Rapid expansion can destroy what makes a premium spirits brand special. This seminar explores the art of strategic, sustainable growth through the lens of brands that have successfully scaled without sacrificing quality, authenticity, or market positioning. Our panel of industry leaders will reveal how they’ve navigated the tension between meeting demand and maintaining exclusivity, sharing proven frameworks for international expansion that prioritize depth over breadth. Learn why thinking in cities rather than countries creates more sustainable growth, how shifting distribution models can reclaim brand ownership and profit margins, and the importance of building genuine local relationships that create grassroots momentum.
How Tequila Fortaleza Handles Expansion and Allocation Challenges
How does a small, family-owned brand become one of the most sought-after tequilas in the world? Billy Erickson, Sales & Marketing Manager at Tequila Fortaleza, shares the journey from his father selling bottles out of a truck to the brand’s current global “cult” status. At Bar Convent Berlin, Erickson dives into why Fortaleza shifted its European distribution model from a brokerage system to direct logistics to reclaim brand ownership and profit margins. Billy also explains the “Go Deep” U.S. strategy—focusing on local relationships and groundswell movements in specific markets like California and Texas rather than chasing national scale.
The 6 Pillars of Luxury Spirits Brand Expansion
At Bar Convent Berlin, Matteo Fantacchiotti, Partner and Chairman of the Board at Cygnet Distillery, shares his 25-year blueprint for luxury spirits brand expansion. Discover why “countries” are too broad a target and why you should be thinking in terms of cities—from London to LA—to build reputable models before scaling. Watch to learn why the best advice for international expansion is often to “expand strategically, stay focused, and go deep.”
Scaling Your Rum Brand: Understanding Market Preferences
Adhy Singagerda, Business Development Manager at E&A Scheer, takes us inside the operations of the world’s largest rum blender and the keys to scaling your rum brand. In this Bar Convent Berlin session, learn how E&A Scheer provides access to over 240 different rum marks across 40 origins, allowing brands to create reproducible, tailor-made blends at any age or price point. Adhy shares critical market insights, such as why “grassy” French-style rums struggle in the US and how to navigate the price-sensitive German market.
How Tequila Fortaleza Handles Expansion and Allocation Challenges Transcript
Billy Erickson (0:03)
I’m William Erickson, I go by Billy. I’m the sales and marketing manager for Tequila Fortaleza. We are a small, family-owned brand that started about 20 years ago, and I’m going to take you through the last ten to fifteen years of our journey and how we got to where we are today.
We had some fortunate family history. Back in 1873, my great-great-great-grandfather founded Tequila Sauza. My great-grandfather ended up selling that company in the 1970s, and my dad started Fortaleza from scratch. We imported our first bottles in 2007, and we were so small that my dad was doing the sales and distribution himself. We had an importer bringing the bottles in, and my dad was personally delivering cases to restaurants. Nowadays, we work with about 30 states in the United States and around 20 countries globally. We’ve come a long way from those beginnings.
Billy Erickson (1:04)
Our story in Europe started about eleven or twelve years ago. There are really two general ways you can expand into a country: you can do it yourself, or you can expand via a broker. In Europe, we initially worked with a company called Alias Smith, who were a great partner for us at the start. We entered several European countries and it made life very easy. We would ship products to Alias Smith and it was their job to sell it across Europe.
The challenge, however, is that the more partners you have in the chain between you and the bar, restaurant, or retail location, the more margin you’re adding at each layer and each layer isn’t cheap. In the US, for example, when we import products, the distributor takes around 30%, the retail location takes another 30%, and if you have an additional intermediary, that’s another 20 to 30% or more depending on the contract. So one of the challenges we faced in those initial years was that while we wanted to maintain a healthy margin at the distillery level, our European partner was taking a healthy margin too, and so were the local importers in each country. The net result was that a bottle of Fortaleza became very expensive in Europe, and that became a real barrier to driving volume.
On top of that, our brand relationships were being managed through our importer, and that didn’t align with who we are as a brand. The visits to Europe were great — we’d book flights, our importer would have the whole itinerary planned, and my dad would work the market for three weeks at a time, making introductions and leaving very happy. But those structural challenges posed a significant problem, and our initial growth in Europe was limited as a result.
Billy Erickson (3:37)
After a few years of that model, we decided to change direction. Park Street has entered the European market as a logistics provider, similar to what they do in the United States. We have a partnership with them in the US as well. Once we had the logistics sorted out, we wanted to take ownership of the brand relationships directly.
We reorganized using Park Street, sent our product to their warehouse in the Netherlands, and expanded into a few more countries across Europe. There were challenges that came with this whereas before we didn’t have to manage direct relationships with importers country by country, now we were spending significantly more time on that. It became around 20 additional meetings every quarter, managing different partners, discussing marketing and promotional spend, addressing challenges, and setting brand goals for the quarter. That was all work that Alias Smith had previously handled for us, so it was a real adjustment to our workload.
But it worked out for us in the long run. We’re a brand that likes to have very distinct control over exactly where we’re placing the product and which relationships we’re driving. Being in that position allowed us to plan events like this one, to come to BCB and the Rome Bar Show, to organize our own stand in partnership with other brands, and to have direct, controlled relationships with our partners. When we talk to our distributors now, we can say, “We’d like to be in this specific hotel, or this best bar. It’s part of our global strategy. Can you make it happen?” For us, the time and investment required by that change has absolutely been worth it.
Billy Erickson (5:21)
Let me also share a bit about our expansion in the United States. From 2007 to 2011, in our early growth stages, we were in about four states: California as our home market, Nevada, Oregon, and Illinois. I was in high school and just starting university at that point and didn’t participate much in those early years. About midway through university, my dad asked me to come on board and said we needed to grow the brand.
And referencing a point made earlier we tried to enter as many markets as we could, as fast as we could. We had no idea what we were doing. We thought that every new distributor who bought a half pallet or a pallet was just more product going out the door. We expanded quite quickly, and for about nine years I spent every other week on the road somewhere. As colleagues have mentioned earlier today, it was a lot of time and a lot of money, and it was not very focused.
It worked out okay we got placements and drove results. But when someone asked us to come in and do a staff training, and we said, “That’s great, I’d love to I’ll be back in six months,” that didn’t go over particularly well. As it turns out, when people ask for staff training, they don’t mean six months from now. They mean in the next couple of weeks. That became very challenging. We did eventually hire brand ambassadors, who were helpful and could visit markets more frequently but a brand ambassador is a significant annual cost, between flights, travel, salary, and marketing spend.
Billy Erickson (8:05)
More recently, since COVID, we’ve hit a different kind of problem: allocation. Managing how we want the brand placed when supply is constrained is genuinely difficult. How do you manage relationships that have driven the business for 20 years, with accounts that used to order regularly, who are now being told they can’t always get it? How do you manage that shift in scarcity when an account says, “I can’t get it regularly, my distributor won’t let me have it, and you seem to be spreading the bottles around”? Those are real relationship challenges.
So if I were to give you some recommendations on what to do differently, the first thing before you even start talking to people is to honestly evaluate how much time you actually have in a given market. Can you manage the distributor relationship? Can you manage the client relationships in that market? If a distributor hands you a warm lead, and you’re a brand with a beautiful distillery, they might email you saying someone is visiting Mexico and they’d love to set up a tour. Or they might say there’s an opportunity for a dinner next month can someone from the brand be there? If 50% of your time is already going toward running your operation and 50% toward sales and marketing, how much additional time is entering this market realistically going to cost you? That’s something to think very carefully about. And linked to that, what kind of return are you expecting, and what are you willing to invest to get there?
The other significant consideration right now, at least in the US, is tariffs. I wish I had great advice on this, I don’t. We’ve been dealing with the threat of tariffs on Mexican products since early this year. The tariff situation in Europe is a bit more settled right now, but it could change at any time. Before you enter a market, you need to ask yourself: if a 20 or 30% tariff lands, does this market still break even? Do we start losing money? Work out where your shelf price ends up, model the tariff scenarios, and be honest about whether you’re comfortable making this a market where you’re investing without an immediate return.
Once you’ve done that thinking, select one market. And the right market depends on your spirit, your goals, and how fast you want to grow. For tequila, the two biggest US markets are clearly California and Texas. But if you’re selling rum or whiskey, you might not start in either of those unless you already have a close relationship with a distribution partner there.
Billy Erickson (11:01)
Once you’ve selected a partner and a market, go deep. Going deep is what moves a market from costing you money and time into genuine profitability. Once you get onto a few cocktail menus, once consumers in that market know what they’re talking about, the momentum builds. Consumers who discover new spirits are probably the single biggest driver of how our brand has grown. There’s a particular subset of tequila drinkers who pick up a new bottle, try it, go to a friend’s house, and say “you have to try this.” That groundswell of word-of-mouth carries you into profitability. But you only get there after you’ve invested the time, marketing, and effort in that market.
One more thing worth noting: at least in the United States, this industry is very interconnected. Once you meet one person in a city, meeting the next six is much easier. That first staff training you do, someone in the room is guaranteed to work at another restaurant and say, “Hey, can you come train our team too? We love your product.” Those small moments are what drive a brand forward.
That was my quick guide to entering the United States. If you have any questions or want to talk about our experience, I love talking about this. Building brands is one of the most interesting parts of being in this business. My email is billy@fortaleza.mx. Thank you all for attending our session today. We really appreciate it.
The 6 Pillars of Luxury Spirits Brand Expansion Transcript
Matteo Fantacchiotti (0:04)
The learnings I’m going to share today come mostly from more than 25 years in the drinks industry and especially from times when I was deeply involved in market expansion.
The topics I’m going to cover fall into six themes: sustainable brand value, prioritization, laser-sharp focus, resources (which is essentially cash), people, and building demand.
Sustainable brand value the question I always start with is: why do you want to expand? You’re here listening about this, so why do you want to expand? The guess is you want to sell more, right? Most likely. And what I will say is: if you don’t build sustainable brand value, most likely you’re not going to sell more. You might sell a few pallets here and there, and then very little will happen next.
To build that, you need to think through what your unique value proposition is. Why will people choose your brand and think, “I’d love to try this over everything else already in the market”? What is the profit pool, the occasion, the community you’re targeting? What is the sub-segment? Where do you want your brand to be consumed in what moment of the day, in what channels? And what is the community? Brands are built through communities today, not individuals. These communities get influenced. And what is your overarching business mission and vision?
To make this less corporate jargon and more of a real example at Sénate, our current brand, what we decided was to target a profit pool that was, in our view, an underserved super-premium-plus segment in gin. Gin is very crowded between $15 and $40 US per bottle probably overcrowded. But unlike almost any other category, there is very little above $50 US per bottle. We thought: that’s what we’re going to build. Our unique value proposition was to change the paradigm in gin by creating a female-forward, female-led spirit that can be enjoyed neat and that balances sustainability with understated luxury. That was the positioning — why we want people to choose us. And the business mission statement is simple: we want to be the number one luxury gin brand globally by 2030.
Matteo Fantacchiotti (3:06)
Once you have that clarity, prioritization comes next. Everything you do needs to be in service of your business goal and mission. Going back to my example: if I want to build that segment, where does the profit pool exist? Do I want to trade up from premium to super-premium? Trade across from existing brands? Trade in from other categories? Where does the occasion exist? This is how you start to see where to prioritize in order to build the brand, and portfolio and product choices will naturally follow.
The chart I’m about to show you and the specific numbers and data don’t matter as much as the framework comes from 2020 when I joined Campari in Asia. We started looking at the size of the profit pool for the products and categories we believed we had the ability to compete and win in across our geography. The size of the bubble represents the combination of category size and growth trajectory, because a category can be large but declining.
On the bottom axis you have what I call strategic feed factors: macroeconomics, emerging middle class, affordability, market stability, complexity. To finish the example, you can see in this chart that New Zealand becomes slightly more attractive than India. You might ask: how would you prioritize a 25-million-person market over a billion-person market? Well, at the time, we were building a three-to-five-year business plan. India is a very complex market. We didn’t have the capabilities, we had a very small team, and setting up there would have been enormously difficult. New Zealand, by comparison, was a relatively straightforward market where our categories were already relevant, price points worked, and we had strong capabilities in Australia that could be leveraged across the Tasman. Those are the kinds of dynamics that drive these decisions.
Matteo Fantacchiotti (5:32)
After prioritization comes what I’d call prioritizing your priorities because once you’ve decided which geographies to target, in my experience across Reserve brands and Cazburg, we always talked about cities. A country is a big concept. When you’re trying to build a brand, you don’t talk countries you talk cities. The examples at the bottom here are from our current Sénate city strategy, where we are single-mindedly focusing in the UK on London and Wales because of our provenance. We’re launching in the US this month and targeting four cities initially, with a year-two plan behind that, and a couple of seeding plays in Singapore and Dubai to test the concept. We are very deliberately focused on cities.
And when you talk about cities, take LA — LA is effectively four different cities in one. You have West Hollywood, Midtown, Venice, Santa Monica. Those four places are wildly different: different consumers, different channels, different occasions. So how do you understand within a city where to activate your brand, where to test your investment, what to learn, how to build replicable models and proof of concept so that you can confidently replicate in the next city without wasting money?
Matteo Fantacchiotti (7:07)
Then you need to face the hard truth, which is money. My point on money is this: first, always start by thinking about unlimited resources. When you build a business plan, you don’t want to start with a constrained view. Think as if you have everything you need and build your ideal plan.
After that, you look at the numbers and most likely it’s a lot of money. Now, you might have all the money you need in which case, congratulations, you’re very lucky. But luck is very often not everlasting. I’ve heard from many people who thought they were fortunate to have generous founders or investors behind them, only to find that after a few years, if the results aren’t materializing, those backers start to say, “I think we’ve seen enough.”
But even if you do have plenty of capital, there are still two things to consider. First, your risk appetite: you need to be comfortable that in the early stages, your costs will most likely run ahead of your sales and top line. What is the monthly cash burn rate you’re comfortable with? You need to have clarity on that. Second, pace and capacity: given your team and capabilities, how much can you realistically absorb? How much can you handle? If you want to launch in 15 markets and 15 cities simultaneously, the odds are you’re not going to execute the way you planned, and you’ll start spending money without the return you expected. There is a trade-off between your risk appetite, your capacity to absorb, and your cash and it all needs to be in balance with your business plan.
Matteo Fantacchiotti (9:17)
I mentioned capabilities, which brings me naturally to people. For me, every great business is built on two ingredients above all else: brands and people, and they are absolutely equally important. I’ve come across fantastic brands that didn’t do well because they didn’t have the right people or capabilities behind them, and okay brands that are doing really well because they have the right team. You need to pick the right people.
Especially if you’re thinking about expanding and you’re still a small business, it’s about a mix of functional and leadership capabilities. You’ll probably be buying those capabilities from larger companies that have already done it but the question is how do you attract people who also have the mindset to step into a smaller environment where they need to be more hands-on, more creative, more entrepreneurial? They cannot simply replicate what they did in a big corporate environment, because they’ll run out of cash and get beaten by the competition.
The second element of people is fixed versus variable. You need your core capabilities in your key markets and key cities as full-time people there’s no substitute for people who deeply understand how you want to build your brand and what the message is. But you also need a lot of variable resources, otherwise compounding fixed costs become too heavy. So think creatively about collaboration models, partnerships, synergies, revenue sharing, and performance-based arrangements and find the right balance between fixed and variable.
Matteo Fantacchiotti (10:58)
The last section is the most important one: building demand. You might have found the right distributor in a given market. You might have heard from people, “Oh, they’re the right guys, they have the right portfolio, they call exactly the right outlets. We’re going to be fine.” And they might indeed sell and distribute your product into the right venues. But then no consumer knows your product. They don’t know what it is, why it’s there, or what the story is. The staff doesn’t know it. The bartender doesn’t know it. Why would it sell? Most likely those two bottles on the back bar will last maybe six months to a year, if you’re lucky.
That’s where activation comes in. What is activation? It’s about training the staff, training the bartender, turning them into advocates who recommend your product. Being on the menu in a cocktail that changes your volume per outlet. Engaging consumers at the outlet level through small events, ritual serves, and all of that.
The second element is drink strategy. The product is there but for what drink? You either take share from an existing occasion, say a gin and tonic because you have a twist, a signature serve, or a particular fit with what that outlet is already doing. Or you create your own drink. If it’s simple enough to execute, replicate, and scale, that can be even more powerful though obviously harder to establish. You need to be very clear on this and execute to a consistent standard. Every touchpoint is an opportunity to reinforce your story with consumers.
The very last point is sufficiency. Rather than talking theory, I’ll give you one example. In 2022 at Campari Australia, we had Wild Turkey as our biggest brand by far, then Aperol, Espolòn Tequila were growing strongly, Campari itself obviously needed prioritization, and then we had Glen Grant five brands, with significant investment going into all of them. I said to the marketing team: let’s ask the media agency to tell us, given the categories these brands play in and the investment levels of our competitors, what the optimal investment threshold would be to achieve our fair share of voice relative to our market share and the reach we needed. Long story short, the audit came back and not even our number one brand was receiving the proper investment, because we were trying to do too much across too many brands. We were diluting our investment to the point where none of it was cutting through.
Bring that back to a smaller company with a smaller budget: the chances are you’re investing in very cool things producing videos, making beautiful photography, feeling good about it but consumers aren’t noticing. It’s not cutting through. So how do you stay focused, go deep, and build real saliency and demand?
Matteo Fantacchiotti (14:36)
You might be thinking: I came here to learn about market expansion, and what Matteo seems to be telling me is not to expand. Maybe that’s partly true but my message is really this: number one, expand, but very strategically. Number two, stay really focused. And number three, go deep. Thank you very much.
Scaling Your Rum Brand: Understanding Market Preferences Transcript
Adhy Singagerda (0:03)
My name is Adhy, as EMTT just introduced me. I have experience gained within the beverage industry, starting in soft drinks and moving into the spirits and hard liquor world, just to spice things up. I’ve gained experience at Coca-Cola, Red Bull, and also at Suntory and some private equity entrepreneurships, before joining E&A Scheer. Without further ado, I’m here talking about E&A Scheer, a company which is all about rum.
Our core competence is creating bespoke rum blends and finding the best liquid proposition for our customers. It starts with understanding the brand. We want to know more about your brand, your mission, your values, and your identity, and we try to translate all of that into the liquid.
The next step is looking at trends: premiumization, RTD convenience, bold flavors, all of which should be integrated into the requirements you share with us. We also need to understand insights from local markets and the balance between on- and off-premise, in order to create the right price proposition for you. All of that information comes together to create your bespoke rum blend, one that can help make you successful in introducing your brand into new markets.
Adhy Singagerda (2:19)
This next slide is one of the most important ones we have, because we use it to better understand your requirements and to turn the intangible story you’ve connected to your brand into a tangible rum blend.
If you look at our rum blending tool, you’ll see a lot of steps we really want to understand when you brief us about your rum blend. Profile, for instance, is important. Is it going to be a heavy Jamaican rum profile? A grassy French rum profile? Or a more classic aged Latin-style rum profile? Then there’s age: do you want an age statement? We offer blends up to 15 years old within our portfolio of bulk rums. Is it going to be a pouring rum, which is usually unaged? And then there’s origin, which is usually a very important consideration for brand owners. That’s something we can offer from across the 40 different origins we work with.
One particularly important factor is market preference. We typically categorize rum into three main styles: British style, French style, and Latin style. What we know, for instance, is that French-style rums, very grassy, cane-juice-based profiles, don’t have a great deal of traction in the US. So if you’re planning to expand there, that’s something you need to consider. In the German market, for example, the middle and standard segments are quite large, which means pricing is an important issue. Please think about that if you’re considering a well-aged rum, because age relates directly to price, the older it is, the more expensive it generally gets.
Adhy Singagerda (5:06)
One thing I also wanted to mention is something that is becoming increasingly important: sustainability. Within our rum portfolio, we offer some sustainable options, usually Fair Trade certified, but we also have the Bonsucro certification, which isn’t widely known yet. However, I think it’s something we as rum blenders and key players in the rum category need to convey more clearly. The Bonsucro certification is becoming more and more important in the overall proposition, and it ensures that the entire value chain in rum production is sustainable, both environmentally and in terms of the people involved. So if you’re thinking about launching new rum expressions into new markets, this is a factor I believe is of key importance.
To give a brief summary of what we do: E&A Scheer consults brand owners, bottlers, and anyone thinking about launching a rum. We work together with them and support them through the liquid creation process. Again, we don’t own brands, we advise and help brands expand.
Adhy Singagerda (6:48)
Another thing worth considering is how we facilitate your rum sourcing. Of course, you can always go directly to a distillery and ask for an offer, but I think it’s considerably easier to start by talking with a party that facilitates your sourcing, drawing on 350 years of experience. And all of this is readily available from Amsterdam.
The next step is the creation of the blend itself. Based on everything we’ve discussed, we’re able to respond quickly and develop things efficiently. Once we agree on a rum blend, we have the flexibility to scale up in bulk volumes, starting with IBCs and ISO tanks, and also tank trucks if that’s what you need. We have an efficient rum value chain: any blend, any place, any time.
Adhy Singagerda (8:05)
To finish off, I’d like to share a case study. Shaker Canan is a startup from Amsterdam, a playful, innovative brand with the ambition of shaking up the ready-to-serve category. They are rooted in bartending culture and built for accessibility and fun. Based on that positioning, and tapping into the trend for bold and global flavor experiences, think flavors like umami and beyond, they developed a ready-to-drink cocktail concept where you simply screw on a cap and enjoy an experiential consumption moment. It’s a direct expression of those trends.
We helped them gain insights about which markets are seeing the fastest growth in ready-to-drink beverages. RTDs are growing everywhere, but particularly strongly in markets like Germany, where the segment is expanding rapidly. We also know that RTDs are predominantly off-premise, which is a very strong channel in Germany, a market where convenience is of paramount importance.
Bringing all of that together, we created a versatile rum base that serves as the perfect foundation for their Mai Tai and Daiquiri ready-to-drink cocktails. They’ve just launched, so hopefully these will fly off the shelves but this is one clear example of how we help brands grow into new territories. Thank you.
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