The stats tell the bitter truth. We’re drinking less beer, less wine and less alcohol overall. But, despite these numbers, interest in cocktails and high-quality spirits continues to surge. That’s because, though we’re all drinking less, when we do decide to imbibe, we’re sipping the good stuff.
The ready-to-drink cocktail market is growing, going against the tide of lower liquor volumes. And The Fort Distillery is expanding its Tumbler & Rocks brand further into the United States.
“The U.S. has much better regulations for alcohol, so that’s where we focused on our expansion,” says Founder Nathan Flim.
Flim opened The Fort Distillery in 2018, located in an industrial area in Fort Saskatchewan. While The Fort has definitely carved a niche for itself with its Mountain Pass Whisky, Two Bean Brew coffee liqueur and Canadian Boreal Gin, the largest growth is in its Tumbler & Rocks line of ready-made cocktails, available in 750 ml or 100 ml personal serving size bottles.
A year and a half ago, the company struck a deal to make the cocktails available on Porter Airlines flights.
But, expanding into other areas of Canada is difficult. Right now, Tumbler & Rocks ready-made cocktails are being sent to British Columbia but the shipments have to be small.
Foreign distillers are allowed to place their products in British Columbia. But Canadian producers from outside the province are not. So, an Alberta distiller has to pre-sell its stock (once there are enough orders to make shipping worth it) in order to get it across to B.C., which makes it exceptionally difficult to get on liquor-store shelves in Vancouver, Victoria or Kelowna.
But, to get into the (majority of the) American market, a distiller only needs to reach an agreement with a distributor, whose job it is to get the bottles into liquor stores. Fort sends products to B.C. — without any real profit margin, and isn’t available in provinces east of Alberta, unless you’re on a Porter flight.
So, for Flim, expanding south makes a lot more sense than going east. This past summer, the Tumbler & Rocks brand was introduced to Colorado. It will be stocked on liquor store shelves in Arizona this autumn. That increases the Fort’s reach to 12 American states, with plans for more.
To help finance this, Flim placed the company on FrontFundr, a crowdfunding platform which pairs companies with small, public investors. The goal was to raise $1.5 million, with shares priced at $1 each. The minimum buy in was $500, and the company was valuated at $12 million.
The distillery already has upgraded its bottling system, and has the capacity to ramp up production, so why was the investment needed? For marketing, sales and promotion.
“The liquor business is still very old school, it’s still very face-to-face,” says Flim. “People still want to meet people. It would be very hard for us just to send emails to liquor stores in Denver and say, ‘Hey, we’re new, you should buy it.’”
When the company expands to a new state, it has to secure a distributor. That distributor could be working with hundreds or even thousands of products. So, Flim and his staff have to head south so they can educate the sales people and visit liquor stores. They also need to make attractive displays.
“You really have to win on shelf,” he says.
Flim says his customers are in the rising demo that sees cocktails as something to be savoured around a campfire, rather than the binge drinkers of years gone by. Statistics Canada supports his claim.
The most recent StatsCan survey of the national liquor market found that sales rose to $26.3 billion a year, an upward trend of 2.8 per cent. But, while revenue is up, beer consumption is at an all time low of just 3.6 bottles a week per Canadian of legal drinking age. Wine is also on a downward trend, with sales decreasing by three per cent over the last year.
So, if wine and beer are down, but sales figures are up, it supports the idea that spirits — the ones on the top shelves — are leading the way.
The Tumbler & Rocks line includes an Old Fashioned, Manhattan, Cosmo, Espresso Martini and a traditional Martini (insert shaken, not stirred joke here). The Fort has also brought a Blueberry Marg and a Maple Bourbon Smash to the Alberta market. The Smash was so successful, it will soon be shipped south, too.
“You can stock your home bar without having to buy 30 bottles,” says Flim. “We focus on using premium ingredients and good, quality stuff in our cocktails. If we switched from using real lime juice to a lime flavouring, yeah, we could sell our cocktails for less. But that’s not what people want. They want real ingredients. We use high-quality ingredients, and, yes, it impacts the cost. We’re definitely not super expensive, but we’re definitely not bottom-shelf, super cheap stuff either.”
This article appears in the October 2024 issue of Edify
