The spirits industry is as dynamic as it is competitive. With new brands constantly emerging and consumers seeking ever more unique, high-quality products, it's a thrilling yet challenging space to operate in. In such an environment, it takes not just a passion for spirits, but a deep understanding of the industry's nuances to thrive.

For Nick Scarff, a decade of experience, from product development, and R&D to sales, and operations—has provided valuable insights to identify and address unmet needs within the industry. In an interview with International Bulk Wine and Spirits Show (IBWSS), a renowned trade show that brings together buyers, distributors, and producers, Nick Scarff shares, how these insights inspired him to found the Cunning Spirits Merchants – Rare Whiskies & Casks, a company dedicated to helping distilleries and brands navigate the complexities of the spirits world while offering them the tools to craft exceptional products and build long-term success.

Edited excerpts from the interview.

1. Tell us about yourself and what inspired you to found Cunning Spirits Merchants. 

I've been in the spirits industry for the past decade, during which time I've helped launch and expand a variety of distilleries and brands. Having worked in product development, R&D, compliance, sales, operations, business development, and M&A, I've had a unique opportunity to watch hundreds of different brands launch, grow, and then either succeed or fail in real time. This allowed me to identify needs in the industry that were not being met - namely rare cask acquisition, holistic brand/business development, and customizable spirits creation. 

 2. How do you approach partnerships with distributors, retailers, and other industry players to ensure the growth and exclusivity of the brands you work with? 

Every brand has a different ideal growth trajectory, which means they all need customized strategies. Some brands are built on-premise, while others are built off-premise. Some don't fully require either if their niche is specific enough. The trick is understanding where your products fit in, optimizing sales techniques through innovation, and then executing with purpose. Distributors are not your sales force - which means you need to assume that every bottle sold is done so through you and your team. The same goes for retailers and bartenders. You need to have a strategy for overcoming this and that begins with great liquid, great packaging, and a great narrative that ties it all together.

3. In your experience, what are the most effective marketing strategies for spirits brands today? 

Burning through your capital while trying to out-spend the major players on marketing is a losing proposition. The most effective marketing is the type that your consumers discover for themselves. You need them to be excited for what you're offering - if they're not seeking you out and asking for what you're offering, you probably don't have a true product market fit. It's helpful to find taste-makers and enthusiasts, test your hypotheses with them, and then build your marketing strategy around what your target demographic is telling you is important to them.

4. What types of clients do you typically work with, and what are the most common challenges they face when navigating the world of rare cask acquisitions and exclusive spirit branding? 

On the bulk side of our business, we primarily focus on working with brands and distilleries who have a unique story to tell. We help find interesting casks of whiskies, rums, brandies, tequilas, etc and then establish the perfect link between the liquid and that aforementioned story. On our branded products, we offer the most tailored, customized, small-scale bottlings of spirits in the world. We believe in providing our customers with an education to help them find or develop exciting blends and flavor profiles with every bottle. We're a bit like a library for rare spirits- clients can have a unique blending and bottling experience each time they work with us while expanding their palates.

5. How do you help brands navigate the complexities of the spirits industry, from production to marketing and distribution? 

We provide a holistic approach to spirits development. We first work to understand their needs- both short and long-term, and help them identify realistic metrics by which they can measure success. We start by making sure their liquid is outperforming their competitors and then work to set them up for success with achievable goals that are backed by operational excellence.  We have the specific experience to walk them through a variety of options for branding, liquid sourcing, product development, packaging creation, co-packing and manufacturing, logistics, sales strategies, M&A, and more. No matter at which stage our clients are in their lifecycle, we can help guide them to that next level.

Image Credits: International Bulk Wine and Spirits Show 2022

6. How do you help brands scale operations without compromising on quality or brand identity?  

If you want to add scale, you'll have to sacrifice either flexibility or cost.  We've spent the last decade turning small, start-up brand concepts into market leaders, so we help our clients understand the risks and benefits of scaling their production and working with them to find partners who can meet these needs from cost, timing, and quality standpoints. Our experience in building quality programs helps us outline these requirements clearly for our partners to avoid production slowdowns or reductions in quality. By being involved in both the liquid development and narrative creation sides of the equation, we can help make sure that the product and the story are always connected and working in tandem to establish and promote the brand's identity.

7. What challenges do you face when positioning your brand in the highly competitive spirits industry? 

Having worked with 200+ different brands and products, we know that every brand owner thinks their product and story are unique, but they rarely take the time to do deep dives into the competitive sets and test their product market fit. Then, even when they do have a unique offering, they often can't find the right way to convey that message. We focus on category creation and best-in-class liquid development to lead the marketing charge. Great branding sells one bottle - great liquid creates life-long customers who become natural ambassadors of your product. We've been able to achieve roughly a hundred different gold medal (or better) awards and about a dozen "world's best" or "best-in-class" accolades in the largest spirits competitions in the world for the products we've developed, which has gone a long way in helping get distributors, retailers, and consumers excited about the products we work on.

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8. How do you stay ahead of market trends and consumer preferences in the spirits industry? 

If you're tracking the trends of other spirits companies, you're often already too late. You need to be gathering consumer feedback at all times. This means testing new product concepts, finding innovative ways to gather data (besides major, for-sale databases), and executing on category-creation before your competitors figure out what you're doing. For example: 6-7 years ago, I talked a lot about American single malt as a new opportunity category. You're now seeing many new brands launch their own versions, but almost all of the major multinationals have already made their bets (through investment or acquisition) on the earlier entrants who made their mark in establishing the category before everyone else caught on. That means there's now less room for M&A opportunities for the groups who waited to see what the market would do.

9. What kind of innovations or trends in the spirits industry do you foresee shaping the future? 

Firstly, we anticipate a huge transformation on the back of the DTC revolution in the industry. The volume of online spirits sales will only continue to increase, creating never-before-seen opportunities for tailored spirits development that serve a more discerning and curious consumer. Secondly, oversaturation in categories like bourbon and tequila will force producers and brands to innovate to keep the attention of their customers. This will mean more unique cask finishes, expensive "super-premium" offerings, and non-denominational blends of different spirits types. 

Conclusion

Nick Scarff’s insights provide a comprehensive look into the complexities of the spirits industry and the strategies required to navigate its challenges. Whether it's acquiring rare casks, developing unique blends, or positioning a brand for success, Scarff's expertise has helped numerous brands elevate their offerings and find their place in an increasingly crowded market.

The International Bulk Wine and Spirits Show (IBWSS) is a perfect opportunity for anyone in the bulk wine and spirits industry to gain firsthand access to the latest industry trends, build valuable partnerships, and discover innovative strategies to grow your brand.

Header image sourced from Nick Scarff.

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