Distillers Should Sell Their Whisky!

Duh! Hot take I know. :). Of course distillers should sell their whisky. But perhaps the real question is should distilleries care who they sell their whisky to? Is there a fundamental difference between selling whisky to consumers, other distilleries, non-distiller producers and independent bottlers? I say no! Read on as we walk through the differences and recognize my own obvious biases on the topic, though I'll try to set those aside and point out where I think a distiller could have a different point of view. Though to get down to brass tacks ... selling whisky is selling whisky, and isn't that what any distiller wants to do?

Why should distilleries sell casks or bulk whisky to independent bottlers or non-distiller producers? The difference being an independent bottler produces a co-branded product that identifies the source distillery clearly on the label, and a non-distiller producer will normally hide the original source distillery. For this discussion they are mostly the same, and so I'll just refer to IB's (independent bottlers for short) which will include non-distiller producers.

As far as selling to consumers vs selling to IBs goes, there's profit in both and reasons to do both. And I think a profitable distillery should use as many avenues as possible to sell their product and get their product in the hands of consumers. Yes, there will be different amounts of work, profit percentages, risks and costs for either avenue. Consumer sales is a long haul game and bulk sales can be more of a quick buck. So far I think all of that is obvious. I've said nothing game-changing (not that any of this is game-changing), but as an IB we still run into hesitation from distilleries when we approach them. To be honest most of the time the objections come in the form of deafening silence. And other times it's just hums and hahs, and sometimes flat-out nos, though we also get "sorry we don't need any help bottling our product", which just completely confounds me, because at that point you know that you're talking to someone who isn't going to understand what your're trying to achieve anyways, and why it's good for both parties. So let's get down to it.

Any distillery has several battles to fight and they all center around cost, quality and risk. To be clear there are many battles but these are some of the areas where an IB could help ease the burden, just a bit.

Most people know or at least have some perception that creating alcohol, especially whisky, is incredibly expensive. The most expensive aspect of whisky is the time in the cask. Many distillers change their process, even their distillation techniques to shorten the amount of time that whisky needs to spend aging. Daniel Whittington from the Whiskey Vault channel on YouTube recently posted a video titled "How to run a Still - Bell Meade XO Bourbon", check it out for more information. Basically, distillers can take smaller cuts so that whisky needs to spend less time being affected by a barrel in order to achieve the designed product.

So how can independent bottlers help with these problems of cost, risk and quality? Besides the obvious benefit … that of the actual money that goes straight into the distillery's coffers for the sale of the cask. A distiller can raise the average quality of casks aging in their warehouse by selling off the weaker ones. They can simultaneously raise the average quality of casks while taking in funds for that cask and at the same time increase the quality of future whisky produced because they don't need to include those weaker casks in their blends. Their overall cask management is improved and their cash flow increased. That's 2 benefits.

Cash money for your casks!

An IB buys whisky from other distilleries. If that IB wants to sell that product they need to ensure that whisky is quality while they target an enthusiast market. Which is normally a different market from the distillery, because they will normally target a mass market. An enthusiast market that will hold them to a high standard …. An independent bottler lives and dies by that enthusiast reputation so they must release quality whisky. And as enthusiasts try whisky from different distilleries, produced and distributed by the IB, they will most assuredly buy whisky from those distilleries directly. Many of the distilleries we want to buy whisky from are small, and so I'm sure they would welcome the chance for more consumers. That's benefit number 3.

As Spirit For Us, or Whisky For Us, our whisky bottling brand, we have chosen to focus on bottling whisky from local Canadian distilleries. And so it is in our interest for those distilleries to grow strong. We want people to buy our whisky but we also want people to buy our partner distillery's whisky. And in so doing enrich the entire local craft industry. A Rising Tide Lifts All Ships. And we want to see all Ships lifted because that benefits us. It is a cycle of benefits. So the next benefit is "New Markets/New Consumers", we interest new consumers and potentially sell in different markets than our partner distilleries. That's benefit number 4. Benefits three and four are where independent bottlers who produce a co-branded product and non-distiller producers diverge. Because non-distiller producers hide the source of their product the original distillery receives no benefit, marketing, reputation or otherwise.

In summary we've talked about the following benefits …

1. Cash Flow - the influx of new money

2. Cask Management - Raising the overall quality of casks in their warehouse

3. Customers that identify with that IB will learn of new distilleries through the IB.

4. New Markets - Distilleries might be introduced to new markets. Benefits three and four are very closely related, though a little different.

5. And the last, which is my favourite - Zero-cost experimentation for the distillery.

Distilleries will see what their whisky is like in new kinds of wood, and they will be able to see how the market responds to those flavours in their whisky without taking the risk themselves. Because we do not have much control over the creation and distillation of the original spirit. By necessity, we need to invest in our cask program, so finishing in different woods is one of the only options we have to make our mark on the whisky we purchase.

In Canada, there are a few Independent Bottlers, but not nearly as many as there are in Scotland, and none besides Spirit For Us, that I'm aware of that are focusing on local craft distillers. With the stated benefits, I believe I have provided solid discourse for IBs being a genuine industry tool for distillers. I also believe that the ratio of Independent Bottlers to Distillers is an indication for the health of a particular whisky industry. Meaning the Canadian whisky industry has room available.

Now, IBs aren't the only tool that distillers have to solve the problems of quality, cost and risk, but we are a good one. I hope that distillers take advantage of us. We are looking to build great mutually beneficial relationships, because an IBs business depends on distillers, it is in our benefit to do everything possible to ensure the success of each distillery we partner with.

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