Craft Spirits: Navigating Growth with Financial Clarity

Craft spirits are growing fast—double digits in many categories. This isn’t a flash-in-the-pan moment. It’s a sustained shift in what consumers want: authenticity, story, craftsmanship, and values. And that’s an incredible opportunity for founders.

But here’s the catch:

Growth doesn’t guarantee sustainability. In the rush to meet demand, too many brands make the mistake of chasing visibility before building financial resilience.

Understanding the Landscape

Let’s break down what founders and finance leads should be watching:

1. Aging Spirits as a Burden

   Spirits that need aging can become your biggest balance sheet burden. While the product matures, so does your exposure—cash tied up in liquid you can’t sell, sitting in barrels that still cost money to store, insure, and monitor.

   
   

2. The Cost of Visibility

   Yes, a placement on the right shelf or back bar can change the game. But many brands underestimate the cost to win (and keep) those accounts. Case discounts, marketing spend, activation budgets, and rep incentives all add up.

   
   

3. Focus on Depletion, Not Doors

   Growth isn’t about total doors—it’s about depletion. High-volume, high-turnover accounts are what move the needle. Yet many brands overspend on visibility and underinvest in account support that actually drives reorders.

   
   

4. Hidden Costs in Margins

   On paper, your gross margins may look strong. But after marketing, distribution, freight, and trade spend? Many craft brands are running far leaner than they realize—especially in early-stage growth.

   
   

The Importance of Financial Clarity

The Bottom Line

Craft spirits are booming—and that’s exciting. But the brands that survive (and thrive) in this next chapter will be those with financial clarity, operational discipline, and a strategy for sustainable scale. The future isn’t just creative. It’s calculated.

Strategies for Sustainable Growth

Build a Strong Financial Foundation

Establishing a solid financial foundation is crucial. This means understanding your costs, margins, and cash flow. Regularly review your financial statements. Are you aware of your true expenses?

Invest in Relationships

Building relationships with distributors and retailers is key. They can help you navigate the complexities of the market. Invest in account support that fosters loyalty and drives reorders.

Embrace Data-Driven Decisions

Data is your friend. Use analytics to understand consumer behavior and market trends. This insight can guide your marketing strategies and product development.

Focus on Brand Storytelling

Your brand story matters. Consumers want to connect with authentic narratives. Share your journey, values, and craftsmanship. This connection can drive loyalty and repeat purchases.

Final Thoughts

If you’re a spirits founder or finance lead navigating these growth decisions, you're not alone. The opportunity is real—but so is the pressure. Keep asking the hard questions: What’s our true margin? Are we chasing growth or building a business? Do we have a financial model that supports the story we’re trying to tell?

Remember, the path to sustainable growth is not just about expansion. It’s about making informed choices that align with your values and vision.

Let’s embrace this journey together.