The innovation and growth that is occurring in the emerging brand segment has added pressure to large suppliers to find new avenues for growth and relevance among younger consumers. One such avenue is investing in or acquiring entrepreneurial brands. As the competition among large suppliers for these deals has increased, large suppliers have begun investing in or acquiring emerging brands at earlier and earlier stages in the lifecycle of the target brand. Some examples, among many others, of large suppliers making investments and acquisitions in recent years include:
Bacardi
Angel’s Envy
Ilegal Mezcal
Banks Rum
Teeling Irish Whiskey (2017)
Leblon Cachaça (2015)
Patron Spirits (2018)
Constellation Brands Casa Noble Tequila (2015)
Schrader Cellars
High West Distillery
The Prisoner Wine Company (2017)
Catoctin Creek Distillery
The Real McCoy
Nelson’s Green Brier (2016)
Copper & Kings (2018)
Pernod Ricard Tequila Avion (2015)
Paddy Irish Whiskey (2016)
Monkey 47
Del Maguey Mezcal (2017)
Smooth Ambler
This trend will likely increase as fragmentation continues. In addition to seeking growth by acquiring high growth brands, large suppliers will continue to invest considerable resources in growing or preserving portfolio anchor brands. Activities may include, among others, seeking more favorable terms from distribution partners and implementing brand and product line extensions. Further, large suppliers will likely continue to shed underperforming brands which are not core to their portfolios or are in highly challenged categories or segments and will continue to avoid new brand creation in-house.
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In the context of these insights into the industry, the next question is what can entrepreneurial brands do to increase the likelihood of success? Part Two of this series will address trends among distributors and outline key considerations for navigating these trends.
Sarah Nagel Sisisky is the Client Development Director at Park Street in Miami, Florida. For more information visit www.parkstreet.com or call (305) 967-7440. WWW.ARTISANSPIRITMAG.COM