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."