Craft Spirits: Finding Success in a Growing Market - Apex

Several years ago, the beer industry was revolutionized by the advent of microbrewers who produced small batches that focused on carefully crafted, idiosyncratic flavors, sometimes from local sources. That same attention to detail and regional focus is now behind the rise of craft spirits.

Craft spirits, produced by licensed distillers that have under 750,000 proof gallons removed from bond and are not controlled by a large supplier, had $2.4 billion in retail sales in 2015, and sales are continuing to rise by 27.4% in volume annually. There were over 1,300 active distillers in the U.S. in 2016, and their offerings reflect the wide range of regional varieties available, from the Chesapeake Bay-flavored vodka that tastes like Old Bay Seasoning produced by Philadelphia Distilling Company, to the dried cranberries and eastern red cedar berries in Dry Line Cape Cod Gin made by South Hollow Spirits in Massachusetts, to the Dulce Vida Organic Tequila made by Tito’s Handmade Vodka in Austin, Texas.

There is great potential for growth, but new distilleries still struggle to survive. This is largely due to the fact that 60% of cases sold are produced by only 2% of producers.

To help your distillery succeed, consider these tips below:

Do Your Research

Read about the history of your drink. Meet with other distillers. Study the market. Gin Foundry suggests that if you haven’t studied at least 100 varieties of craft gin, for example, you still do not know enough about gin to launch your own unique product. “So many people launch products claiming to be the first, the only, ‘a unique blend,’ etc.,” they write. “The reality is that for 80% of gins out there, it’s just not the case.”

If all your research leaves you even more energized about the craft spirits market, you can consider that a very good sign for going forward.

Make It Distinctive

Show off the pride you take in your ingredients, the care involved in producing your spirits, and the history of your company. You may emphasize the regional flavors in your product, or you might grow and roast your own grains – like Rogue Ales & Spirits in Portland, Oregon. If your distillery is already well-established, share your history through your marketing materials.

Connect with Your Community

Make a human connection through your marketing and outreach. Find ways to help your customers engage with your distillery, such as adding a tasting room. Copper & Kings American Brandy in Louisville, Kentucky, attracts tourists with a butterfly garden, art gallery, and live music.

Consider Crowdsourcing

As we wrote in a previous post, small businesses that fail to get funding from traditional investors can find success with crowdfunding. Republic Restoratives in Washington, D.C., raised over $119,000 from their Indiegogo campaign, and their success in turn made banks more interested in working with them later. Just be sure to consult our post and plan your campaign carefully.

Think About Your Bottle

The way your product looks on the shelf is a very direct form of marketing. This will influence your customer’s impression of your brand in just a few seconds. When choosing a bottle for your craft spirits, consider these factors:

•      Degree of Customization. There are bottles available from direct stock in industry-standard sizes and shapes, and these are the most affordable. Semi-custom or fully custom bottle shapes will look most distinctive on the shelf and will help customers identify your brand immediately. However, they are also more expensive, especially in smaller quantities.
•      Weight. Many consumers perceive a heavier bottle as being more luxurious, and that perception may be important to your brand. Conversely, other consumers may appreciate how a lighter bottle uses fewer resources to produce and transport. For this reason, lighter bottles are also less expensive for the distiller.
•      Label. All the elements that go into the design of the label will affect your brand image. Some brands may want a handmade, rustic look, and others might want to use a metallic label. Get the best design help you can, and test options thoroughly with your target market.

No matter what shape of bottle you choose for your craft spirits, or how many bottles you need to fill, Apex can customize a solution for you. Call us at 219-575-7493 or visit our page here to discuss your design ideas.