This past year saw another wave of new innovations, challenges and market evolutions in the control state system. At the same time, many persistent issues, opportunities and cultural shifts from recent time remained in 2023-24. In other words, it was business as usual in the last 12 months: rarely a dull moment in navigating our often-shifting seas in the beverage alcohol industry.
At least Covid-19 posing a significant hurdle has become a thing of the past. The virus has fallen far down the order of pressing issues. What’s risen to the top? New technologies, an unusual economy, geopolitical tension, direct-to-consumer shipping, the premiumization of everything, blurred lines between alcohol and nonalcoholic products — just to name a number.
Altogether, this era requires unique leadership to shepherd companies through persistently challenging times. During the year, the NABCA Board of Directors meets with the advisory committee — a group of beverage alcohol supplier executives — to address new and ongoing issues facing the control state system. StateWays annually invites these committee members to share their accomplishments, challenges and initiatives from the past year.
The theme for Chairman Fred Wooton this past year has been: New Horizons, New Opportunities. We urged committee members to write about how they have worked to achieve that goal.
Reed Davis
Luxco
Business Unit Manager — Control States
As a proud NABCA member, Luxco is excited about growth in 2024 and beyond. Chairman Fred Wooton’s theme, New Horizons, New Opportunities, summarizes our momentum.
Our expert team leads with an innovation mindset. We reach consumers in new ways with premium brands, and we’re passionate about our NABCA membership and cause-marketing efforts for the greater good.
We are thrilled to spotlight significant leadership changes for future growth. David Bratcher became MGP’s Chief Executive Officer and President on January 1, 2024, following former President and CEO David Colo’s retirement. He joined MGP as Chief Operating Officer and President of Branded Spirits after serving as Luxco President from 2013 to 2021. Former Chief Information Officer Amel Pasagic took on the new role of MGP Chief Commercial Officer, leading all commercial activities for Branded Spirits, Distilling Solutions and Ingredient Solutions.
These changes follow innovations throughout 2023 — most notably the Penelope Bourbon acquisition in June. Penelope brings deep expertise in high-quality whiskeys and expands our portfolio’s premium tiers. Founded in 2018, the award-winning brand features four core expressions — Four Grain, Barrel Strength, Architect and Toasted — plus limited releases within its Cooper Series, Private Select and Founders Reserve lines. In February, 8-Year Tokaji Cask Finish launched in the Cooper Series followed by Rio, a double cask finish of American honey and Amburana. Rosé Cask Finish debuts in the second quarter followed by Valencia and Havana.
Additional innovations in market and ahead include:
- Limestone Branch Distillery’s Yellowstone Bourbon launched the Special Finishes Collection in October 2023, and Yellowstone Kentucky Straight Bourbon Whiskey Finished in Rum Casks debuts in March.
- Lux Row Distillers’ Ezra Brooks and Rebel offer Stave Finish Collection barrel programs and special releases, including Rebel 100 6-Year and Ezra Brooks 99 Port Wine Cask Finish. In February, Rebel announced its multi-year sponsorship of Richard Childress Racing and driver Kyle Busch in the NASCAR Cup Series.
- Ross & Squibb Distillery’s Remus Bourbon is launching new advertising and products, including the anticipated Remus Repeal Reserve VIII and the 2024 release of Remus Gatsby Reserve.
- El Mayor Tequila capitalizes on category growth in 2024 with the exclusive Añejo Crisalino Barrel Program, meet-and-greets with Master Distiller Grace Gonzalez, food pairing events, a sweepstakes and the summer release of an ultra-premium limited-edition variant.
We are grateful to partner with organizations committed to improving lives and the environment. Since 2018, Yellowstone Bourbon has donated nearly $500,000 to National Parks Conservation Association (NPCA) to preserve national parks, and in 2023 it became NPCA’s largest annual corporate donor at the $250,000 level. The Dos Primos Tequila Company renewed its partnership with The Nature Conservancy in 2023, pledging $50,000 for land restoration and water conservation in the Tehuacán Valley, near Dos Primos’ distillery Destiladora González Lux in Jalisco, Mexico. This year, Dos Primos became a Proud Partner of Ducks Unlimited (DU) in 2024. With this highest-partnership designation, DU can continue conserving North American wetlands and waterfowl habitat and both brands can expand awareness. In January 2024, Ross & Squibb Distillery, in partnership with NFL legend Chris Long and his Foundation’s Waterboys initiative, completed efforts to bring a lasting clean water source to a Kenyan community of 1,600 people.
As we grow, we value the level playing field and trusted data control states offer. We’re grateful for Chairman Wooton’s leadership and proud to continue investing in sales in control states equal to or greater than our peers. We look forward to furthering NABCA’s goals by sharing best practices state to state in our role on the NABCA Industry Advisory Committee.
Ryan Grimshaw
Brown-Forman
General Manager, Control States
Our industry has always been a dynamic and evolving sector, shaped by changing consumer preferences, technological advancements and global market trends. In recent years, the landscape of the business has undergone significant transformation, opening up new horizons and opportunities for innovation and growth. From the rise of Ready-to-Drink cocktails (RTDs) and the continued premiumization of spirits to the way LDA consumers shop, the industry is experiencing a period of unprecedented diversity and expansion. However, we have seen some of the best growth come from the people and processes that make up the control states business in the U.S.
At Brown-Forman, we are excited to further our partnership with NABCA, state leaders, and our industry peers. It is no surprise to see control states leading in many metrics across the U.S. when you consider the positive adoption of some of the category trends mentioned, as well as states’ tireless efforts to improve the consumer experience whether in-store or digitally. Because of these efforts and resulting trends, we at Brown-Forman have seen a need to expand our control state footprint with more resources to help drive this growth for years to come.
One of the most notable trends reshaping our business is the growing demand for premium spirits, especially within the tequila and whiskey categories. LDA Consumers are increasingly seeking unique and high-quality beverages that offer a distinct flavor profile and a sense of authenticity. This shift in LDA consumer preferences has fueled the proliferation of innovative brands, providing LDA consumers with an array of options to explore and enjoy. By tapping into this demand with new product offerings like our Jack Daniels Bonded Series, Jack Daniels aged statements, and continued high-end offerings within Woodford Reserve, Old Forester Bourbon, and Tequila Herradura, we can differentiate ourselves in a crowded market and attract discerning LDA consumers who value quality and craftsmanship.
In addition to the rise of premium spirits, the alcohol beverage industry is also witnessing the emergence of innovative new categories that cater to evolving consumer tastes and lifestyles. One such category is RTDs, which have surged in popularity in recent years, particularly among younger LDA consumers seeking alternatives to traditional alcoholic beverages. RTDs offer a refreshing and convenient option for LDA consumers looking for a more sessionable drinking experience and have quickly become a significant segment of the market. Brown-Forman stepped up in a big way within this category with our partnership with Coca-Cola, creating the Jack & Coke RTD line. We see this category as an ongoing growth sector that will fit the needs of LDA consumer preferences, as well as introduce many consumers into full proof spirit categories over time.
Moreover, advancements in technology and digital innovation are opening up new opportunities for businesses in the alcohol beverage industry to engage with consumers and enhance the customer experience. From online sales platforms and mobile apps to augmented reality marketing campaigns and virtual tasting experiences, technology is transforming the way alcohol beverages are marketed, sold, and consumed. By leveraging technology to connect with LDA consumers in innovative ways, we believe Brown-Forman and the control states can build brand loyalty, drive sales, promote responsibility, and stay ahead of the competition in an increasingly digital marketplace.
Our industry is experiencing a period of unprecedented change and innovation, driven by shifting consumer preferences, technological advancements, and global market trends. By embracing these trends and investing in innovation Brown-Forman, NABCA, control state leaders, and the industry as a whole, are positioning the spirits category for success in a rapidly evolving market, driving responsible growth, and profitability in the years to come.
Steve Feller
Heaven Hill Brands
Chief Sales Officer — North America
We extend our sincerest gratitude to Chairman Fred Wooton for his leadership this past year. At Heaven Hill Brands, we reflect on Chairman Wooton’s vision of new horizons, new opportunities, which truly represents the relationship we enjoy with the NABCA and control state partners. Our industry has faced significant challenges, punctuated by the impact of the pandemic, inflation, rapid changes in consumer preferences, all playing a part in changing market dynamics. Through collaboration with our control state colleagues, we have successfully capitalized on emerging opportunities, highlighting the resiliency and adaptability of our industry.
As the fourth largest spirit supplier in the control state system, Heaven Hill Brands recognizes the power of partnership and continuity. Our relationships with NABCA and control state leaders underscores our commitment to progress and innovation, benefiting both the trade and consumers alike. These longstanding relationships, cultivated over decades, serve as pillars of support, providing the environment for ongoing success.
The past few years have prompted swift transformations. These changes highlight the pivotal role played by the NABCA and its members in maintaining industry standards, meeting consumer demand and advocating for responsible consumption practices. The lessons learned during this time continue shaping future growth and innovation for the industry.
Membership in NABCA, for example, grants access to several essential data and service platforms that support unique market analysis and insights. This truly best-in-class data allows suppliers to monitor market trends, analyze portfolio offerings and provide operational efficiencies to better serve both trade and consumers. With an incredible amount of control state data, suppliers are well equipped to make more insightful, timely decisions.
Heaven Hill Brands’ proactive approach to NABCA data illustrates how market information can facilitate meaningful strategies that ultimately drive business. Through thorough analysis, we foster innovation and can adapt our portfolio of brands that deliver on consumers’ wants and needs.
Looking ahead, meeting consumer demand through relevant product offerings will remain the focus of Heaven Hill Brands. Strategic investments in brand development, along with responsible practices of marketing, are essential for our collective success. As we navigate the complexities of the past and embrace the horizon of new opportunities, Heaven Hill Brands remains steadfast in its commitment to excellence and responsible brand experiences. Together with our control state partners, we create enduring relationships that result in a future defined by continued accomplishments.
Scott Schrader
Diageo North America
SVP/GM Control States
“Opportunity is missed by most people because it is dressed in overalls and looks like work.” — Thomas Edison (1847-1931)
NABCA Chairman Fred Wooton challenged us during his year at the helm with his theme of New Horizons, New Opportunities. At Diageo, we are continually striving, not only to engage in meaningful ways with consumer trends, but also to stay one step ahead of the pack.
As consumers’ tastes evolve, societal trends shift and technological advances redefine the way we interact with brands, Diageo stands poised on the brink of new horizons, brimming with opportunities, to shape the future of the beverage alcohol industry. While there are so many things to be excited about in beverage alcohol today, I wanted to highlight particular areas where Diageo sees opportunity for our industry, including the following:
Premiumization
A significant trend, premiumization offers a strong avenue for growth and differentiation. As consumers’ tastes become more discerning, demand for high-quality, premium spirits and beverages continues to grow. Diageo’s advantaged portfolio, with iconic brands like Johnnie Walker, Tanqueray and Guinness, positions the company well to capitalize on this trend. By continually innovating and introducing new products that cater to evolving consumer preferences, Diageo continues to solidify its position as a purveyor of luxury and sophistication in the beverage alcohol market. And, of course, control state cash registers ring loudest whenever premium spirits are sold.
Collaboration & Partnership
Collaboration and partnerships also hold great promise as avenues for innovation and growth. Whether through strategic alliances with technology companies to develop cutting-edge digital solutions, or collaboration with other industry players to create unique product offerings, Diageo builds bridges to leverage the collective expertise and resources of its partners to drive innovation and stay ahead of the curve in a rapidly evolving landscape. Control states, needless to say, have an open invitation to work closely together with Diageo.
Digital Acceleration
The current state of digital acceleration presents a wealth of opportunities for Diageo to engage with consumers in innovative ways. From personalized marketing campaigns to leveraging augmented reality in immersive brand experiences, the possibilities are virtually limitless. Digital is reshaping our entire business — by harnessing the power of social media platforms, e-commerce channels and mobile apps, Diageo can establish deeper connections with consumers, drive brand awareness, loyalty and, ultimately, sales.
Sustainability
As an industry that relies on natural resources — like heat, water and grain — to produce quality products, our long-term success and stewardship of the environment go hand in hand. It is why Diageo’s “Society 2030: Spirit of Progress” plan addresses the most material issues facing our business, people, brands, suppliers and communities. From the farming and production of our ingredients to the creation and distribution of marketing materials or merchandising, we want to ensure each stage of our supply chain is environmentally sustainable. And we’ve taken significant strides in this direction, with initiatives aimed at reducing water usage across our operations, reaching net zero carbon across our direct operations, and using 100% renewable energy, as well as eliminating waste and increasing recycling content. Control states are also beginning to fully adopt sustainability initiatives across their enterprises.
Closing
In navigating these new horizons and seizing the opportunities that lie ahead, Diageo must always remain true to its ambition to be one of the most trusted and respected consumer goods companies. By pursuing premiumization, fostering collaboration, embracing digital innovation and prioritizing sustainability, Diageo stands ready to continue to thrive and shape the future of the beverage alcohol industry for generations to come.
And, as the company looks ahead, one thing remains certain: The horizon may be ever-changing, but with vision, determination and a commitment to excellence, the opportunities that await are boundless.
In closing, I invite all control states to join us today as we build the future together and, in the meantime, I thank Chairman Wooton for his theme, as well as his leadership, over this past year.
Brooke Rodriguez
Bacardi
General Manager Commercial Operations Control States
At Bacardi, everything we do is with a long-term view. As a family-owned business for 162 years, we’ve grown into a global business by always keeping an eye on what’s new and next. That includes the continued taste for premium, as consumers look to drink less but better spirits that provide a taste of luxury, even in tough economic environments. In the Bacardi Global Consumer Survey, quality ranked as the number-one reason for choosing a drink among respondents in the United States. Premium spirits are top of mind for younger cohorts too, with 41% of U.S. respondents aged 21–44 looking to seek more premium spirits in this year.
Tequila unanimously ranked as the number-one premiumization category globally, according to more than three quarters (78%) of respondents in the Bacardi Global Brand Ambassador Survey. Patrón tequila is poised for this trend, and takes it to new heights with its latest innovations: Patrón El Cielo and Patrón El Alto. Patrón El Cielo, is a prestige silver tequila with a light, fresh and ultra-smooth finish. Patrón El Alto is made with extra añejo, aged for four years and blended with exceptional añejo and reposado tequilas. It’s presented in a striking azure bottle that stands out on any bar shelf.
Our focus on premium and unique offerings are also part of our ongoing barrel programs with Patrón, Angel’s Envy and Teeling Irish Whiskey, giving states and retail outlets something special to offer customers.
Our Trends Report also highlights innovative aging and blending as a new horizon for 2024 as distillers move beyond tradition, looking to disruptive aging techniques to reimagine time-honed serves, without losing their centuries-old refinement.
This trend is being embraced by our talent, including Angel’s Envy Master Distiller Owen Martin, and Director of Blending, Scotch Whisky Stephanie Macleod, who, for an unprecedented fifth year in a row, was awarded the prestigious title of Master Blender of the Year by the International Whisky Competition (IWC) 2023. They, along with others, are constantly innovating to bring new expressions to life.
Angel’s Envy is experimenting with second-barrel finishes, looking to port, wine, rum and ice cider casks to add new levels of flavor and nuance to its American whiskeys. Within Scotch whiskies, releases like the Dewar’s Double Double range, which uses a unique four-stage ageing process pioneered by Stephanie, have been earning awards for taste and quality.
Speaking of new opportunities, mezcal is the next category to premiumize, according to the 2024 Bacardi Cocktail Trends Report, and we are in prime position to lead that journey. Last year, Bacardi became the sole owner of Ilegal Mezcal, a leading super-premium artisanal mezcal. This was after several years of partnership, and now we can bring the brand to even more consumers. Hand-crafted in small batches in Oaxaca, the brand captures mezcal’s storied history as one of the oldest distilled spirits in the Americas, using 100% sustainable Espadín agave and no artificial colors, flavors, yeasts or additives. Ilegal Mezcal has the credentials to own and lead the super-premium mezcal category.
Always on the horizon for our iconic brands is maintaining cultural relevance by meeting consumers where they are. From music festivals like Buckeye, Breakaway, Dreamville and Lovin’ Life to major sporting events like the US Open, F1 and partnering with the Detroit Red Wings, Pistons and Tigers, these are just some of the moments where our brands connect with consumers.
Cocktails, spirits and liquors that capitalize on exclusivity, quality and cultural collaborations have never been more in demand, and at Bacardi we are ready for it.
Sean Noble
Campari
General Sales Manager Control States
In 2023, the spirits business within the control state region experienced a year of significant evolution and adaptation driven by various factors, including changing consumer preferences, market dynamics and global events.
One of the notable trends in the spirits industry in 2023 was the continued rise of premiumization. Consumers increasingly sought high-quality, premium spirits driven by a growing appreciation for craftsmanship, authenticity and unique flavor profiles.
Another significant development in 2023 was the increasing emphasis on sustainability and corporate responsibility within the spirits industry.
For Campari America, we worked closely with our partners to promote sustainable practices, encourage responsible consumption and address environmental concerns throughout the supply chain.
Looking ahead to 2024, the outlook for the spirits business in the control region is characterized by both opportunities and challenges. On the one hand, the spirits industry is expected to continue its upward trajectory, driven by growing consumer demand, and ongoing innovation. We will play a vital role in supporting this growth by advocating for fair and balanced regulatory policies, fostering industry collaboration, and promoting responsible business practices.
Additionally, the post-pandemic recovery is anticipated to stimulate economic activity and consumer spending, further fueling demand for spirits products. As social gatherings, events, and hospitality establishments resume normal operations, we can capitalize on increased consumption occasions and drive sales growth.
However, the spirits industry also faces several challenges and uncertainties in 2024. Continued geopolitical tensions, possible trade disputes and regulatory changes could disrupt supply chains, impact international trade and affect market dynamics. Moreover, evolving consumer preferences, demographic shifts and emerging health and wellness trends may require spirits producers to adapt their product portfolios, marketing strategies and distribution channels accordingly.
The spirits business in 2023 experienced significant transformation and adaptation in response to changing market dynamics, consumer preferences and global events. Looking ahead to 2024, the outlook for the industry is characterized by both opportunities and challenges, with Campari America poised to play a pivotal role in shaping the future of the spirits industry through advocacy, innovation and collaboration.
