Over the past several years, the availability of bulk spirits has exploded.
While distillers have often turned to bulk spirits, the combination of increased production by both larger rectifiers and craft distillers has resulted in an excess of available product. This ample supply has driven down prices and increased accessibility to high quality bulk spirits. In turn, these factors have spurred opportunities to create marketing-driven brands and private label products.
What Are Bulk Spirits?
The term “bulk spirits” refers to finished distilled spirits that are available for purchase. Once obtained, they are ready to be bottled and sold immediately or they can be blended or further aged by the distiller to put their own signature touch on the final product. This category has grown to include everything from unaged products like vodka and gin to aged whiskies to lesser-known regional spirits from all over the world.
Current Market Landscape
- Slowing Sales
- Distilleries Closing
- Excess Production
The unfortunate realities of the current market have been hitting the craft distilling community. “Consumer purchasing power has been significantly impacted by inflation, rising costs of living, and economic uncertainty. When consumers are financially strained, discretionary spending – such as craft spirits – naturally declines” (Wine & Spirits Wholesalers of America). Health concerns and the rise of the “sober-curious” trend have given consumers reasons to cut back on their alcohol consumption. These factors, and many others, have all contributed to slowing alcohol sales and in some cases, the closure of distilleries. With the downturn in sales of alcohol, many distilleries find they have produced more product than they could sell and defunct distilleries have inventories that need to be liquidated; both of which has contributed to an excess of supply.
Business Opportunities in Bulk Spirits – For Every Stage in the Lifecycle of Your Brand
While the market landscape is challenging, there remains opportunities for those who can utilize this new flood of product on the market. No matter the size or tenure of your distillery, there is an opportunity for you to take advantage of the bulk spirits market.
- New Distillery: Are you a new distillery looking to launch your first release of products? Utilize bulk spirits to rapidly get to market and generate cashflow to fund the build of your equipment and distillery. There is currently an amazing supply of high-quality whiskey – take advantage of this and purchase bulk whiskey while you build up and age your inventory of in-house products.
- Marketing-Driven Spirits Brand: Set up a marketing-driven spirits brand and exclusively utilize bulk spirits to develop your portfolio. This path is a huge time and cost saver, allowing you to re-allocate money that would have been spent on a facility and equipment to instead develop your brand packaging, marketing, sales and distribution. Creating a portfolio sourced from bulk spirits does not mean forgoing creative control. Many distilleries continue to age or blend the spirits – creating entirely unique products that stand out in the market for a fraction of the cost of in-house distilling from the start.
- Expand Your Portfolio: An existing brick-and-mortar distillery can take advantage of bulk spirits to expand a portfolio. Use your still and equipment to produce your core offerings and turn to bulk spirits for new products that are outside of your standard spirits, limited edition items, lower priced entry products, or test a new offering by bottling bulk product and getting customer feedback before committing to producing it at your distillery. Bulk spirits also allow distilleries to rapidly scale a product or their brand without worrying about bandwidth in their facility.
- Take Advantage of Niche Opportunities: The huge advantage of bulk spirits is the ability to be nimble and respond to unique and time-sensitive opportunities. Grocery stores, liquor stores, bars, restaurants, hotels, cruise ships, and airlines are frequently interested in pursuing private label brands with distillers – and often with breakneck timelines and competitive pricing. In these situations, having access to a wide variety of products that have a fixed price and that are ready to taste, bottle and ship puts you in an advantageous position to be awarded the contract.
How to Source Bulk Spirits
While there are many companies that provide bulk spirits, here is a selection of a few you can consider to fulfill your needs.
- Bardstown Bourbon Company
- ClearSource
- Corning & Company
- EUS Distilling
- B. Thome & Co., Inc.
- MGP Ingredients/Luxco
- Middle West Spirits
- Monson Ranch Distillers
- Southern Distilling Company
- The Strategic Sourcing Hub
- Ultra Pure LLC
- Victory Spirits
The bulk spirits market is expanding, providing a diversity of products at a variety of price points. They give you the flexibility to build and expand your portfolio and take advantage of opportunities that were once only available to the larger producers. There are many ways in which you can incorporate bulk spirits into your business model – determine what works best for you and take advantage of the incredible opportunity they provide.
Photo from FreePik.
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