Tales Seminar: The Global Drinks Business

These are notes from The Global Drinks Business seminar at Tales of the Cocktail, lead by Phil Duff.

Please don't treat these facts as absolute or fact-checked - I'm typing fast and mistakes could be made. 

• In the Middle East, the duty-free market is enormous.
• "The world drinks locally." The overwhelming majority of spirits are consumed in the country in which they are made. 
• The world drinks whisky (not always scotch, but something that tastes like scotch), vodka (at every level. The first market out side the USA for Absolut was Russia.), and soju.
• In the Phillipeans they drink 27 million cases of one brand of gin, double the rest of the world's total consumption.
• How much does it cost you to make a bottle of a grain alcohol product: about $1 for the spirit. (Grapes cost 30% - 50% more). The bottle (a standard nice one) costs you $1.77 per bottle for a minimum large order.  Screw cap costs 14 cents. Bottling costs 70 cents. Case and divider 35 cents. $3.96 per bottle for less than 4000 cases. More than 4000 cases costs $2.97. 
• 100,000 case mark means your brand could be bought, or could be 'made more efficient.' 
• Producers margin on 1 bottle (for production cost $3.33) and selling price 7.83 is  4.50; or a  57.46 % profit. Then it goes to marketing. (There were a lot more numbers on marketing costs but I didn't catch them. Something about 30% markup.)
• The booze biz is one of the most heavily marketed industries. The best and brightest in marketing want to work in the booze biz. 
• Bailey's is so successful it sells one out of every 4 bottles of liqueur in the world.
• X Rated Fusion Liqueur - Only sold 60,000 total cases before the brand sold for $40 million. This is due in part to technological innovation that allowed the fruit juice in it to be stable.
• Grey Goose - Was  sold for 1.8 billion to Bacardi. For 20 times the earnings. 
• Ciroc - 2003 created. Distiller came up with name. Gave Puffy the equivalent of half the profits. Moved from 60,000 cases to 400,000 cases in one year. This year broke 1 million case mark.    
• Distributors add 30% to the price of the spirit. Retailers add 30%. So a product that costs $3 bucks to make is sold for $30 at retail. 
• "Nobody is making a great deal of money for an $8 cocktail."