Current State of the U.S. Spirits Market; from tough to tougher

The U.S. spirits market has been real tough over the past 24 months, and the road ahead doesn't look any easier. For brands/suppliers—whether well-established or fresh players—the competition has never been more intense.

It’s been a tough 24-month stretch:

The last two years have been super challenging for the spirits industry. Consumer behavior has changed - there is a clear pre and post Covid, economic pressure is real ($44 pasta dish, anyone?), and market saturation have made is super hard for most brands/supplier to just maintaining ground.

There is no signs of easing up:

Unfortunately, everything points towards the game getting harder in 2025. If only for tariffs on imported booze, which are not going to help much.

The market feels real saturated. Competition is fierce. New brands pop up from nowhere everyday. Pretty packaging, cool story. Breaking through the noise has never been harder.

Tequila cant keep growing forever. Tequila has been crushing it. But with new brands popping up every week, one has to wonder how much longer this can continue.

Cognac and Armagnac, brandy in general, is stuck. The outlook for Cognac and Armagnac feels bleak. These categories have struggled to attract consumers’ interest for different reasons. It feels like Cognac has lost touch with the customer, isn’t sure who she is and how to talk to her. Marketing efforts addressed to everyone seems to be made while the category might not be aware of how few people are interested or drinking the stuff. We (PM) LOVE Cognac and it is heart-breaking to see where this category is at now.
When it comes to the the US market, Cognac in 2024 feels very much like Bordeaux in the 2010’s - an appellation which has not yet realized that the consumer has moved on to other appellations/categories that put in more efforts over the years to stay relevant. Armagnac has seen a sharp decline from heights in 2021/2022 that might have been a little artificial (consumers at home drinking more and willing to explore); this decline seems less worrying than for its “big brother” as the category feels like it remains attractive to the early-adopter’s eyes. If it keep it’s efforts explaining what it is it could maybe get back on the up and up.

Selling a second bottle of something is a challenge. If you think selling a customer on a new product is hard, try getting them to repurchase it. The market’s saturation & extreme variety of choices available mean that customers are more inclined to try something new rather than buy a second bottle of the same stuff they just finished.

Add to this that people are just drinking less (and/or better) as health-conscious lifestyles are on the rise and shoppers are very selective because price sensitivity is very high. The cost of entering (or re-entering) the market is skyrocketing. For those hoping to bring a new brand to market (or revive an old one) it’s going to take substantial investment over an extended period—not just in terms of money, but also in patience.

What’s the next big category? No clue.

There Is No Rest for Those Who Want To Get Heard in a Crowded Spirits Market

Picture a fictional small company in the world of artisanal spirits, creating products that are nothing short of exceptional. Let's give it a random name, call it PM Spirits.

They’ve mastered their craft, perfected their offerings, but there’s a problem: getting people in larger more corporate businesses to notice and understand the value of their work.

It’s like they're holding a light but it's so foggy out there, only those who know to look hard for it can see it.

The struggle is when they reach out to larger, more established partners, hoping to collaborate. They’re met with silence or, at best, a delayed response. Emails go unanswered for days, sometimes weeks. Meetings that seem promising are full of enthusiasm, but those words tend to disappear into the void.

It's not that these larger partners don't care, but to them, this small company is just another one in a long line of offers. Why would they feel the urgency. None of the products or brands schlepped by the smaller outfit necessarily rings a bell. To the one who does not know, there is nothing special.

To the small business, every ignored email or missed opportunity could be felt as a blow. They’re not dealing with mass-produced, interchangeable products. Each distillate is a story, made by someone who really exists, doesn't cut corners & truly cares.

So what do they do?

They look at their feet and cry. It's too hard, too unfair they say.

Nah. They dust off, get back up. They hustle, relentlessly.

They show up, they follow up, the find creative ways to remind the partners they exist.

Sometimes it works; they might get a foot in the door.

Often they’re left spinning in circles, battling bureaucracy, trying to figure out who is even making the decisions.

They’re trying to carve out space in a crowded, noisy world. It’s exhausting, sure. But they persist. They’ve built something too good, now they "only" need more people to know about it.

Balancing Growth and Identity in the Spirits Industry

In most businesses, growth is the name of the game. Whether you’re schlepping bottles, making deals, or hustling to get your name out there, it’s easy to feel the pressure to constantly do more. Bigger. Faster. Louder.

More SKUs, more markets, more products. Everyone’s chasing growth because we’ve all been told it’s what counts, how success is defined.

But what happens if you grow too much and lose sight of what makes you you?

We’ve seen more than a few good people burn out. It’s easier than one thinks to have a great thing going, and then the pace of chasing more just overtakes everything. One gets caught up in the idea of expansion, loses focus, and ends up with a product or a business that looks nothing like what one set out to build.

PM Spirits is in the business of finding and selling spirits we think are really, really good. We focus on the people, the stories, the craft behind each bottle. We’re not just here to slap labels on bottles and move them or find what’s cheapest to generate volumes. It’s about curating something special. But I’d be lying if I said there wasn’t always that itch to go bigger.

Expand the lineup. Jump into more categories. Scale faster.

Growth is great—don't get me wrong. I'm not advocating against it. But what I am saying is that if you’re a business that stands for something, there’s a fine line you have to be aware of. There’s a threshold where growth can start to pull you away from what makes one unique. The ethos that defined one in the first place.

How does one know when one is close to that line? No idea.

We’re not there yet, but we’re conscious of that possibility. It’s something I think about often—how do we keep growing without losing the soul of what we do? How do we get bigger without diluting what makes our products and our relationships special?

I think part of the answer is in growing thoughtfully, not just for the sake of it, but in ways that align with our core values. If the people and the products are our focus, then the growth has to respect that. We can’t let the drive to expand undermine what made us stand out in the first place.

I believe it’s about taking one’s time, being really patient, and letting our growth reflect the quality, relationships, and mission that got us this far. It might mean saying "no" to certain opportunities or moving a little slower than others in the industry. But it also means we’re building something that lasts.

Growth is important, but only if we can do it without losing our way.

Rum, rhum, ron etc...

Jason Cox (Cinco Sentidos, Alambique Serrano, Cañada) in his brilliant interview on the same podcast suggested to hosts Will Hoekenga & John Gulla that they should talk to the french dude.

So they did.

I wanna watch a french person while listening to his strong accent -> https://www.youtube.com/watch?v=WMcAPf4mS6c

Just the sound is already plenty: https://www.rumcast.com/episodes/pm-spirits-nicolas-palazzi

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In this episode, we sat down with Nicolas Palazzi, the founder of PM Spirits. As a self-proclaimed "provider of geeky spirits" PM is an importer/distributor known for supplying the US with many sought-after rum releases thanks to relationships with brands like La Maison & Velier, Père Labat, Alambique Serrano, and many more.

Note: You can watch the video version of this episode here.

It was a fascinating conversation that touched on everything from visiting rum locales like Marie-Galante and Hampden Estate to the challenges of growing the rum category. We discussed:

Nicolas's journey from working as an engineer in France to becoming a spirits importer in Brooklyn

Blending rums at Hampden for an upcoming collaboration with Habitation Velier

The magic of Marie-Galante rum

Growing the Mexican rum category

How Alambique Serrano has gotten so much early attention

Authenticity in spirits

Lessons from 10+ years bringing obscure spirits into the US market

What he looks for when evaluating a spirits producer

Why he will forever be known as Captain Cognac (despite John's attempts at new nicknames)

And much more!

Check out the PM Spirits website here:

P.S.Did you know you can support The Rumcast on Patreon now and get bonus episodes, happy hours, and more? You can! Check it out here: https://www.patreon.com/therumcast

Contrasts in Hospitality: Experiences Across France, Spain, and Italy

Coming back from six weeks of work in Europe and having driven from meeting to meeting during 20+ days—first around Spain (Madrid, Barcelona, Jerez), then France (Paris, Banyuls, Perpignan, Montpellier, Nice), and finally Italy (Genoa, Modena, Milan), stopping by hotels, restaurants, and bodega-type shops in each city—it was startling to see the contrast between how the French on one side and the Spaniards/Italians on the other react to someone who appears to be a foreigner.

I naturally do not look very French from the outside and happened to have been traveling with an American friend through part of the French and Italian portions of the trip. He did not look very French either. We spoke English.

The number of French restaurants we had reservations at (which I had made), arrived perfectly on time for, and yet were either greeted coldly or simply told that the "kitchen was closed" despite the fact it obviously wasn’t, was staggering. We arrived at each of these places looking like we did not belong, likely could be heard not speaking French, and triggered a negative reaction from the venue: we were bothering the establishment. Only after I started interacting in French, with a French accent, and signaling that it did not come from a heavy use of Rosetta Stone but rather because I knew the culture as well as our hosts, due to being born and raised in France, did the situations slowly ease up and people started to "look into what can be done." In most instances, though, we were made to feel like one was doing us a favor. Had I not been French, three out of four times, we would not have been served.

This contrasts with the Spanish and Italian experiences, where people seemed happy to welcome those who might be spending money on multiple dishes and some wine.

Having left France in 2004 and coming back since several times a year for a few days, I had never felt so vividly that the French seem to have evolved inward, with what appeared to be a clear distaste for what is not French. The current politics of the country might be another indication of this "replis identitaire" (a retreat into a narrow sense of cultural identity).

And yes, not all French are alike, some are very opened and welcoming etc... BUT, during these specific 10+ days, it was hard for the French person in me to not feel a sense of shame, seeing how the perceived non-French were treated on the regular.

Schooled by Todd Leopold : American whisky barrel entry proof

We/PM had the immense honor to get schooled today by Todd Leopold, one of the most knowledgeable distillers we got to meet. Below is a recap of one of the many bits of deep info he shared with the team.

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From the early 20th century until 1962, the standard entry proof for American whiskey was consistently set at 50%. This entry proof, or the alcohol content at which whiskey is put into barrels for aging, played a crucial role in shaping the character and quality of the final product. A significant reason for this standard was that a lower entry proof contributes to a softer, more refined whiskey. This effect is particularly notable after the whiskey has aged for several years.

Historical data, such as studies conducted by the IRS, reveal that the proof of whiskey in Kentucky warehouses typically increased from 50% to about 107 proof over an eight-year period. This gradual rise in proof necessitates only minimal dilution with water to achieve the desired bottling strength, thus preserving the complex flavors and aromas developed during aging. In contrast, starting with a higher entry proof, such as 62.5%, results in a much more concentrated spirit that can climb into the high 60s or even 70s in proof. Diluting this high-proof whiskey to bottling strength requires adding significant amounts of water, which can dilute the flavors and aromas meticulously developed during maturation.

A lower entry proof also impacts the extraction of compounds from the wood of the barrel. Whiskey aged at higher proofs tends to pull out more aggressive tannins and wood flavors, sometimes described as pencil shavings or furniture-grade wood. These characteristics can overpower the subtler notes and lead to a harsher tasting whiskey. Conversely, whiskey aged at the traditional 50% entry proof extracts fewer of these intense compounds, resulting in a smoother, more balanced spirit.

The legislative and regulatory changes over time have also influenced whiskey production practices. In the early 1960s, lobbying efforts led to an increase in the maximum legal entry proof from 55% to 62.5%. Prior to this change, few distillers utilized the 55% maximum, instead adhering to the lower proofs. The rationale behind these regulatory shifts was largely economic. By allowing higher entry proofs, distilleries could produce more whiskey with fewer barrels, thereby reducing costs associated with storage and production. This change, however, was not driven by considerations of quality but rather by financial imperatives during a period when many distilleries were struggling to remain operational.

Another critical factor in whiskey aging is esterification, the chemical reaction that forms esters, which contribute to the fruity and floral notes in whiskey. Lower alcohol content during aging facilitates greater oxygen absorption, enhancing esterification reactions. Experimental data, although not extensive, suggests that whiskey aged at lower entry proofs (such as 50%) tends to develop higher levels of esters compared to those aged at higher proofs. This interplay between organic acids and esters is crucial during the aging process, particularly in the initial four years. Studies have shown that these components evolve together, reaching a harmonious balance that signifies maturity.

The historical context provided by documents such as the Crampton and Tolman study illustrates the meticulous approach to understanding whiskey production. This study surveyed 31 distilleries, analyzing variables like mash bill, warehouse conditions, and aging samples over eight years. It established that the standard entry proof was around 100 proof, with minor variations. Subsequent studies during Prohibition confirmed these findings, underscoring the consistency in production practices despite economic pressures.
******

Yeah, Todd is VERY good.

Marie Galante, The Last Sugar Cane Island of the French Caribbean's

Some details from my last trip to the island of Marie Galante in the French Caribbean’s:

Marie Galante is located south of Guadeloupe in the French Caribbean, It's a small island, about 61 square miles. To give you some proportions, it's about one tenth the size of Guadeloupe.

You can reach Marie Galante either by boat or small planes; there's a tiny airport. It takes about an hour to get there using a ferry-type boat. Depending on who you ask and when, there are between 10,000 and 15,000 people living on this little island. In contrast, Guadeloupe has about 400,000 people, and Martinique around 350,000.

Marie Galante is super flat, with no hills or mountains, unlike Guadeloupe and Martinique. The soil on Marie Galante is mostly chalk, while it tends to be clay in Guadeloupe. The sun is beaming on the island all day, everyday.

As a result Marie Galante is known as the last sugarcane island in the Caribbean because in terms of surface area planted with sugarcane relative to the total island area, it has the most sugarcane of all the Caribbean - about 20% - when Guadeloupe is at about 7% (Martinique clocks in around 3%).

Historically, Marie Galante's trade was initially cotton, coffee, and indigo, but very quickly shifted to mainly sugarcane. The soil is pristine; there's never been an extensive culture of bananas here, which on other islands often involves heavy use of fertilizers and pesticides. The locals consider their soil as close to organic as possible, comparable only to Haiti.

There are 5 distilleries on island making the island in the French Caribbean's with the most distilleries per square miles:

- Grande Anse is the large industrial facility

- Bellevue the largest artisanal players

- Bielle

- then Poisson which makes the brand Pere Labat

- and RhumRhum (micro distillery, initially operating within Bielle and since 2021 at Pere Labat).

Zooming in on the Distillerie Poisson, started in 1860, the smallest of 5 located on the island of Marie Galante:

Distillerie Poisson (Poisson = "fish" in French) makes the brand Pere Labat.

The distillery was purchased in 2007 by J.C. Brot, who was born and raised in a family with a long history in Guadeloupe and Marie Galante proper. Culturally, on these islands, making rum is seen as a high achievement and JC always dreamed of being a rhum maker.

The distillery employs 17 people and manages about 250 hectares of land, some of which is cultivated with cane that feeds the distillery, while much of the cane is bought from small planters to maintain good relationships with the local Planteurs.

Being a French territory, working hours are highly regulated (35hr/week, 5 weeks off per year).

The teams is working from 7am to 1pm Mondays to Fridays and 7am to noon on Saturdays.

Distillation occurs from Feb to July.

The facility is not large or glamorous; it's rusty, it's beat-up, it experiences a lot of daily operational challenges which causes frequent repairs and maintenance issues. Despite these conditions, the distillery continues to produce super high-quality booze, experimenting with aging in various types of casks, including ground cru white Burgundy and Mouton etc...

The fermentation process lasts 72 hours and is inoculated. The 2 "Creoles" columns, one from 1955 the other from 1977 are all copper and consist of 15 plates - 11 stripping plates and four concentrating plates. White rhum flows out of the stills at 70.7% alcohol by volume and eventually entering casks at around 63%.

The distillery makes about 1,500 liters of booze per day and sells about 40K cases a year (3/4 to the French market, the rest sold internationally).

The distillery's operation is deeply intertwined with the local community; some planteurs have scheduled appointments to deliver their cane, other randomly show up. The unpredictable supply of sugar cane from the small local planteurs reflects the totally artisanal nature of its production.

The island's hot (temp typically varies between 74 and 95 F) and humid conditions contribute to about 7+% annual evaporation in casks, more than twice the evaporation typical in the Cognac or Armagnac regions of mainland France.

Relaunch Ninjas

Relaunches are something PM Spirits is a black belt at. We're in constant conversations with brands that have already dipped their toes in the US market but feel like they're not getting it right. They're looking for that partner to FINALLY bring them this "success" the brand feels it deserves.

Brand A, seasoned yet not shining in the US, watches its nemesis, Brand B, in the spotlight. Frustrated and wanting the situation to change, Brand A come knocking at our door, hoping we can somehow orchestrate that breakthrough.

In the many tales of "Brand A" we witnessed, we often see a journey of ambition, impatience, and disappointment. The belief that sales will 3X, 5X etc... in a blink if only one could find the right importer.

Sadly believing that switching partners will make sales flow is misguided. A new importer is not the magic fix.

First, the brand may just never "make it" for a variety of reasons, some linked to timing, the brand itself, internal politics, people, change in leadership, funding... or just the fact that it "wasn't in the cards". Not every brand ends up successful in the US.

Unless the team leading Brand A can truly do a mental reset, put aside the many years of frustrations due to subpar results and have a long term approach to this US journey 2.0, here is what will happen:

2 years into the relationship, patience starts to wear thin, expectations soar higher, and the eventual realization that the anticipated quick wins are not happening settle in.

Three years pass, goals remain distant, and the honeymoon phase with the importer is over. Brand A starts losing trust in the lethal weapon of sales it thought it once had found.

This cycle of hope, frustration, and disillusionment is a recurring theme.

The impact on the importer's team's spirit and quality of life is real. Drama, as it turns out, is an energy drainer.

But there's a different path less traveled. It's about true partnership. And the shared understanding that what is being played is A VERY LONG GAME.

In our collaboration with brands, the initial 2 to 3 years are about setting the foundation. There might be dips in sales - wait, no, there WILL BE DIPS - even significant ones. But it's all part of recalibrating & finding the right rhythm.

By year four, the strategy has good chances to starts humming, stories begin to spread, and a new dynamic might emerge. This is when a brand, with our guidance, might begin to echo across the market, benefitting from the foundational work PM Spirits laid down as well as the brand's own efforts to build its narrative through powerful marketing and a solid social media presence (*).

By the fifth or sixth year, the fruits of patience, dedication, and collaborative storytelling should start to ripen.

Now sometimes nothing happens. Reasons are many. Not everyone get it right all the time. Not every brand will be succesfull.

But when it happens it's a testament to the fact that success in this industry is about true partnership, understanding, patience, ability to curb frustrations and the burning desire to succeed tomorrow. And relentless effort across many many years, not months.

(*) A brand has to understand that to have a chance at - maybe - being successfull, it is its responsibility to put it solid time, skills and effort in telling its own story and building its message. Across all social media platforms and beyond. The absence of a steady commitment to brand-building will thwart the importer's efforts.

Low Hanging Fruits of Sales

Identifying Key Accounts and Setting Sales Goals:

"I was thinking about the low-hanging fruits and how we could use those low-hanging fruits to increase our sales. As one runs one's own business, from a sales perspective, there's a need to know who your key accounts are. They may not be the people you think they are, because some of your customers require a lot of time and communication, maybe they're friends. In one's mind, an account might feel more important than the sales made to this account. Nonetheless, these are suggestions, but I think it would make sense to run one's account list by order of decreasing dollars sold and get a sense of who your top 5, 10, or 15 customers are, look at what they did in 2022 and 2023, and set a goal for yourself for 2024. One doesn't need to be a math maverick to set up a goal.

Establishing Realistic Sales Targets:

If you did $32K with an account in 2022, and let's say you did $28K in 2023, you could decide, and these predictions or goals are just that. You say, well, let's make it $40K; it's not crazy. You're not saying, let's make it $200,000. You say, all right, let's sell another $10,000. That's an additional $800 a month or so. Then, you set that goal for yourself, and you decide to follow up, look at that goal and how you are doing compared to that goal on a monthly basis, because that's going to keep you on track.

Developing a Plan to Achieve Sales Goals:

Also, you kind of want to have a plan to reach that goal. That may mean going there once more every month because you know that when you go there, you get an order. Or it could mean trying to sell them a cask. It doesn't have to be an Armagnac cask, but if it is, that's great. We have other barrels we could sell. Or maybe they'd be interested in a batch of whatever. Having that plan will help you set and reach your goal. Then, go to the account, because having a plan for the account is good, but you might want to have the account agree with that. Suggest going to the account and saying, "This is what we did. This is what I would like to do. Are you game? What would you need from me to get there?" Discuss that. Having a plan for somebody is great, but having that person sign up on this, think it makes sense and be willing to help you get there is something powerful.

Regularly Measuring Progress Against Goals:

Measure against that goal regularly. Are you on track or not?

Remember that to reach a certain amount of sales, you have several levers, like cool products, one-offs that are coming. You have access to batches and casks. On top of that, you have in-store tastings and staff trainings that you can plan, which may increase your sales. And we have this office that we should be using to welcome people. Every time you have this interaction, you may be able to place a new product or get a reorder.

Utilizing Tools for Account Management:

If you're unsure how to run a list with your top accounts by dollar sold, let the office know, and someone will show you. But I hope by now you should all be able to run such a list. So now, there is a second way to increase your business, which is finding new business. I don't know how you guys organize yourselves to find new business. The thought that I put down is you want to open up off and on accounts. Off premise accounts increase sales quicker, and on-premise accounts play the long game. This helps with creating brand awareness. Don't forget about on-premise because this is like long-term success.

Strategies for Finding New Business:

Where to find new business? It could be around your house. There's an argument for wanting to have a bunch of PM products around where you live. If you're not doing that, it's just an idea you might want to consider.

Around a specific existing account, in a three, four, five blocks radius, what's there? Have you talked to everyone you think you could sell PM stuff to?

And get introductions. People who know you're a good person, who know you're not wasting anyone's time, you're reliable, you have

Differentiating Factor

Here is an idea that might help a French whisky brand CRUSH the market:

Some context:

Everyone is looking for THE differentiating factor, asking oneself "what do we got that others dont?".

As soon as a "competitive advantage" needs to be explained/requires some form of knowledge or understanding on the consumer part/cannot be grasped immediately by the layman, it limits the scalability of the reach.

A real such advantage is one that is obvious to most.

Mash-bill, yeast, distillation, geography, terroir: all very relevant & cool but most end-customer couldn't care less.

I believe the easiest, most straightforward argument that needs little to zero explanation is the cask. There is a reason why a Macallan bought Grupo Estevez (owner of Sherry bodegas Valdespino, La Guita etc...).

Idea:

Imagine there was only one guy in France holding the highest title in the cooperage industry of "Maitre Artisan Tonnelier", the lethal weapon of barrel making

Imagine this guy's cooperage had just celebrated its 50th anniversary in 2023.

Imagine a high-quality, well-capitalized, marketing savvy, French whisky company was to secure the exclusivity of this person's time and skills and market the f*ck out of it.

This would be a hell of a differentiating factor.

Note: i have zero skin in this game, i just know who that dude is (Jean-Noël PELLETAN 👀 )

PM Projects: what/why/how

A few toughts on how & why, in 2016, PM Spirits started to develop its own bottlings (aka the PM Projects):

The journey began with importing and bringing in the US a bunch of artisanal French spirits circa 2011. This is still the core of what we do, the reason of our existence and about 70% of our business.

But little by little we realized that as we networked more and interacted with different people, there were opportunities in the market.

Things that were not readily available, that we recognized we could come up with and knew we could sell, at least throught PM Spirits Distributing, our wholesale operation in our home NY market. It kicked-off the initial idea to collaborate with our existing suppliers and friends, creating products to fill these voids. That's the essence of the PM Projects - collabs and what we want to think are "innovations", be them in term of packaging, how the story gets told etc...

One aspect of our work involves collaborations like PM VS Overproof Armagnac, the Mic.Drop whiskies, PM Tequila, the PM Sherries or even CobraFire. These products are significant markers of our ethos.

During COVID, since we were as scared as bored AND i happened to own a small but unique collection of casks and demi-johns in a cellar in Cognac, France, i decided to release these things, leading to a larger PM Project release.

These were not just products; they were special, something that resonated with the ethos of PM - good people with good intentions making good juice.

Note that we don't care much about building brands per se or growing like crazy Casamigos tyle.

It's about keeping things fresh in an industry where novelty is really key.

In New York, being a wholesaler, we know what sells. We talk to people daily, we see gaps in the market. We have ideas and know we can make them happen.

With a great graphic designer (William Bahan) and over 12 years of experience, we've built a solid network of people distilling great stuff.

There is also, to be totally honest, a personal motivation - to keep myself entertained through the intellectual process of creating and actualizing ideas.

That's how the PM Project stuff comes/came together: by linking ideas, people, and possibilities to create what we think are unique and meaningful distillates.

There is no "Cognac Market"

Is Cognac getting more popular? No (at least, not yet). But the gloabal BRANDS that happen to be in the cognac game are.

There always has been a misunderstanding about "Cognac":

We hear the "Cognac" this, or the "Cognac market" that, read about a brand and assume it tells something about a category. I dont think this is accurate.

There is a Hennessy market and a Remy market and a Courvoisier market etc... much like there is a Ford, Supreme or Krispy Kreme market. There is a market for global cognac BRANDS, individual markets based on specific brand recognition.

The more successful/known they become, the less they tend to talk about the product and orient communication towards partnerships, experiences etc...

From labeling to wording on the companies' website the BRAND is front center while the mention "cognac" seem to take the back seat.

For every artisan distiller/brand owner/negotiant who has not achieved brand notoriety at scale, there is no "market" per se. It is an every day fight to tell a story, get anyone who accepts to taste the product to understand what is Cognac, demystify, get rid of the bagage the word comes with and do one's best to explain within that framework why one is different.

Pour that booze/modifier neat

The idea that using good artisanal spirits and/or modifiers in cocktails will boost the sales of said spirit/modifier is appealing, but I'm not entirely convinced it actually works.

What's more likely is that these dope cocktails will increase their own sales and possibly strengthen customer loyalty with the bar making them.

I think there's a more impactful way to promote the base spirit/modifier the bartender has spent time & energy sourcing to make this banging drink:

- bar factors in the cost of the drink an extra half-ounce of the base spirit or modifier.

- bartender serves the drink with that neat .5oz of spirit/modifier on the side for guests to taste

This would accomplish several things:

- educate the customers about the ingredients in their drink.

- strengthen the relationship between the bar staff and the customers ("man, the team at XYZ is SO knowledgeable and skilled")

- help justify the cost of the drink, explaining why it's not just $6 (using good ingredients naturally leads to a higher price than when using mass-produced ubiquitous garbage).

- increase awareness for artisanal booze/modifiers

- might lead one who had one of those drinks to go out & seek a bottle of one of the ingredients.

An interesting side effect would be that bars currently charging high prices while using inferior booze will either be reluctant to adopt this approach or, if they did, they'd have to upgrade.

Note: I'm vastly aware this strategy is only suited to venues where it's not super busy, those places allowing for interaction between staff and guests. It also requires knowledgeable and trained staff because simply pouring the modifier neat without understanding it/knowing anything about it, wont'd do anything for any anyone.

Booze Wholesaler's Gold Standards

Below are the suggestion our Sales Director Leonardo Comercio constantly share with our NY team:

• Planning and Setting Goals:

Benefit from planning the week ahead.

Set specific goals, such as:

-Number of customers to see.

-Key products to sell.

-New accounts to open.

-Sales targets.

Social media posts to support sales.

Importance of goals for accountability and improvement.

• Product Presentation:

Present both new and existing products to customers.

Avoid the mistake of only showing new products.

Remember the commitment to brands represented for years.

Rotate showing new and old products to accounts.

Consider customers who may not be familiar with certain products.

• Genuine Connections and Self-Presentation:

Strive to make genuine connections with people.

Learn from every interaction, regardless of personal opinions about the individual.

Present oneself authentically, not just professionally.

Aim to be seen as a resource beyond just selling products.

Share knowledge and expertise, as exemplified by NP's early experiences with Calvados.

• Product Familiarity and Tasting:

Emphasize the importance of knowing and tasting the products.

Ensure that a wide range of customers are tasted on products, not just a select few.

Continuously introduce products to new and existing customers.

Document activities and outcomes for better tracking and success.

• Follow-Ups and Sales Approach:

Importance of following up on meetings and interactions.

Don’t hesitate to ask for the sale directly.

Regularly follow up on sales to check product success and offer solutions if needed.

Diversify sales to accounts by offering a wider range of products.

• Self-Awareness and Customer Relations:

Reflect on personal patterns and behaviors in sales.

Create standing appointments with key customers for regular engagement.

Plan ahead with customers for upcoming product launches.

Utilize in-store tastings as a sales opportunity and engage with all staff members.

• Proactive Account Management:

Identify accounts needing more attention.

Be proactive with reorders, rather than waiting for accounts to reach out.

Regularly review the full list of accounts to ensure none are neglected.

Seek opportunities to reconnect with older accounts.

• Utilizing Social Media:

Build a personal brand on social media to support sales.

Be proactive and creative in using social platforms like Instagram, Facebook, and LinkedIn.

Share knowledge and insights about products.

Consider creating a separate sales-focused social media profile.

• Customer Service and Communication:

Go the extra mile in customer service.

Provide direct and helpful responses, including links and detailed information.

Don’t disparage anyone, any company, any brand. Ever.

Be genuinely nice to EVERYONE (eg not only to the person who has decision power)

• Organization and Goal Tracking:

Keep a to-do list and schedule tasks on a calendar.

Regularly review performance against goals and previous year's numbers.

Understand the correlation between growth, job stability, and personal success.

Caramels / E150s

Caramel is an additive that is often used in spirits. It does not have to be disclosed on the label and the need for it can be debated. Because caramel is more or less dark it is used as a tool to adjust the color of the liquid.

What’s “caramel”?”

A “caramel” is a complex mixture of compounds produced by heating carbohydrates under controlled conditions. It is a dark brown to black liquid or solid, miscible (soluble) with water and contains colloidal aggregates that are key to their coloring properties. Now there are more than just one caramel. Each of the 4 classes of caramel color carries a different charge, impacting its use and application in food and bev products.

The different types:

Caramels are splits into four classes depending on which other “ingredients” the carbohydrates react with to produce said “caramel”. Those reactants work in the chemical reaction as catalysts, eg help speed up the process. These classes are class I, II, III & IV, corresponding respectively to E150a, 150b, 150c and 150d.

In alcoholic beverages, "caramel" typically refers to E150a or E150b.

E150a/Class I/plain caramel is carbohydrates heated without reactants, producing a range of hues from yellow to red-brown. It is used in various products like bread, spirits, dairy, beverages, and confections.

E150b/Class II/Caustic Sulphite Caramel, is carbohydrates heated in the presence of a sulfite compound. This class produces hues from very yellow to dark red-brown, has a negative colloidal charge and is commonly used in tea, whiskey, and brandy.

The other two classes:

Class III/Ammonia Caramel/E150c varies from a light brown to dark red-brown and is positively charged. It's a key ingredient in coloring soy sauce and beer.

Class IV/Sulphite Ammonia Caramel/E150d ranges from light brown to deep black-brown, has a strong negative charge over a wide pH range, and is mostly used in the soft drink industry.

Caramel coloring is widely used, though not many distilleries are really open about it.

Adding caramel to spirits can be seen as a way to return the booze to its original color post chill-filtration which inevitably removes some of the tannins from the wood that confer the booze its darker color. The thinking behind this often is that many customers might not fully understand the process, leading to confusion over why a spirit might be yellow or why the color might not be consistent from one batch to the next. Brands using caramel coloring tend it aim at maintaining a consistent appearance for their products.

Now let’s distinguish the above from using caramel coloring to introduce a color that wasn't there to begind with as a way to trick customers into thinking a product is older/spent more time aging in casks than it actually did.

This is straight up deceptive.

A Few Of The PM Tenets (In No Specific Order)

Here is what happens when one runs the content of one’s PM’s weekly staff sales meeting thru ChatGPT to create a summary of the key ideas evoked:

Emphasis on Curated Selection: Our focus is on providing a selection of spirits that stand out at events, being a bar, in a restaurant, at home or in a retail shop; we aim at not just fitting a theme/being part of a list, menu or offering but at being a highlight in categories like brandy, agave, rum, whisky etc...

Educating and Engaging: It's important to draw people in and educate them about different categories of spirits. Introducing consumers and clients to new experiences, whether new to the portfolio or just new to them, is a priority.

Customer Engagement: Constantly informing customers about the offerings is key, especially reminding them of products they may have missed or forgotten, as well as emphasizing the exclusivity of limited-stock items.

Event Participation: The desire to do more events and finding ways to engage directly with drinkers and end-consumers is paramount; it shows the work put into the brand and has the potential to slowly increase sales.

Shelf Awareness: Being aware of what's on the shelves at client locations and finding ways to help move long-standing inventory is important.

Collaborative Promotions: Establishing and maintaining relationships with industry players, being seen as a resource and a connector in the industry.

Brand Representation: Embodying the brand in a personal way, being the "face" to the brand, and ensuring consistent product availability builds trust and differentiates PM Spirits from competitors.

Quality Confidence: It's essential to communicate the consistent quality of the products, which gives PM Spirits an edge.

Communication: Emphasize the importance of CC'ing colleagues on emails to ensure follow-ups with accounts are transparent and accountable. Communication is essential. Offer constant feedback internally, share ideas and opinions, ask questions. All ideas, remarks, critics are welcomed and encouraged in order for PM to keep getting better.

Utilizing Brand Ambassadors: Consider actively how brand ambassadors can be used more effectively for promoting products and events.

Supplier Engagement: Acknowledge the positive impact of the supplier visit and of communicating out strategy to maintain momentum in building the brand.

Event Participation: Be aware of the success of recent events, share feedback and insight with PM team, plan for continued presence at events to increase brand visibility and consumer engagement.

Portfolio Management: Be aware of distribution of our products to ensure wide visibility rather than concentration in a few places.

Brand Awareness: Constantly remind yourself of the importance of maintaining and growing brand awareness so PM Spirits never stops growing its reputation in the industry.

Customer Engagement: Encourage the team to continue reaching out for new placements and to utilize events as opportunities to engage with both trade and consumers.

Humility and Brand Perception: Recognize the need to continually introduce and explain the PM Spirits brand/brands and portfolio, acknowledging that not everyone may be familiar with the company's offerings.

Maintaining Credibility: It's clear that PM Spirits is proud of its curated selection of spirits and the credibility that its portfolio brings. It's important to continue emphasizing the quality and authenticity of the products we distribute.

Educational Approach: The importance of understanding the entire production process, history of things, regions and people, who makes what/how and why and imparting this knowledge both internally and to your customers is super important. This educational aspect is a unique selling point, distinguishing PM Spirits.

Do your job: go out in the market, pour products for buyers, tell the story eloquently and with precision, build the brand, one customer at a time.

Growth Strategy: Slow and steady growth is a realistic and sustainable approach. It's crucial to continue this path, ensuring that each new product aligns with the company's values and quality standards.

Marketing and Sales: Focus on building genuine relationships. If marketing budget, it should be used reflecting this ethos, focusing on educational events, tastings, and storytelling about the products and the people behind them.

Expanding Reach: PM growth is promising. Continuing to identify and nurture new markets/area/customers will contribute to your expansion while maintaining the quality and ethos of our brand and portfolio.

People Matter: Our emphasis on working with good people "beyond the juice" is real. This is a part of the story we should tell about each product, a part of the PM ethos, making it more than just a transactional experience. We are not just logistics providers/boxes movers.

Advocating for the PM Brand: It’s essential to communicate the PM Spirits brand as a whole, not just the individual products. Sharing the company's story, ethos, and dedication to quality will help build a stronger connection with our customers.

Leveraging Media: Encouraging anyone to listen to Nicolas's interview such as the one on Agave social is a great idea. Using this as a tool to unify the message and provide insights into the company's background and values can be powerful for storytelling in sales and marketing.

Continued Learning: Stay attuned to industry trends, consumer behavior, and feedback from the market. Keep refining your approach. Keep learning. Have various center of interest and areas of expertise. Be a well rounded person. Always be curious and ask questions.

PM Spirits' core values are of transparency, genuine interaction, and passion for artisanal spirits.

We are passionate about the products we represent and the relationships we build. Continuing to focus on these strengths and effectively communicating our story and values to both new and existing customers is key to our ongoing success.

We shall not become complacent, even with established customers, and always work to build and maintain our portfolio as well as the company’s reputation and visibility in the market.

Sherry Casks And Their Potential Impact On Sherry Quality

There was a time when the Sherry triangle (province of Cadiz in Southern Spain) was producing Sherries and, as a side business, would sell sherry butts to whisky companies so their distillates could be aged or finished in sherry barrels.

The Sherry trade has seen ups and downs over the past 15 years but overall, sales have not been amazing, leading to the bankruptcy of one bodega after the other and consolidation. Meanwhile, whisky sales just keep climbing and so is the demand for sherry casks.

Combined with lower yields over the past few years, this trend might lead to a peculiar situation:

The largest customers of the cooperages in the area are whisky companies who are paying for casks that can be legally called "sherry" casks (1).

Tens of thousands of new barrels are made, typically filled up with Sherry-like wine made in the Sherry DO and stored for at least one year. Note the term "Sherry-like" as the seasoning wine does not need to have the Sherry appellation as long as said wines are made by registered companies registered in the appellation, from grapes grown in the appellation and fortified up to at least 15%.

It is intuitive that Sherry-like wines are cheaper than Sherry DO wines hence any companies offering seasoning services (coopers, some bodegas etc…) will naturally tend to purchase such liquids. Most of the sherry cask business is driven by quantity over quality, the mission being to churn out as many sherry butts as possible (some/few, I am sure, might be looking at using sherry barrels that have held old immaculate Sherry DO wines for decades, which would influence the whisky tremendously. But these barrels are rare and one won't be able to find them in any kind of volume. This is the exception, not the norm).

As alluded to above, weather has a tremendous impact on yields which recently have notably gone down. This led to the little Sherry-like wines available while the sherry cask demand was climbing. Needing liquid to season, seasoning companies started to purchase DO Sherry wines to fill up those casks.

The whisky company purchasing thousands of casks is paying per unit: the price of said unit is mostly calculated based off of cost of manufacture, cost of the seasonning Sherry/Sherry-like wine and storage time. This means that the seasoning company, after 1+ years, empties barrels of their oaky liquid - the wine having sucked up a lot of wood matter from the new barrel - and ships it out to the whisky customer. The liquid has been paid for; its cost to the seasoning company is zero.

The bigger the need for sherry casks, the more zero-cost bulk DO Sherry wines having spent 12+ months in new barrels are available.

From a financial standpoint, it would be hard for any sherry producer to not think about blending a small fraction of these seasoning Sherry DO wines into one’s regular offering as a way to increase profits.

Whether it is done or not, I do not know. But it has to have crossed minds. And if it went further than just being an idea, it means that the average quality of the less expensive sherries is likely to come down and/or taste somewhat woodier.

(1) Wine-Seasoning Technical Specifications (in English): https://www.sherry.wine/documents/183/especificacion_tecnica_de_envinado_ingles_rev_03_2.pdf

(2) Jerez-Xeres-Sherry DO (in Spanish): https://www.sherry.wine/documents/288/Pliego_Jerez_normal_consolidado_RtlY1Wr.pdf

I have a new product; How should i approach the market?

When launching a new spirit, it's not just about pushing a product or moving boxes.

Saturate your own market/state. Get your product at those retailers/bars/restaurants, the ones who understand, appreciate, and do care. This is how you build a foundation, a loyal customer base that'll follow you, possibly advocate for you.

DTC - direct-to-consumer - partnerships are a strong play. Take Barcart, for example (I have no dogs in that fight, I don’t get any money by mentioning them). They bridge the gap between you and multiple retailers across the US, boosting your product's availability big time. Suddenly you're not just stuck selling your stuff in your own state anymore while not having to have a wholesaler in those states.

Because finding a good wholesaler is key and also tricky. Like in any business, a few are great, some are good, and many don’t do their job. COVID didn’t help as it created a lot of turnover in many staffs, sometimes for the best and sometimes not. Finding a good wholesaler takes time. Hurry things up because your ego tells you you need to be in 10, 20, or 50 markets by the end of Q3, and chances are you are going to link up with the wrong people. By the time the staff has been trained, the first PO shipped out, the very first market visits under your belt, you will get a feeling that this is not going to work out. 8 months were lost. Another 6 months to make sure your last conversation did not change the dynamic. Now you are looking for a new partner. 18 to 24 months have been lost.

So build your brand, your reputation, your leverage first. Be the master of your own destiny. When you do decide to work with wholesalers, make sure it's at a time when you've already got momentum, when you've already got a story to tell. And that you picked the right partner.

Community engagement is super important. This isn't about bombarding folks with sales pitches. It's about tapping into those spirits groups, those who are passionate, those who know their stuff, those who are genuinely interested. Get into groups of like-minded individuals on Facebook, leave your ego at the door, ask if you can send out samples, and ask for people's honest feedback. When asked, a lot of enthusiasts love to share their thoughts, which are invaluable. But this is NOT about trying to sell under the covert of looking like you are not; people are not stupid, they will see you a mile away. It's about building genuine relationships with people who might get what you are doing and might want to help.

Thoughts on strategy:

• Limited releases, maybe a couple of times a year, sold exclusively through your DTC channel can create a buzz.

• Make sure you've thought about your prices. Discrepancies cause confusion. A well-thought-out pricing strategy ensures that if/when you eventually move to the three-tier system, everyone involved – retailers, wholesalers, you – makes a decent margin.

• Don’t sell through DTC the stuff you are selling via the 3 tier systems; competing with your wholesalers is just going to upset them.

• Offer some of the relevant groups and/or retailers a special single cask pick.

• Keep growing your presence on your home market.

• Network and learn about which wholesalers seem to align with your goals and values.

• Use word-of-mouth as a key growth engine.

• Be real/genuine, share the struggles, present yourself as a human with flaws and such.

French Whisky & the US market

France is renowned as a top whisky consumer and has a strong distilling tradition with Cognac, Armagnac, Calvados and such. French whisky production began in the early 1980s, and in 40 years, over 50 distilleries and 15 bottlers have emerged. It’s been getting easier and easier to make whisky in the Hexagone. For ex, laws used to restrict Cognac producers to their specific spirit, but now, stills used to make Cognac can produce gin, whisky, or other spirits when they are not in use.

But despite the steady increase in French whisky production, there's a clear lack of branding and consumer brand awareness for the stuff.

In the U.S., recognizable whisky brands like Macallan and Johnny Walker and Dewar’s do well and lesser-known brands struggle. Many independent bottlers and smaller brands (by “smaller” i mean less recognized) have little to no traction.

The market currently has little to no demand for French whisky; those bottles are very likely to remain on shelves without significant brand-building efforts.

To be successful in the U.S., I feel French whisky producers need to build their brand and create awareness, both for the category and at the individual distillery level, tell a story genuinely, humbly, in a relatable manner, using all platforms and adapting content to them.

Understanding the culture of the target audience is key, and it can't be done from afar. It requires spending time on the ground and observing/learning. It might lead to tweaking the offering a little bit as a way to adapt to the market's specificity. Not everything can sell everywhere.

Success can't happen without tasting people on the stuff, relentlessly (no importer yet? That's ok. Look for the expats working on/off-prem in the main French cities, those who care. Make friends, if the product is good, turn them into evangelists, ask them for introductions to their friends/colleagues in the U.S., go meet these people and/or welcome them at the distillery next time they travel, taste them on your stuff...)

This is a long-term effort; it needs patience and consistency. Thinking large advertising and promotional budgets are needed would be misguided. Brands have it a lot harder trying to peddle their branded message. Genuine is the way.

Be strategic, story-driven, persistent and real, make a lot of friends and super patient.

Drink the stuff, dont over intellectualize it too much

Brandy isn't about grand labels or super pricey bottles. It's first and foremost about having a good time and making social connections while drinking something that tastes good to you. Then, one can, if one feels like it, make it an exploration, a discovery.

Lots of drinkers are coming to brandy from another category (often whiskey) and might not know "where to start." I believe the answer is "just start somewhere." Don't obsess about the stuff, don't over-research, and don't freak out as to whether this first bottle of Armagnac or Calvados is good enough or if it is too cheap and you should spend more.

First off, some of the most memorable spirits I've encountered weren't the most expensive ones.

Second, it is super important to be open-minded and willing to try out several things before making an opinion for oneself: by that, I mean one would likely not decide whether one likes "red wine" based on that random "Merlot" one got poured on board of that coach flight.

So, pay attention to what you’re drinking. Does it taste good to you? Do you like it? That’s #1. If you do, can you say why? If not, it’s totally fine. But knowing why one likes a specific spirit (or not) helps in navigating the world of possibilities within that category.

One could take this a few steps further by learning what that stuff is, where it comes from, who made it, and how. Are the makers cutting corners, or is there an authentic, artisanal touch to it? Does the brandy reflect a sense of place, a tradition, a story? Understanding the 'who', 'how', and 'why' behind a spirit adds depth to your drinking experience and allows you to get a better sense of what you are drinking. Having that context allows you to understand why that stuff was $35 when that other thing in the same category that you were debating getting instead was three times as much. Maybe one was made by a négociant and bottled with additives at 40% alc when the other was made by a family, without corners cut, and at cask strength? (Again, marketing has been around for a long time; pricier does NOT necessarily mean better or older or more artisanal.)

When I am drinking anything really (besides water), the main thing I pay attention to is: "does this liquid have a personality?". I don't want to think too much about it; I don't want to contemplate the beverage for hours. I want to see if that liquid naturally made a positive impression on my brain. If the answer is "yes," often I do want to go deeper, but it is not a prerequisite.

I am just not interested in ingesting something boring.

Example: new to Calvados? Never tasted the apple stuff from Normandy? There are plenty of cheap options out there to dive into it. Take an entry-level VSOP Boulard or Pere Magloire, for instance. They are a decent introduction to Calvados, totally serviceable brandies. They might not blow your mind, but they are stepping stones in understanding what this category has to offer. Just remember not to judge the entire world of Calvados based on that one bottle you picked up, not knowing much about the stuff, and chose mostly based on its price point.