Craft Spirits Go Corporate

FILED FEBRUARY 21, 2017

Your editor just got back from the American Craft Spirits Association (ACSA) conference last week, and I'm ready to declare 2017 the year that craft went corporate. Although some of them might consider that slander, I don't mean it negatively. I mean that in its fourth year, ACSA and its attendees are almost unrecognizably organized and unified compared to the rag-tag bunch of day dreamers it was three years ago.

More importantly, the tone of the conference mirrors the category's evolution. During the first ACSA conference in 2014, the conversations among attendees were typically about how unfair the distribution system was, and whether or not businesses that source spirits could join the craft club. Thankfully those arguments are largely behind us. The craft distillers that are still around have figured out how to navigate the distribution tier (even if it is begrudgingly) and there was no divisive rhetoric on sourced spirits.

"The most striking change I observed during this convention was that we are no longer dealing with craft brewers, surfers, cowboys and pirates. The men and women running these businesses are smart, talented, mature professionals," Dan Garrison, ACSA vp and owner of Garrison Brothers Distillery, tells WSD.

There was also a clear message of inclusivity, and it was accepted with little to no push back that your editor observed. "We are not going to win if we're fighting amongst each other," says Paul Hletko, ACSA president and FEW Spirits founder. "We are all friends, we are all tackling the same problems and same issues."

That's not to say things are hunky dory in the craft world. There were several mentions of overcrowding on the shelf and in distributor warehouses. "There is definitely a glass ceiling in the industry. Few, other than Tito, have been able to independently break through it," says Dan.

Southern Glazer's craft whisperer Louis Zweig, who is in charge of SGWS's new centralized supplier acceptance process, gave some insight on the matter from their point of view. He says he gets 325-350 new supplier proposals every quarter, 30-35 of which go to a national committee, and in the most recent meeting they accepted about seven. "We're very selective of what we take on, but when we do take on a craft distiller, I think it's one of those things where the winner knows we're very serious about what we're doing, and we do everything possible to build the brands."

But "things are generally improving," Steve Johnson, ACSA treasurer and founder of Vermont Spirits, tells WSD about distributor relations. "We're learning how things work. Everybody's got their war stories today, but I think those are more in the past... people are generally feeling better."

Besides, there are bigger fish to fry now that FET parity is looking like a real possibility. ACSA's lobbyist Jim Hyland says initially they thought it would be on the table earlier in the year, but Congress is aiming to address the impending tax reform bill in May. Recall, ACSA has previously says the best chance to get FET parity is to get their legislation into the larger tax bill [see WSD 01-16-2017].

"I don't think it's going to be easy. We hear from these committees that every industry wants it's little thing in there," says Jim, but "the good news is, we connected enough with [Orrin Hatch, chairman of Senate Finance Committee]…and I think he will remember us when the day is done."

BACARDI CANADA SHUTTERS BRAMPTON FACILITY

Bacardi Canada announced it will be shutting down its production facility in Brampton, Ontario in the coming months, eliminating 51 jobs, reports the Brampton Guardian. The majority of the plant's production will then transfer to Bacardi's facility in Jacksonville, Florida and the rest--which includes products exclusive to Canada--will go to a Canadian co-packer. The plan is to sell the Brampton facility and open up a new office location in Toronto. A final closure date has not been set.

"Bacardi carefully considered all other options before making this decision, which was necessary due to the changing business environment over many years in Canada and the importance of increasing efficiency to ensure the company's future competitiveness," per a statement.

This closure comes less than a year after Bacardi Canada was awarded a government grant of $350,000 to support the plant's operations.

B-F NOW SHARING SERVING FACTS ON NEW WEBSITE

Last summer Brown-Forman said it was developing portion information for each of its brands and nutritional information on corporate websites [see WSD 07-13-2016]. Yesterday the company launched a website providing nutritional information for its brands, including Jack Daniel's, Finlandia, Canadian Mist, Jimador, Herradura, Sonoma-Cutrer, Chambord and Woodford Reserve.

"We believe the more information a consumer has, the better prepared they can be to make smart, responsible decisions about their alcohol consumption," says corporate responsibility director Rob Frederick. B-F's consumer branded websites and social media pages will be adding a link to the new website over the next several months, per a release.

You may recall, the Alcohol and Tobacco Tax and Trade Bureau (TTB) moved to allow serving facts on alcohol product labels in 2013 after nearly a decade of discussion [see WSD 05-29-2013]. The TTB defines a serving fact as the the serving size, number of servings per container, and the number of grams of carbohydrates, protein, and fat per serving size as well as the alcohol content. Diageo was the first major spirits supplier to make a move on the ruling, using Crown Royal as the guinea pig of the portfolio [see WSD 10-06-2015].

Historically, spirits companies have been the ones in favor of sharing serving facts and nutritional information because they often have fewer calories, while beer companies have opposed. Though last summer the Beer Institute announced a voluntary labeling initiative encouraging its big brewer/importer members to include the approved serving facts.

WSD BRIEFS:

CRAFT + ESTATE EXPANDS PORTFOLIO WITH 9 BURGUNDY WINERIES. Craft + Estate, a member of The Winebow Group, has become the exclusive US importer for: Domaine Pierre Grelin, Domaine Jean Griot, Domaine Tollot-Beaut, Domaine Xavier Monnot, Domaine Alain Chavy, Domaine Gagnard-Delagrange, Domaine Blain-Gagnard, Domaine Laurent Cognard and Maison Joseph Burrier - Chateau de Beauregard. As part of the agreement, Craft + Estate will acquire all existing inventory from the previous US importer, per a release. "This addition is a unique opportunity and milestone for Craft + Estate, one that will put us on the map as a sought-after Burgundy importer, much like our position in Bordeaux," says svp Liz Mathews.

OREGON BANS CANNABIS-INFUSED ALCOHOL. Last week the Oregon Liquor Control Commission issued the ban, per a local publication. The OLCC is following the lead of the Drug Enforcement Agency (DEA) because the DEA designated the active ingredients in cannabis, THC and CBD, as Schedule 1 drugs and illegal under federal law. "The labeling on alcohol generally is done by the feds. We don't do that here in Oregon," says says OLCC director Steve Marks, adding, "So they're not approving labels with the Schedule 1 THC products in them. Same for now, CBDs, which the federal government recently made Schedule 1 as well."

SAZERAC'S BUFFALO TRACE TO RELEASE OLD RIP VAN WINKLE 25 YEAR OLD, the oldest ever bottled for the brand. There's only 11 barrels available of the small batch bourbon, or 710 bottles. The bourbon was distilled in spring and fall of 1989, and bottled at 100 proof. It will start shipping in April with a price tag of $1,800 a 750 ml. And because it's so limited, and so expensive, each bottle is actually a handmade glass decanter packaged in a wooden box that is made from the staves of the used bourbon barrels.

Until tomorrow,
Your Editors

Emily Pennington - emily@winespiritsdaily.com
Sarah Barrett - sarah@winespiritsdaily.com

"Truth springs from argument amongst friends." -- David Hume

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