Artisan Spirit: Spring 2015

Page 27

YOUR NEXT MARKET IS…

ABROAD WITH MORE DSPS THAN EVER BEFORE, EXPORTING MAY BE THE BEST NEW MARKET FOR YOUR SPIRITS written by RYAN MALKIN

“Everyone should be going abroad,” says Adam Spiegel, owner and distiller at Sonoma County Distilling Co. After all, you avoid paying federal excise tax and skip the localization issue facing many craft distillers seeking to expand beyond their home markets. There is so much “saturation in other states,” says Spiegel, that “quality may take a back seat to it being made down the block.” Because the US is so competitive, Noah Rothbaum, author of the The Art of American Whiskey and founder of drink trend consultancy Liquor Intelligence, says you may have more success competing abroad. “The demand for American craft spirits abroad has blown up over the past few years,” says Rothbaum. According to DISCUS, spirit exports from the USA grew from 7.3 million proof gallons in 2013 to 10.7 million proof gallons in 2014. Like any new market, the first step is determining who drinks

hailing from New York may hold more prestige abroad than

what you produce. “You have to understand the difference in the

a product from, say, Indiana, Vachon notes. Yet, as it should

market and know why you want to do it,” advises Paul Hletko,

be, it’s about the liquid. If the liquid is superb, price is a less

founder of Few Spirits. DISCUS data is readily available online,

important aspect. However, packaging, he says, is key to your

but it’s no surprise everyone seems to be drinking American

success in the EU. “There is no silver bullet when it comes to

whiskey. The biggest export markets for American whiskey,

packaging, it just has to look amazing,” advises Vachon, who

according to DISCUS data, are Australia, France, Germany,

imports such brands as Balcones, Few, New York Distilling, and

Japan, and the United Kingdom. In the United Kingdom, for

St. George. The good news is there is room for growth for craft

example, “American whiskey is in vogue, along with hamburger

spirits in the EU: craft brands have the potential to increase

and barbecue restaurants,” notes Michael Vachon, head of

sales at least 90% over the next ten years, according to Vachon.

brand development at UK distributor Maverick Drinks. Gin, he

The allure of business trips to Europe or Asia should not

says, is also doing well, though there are a lot of them so yours

dissuade you from forgetting our neighbor to the north. For

had better stand out. Outside the UK, gin does well in warmer

some, it may be right in your backyard like it is for Headframe

climates like Italy and Spain, notes Brian Facquet, distiller at

Spirits. “Draw 500 miles around Butte, Montana and you get

Prohibition Distillery.

Vancouver and Calgary,” says owner John McKee. McKee likes

However, don’t expect success in your backyard to necessarily

shipping to Canada not only because it’s so close to his distillery,

translate into success abroad. In the US, says Vachon, “you can

but also because NAFTA tariffs going across the border to

get away with an OK product with local support but that does not

Canada are dropped so he’s not paying the excise tax or tariffs to

in any way correlate to international success.” Sure, a product

Canada. Canada is “a very serious market” for Headframe Spirits

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