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How to Start a Whiskey Business

by / ⠀Startup Advice / August 3, 2022
whiskey business

There are many business-oriented people out there who seek to have their own liquor business. Perhaps you want to deal with just wine coolers. Or perhaps one of the clear liquors like vodka. But, today, let’s focus on the world-famous brown-colored drink known as whiskey.

This article explains how to start up a whiskey business. One thing to keep in mind is that this does not technically need to be a whiskey business, but any sort of alcohol.

What is Your Business?

Now, if you are brand new to the whiskey business then you are going to have to decide what kind of business is it going to be. For one, if you are planning on creating your very own brand, the good news is that you are not required to have a distillery for your business. In the past, while there were many brands, they were all made at a select few distilleries because of how expensive it was to build and operate.

However, these days, many are excited by homemade alcohol. More distilleries have been created in the last few decades and there are now at least 2000 distilleries in the United States. In fact, you can check out the American Distilling Institute to locate where a distillery is near you. That way, when you start your whiskey business, you know how far away the nearest one is. Plus, they may be welcome to some new business, creating a relationship between distillery and entrepreneur.

So, now that you have an idea of where a distillery is, now you have to look at what resources you have available to create your whiskey business. The big problem is building a place for your business. This could be just a place to sell alcohol, a bar, or even a restaurant. But, the real kicker is that it can be extremely expensive. A small operation on its own is $1 million. New operations can be up to $10 million if you are planning to make it into a bar or something similar, but that money can assist in growing your brand.

What is the Big Idea?

Perhaps the most difficult step, but in order to get something on the shelves, you will need to develop a unique brand. A good place to start is to look at your favorite whiskey or other alcohol and see what makes it popular and what the demographics are for them. A website that can heavily assist in this is the Distilled Spirits Council where they have various data on trends in decades prior. You may feel that any idea you have come up with is already been made, but the fact is, many products are quite close in similarities.

With that in mind, the real difference is in what the brand is, who your demographic is going to be, the price, and the design of the brand/bottle. It is all of that, along with the liquid that makes it special. Whiskey is special because there are a lot of ways to change up the liquid. Some of the easiest ways to change the whiskey is:

  • What type of grain used
  • The type of barrel used
  • How distillation occurs

But, to truly stand out, you need to get really creative and look at some other options such as:

  • The finish for the barrel
  • Amount of alcohol in the product (the proof)
  • Blending tactics
  • And more

So now, it is time for the packaging. A customized container will be an expensive endeavor, but it could lead you to success. A place to start is to locate experts in this field and ask for their recommendations, advice, and tips.

Running the Numbers

You have your idea, your location, and your whiskey, now what? Now it is time for all of the boring hard stuff to do.

For starters, you need to have a good grasp of numbers and math to understand how much the operation will cost you, the cost of distilling your whiskey, your supplies, marketing, and more. You will need to ensure that your margins can keep you afloat and have a successful whiskey business.

A place to start would be how much your whiskey is going to cost. Note: sometimes, a business owner may determine the price through the cost of making it. Instead, you need to look at what the market says about alcohol. Take a look at whiskey sold in your area. Think about the cost of the whiskey and think of concepts like locality, quality, and packaging.

In most cases, you will have to use a three-tier system that America uses since the end of prohibition. The government of the United States requires that producers sell to distributors, who then sell it to the retailers where it can be bought by consumers. Many states allow the distributor to sell straight to a restaurant or bar. Others require special permits. Consider what state you live in to understand the distribution of your whiskey. Note: A producer will sell based on the amount they sell to a distributor. It can be a lot less than what is sold at locations.

Supplies

You will need a variety of supplies depending on what your whiskey business is like. If you are new to the business, you will have a harder time getting suppliers because you will need to convince them to do business with you. Finding the right person can mean life or death for your business.

There are many online websites as well as magazines and books that can help you with supply questions. Plus, if you have a supplier, then you may have competition with other startups that are even larger than you. The larger ones will often get the most attention, so you need to fight for your supplies. Large supply companies also might not be interested in a startup because there is already so much growth in that industry. But it doesn’t hurt to have these meetings because you can create a long relationship with the supplier. Yet, there are also other new supply chains opening up. But you have to make sure that these are sustainable as it can be difficult to find a new supplier.

Marketing

Now that you have a lot of your whiskey business set up, you can begin marketing. There are a lot of ways to go about marketing. In your local area, make ads in the newspaper or on the radio for people to find. Or, if there is an event such as a fair going on, then you could hand out flyers or have a booth for people to taste.

You will also have to keep up on marketing because there are always new people to bring in. Consider putting aside your budget for marketing.

As a reminder, there are different rules in different states regarding alcohol. It would be wise for you to hire an attorney to ensure that every law is followed, you have all the permits, etc.

Conclusion

That’s about all there is to the whiskey business! One thing to keep in mind is that sometimes these ideas will come to you at different times. For instance, you may have a brand idea before you have the whiskey or vice versa. Regardless, the best thing to do is research, research, research. Make sure you have everything you can before you get started on even making your whiskey.

If you are new to the creation of alcohol in general, you may want to bring in a business partner who knows this stuff or learn it yourself from a class or shadowing a distillery. Regardless, you will have a lot of work on your whiskey business before you can sit back and enjoy your profits and your drink.

About The Author

Tristan Anderson

Hello! My name is Tristan Anderson and I live in Manhattan, Kansas. I enjoy being in nature and animals. I am also a huge geek who loves Star Wars and has a growing collection.

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