If you’re a distiller and looking for bad news, there’s plenty to be had right now. Tariffs, trade wars, the decline in consumption by younger generations, and the rise of competition from Ready to Drink products and botanicals whose initials are MJ.
We’re undoubtedly experiencing disruption, but that also means opportunities for distillers who are open to them.
One opportunity is to look into companies coming up for sale. Some distillers might be speeding up their retirement timeline; some may just not have the resources, risk tolerance, or optimism to wait out this time of uncertainty. In a down business cycle like this, stronger companies often acquire weaker ones. Warren Buffet has said, “A simple rule dictates my buying: Be fearful when others are greedy and be greedy when others are fearful.”
In other words, buy when others are worried about the future; you’ll find some bargains that might be just what your business needs. Whether it’s a partnership with a company with complementary resources (like distribution) or teaming up with a competitor because you’re stronger together, or buying equipment at a discount as distillers leave the industry, you might be able to think more creatively now than you were thinking two years ago.
You might be able to invest in developing deeper relationships with your consumers or exploring other distribution ideas, such as subscriptions. You might expand your offerings by taking on a partner or expand your market by finding a good fit for your products in another state. You might have time to become a thought leader on what differentiates a good bourbon from a top-shelf classic.
Well-positioned and optimistic entrepreneurs will find that the decisions they make and opportunities they take now will pay off in multiples when the business cycle turns again. And it will – make no mistake about it. We’ve lived through one of the most profound disruptions in human history, and yet, the pandemic lockdowns provided a significant boost for at-home consumption.
It’s normal to be nervous about news you can’t control. No one can predict the future, so it’s impossible to know how the industry and the economy will be faring a couple of years from now. It never makes sense to try to game the market and figure out the “perfect” time to sell your business. Your timeline should be based on your goals, not your fears.
But if the market for distilling companies is a leading indicator, buyers are still bullish on the alcohol industry. I’m getting several calls a week from potential investors who think this is the time to acquire a distillery, and they’re looking for well-run operations with a great product. They’re definitely seeing the glass as half full.
If you need to connect with a strategic partner, reach out, and I’ll do what I can to move your business forward.
He has been an entrepreneur and business owner for more than thirty years. As a spirits and beer specific business broker, he is uniquely positioned to draw on this experience and help others retire or pursue other interests. He takes great pride in his concierge approach, which ensures a smooth transaction and lucrative exit.
