Consumer: Rising Spirit Competition

A crowded space where branding dominates the show.

The reason I’m writing about this vertical is because David Adelman has acquired two spirit lines in full. Through Darco Captial, David has amassed an impressive series of Spirit investments. He has even invested in VIDE a brand owned by two close friends of mine. So I have known about Darco for quite sometime but David continues to remain incredibly active in the space.

David has amassed over 50 investments across the venture and private equity space. He doesn’t exclusively invest in liquor brands, he also invests in the beverage; fintech; sports & media; life sciences; and consumer-facing brand space, has acquired a full ownership stake in American Harvest Vodka and Beach Whiskey. The spirit brands will now be a part of the newly formed 1776 Spirits Company, which is fully invested in providing the experienced infrastructure and resources required to market the spirits, facilitate distribution expansion, and develop innovative new variants for both brands.

About the two brands:

  • American Harvest: “The Spirit of America,” American Harvest Organic Vodka is proudly handcrafted in Idaho, in small batches from organic Rocky Mountain wheat, certified organic ingredients, and water from deep beneath the Snake River Plain, yielding a distinctly smooth and silky spirit with a crisp, clean taste that was awarded Double Gold from the San Francisco World Spirits Competition. The company has plans to launch five botanical flavor/ready to drink seltzers in 2021 featuring Mango Lime, Cucumber Mint, Black Cherry, Ginger Lime, and Cucumber Lavender.
  • Beach Whiskey: Conceived in two different flavors, Island Coconut and Bonfire Cinnamon, Beach Whiskey’s mix-ability lets consumers reinvent their favorite cocktails and discover new ones. The unique filtration process creates a distinctly smooth, round mouthfeel that gives Beach Whiskey drinkability unlike other harsh whiskeys, making it perfect on its own or in a cocktail. The brand also has plans to expand into the ready-to-drink cocktail space in 2021.

As for 1776 spirits, beverage distribution expert, Rebecca Running, will serve as CEO of 1776 Spirits. Rebecca has over 30 years of distributor management experience, most recently, serving as President and General Manager for Los Santo International, and other senior management positions across Young’s Holdings, and Moet Hennessy USA. Rebecca is reported to be in charge and drive a cohesive strategy designed to maximize efficiency and quality while overseeing production, demand planning, distribution, QA, sourcing / procurement, engineering, facility maintenance, and customer service to drive sales growth and increase general market awareness for the brands.

Now that we’ve talked about the backstory about this article and some of the details around Adelmans latest investments, let’s move onto the point of the article.

The spirit industry in my opinion is one of the most competitive, and most saturated space. If you’ve ever walked into a major liquor store then you can attest to how many brands line the shelves. Especially if you walk over to the spiked seltzer portion of the store. You’re immediately hit with countless brands, and these are the big guys. If you do a bit of digging you’ll really get to see just how many boutique and niche brands are out there floating around.

The way these niche brands are sustaining a business is they’re taking the approach of targeting a very small niche. Some brands are geared towards individuals that spend summers in the Hamptons, some are for a more rugged individual and the branding is what really is pushing the product onto the consumer.

The point of all this is to say that it’s incredibly hard to make an investment thesis in the space given all of the competition. The main driver for success at the earliest stage in my opinion, outside of taste would have to be brand identity.

Primarily Growth & Venture Content // Avid Art Collector and Newfound Traveler (All Thoughts are My Own)