What’s on the Craft Spirits Industry’s Mind

A horde of craft distillers descended on Minneapolis this week for the American Craft Spirits Convention, aptly called Craft on Ice. Your editor was on the ground at the event to bring you the highlights and common themes from the convention.

REMEMBERING DAVE PICKERELL. The ACSA town hall meeting began by remembering beloved industry veteran Dave Pickerell, who you may recall died in November [see WSD 11-02-2018]. ACSA ceo Margie Lehrman led a moment of silence for Dave, who had a huge impact on the American whiskey category and craft distilling.

AT THE FEDERAL LEVEL. Reducing federal excise tax on distilled spirits is still a top priority for the group since the Craft Beverage Modernization and Tax Reform Act is set to expire at the end of this year. Last week, the bill was reintroduced in the Senate [see WSD 02-06-2019]. But this year, there won’t be a larger tax bill that CBMTRA can be attached to.

In a similar vein, ACSA is also calling for input on the proposed new advertising and labeling regulations [see WSD 11-27-2018]. Mark Shilling, ShillingCrafted founder and former ACSA president, outlined a few key challenges regarding the proposed requirements: 1) balancing innovation and quality protections; 2) ensuring a level playing field; and 3) any unexpected consequences.

“Whatever we do today has to last” because “it may be decades until this issue comes up again,” said Mark.

LESSONS FROM CRAFT BEER. The craft spirits industry is turning to craft beer for insight. For instance, craft beer was taken by surprise when growth began to decelerate over the last couple of years. The category had become accustomed to double digit growth and to having the beer basically sell itself, according to Anna Nadasdy, current managing partner at MBM Group and formerly of Great Divide Brewing Co., which craft spirits should view as a cautionary tale.

Another key takeaway from craft beer is the importance of owning your own backyard and being careful not to spread the business too wide, too fast and in an unsustainable way.

WHAT’S COMING DOWN THE PIKE. In a discussion about ready-to-drink cocktails, specifically spirits based, your editor was struck by the number of craft distillers in the room (60+) who are either looking into RTDs or have already begun the process of creating the product, submitting formulas/COLAs etc.

The low and no alcohol segment also presents an area of opportunity. “I think there’s a bright opportunity in low and no alcohol products in spirits….I see no problem with that being 10% of the spirits market,” said Dan Gasper, former Distill Ventures exec.

Stay tuned for more convention coverage in future issues.

DRIZLY EXPANDS NETWORK IN CA THROUGH BEVMO PARTNERSHIP

Drizly has announced a partnership with California-based retailer BevMo, adding 45 stores to the Drizly platform. This expansion is not about launching into new markets, rather it’s “adding breadth and depth” to areas in California where Drizly is already available, Drizly svp of commercial sales and operations Bryan Goodwin tells WSD.

“We’re constantly trying to expand the retail network with different markets and better retailers. They’re a top-tier retailer that have been on our list for a long time,” says Bryan. Adding more locations helps to increase selection as well as price transparency, he adds.

BevMo operates about 150 locations throughout California. When asked if the plan is to eventually add the other locations to the Drizly network, Bryan said “absolutely” and they’ll evaluate that opportunity to expand as their relationship with the retailer evolves.

This is not BevMo’s first foray into the alcohol delivery/ e-commerce space. The retailer already has a buy online pick up in store business as well as other shipping and delivery options available. “We’ve been working with other delivery partners for over two years and are happy to add Drizly to this channel,” BevMo chief marketing and information officer Tamara Pattison tells WSD, adding, “We believe their unique customer base and our amazing store assortment will be a home run for both of us.”

WSD BRIEFS:

DIAGEO LAUNCHES CROWN ROYAL PEACH. Diageo has launched the limited-edition Crown Royal Peach. It is bottled at 70 proof in a glass cut bottle including the brand’s signature box and bag. It will be available starting next month at a suggested retail price of $25 a 750 ml.

CANTELE WINERY PARTNERS WITH WINEBOW. Italy’s The Cantele Winery has partnered with Winebow as its US importer. “There’s no doubt in our minds that Winebow has the prestige, the national reach, and the sales team that we need to continue to build our brand in North America,” says export director Paolo Cantele.

STOLI GROUP UNVEILS FLAVORED RUM LIQUEURS. Stoli Group has introduced Gator Bite, a flavored premium rum liqueur brand. The brand will launch with two flavors: Satsuma oranges and coffee. Gator Bite will launch in Florida first with a national rollout following shortly after. The Satsuma is bottled at 60 proof and the coffee variant is bottled at 52 proof. They will be available for approximately $17 and $20, respectively.

Until tomorrow,
Sarah

“Someone’s sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett

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