The US market is notoriously difficult to crack for alcohol brands. But the rewards if successful are endless. For Irish Whiskey the case is no different. As the US market remains the strongest economy for the industry representing 56% of the total growth for 2018, why is the US so difficult? Well, there are several reasons.
Firstly, each of the 50 states can be taken as 50 different countries. 50 different countries with seperate cultures, behaviors, expectations, rules, and regulations. For example, Georgia is a dry state, meaning that pouring in retail stores to sample your product is illegal. It is also forbidden to condition a purchase with point of sale (POS) material. In contrast, New York, can do on-premise tastings to sample prospective buyers and consumers on the quality of the liquid, not just taking my word on the quality of the liquid and aesthetics of the bottle.
In terms of pricing, it is possible in New Jersey to implement rip pricing (deduction of costs when you buy a certain amount of product e.g. more than a 6 pack case). For a small whiskey company, this can be a hindrance as big players have the budget to entice buyers to buy large amounts of product to gain further price savings to attain a profit growth (which is understandable for the retail owner). However, this can result in a lack of shelf space, an overstock of particular Irish Whiskey in stores and a reluctance to purchase unique crafted Irish Whiskey. But ultimately, it can mean that consumers are robbed of choice. In contrast, a state like Connecticut is strictly based on the price of the product sold with no added incentives. Meaning, it is a fair game for everyone involved.
Secondly, is the three-tier distribution system. In Leman’s terms, it is a distribution system where you must have an importer for your product (in Lambay Whiskeys case – CIL US), who then sell to wholesale distributors (Lambay Whiskeys distributors vary from state to state), who then sell to the retailer (bars, restaurants, liquor stores). The key to this system being successful is the distributor (the middle man). Who essentially has the power to make or break your product in each specific state.
Recently, Lambay whiskey has switched distribution in New York to Southern Glazier Wine and Spirits (SGWS), the largest distributor in the United States with operations across 44 states. There are many benefits to being with such a large distributor. Now, in New York, Lambay Whiskey has instantaneously reach to nearly all on and off-premise accounts throughout the state of New York. Sales reps have relationships built with buyers and owners of these accounts, saving valuable time getting the product sold and placed.
However, Lambay Wiskey is not the only brand nor Irish Whiskey in SGWS portfolio. There’s a lot of in-house competition to contend with. Being a new craft Irish whiskey, it is tough to stand out amongst the crowd. To counter favoritism, Southern has set up different divisions for various areas of the market, where the dedicated sales reps to that division only have a select few brands to work with. Thus, giving Lambay Whiskey more attention from the sales reps of our division. However, these divisions create further competition within the organization, as each section is competing against each other in every account in New York.
But, it’s not all on the distributor to create success. A brand can incentivize reps on making placements. To utilize opportunities for work-withs with sales reps. To invest time and effort to train employees and consumers. Marketing efforts to increase brand awareness. But most importantly, seek to gain a positive working relationship with sales reps to get them to want to sell your product.
But Lambay Whiskey stands out from the crowd on many different levels. Firstly, we are very different from other whiskeys, as we are solely finished in Borderies Cognac casks from Camus. The liquid is very unique. The small batch blend being very light, citrus, and floral with an exceptionally smooth finish. It is perfect for cocktails, mixed drinks or simply on its own. Our single malt is a bit more complex, with a longer finish in the cognac casks (6 months). Resulting in deep rich notes of dried fruits and ripe banana delivering a long lingering spice on the back of the throat, synonymous with a phenomenal Cognac. Combine all of the above, and you’re on to a winner.
Thankfully, all of the above is in place, and were ready to go and hunt the market for our share.
Till next time,
The Wolf of Malt Street.