In today’s world, it’s not the big that eat the small, but the fast that eat the slow. Yesterday’s world was about size, but what matters in the more connected, international, and vibrant modern economy is speed. Speed of innovation. You outgrow your competitors by innovating faster, by learning faster, by improving faster. By being faster than the ones you are competing with.
It’s what iStill does, and it works out pretty well with our market share in new still sales rapidly approaching 30% globally. And guess what? It’s what you should do as well!
Who your enemy is, whom you compete with? Big Alcohol. That limited number of world-wide producers of alcohol with unlimited brands, outlets, and funds. How to get them? You nibble away at their market-share one bite (or one sip) at a time. If you are faster, that is.
But are we faster? Is the craft distilling industry faster on its feet than Big Alcohol? Let’s see … Big Alcohol uses advanced controls and computers and automation, where many distillers still define themselves (and their workflow and value creation chain) via equipment that hasn’t left the 1800’s.
So the competition is bigger and faster? Good luck to you! Imagine the chunks and bites they can take out of craft distilling’s already smallish market share.
“Well, but they didn’t, didn’t they?” one might say in rebuttal, “Because the number of craft distillers is still rising.” I am inclined to disagree, though. I am inclined to disagree with declaring that easy metric, of a growing number of craft distillers, as a measure of success for the craft distilling industry. Here’s why:
If we take the North American craft distilled whiskey market as an example, rumor has it that over 80% is purchased via MGP. Whiskey that’s bought in from … Big Alcohol. So … that simply means that the North American craft distilling industry “just” lost the battle for whiskey to Big alcohol. Let’s dive in a bit deeper:
When 100 distillers open their doors and each produces, as an example, 10.000 liters or 2.600 gallons, then 80% of that is 800.000 liters or 200.080 gallons. Craft distilling only produced 200.000 liters or 52.000 gallons. See how this practice benefits Big Alcohol’s market share more than it helps the craft distilling industry forward? Four times more, actually.
Now how’s that for having someone taking a bite out of your market-share? How’s that for your biggest competitor having the dominant position in an important segment? Doesn’t get worse than that, me thinks!
My point? A large part of the craft distilling industry, as a generalization, had already placed its future success in the whiskey market segments in the hands of Big Alcohol, the moment it decided to outsource over 50% of their alcohol production to them. At 49% the craft distilling industry actually grows at a faster rate than Big Alcohol. At a 51% isn’t it basically game-over?
How do we escape the death-trap? Well, we simply need to move faster, be more innovative. Innovations allow us to make better drinks at lower production costs. That’s what’s needed to turn the tide and to start chasing Big Alcohol. If we learn at a faster rate, we can catch-up and eventually even overtake them. But for that to happen a paradigm-shift needs to happen as well. Or better phrased: “for that to happen a paradigm-shift needs to happen first!”
A summary on what’s needed to turn the tide? What do craft distillers need to do to secure a long time presence in the alcohol industry? Here you go:
- Replace “Romantic Era”-paradigm by “Innovative Future paradigm;
- Embrace innovation on every level: it’s key to a growing market share;
- Bring spirits production in-house and stop sponsoring Big Alcohol.
The good news is that more and more distillers are converging in the above direction. iStill is proud to support many hundreds of craft distillers that favor innovation over romance, and that actually make their own spirits, instead of purchasing from what’s basically your biggest competitor.
iStill’s role in all this? To provide the craft distilling community with the innovations it needs to move faster, to produce in-house, and to start taking market share away from the competitor.
My role in all this? To help the industry innovate and to spread the message of a brighter future.
But since I am not a craft distiller, but you are … may I ask how you guys see your role in all this?
Innovative craft distillers, chasing Big Alcohol …