Artisan Spirit: Fall 2021

Page 116


DOWN to the CORE

The Rise of the Simplification of Product Lines Written by George B. Catallo


e have always been told to diversify our portfolios; there is more opportunity and less risk. We hear it from every angle. From our financial advisors, economic professors, news media analysts, billionaires, and even rap great GZA told us to diversify our bonds in an episode of Chappelle’s Show. It has proven to be sound advice. But is it ideal for your portfolio of products? Well, yes and no, but also no and yes. Having a great diversity of products in your arsenal is a double-edged sword. On the one hand, you are more likely to have something for everyone, and more opportunities to squeeze something onto a shelf in stores. This positions you to be appealing to a broader audience and gives you a much broader growth potential —

provided all products are successful and profitable. The tradeoff of this is much higher risk. The statistical probability that all of your products are commercially viable is relatively low, even if they’re all well crafted. This is also extraordinarily expensive. You have to buy a greater variety of ingredients, pay for the approval and printing of more labels, pay more filing fees, and face the issue of convincing your distributor to take all of the products. Producing numerous products also ties up your production space. You can’t run two things through the still at once. You only have so many fermenters, and so many hours in the day. Being low on inventory on multiple products and under a time crunch could harm you in a big way. Backorders are usually not your friend. While the negatives are daunting, they shouldn’t deter you

Having a great diversity of products in your arsenal is a double-edged sword. 116

if you’re logistically capable of handling them. As attractive as the positives are of having a diverse portfolio of products, there are some notable shifts away from this model. Examples of this can be seen by the Dingle Distillery in Dingle, Ireland, which has changed from a batch-to-batch release of their single malt whiskey to a core standard single malt. This has also been observed at the Westland Distillery in Seattle, Washington. Westland consolidated their three single malt expressions into one single core American Single Malt. Why are brands doing this? We can speculate on a number of reasons for this, or focus on what we know — the benefits of a more concise product line. Logistically, streamlining means you’re able to allocate your resources more efficiently. Fewer ingredients, labels, filing fees, and no competition between products for your production space. Fewer W W W . ARTISANSPIRITMAG . C O M