When considering the owners of your favorite alcoholic beverage brands, you might recall celebrities like Matthew McConaughey, who is associated with Wild Turkey Longbranch Bourbon, or David Beckham, who collaborates with Haig Club Scotch.
Alternatively, you might think of renowned whiskey brands that are under the ownership of major parent companies. The top two American whiskey brands, Jack Daniel’s and Jim Beam, are owned by Brown-Forman Corporation and Beam-Suntory, respectively.
Although owning whiskey, bourbon, and other spirit brands can bring prestige and financial success, it's not limited to just celebrities and big 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.”
So, what exactly does it entail to own your own alcoholic beverage brand? Well, the most straightforward answer is that it really depends! This is because, in this dynamic and constantly changing industry, there are various options available when it comes to ownership:
Brindiamo Group has helped dozens of clients build successful beverage companies and brands. Contact us about working with your brand!
While opening your own distillery is the obvious approach to owning a 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 are 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!
Have you considered the option of owning an alcohol brand without the need to own a distillery? If you have a specific name, story, or innovative beverage idea in mind but prefer not to handle the production process or upfront expenses, this could be a viable solution for you.
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 achieve this by establishing your own company (such as an LLC or S-corp), attracting investors, and collaborating with a distiller who will handle the sourcing and bottling of your product. This will free up your time to focus on creating a compelling brand identity, obtaining licenses, and devising a distribution strategy, among other tasks.
An intriguing option is to invest in an established brand, whether as an investor or shareholder in a spirits company or as a distillery brand owner. This route requires patience, but over time, you may begin to see returns on your investment. Should the brand grow beyond local markets and reach a broader, more mainstream audience, you may even have the chance to acquire 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.
Are you considering starting a distillery? Need help creating a presentation for potential investors? Interested in investing in a brand? Seeking guidance on navigating the complexities of this industry?
At Brindiamo Group, we strive to craft unique strategies for our client’s business goals and investments. Whether you are a start-up or a seasoned spirit brand, contact us today for more information about our services!