Welcome to BevNET’s new spirits newsletter! We’ll be serving your inbox with shots of news, analysis, and commentary to help get you an edge in the spirits business. As with any service business, send us tips!

This week we’ll be digging into direct-to-consumer shipping updates from coast to coast.

What insiders are reading: Check out recent headlines like inside BeatBox's national sales meeting and the latest RTD data from NIQ.

Thanks for reading.

-BevNET spirits editor, Ferron Salniker

New York distillers and cideries are celebrating after Gov. Kathy Hochul signed a bill this week making New York the ninth state/district to allow direct-to-consumer shipments. While distilleries in some states are still fighting for those same rights via legal challenges, California distilleries also got a win last year (albeit one with time limits). With those changes in place, we thought it would be a good time to check in on the West Coast. 

Like New York, California gave distillers a boost during the pandemic when it allowed the temporary shipments of direct sales. The law was extended, but as we know in the spirits business there’s no rest for the weary, or really for anyone except George Clooney. Permissions in California are set to expire at the end of the year, which means distillers are again riding the roller coaster of pushing for an extension.

Sean Venus of Venus Spirits in Santa Cruz said there’s a lot more his company could do to strengthen their online business “but they don’t want customers to get used to it if it’s not a permanent thing.”

Still, shipping direct has been a great way to get consumers consistent access to Venus’ lineup of craft spirits and beef up their membership club. Venus is distributed throughout California at major outlets, but their online shop gives customers access to their specialty spirits. 

That tracks with larger trends that show DTC functions well when it makes accessing high-end luxury or rare items convenient. In 2021 when online sales were booming, premium-plus products had a 28% value share of total beverage alcohol sales, while online purchases made up 49%, according to the IWSR.

But online sellers have both regulatory and market-related challenges: customers are going back to their normal brick-and-mortar purchasing habits pre-covid. Plus, they are becoming increasingly price-conscious, with special offers and lower prices now almost as important to them as fast delivery times, according to the IWSR. Delivery charges are also one of the most significant barriers preventing consumers from buying alcohol online. Meanwhile, myriad regulatory and cultural shifts are needed for alcohol to bloom online like other CPG products, but it's up against a backdrop of soft spirit sales overall. 

Because shipping is expensive for both Venus and its customers, and because consumers are now accustomed to free shipping, Venus incentivizes bundles of three bottles by absorbing the shipping costs of over $100. 

Despite the costs, Venus said direct-to-consumer is still a lifeline for smaller distillers, who aren't getting picked up by wholesalers like they used to in 2014 when his distillery started. Other distillers have shared that the direct conversations with customers help create community, and provide useful data for expanding a footprint. To that end, the New York law also allows out-of-state distillers that already enjoy the privilege of interstate DTC to obtain a license to ship their products to New York consumers, which could open up a marketplace that hasn’t existed, said Venus. 

“It has worked for wine, it can work for distillers,” Venus said. 

We’re keeping tabs on news in other states and staying ahead of enforcement rules. Are you shipping direct-to-consumers? Let me know how it’s going.

They’ve said craft is in crisis, so we took a deep dive into the problems and asked distillers where they are finding roadblocks to success and some relief. In this article you’ll hear from Freeland Spirits, Corning & Company, Southern Distilling Co, and The Family Jones Distillery about where they see the biggest challenges and opportunities. 

After Boisson shut the doors to its retail stores, many non-alc brands are still asking questions about the closure, while others are finding opportunity in a growing landscape. In the latest court update, Boisson has filed an amended plan that outlines how it will pay back suppliers. But in the meantime, many NA brand founders are grappling with how to move forward with Boisson as its founder seeks to repair trust. Read about the future of the company, and where other players are filling the gaps.

Queen B has entered the spirits chat. Beyoncé has joined forces with Moët Hennessy to launch a new whiskey venture. The group, which has struggled with declining Cognac sales, is now likely aiming to leverage Hennessy’s organic and nurtured relationship to hip-hop culture into a new, leading segment (see below!)

American whiskey is gaining steam as its mother category retains a leading position on-premise in the last 12 months, according to NIQ-owned on-premise data firm CGA. Straight bourbon is also the star of whiskey’s rise on-premise. Get the data.

With wine sales down in recent years, some winemakers have turned to craft spirits to find growth. The latest move comes from a big name in Napa Valley: Charlie Wagner of Caymus Vineyards acquired a majority stake in Spokane, Washington-based Dry Fly Distilling, marking a new chapter of expansion for the distillery, a player in Pacific Northwest spirits since 2007. 

This piece by Ester Tseng explores L.A.’s cocktail culture, and why you are likely to find more restaurants that have thriving cocktail scenes over bars. Restaurants are often the drivers of innovation in this sprawling city, because what they lack in foot traffic, they strive to make up for in check size.