using an existing distillery rather than building your own full-scale operation. Interestingly, this concept is not uncommon for brand owners of spirits like vodka, gin, rum, or tequila, and it can help move your product into the market faster.
You can do this by forming your own company (such as an LLC or S-corp), finding investors, and partnering with a distiller that will source and bottle your product. This leaves you with more time to devote to crafting a brand name and identity, securing licenses, and determining a distribution model, among other things.
Invest in a Distillery, Brand
Another option is to buy-into a current brand, whether as an investor or shareholder in a spirit company or as an owner of a distillery brand. This avenue requires a patient investor. After some time you may find yourself reaping some ROI. Or, if the brand reaches beyond local markets to a larger, mainstream audience, you ultimately might purchase the brand.
With nearly 9,000 new breweries opening their doors in the last two years, more brands need investors to help them establish their name and product in the market. In fact, of almost 17,000 companies operating breweries and distilleries, 98% are privately backed or owned, according to private company intelligence engine Grata.
Investing in the adult beverage industry can be tricky! But you don’t have to navigate it alone. Brindiamo Group can assist and advise you in diversifying your business’ investment portfolio or your individual investment.
Enlist the Help of Brindiamo Group
Opening a distillery? Crafting a presentation for potential investors? Searching for a brand to invest in? Looking for advice about navigating this maze of an industry?
At Brindiamo Group, we strive to craft unique strategies for our clients’ business goals and investments. Whether you are a start-up or seasoned spirit brand, contact us today for more information about our services!