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6 Steps for Sourcing Bulk Spirits

Published on:

February 3, 2021

Whether you want to create a flavored spirit or an RTD cocktail, you’ll need to carefully consider where to source the star ingredient of your drink–your alcohol base, of course! Use this guide to determine what step of the process you’re ready for, with tips and insights for your success in sourcing bulk spirits.

1. Nail Down Your Beverage Concept

First things, first–you can’t source anything until you’ve crystallized your beverage concept. Getting your dream drink on store shelves can be expensive and complicated. Knowing exactly what you’re getting into before you get started can set you up for success and help you estimate a realistic budget and timeline.

It may seem counter-intuitive, but it’s actually best practice to start by thinking through your distribution and sales strategy before you start to develop your product. Ask yourself some of these questions:

  • What kind of drink do I want to make? And what flavors and ingredients will I want?
  • Who is my target consumer?
  • What are my brand’s goals and values?
  • How will my product stand out against similar products on the market?

Answering these 4 questions will help you work backwards as you discover a clearer path from development to manufacturing to distribution, giving you the best chance at success.

Use your answers to come up with goals and a business plan for your concept. Maybe even develop a draft for your marketing deck and sales materials. Once you understand where you’d like to go with your idea, it will be that much easier to flesh out the technical aspects of that vision with your development team–and tackle bulk spirits sourcing.

If you’ve got more questions about this step and the process, see our helpful Checklist.

2. Know Your Alcohol Base Options

Once you’ve clarified your concept, you can begin to explore the possibilities for your spirit source. Ask yourself–do I have a spirit source I want to use, or is that part of what I’m looking for my beverage development partner to solve for me?

Maybe you have a distillery or have talked to a distillery or supplier about getting bulk spirits from them. If you do, then skip to #4 (and keep in mind the labeling implications, as described in #3). If you don’t, then it becomes a question of what exactly you want to make–this will help us explore your options.

There are a variety of different alcohol bases, each of which have their own flavor, color, ABV, cost, and caloric implications. A spirit base is produced by distilling any variety of sugars, grains, fruits, or botanicals. In terms of targeting a specific flavor profile or alcohol by volume (ABV) percentage, the path of least resistance is usually to use a neutral base–like Grain Neutral Spirits (GNS), or Cane Neutral Spirits (CNS).

Maybe you have a concept where you want a specific alcohol profile. White, neutral spirits are going to be much easier to work with than aged spirits. These bases present more of a challenge because they tend to have more flavor and/or color implications than white spirits.

You should also know that beverage development companies, like Flavorman, can create specific alcohol profiles through flavor science. For example, if you wanted to make a whiskey with specific attributes it didn’t already possess or enhance its existing flavors, in theory, this could be done with the help of a beverage developer–and you could still likely call it “whiskey” on the label (but more on labeling in #3).

If you’re making an RTD cocktail, then you should also know that you don’t have to go with a spirit base. Unless it’s important to your brand and target market, you might be better off reducing your costs by using a sugar brew, malt, or wine base. You can explore these options further, here.

If you’re still determined to use a spirit base in your drink, or you know you want to make a flavored spirit, then you should be ready for #3.

3. Consider Your Label

When considering the implications of each base listed in #2, don’t forget that taxes and regulations may vary at both the federal, state, and local levels, which will affect your Cost of Goods Sold (COGS)!

This not only begs the question of cost, but what you ultimately want your label to say. Why does this matter? Well, because the Alcohol and Tobacco Tax and Trade Bureau (TTB) has very strict guidelines for labeling requirements.

Where flavored spirits are concerned, the TTB outlines specific limitations on the allowable types and amounts of additives–like sweetener and color–and how they must be disclosed on the label. For example, a “Flavored Whiskey” is defined by the TTB as a:

  • Whisky flavored with natural flavoring materials, with or without the addition of sugar, bottled at not less than 30% alcohol by volume (60 proof);
  • The name of the predominant flavor shall appear as part of the class and type designation, e.g., “Cherry Flavored Whisky”;
  • Wine may be added, but if the addition exceeds 2.5% by volume of the finished product, the classes and/or types and percentages (by volume) of wine must be stated as part of the class and type designation.

The same goes for the legal definitions of established cocktails, known as “recognized” cocktails by the TTB. For example, if you want “Gimlet” specifically on your label, then it needs to contain “gin and lime juice, oil, or natural lime flavor” in allowable amounts, using approved materials, and be disclosed in a very precise way on the label. Your beverage development partner will use these guidelines to ensure your formulation meets the requirements needed to be approved and labeled accordingly.

The process also applies for RTD cocktails not classified as “recognized” by the TTB. Let’s say you want to make a Bourbon & Cola cocktail and you’ve decided that’s exactly what you want your label to say (as opposed to a Whiskey & Cola). Your beverage development partner will know what to formulate for; however, you’ll still need to find a reliable, consistent Bourbon supplier (which is a challenge unto itself, just check out #4) and you’ll also still need to educate yourself on the TTBs labeling standards so you know what you’re getting into.

4. Source Smart!

It goes without saying that–whatever base you choose–you’ll need to pick a reputable, sustainable source. For example, a commercial supplier might be better equipped to deliver your required volume of bulk spirits than a smaller, craft producer with limited resources. They also may be more likely to achieve the same bulk spirits profiles time and time again, which is crucial to the consistency of your flavored product.

But keep in mind: while there are certainly products that bulk spirits suppliers have created to try and be as consistent as possible, there can still be some nuances with that product that carry over into your drink–especially if you are sourcing aged spirits.

Similarly, if you plan on using your own spirit for a flavored product, then you’ve got some other considerations to think about–let’s go back to our Bourbon & Cola example:

Maybe you’re a small craft distillery with a two-year-old Bourbon and you want to make an RTD. Do you really want to take that super valuable barrel of Bourbon that, in a few years, is going to be even more profitable for you and put that into a cocktail? Maybe not!

It may be in your best interest to hold on to the good stuff, and instead, buy an alternative product that still accommodates your RTD being called a Bourbon & Cola. Not only do you get the drink you want, but it may be more economical for you in the grand scheme of things.

5. Understand the Market for Sourcing

If you want to use white spirits as your base, then it’s much easier where supply is concerned–and more affordable. White spirits also tend to have the cleanest profile for beverage development purposes, and you can ship it at a high proof and dilute it down to your desired ABV to get more bang for your buck.

Meanwhile, aged spirits are always going to be more challenging to come by and develop with, and more expensive than white spirits. Of course, if you do decide to use an aged product–a two-year-old whiskey, for example–then it might be in your best interest to forecast out your need by buying the supply of two-year-old whiskey for your immediate use, plus a one-year-old whiskey that you can hold onto for a year while it reaches the desired maturity for your product. You’ll benefit both from a lower cost, and from having it on hand when you need it.

A few other things to keep in mind: the aged spirits market is wildly unpredictable, and products move fast–you cannot wait too long to mull over an offer, because it can be gone in minutes. Literally.

And while Minimum Order Quantities (MOQs) tend to be reasonable in this market, they can also vary unpredictably–this is especially true where aged spirits are concerned. Aged spirits are sold by the barrel, “as is.” These products lose volume over time; a good rule of thumb is that once a barreled spirit reaches 4 years old, you can count on about a 4 percent loss of volume per year. By the time it is sold, no one knows how much product is left in that barrel, which presents another consistency issue.

If you aren’t quite sure where to look for a supplier, Flavorman can make the appropriate introductions depending on your concept and needs. If you are simply interested in sourcing bulk spirits to simply brand, bottle, and sell, then our friends at Moonshine University can assist.

6. Pick the Right Partner

Finding the right partner to develop your flavored spirit or RTD cocktail will be a huge advantage for guiding you through the entire process, as well as preventing mistakes early.

Flavorman is the expert in custom beverage development. We’ve been doing this for a long time. In fact, many of the almost 70,000 beverage formulations we’ve developed have been flavored alcohol products. And while we’d love to share which ones, we take our MNDAs seriously; suffice to say, you’re guaranteed to have tasted some of the brands we’ve developed.

We know how different ingredients behave in solution, we know what the flavor implications are, and we can guide you toward choosing the right ingredients for making a tasty, high-quality product. Of course, we can also connect you to resources (co-packers, specialists, attorneys, etc.) that can help in areas of the process that might extend beyond our technical expertise.

Because Flavorman is committed to client success, we work collaboratively to ensure clients are involved and informed about every step of the beverage development process. Even after we’ve delivered a custom drink formulation, clients are already teed up for success while we continue to be a resource for them. From start through finish®, that’s the Flavorman promise.

If you’re going to launch a beverage brand, make sure you do it right the first time. When you’re ready to talk about your idea for a breakthrough flavored spirit or RTD cocktail, give us a call at (502) 273-5214 or get started by telling us your story here. Together, we’ll change what the world is drinking.

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