-
Distillery-Focused Investment Group
Our group is interested in the purchase of operating, State and federally licensed distilleries in the Northeast.
Will consider all opportunities. Intend to keep operators on as equity holders.
Stanley H Gruen
717 379 3104
-
6 Replies
-
I have never understood why an investment group would do this.The barriers to entry are very low for starting a new distillery. They seem to be sprouting up like weeds. If an investor buys out the founder(s) then the founder(s) can just go start another distillery.
See Chip Tate. He was forced out of his distillery, now he is planning a new one as soon as his non-compete clause expires.
I understand that an investment group might want to get an established operation with product and sales already. But none of the craft distilleries are anything close to being dominant. There are simply too many new distilleries springing up. All that investors are buying is some time saved in the startup process.
-
I think you answered your own question, Teton. The market is starting to get crowded, and it is probably better to purchase an ongoing concern with brand value, fully operational, established market and distribution, cash flow, expertise, and then fund for the next level of growth, than necessarily starting from scratch, and waiting for 3-5 years to do those very things.
-
I think crowding in the market is a relative thing.
There are far fewer distilleries than craft breweries and far fewer, still, than wineries.
For the most part, a well-run operation in any of these genres will be productive and profitable. Will any of them ever be the next Diageo? No. The vast majority of them won’t even be the next Tito’s. But for many of us, that’s not the goal. The goal is to make good spirits and gain enough localized market share to make a decent living while doing something we love.
Given that, I also wonder about the allure of craft distilleries with regard to outside investment groups.
-
I know this has been a tough business for me, the biggest issue for us is our remote location and government regulations . Regardless how good the product is you still have to get out and sell it. I’m in that next phase of funding and looking for the partner that wants “in” but not take control. Virginia sucks to do business in, but we still have to overcome the problems. So we are moving onto other states, and the issue is the same, you gotta sell it. I don’t know how many craft operations are profitable, I’m close, but it is a 7 day work week for me.
The fact is a- ‘Distillery is a capital intensive business’, beginners have no idea what they are getting into, being under capitalized is a bitch.
-
Very true. Being under capitalized is no fun. There is always something expensive happening that wasn’t in the budget. I encourage everyone to double whatever their projected budget is. There are going expenses you never even dreamed of.
-
In posting the interest of my group, I typoed my email address. Apologies to all.
Should have read,
shgruen.kennedyspirits@gmail.com
Thank you.
/SHG/
Log in to reply.
English 
Spanish 
German 
French 
Russian