CAN YOU FEEL THE OPTIMISM FOR 2021?
As we look back on an unprecedented year for craft distillers, ByQuest wanted to hear from some customers and get their thoughts on the trends that have emerged, and what the next few years could have in store. Much of what we heard confirmed our beliefs that despite the very negative impact Covid-19 has had on craft distillers in 2020, there emerged optimism for a positive future. Let us know what you think!
Ease of Launching New Brands
Using Contract Distillers represents the ability to test a new brand in the market faster and with less upside infrastructure investment. While launching a new spirit is never a “build it and they will come” situation, there has been increased demand for distilleries who are able to do contract production, which makes it easier and faster to launch new brands. “We had worked down to having just three really solid contract clients,” Jason Barrett of Black Button Distilling explained. “For years, we would get one or two requests a year, most of which we turned down and referred to friends. This year, I swear I’m getting asked to quote a new project every week.”
The consistent theme we heard was distillers taking a look at all the SKUs currently in production, trimming away what wasn’t working, and using that freed-up production capacity to look at new opportunities, either their own brands or through contract distilling. “We dropped a few of our brands that aren’t moving, but we are also expanding,” said Larry Cary from Pilot Distilling. The key takeaway is that distilleries have the opportunity to see the disruption caused by Covid-19 as an opportunity to pivot to new production and redefine their selling propositions to support the proliferation of new brands.
Importance of Packaging and Branding
With all the changes that came this year, some things have stayed remarkably the same. As always, bottle and packaging design have to make a strong first impression. “When your Wildly Crafted “Primal” bottle was launched, it provided me with a whole solution of being able to take this chance,” shared Ian MacNeil of Glass Distillery, referring to a project he’d worked with ByQuest on this year. “Now I’m not worried about having jeopardized the value of our brand. I think I did something that is really going to be positive for the brand moving forward.” The fact that ByQuest makes it easy for craft brands to launch new concepts with uniquely designed, high sustainable glass bottles that have low minimum order quantities really helped this idea come to life.
Bottle and package design will only continue to drive brand success, especially as we continue into the digital era for spirits, which was the biggest trend on everyone’s mind.
eCommerce: starting point or end game?
One of the biggest conversation points for 2020 was around all things eCommerce, from last leg delivery partners like Drizly or GoPuff, to the Kentucky state ruling on DtC shipping. Right now eCommerce is working as a catch-all phrase for a number of different Internet based solutions, but regardless of the exact solution, many distilleries are excited by what eCommerce has to offer. “It’s the Model-T coming to the horse and buggy market,” Jason at Black Button told us. We’ve continued to hear the excitement and anticipation that distillers have around what these digital channels can offer them.
At the same time, distillers are also cautious to put too much stock in this new channel just yet. The experience of visiting the distillery is still viewed as one of the main driving factors for consumers to learn about and purchase brands. Without first having in-person experiences, it becomes a last leg delivery service that drives sales. “Most likely is that someone knows about you or your product already, and they’re now dabbling in this new platform so then they’ll buy you there,” shared Hagen Moore, VP Marketing & Creative at Rogue Ales & Spirits.
And yet, there’s still something alluring about this opportunity for a more direct connection with the end customer. While it might not be a silver bullet, there’s still opportunity for these platforms to grow brands from the ground up. Hagen added, “I do think eventually there’s going to be a lot of people who actually buy a brand for the first time off these platforms, and it will have to do with them hearing about your brand from a friend, social media, or advertising directly on the platform.” This idea that eCommerce could be where a consumer not only purchases, but also discovers your brand, ties into the final trend we heard about from these customers.
Internet Only Brands
As the eCommerce channel continues to grow, distillers are responding and looking at how to drive sales through this new channel. Multiple distillers are either looking, or already have hired, full time salespeople to cover the eCommerce channel. “Look at all the products out there that you’ve never seen in a store, that sell millions and millions of dollars and there’s no hard infrastructure,” remarked Ian MacNeil from Glass Distillery.
So What’s Next in 2021?
Clearly, Internet Only brands can become the fast, low-risk way for launching new products, creating buzz, and a test-market for predicting success. This has never been more possible than right now. Starting with Contract Distillers who can help new brands get to market faster and more economically feasible coupled with packaging partners who have readily available stock of inspiring bottles.
And, as the rules around direct-to-consumer shipping continue to evolve and distillers continue to invest dollars in this new avenue, it’s just a matter of time before we see social media minded brand owners shift their focus solely into the digital space. The logistics of this all are, admittedly, still a work in process. But make no mistake, this concept is on the radar for both craft and mass-production distillers alike. And, in our digitally-focused world, the branding, bottling, and packaging of spirits might be all a consumer uses to decide their next purchase.
What are your thoughts on these trends? Are there others that you see having an impact? Let us know, and as always, keep unpacking.
Interviewed for this article were: