Thinking about opening a trendy craft distillery? You may want to think again.
Fierce competition. Big brands with huge budgets. Price pressure from distributors and retailers. Waning brand loyalty. New start-ups every other week.
Add to that a highly regulated industry that has more barriers to growth and profitability than can be explained here.
So how can Florida’s nascent craft distillery industry compete? One way is allow us to sell and ship spirits directly to consumers after they visit our distilleries.
While Florida wineries enjoy this privilege, outdated Florida laws prevent craft distilleries from doing the same. Sen. Jeff Brandes‘ bill (SB 220) creates parity between Florida’s craft breweries, wineries and distilleries.
Guided tours are often our only marketing tool. That’s where we tell our story, share our spirits and create customers.
The ability to ship is a key to customer satisfaction because it provides a convenient way for tourists to enjoy our spirits back home.
Generally, Florida craft spirits are available for sale only at the distillery. Over time, guests will share their “Florida Spirits” with friends after a recent trip to Florida.
Those friends will then ask for it in local markets, creating demand, giving retailers (and distributors) the confidence to offer it for sale.
Retailers and distributors expect the suppliers to create demand and the “pull” to move product off the shelf.
The ability for craft distillers to ship will, over time, create business for out-of-state distributors and retailers. But small distillers don’t have big ad budgets needed to create demand. To distribute without pre-established demand is bad business for suppliers, distributors and retailers — slow selling products collect dust on the shelf.
Florida Farm Wineries have been shipping to out-of-state customers for decades while Florida retailers and distributors have continued to prosper without negative impact.
Florida’s craft distilleries shipping to customers outside of the state will likewise have no negative impact on retailers and distributors.
It’s time to level the playing field. Sen. Brandes’ bill will do that and much more: It will create jobs, increase demand for Florida agriculture, help small businesses grow, and allow tourists to enjoy and share their Florida memories back home — and maybe encourage them to come again next year.
Philip McDaniel is CEO of St. Augustine Distillery in St. Augustine.
February 21, 2019 at 2:49 pm
Florida distilleries should be able to sell by the drink just like wineries and breweries are allowed to do at the moment as it is a comparable amount of alcohol. The rules should be the same for all of these industries, without exception. Also remove the requirement for having a distributor (middle tier) until the business needs to enlist such a service for logistics, and not just simply to allow someone else to take a big chunk of the critical income for the folks that can afford it the least. Right now it’s nearly impossible to start a small distillery without huge debt and the reduced prospect to become profitable within a reasonable time.
February 22, 2019 at 9:12 am
Well put Dean, we feel the same way, as do the rest of craft distillery owners in the state. A huge thankyou to Philip McDaniels for being not only a pioneer in the industry but for his efforts to level the playing field for the smaller guys. The smaller brands can have a chance if given the same opportunities as the big brands despite a lack of marketing budget. In Minnesota for instance, the craft market is very strong due to the fact that they can sell cocktails out of a tasting room, it’s an amazing concept and works wonders to build a brand. I believe it would help the craft distillers battle against “lifestyle brands” as well. While craft distilleries are typically family funded and spend ones entire life savings to build an actual distillery, lifestyle brands still call themselves craft despite the fact that most owners dont even know what fermentation is, it’s a problem. So the distillery owner has millions out in a buildout, and a “brand owner” has zero invested, the best way to level the field is either cocktail sales, or regulating marketing terms such as “handmade, craft, locally made etc.” just my 2 cents
February 22, 2019 at 10:32 am
We need to bring common sense to liquor laws. The left-over tangle of post-prohibition regulations are hopelessly antiquated in today’s world of open and efficient interstate commerce. Florida has the sugar cane — and now the distilleries — that would have flourished here for decades, if not for the great mistake of prohibition. We’re world-famous for oranges, beaches and family vacations, but we should be world-famous for artisanal rums made by talented producers with great pride and attention to detail. Florida rum should stand above others in terms of quality and quantity, but we are sadly boot-strapped with unnecessary regulation and lack of foresight in this arena. Start by allowing visitors to purchase our Florida rums anywhere, anytime with a free and open commerce infrastructure, like Napa Valley enjoys with their wines to the great benefit of small business owners and state revenues. Sugar must be heavily subsidized to compete in the world economy, but rum does not. It’s the greatest value of any product made from Florida’s bountiful cane. Let’s show some pride and stand behind our venerable rum producers in Florida. Open the markets to these noble spirits without restriction or inhibiting regulation. There are no losers, only winners in this scenario.
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