Distribution Strategies for Premium Spirits Brands

One of the biggest spirits acquisitions of the decade started with a single SKU and a very specific consumer. When I moved to Austin four years ago, Lalo was the bottle everyone brought to dinner parties. This was right as they were finishing a raise that was oversubscribed with a very specific group of influential people. The kind of people who talk, host, and shape taste without trying to. We spent time with some of the founders and early employees back then, and it was obvious they were running a different playbook. Lalo is the rare story of how a one-SKU tequila brand broke through one of the noisiest categories in spirits and became the go-to bottle for a certain kind of consumer long before it became one of the biggest spirits acquisitions in the last decade, when it sold to Tito’s. It’s a case study in focus, restraint, and understanding exactly who you’re building for. Most brands enter tequila trying to win every consumer at once. Blanco, reposado, añejo, cristalino, the whole ladder. Lalo went the opposite direction. They launched with blanco and stayed there. Even as they scaled, they held the line: blanco and a higher-proof blanco. That’s it. They bet on a liquid defined by purity and transparency — pure tequila with nothing to hide. At a time when “clean” wasn’t yet a crowded word in spirits, they owned it. Distribution followed the same discipline. They entered the highest end of the market in the places their consumer already lived: Aspen, Austin, St. Barths, Miami, LA. Not just everywhere in those cities either. Specific restaurants, bars, and members clubs. Always within arm’s reach of the right drinker. Always in rooms where being seen mattered more than being everywhere. And they staffed those markets with people who were plugged into culture. People who could place the brand at the Met Gala one week and at the right dinner party the next. That’s how you build gravitational pull. Even their merch strategy had discipline. Those hats weren’t freebies, they were strategic signals. You saw them on investors, founders, chefs, musicians, and friends of the brand who actually shaped culture. Highly selective gifts to the people who already had the microphone. You don’t need every consumer. You need the right consumer early, then you build outward from there. You need clarity of product, clarity of point of view, and the conviction to stay narrow until the world catches up. Lalo didn’t scale because they shouted from the rooftops. They scaled because they stayed small in all the right places until demand pulled them bigger. A lot of brands could take a page from that playbook.

Luxury distribution is about control, not coverage In most industries, distribution is a question of reach. More points of sale mean more visibility, more traffic, and more revenue opportunities. In luxury, this logic quickly becomes a trap. Luxury distribution is not designed to maximize coverage. It is designed to preserve control. Distribution in luxury is a strategic lever that protects brand meaning, pricing power, and desirability. Where a brand is available, how it is presented, and who is allowed to sell it matter as much as the product itself. Jean-Noël Kapferer has long emphasized that luxury grows through rarity and selectivity, not ubiquity: when a brand becomes too accessible, symbolic distance collapses and perceived value weakens, even if demand remains strong in the short term. This is why distribution decisions are never neutral. Opening too many doors, multiplying wholesale partners, or accelerating geographic expansion may boost sales temporarily while quietly eroding brand equity. Over time, control over pricing, storytelling, and client experience becomes fragmented. Luxury brands do not simply sell products. They stage experiences and manage perception. Distribution is the tangible expression of this strategy. Store locations, retail design, sales rituals, assortment depth, and clienteling practices shape how the brand is interpreted and valued. Research and industry practice consistently show that fewer, well controlled points of sale often create more value than broad coverage. Concentration allows deeper investment in teams, service quality, and long-term client relationships, rather than managing inconsistency across hundreds of doors. This also explains the rise of selective direct to consumer (DTC) strategies: DTC in luxury is not primarily a margin play, but a way to regain control over narrative, pricing discipline, data, and client experience. Poorly executed, however, it can reproduce the same dilution risks as uncontrolled wholesale expansion. Distribution discipline requires patience. Closing doors is harder than opening them, especially under revenue pressure. Yet brands that rationalize their networks tend to rebuild desirability and pricing power over time. The strategic question is therefore not how many points of sale a luxury brand should have, but how many it can truly control. If your brand is reassessing its wholesale footprint, DTC strategy, or expansion pace, the challenge is rarely operational alone. It is strategic and cultural. I regularly support luxury brands on these questions and would be glad to discuss your situation. #LuxuryStrategy #LuxuryDistribution #LuxuryRetail #BrandControl #LuxuryBusiness Picture courtesy of Hermès

The Reality Check Every Spirits/Alcohol/RTD Founder Needs: Launching the USA An uncomfortable truth from someone who's been through a spirits acquisition: The Casamigos story you've been sold is missing crucial chapters. George Clooney didn't wake up with a billion dollar tequila brand. Between 2013 and 2017, Casamigos executed a methodical distribution strategy with serious importing infrastructure. Four years of grinding through the three tier system. The receipts are public, yet founders keep chasing the myth of overnight success- seeing it more and more with UK founders... The market reality in 2025 is brutal. After a decade long party, tequila in particular faces a 500 million litre overhang in Mexico as US demand cools. Even established brands are trimming forecasts. When the tide goes out, only brands with genuine trade traction survive. Having built and semi-exited a spirits brand, I can tell you what actually matters: Weekly depletions. Rate of sale by SKU. Chain authorizations that stick. Price architecture that protects margins. Working capital to survive two slow quarters. Your Instagram following? No one cares unless it affects sales. Retailers care about one thing: Do cases move? The economics nobody discusses: Marketing and promotional spending easily consume 30% of gross margin in year one. State compliance is a nightmare - what's legal in California might get you fined in Texas. Working capital requirement for a genuine launch? $500k- $1m USD per state. Unless you have patient capital for parallel market development, pick your hero market and dominate it first. Geographic focus beats geographic spread until you hit $30m in revenue. Distribution delusion: Young brands love to announce "partnership" with major distributors. Here's what that actually means: You're one of 500 brands in their portfolio. Your success depends entirely on the incentives you provide their sales team. Without dedicated resources pushing your brand daily, you're just inventory gathering dust in their warehouse. The best distributors for new brands aren't the biggest ones. Find the hungry regionals who will give you mindshare. Better to dominate with a focused partner in three states than get lost with a national giant. On premise vs off premise reality: Bar listings makes great content, and good advertising but off premise drives scale. One chain moves more cases than fifty boutique bars. Yet founders chase vanity placements while ignoring the grocery channel that actually drives volume. Build with the exit in mind: Strategic buyers care about three things: Clean distribution data showing consistent growth. Strong gross margins. Brand equity that translates to pricing power. Everything else is negotiable. Your story, your awards, your celebrity partners? They're nice to have. But buyers model cash flows, not narratives. Bottom line: In spirits, cash flow is king, inventory is your enemy, and the only velocity that matters is bottles leaving shelves.

Distributors aren't ignoring you. Your brand just isn't built to win. Winning brands don't chase distributors. They build product lineups with clear roles, pricing structures that work, and sales strategies distributors can actually execute. The most successful beverage brands build fundamentals first, distribution second. They make themselves distributor priorities before they ever pitch. THE MISTAKE I SEE CONSTANTLY: A brand spends months pitching distributors. Emails go unanswered. Calls don't get returned. When they finally land a distributor, they celebrate. Six months later, product sits in the warehouse. Sales reps aren't pushing it. Reorders slow. The brand sends follow-up emails asking for support. Nothing changes. You've convinced yourself distributors can't sell brands anymore. But I still see pallets loading onto trucks every day. Distributors don't struggle to move 30+ cases a month for every brand - just the ones that aren't built to win. The brand blames the distributor. "They don't support us. They won't invest. They're ignoring us." But the distributor isn't the problem. You haven't built the fundamentals they need to prioritize you. HERE'S HOW WINNING BRANDS APPROACH IT: Look at Surfside. 360% sales growth in 2024. One of the fastest-growing alcohol brands in the market. Distributors didn't sign them because of random luck. They signed them because Surfside built a brand distributors could actually sell. Distributors knew exactly what to do with them. Here's what winning brands build before they approach distribution: Clear brand positioning. The distributor understands what your brand stands for, who it's for, and why it matters. They're not guessing how to sell you. Clear product roles. Every SKU has a defined purpose - volume builder, flagship, profit engine. The distributor knows exactly which product to lead with in which account. Competitive pricing structure. Pricing that works at every level - retailer, distributor, you. The distributor can make money moving your product without constant discounting. When these fundamentals are in place, distributors don't ignore you. They prioritize you. What's your biggest challenge with distributor relationships right now? #BeverageIndustry #CPG #Distribution #CraftBeverage #BeverageDistribution

📈 How do you take a 180-year-old portfolio of iconic Italian spirits — Fernet-Branca, Carpano Antica, Borghetti — and drive growth that outpaces the category? That’s exactly what Christopher Watt, CEO of Branca USA, is doing. Since taking the helm in 2022, Chris has built a lean, data-focused team of just 48 people to deliver outsized results: Selling more than 3 million bottles annually and growing faster than the overall spirits category — showing an 8% increase in both volume and value so far this year. In the latest episode of Business of Drinks, Chris shares how his team is using sharp analytics, disciplined focus, and creative execution to transform Branca’s brands for today’s consumers — while staying true to the bartender culture that built them. We discuss: 🔸 The strategic shift that turned Borghetti into the fastest-growing coffee liqueur in the U.S., up 81% in volume in 2024 🔸 Why Fernet-Branca’s biggest growth now comes from college towns and neighborhood bars, and how the brand has expanded beyond its trade-darling origins 🔸 How Carpano Antica Formula became the gold standard for home and bar Manhattans — and why that traction was largely organic 🔸 The “pilot fish” strategy: How Branca partners with the biggest brands in its distributors’ portfolios to drive sales, creating a “win-win” for the distributor 🔸 How a Total Wine March Madness display and on-premise activations worked hand-in-hand to deliver a 40% sales spike in that month 🔸 Why Chris believes data and focus — not massive budgets — are the keys to smart brand building today Chris also opens up about the challenges of executing at speed with a small team, why he sets aside daily time for strategic planning, and the mindset he brings to building culture and growth simultaneously. If you’re a drinks founder or operator looking to understand how to modernize a heritage brand — or grow in a tough market with limited resources — this episode offers practical, actionable insights you won’t want to miss. 🎧 Link in the comments #BusinessOfDrinks #SpiritsIndustry #BrandBuilding #HeritageBrands #FernetBranca #Borghetti #CarpanoAntica #Leadership Scott Rosenbaum

Most alcohol brands expand backwards. They open doors. Then hope demand follows. We did the opposite. Before opening new states, we watched behavior. In a 2-month window, 200,000 people searched our website for retail locations in states where we are not yet on shelves. 205,649 store locator searches overall. 1,000+ direct retail requests. 465K active website users. That is not traffic. That is geographic intent. As a CMO, I do not see e-commerce as just revenue. I see it as live market research. Search tells you where awareness is converting into desire. Locator clicks tell you where desire is converting into frustration. Retail requests tell you where frustration is converting into demand. That changes the expansion conversation. Instead of asking, “Which distributor can open this state?” We ask, “Where are consumers already pulling us?” Layer on: 20M organic views. 100+ organic consumer viral videos. Award winning SKUs. This is not push distribution. This is pull strategy backed by proof. In a category historically driven by relationships, data is becoming leverage. If you are in beverage, ask yourself: Are you building distribution first, or demand first? The brands that survive the next five years will know the difference.

It is easy for established brands to think they need a very large wholesaler to achieve success. It is also often misguided. Large wholesalers do have tremendous reach and can get one to the volume of depletions needed. But the reality is that their systems are often rigid, with layers of approvals, policies, and corporate structures. To add to this, the post-covid world looks like an opportunity for efficiency, with more automatisation/use of tech and less of the tried-and-true, though very time consuming, "carrying bottles in bags/tasting customers/telling the stories". For brands looking to grow meaningfully thanks to knowledgeable and truly passionate human carrying samples around, proficient about the who/where/how/why of the very product they are pouring and really standing by it, that model can be stifling. PM Spirits (NY) - like other wholesalers such as Prestige LeDroit (DC/MD/DE), BC Merchant (IL), Maverick (TX, AZ etc...), Chambers & Chambers (CA), Vineyard Road (MA), Rive Gauche (GA) - take a different approach, leveraging our smaller size to offer real flexibility. When you work with such a company, you aren’t just another line on a spreadsheet; you are part of a network of truly curated, high-quality products that the team actively promotes and stands behind. The relationship between a brand owner and their distributor should be personal and collaborative. Our partners are individuals who are deeply connected to their craft, much like we are. We have a shared sense of purpose. Tweaking a market strategy on the fly, launching events to support placements, implementing in-store tasting strategies etc...we have the freedom to act almost immediately. Our flexibility extends to our customers as well. We know how to read the market, and ensure that products land in the right hands. We don’t just push products, we won't sell the customer "a problem" (aka a product the customer is stuck with). Our team checks in with customers on the regular and will be here to assist driving awareness towards slow moving skus, offering education and tastings etc... There are real advantages of working with the small to medium-size wholesalers. Their teams likely cares as much about your success as you do.