Are There Synergies Between Producing and Selling Wine and Spirits?
A small but growing number of wine companies are adding spirits to their portfolios. While the key drivers of this nascent trend are beverage diversification and income growth, there are a significant number of financial and regulatory hurdles wineries must consider before the palpable synergy of winemaking and spirits production will work.
Pop quiz: While “the whole is greater than the sum of its parts” sums up the basic meaning of synergy, can the addition of vodka, gin, brandy or brown spirits production to an existing wine portfolio be synergistic? Before answering the question, consider these observations noted at The Wine Industry Symposium Group’s 2 (a subsidiary of Wine Business Monthly) 26th Annual Wine Industry Financial Symposium (wineindustryfinancial.com) in Napa last September: • “Wine drinkers often recommend wines to other drinkers, but spirits drinkers rarely recommend spirits to others,” said Robert Trone, co-owner of retail giant Total Wine & More. “For us, wine products appeal to a consumer that is interested i...
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