Have you been browsing local liquor store shelves and wondering what a private label distillery is? If so, then you’ve come to the right place. Here at Distillery Nearby, we love talking about spirits and what makes them special. Today, we’re going to chat about what “private label” means, how you can tell if a spirit is “private label,” and how to tell which private label spirits are actually worth the money. Let’s get started.

Why Are Private Label Spirits Becoming Popular?

There’s been a massive boon in the number of private label spirits hitting shelves in the past ten years. This can be attributed, in part, to the growing interest in craft spirits, but there are certainly other factors at play here. Let’s take a brief look at the reasons, and we’ll get into more detail in the rest of the post:

1. Increased demand for unique spirits
2. Flexibility for branding and marketing
3. Cost-effectiveness and easy entry into the market
4. Retailers are looking for exclusive products to sell
5. Growing interest in local spirits and craft spirits (we covered this already)
6. Speed with which bottles can hit the market
7. Potential for customization and personalization of bottles

What Is a Private Label Distillery?

Private label distilleries are distilleries that produce spirits for other brands. However, there isn’t any ownership involved. The private label distillery simply creates the spirits for the company in question. Additional services can be rendered, including:

• Bottling
• Labeling
• Formulation
• Package design

By taking the production overhead out of the equation, small-batch distillers can focus on their ideas and get their products to shelves more quickly. There’s no massive downtime created by setting up a distillery, and they don’t even have to distill the products themselves.

How Does Private Label Differ from Contract Distilling?

These business models are similar in that they can help new brands get rolling, but there’s a big difference in the level of control that the end-brand has over the process. With private label distilling, as we mentioned, the end-client has all of the control over their brand identity. There’s a level of customization, both in the spirit’s formulation and the packaging and labeling of the spirit. The allure of using a private label distillery is the quick, low-cost entry into the spirits market.

For contract distilling, on the other hand, the focus is on using the expertise of the host distillery. Contract distilling is usually able to produce a higher volume of spirits than private label, and this model is better for a wider range of end-clients. Bulk spirit production is one of the main advantages of this model. And, the spirits received from contract distilling are usually used for further processing, like blending.

How to Work with a Private Label Distillery

While each brand’s needs will be slightly different, the process is mainly the same for all up-and-coming spirits brands.

First, the private label distillery will consult with the new spirit brand. They’ll chat about the product imagined, how it should be distilled, how the bottle will look, and much more.

Next, they’ll choose a final spirit and flavor profile for the product, deciding how it will be achieved and the recipe that will be used.

After this, the private label distillery will take on the distillation process, getting the spirits ready for the next stage. This may be bottling or aging. Either of which can be handled by the distillery, depending on their setup.

Finally, the end-client will have the option to either do the packaging and branding themselves or to have the private label distillery help them with this.

Throughout all of these steps, collaboration is key. The benefit of working with a private label distillery is that you’re making use of their infrastructure and expertise to get a marketable end product that consumers want to buy.

What Are the Benefits of Partnering with a Private Label Distillery?

If you’re an entrepreneur looking to start your own spirits brand… but you don’t have the capital to invest in distilling infrastructure, partnering with a private label distillery is a very alluring option. However, keep in mind that your success will be shared with the distillery in some capacity. Different distilleries have different policies when it comes to this topic. Some may charge you a flat fee to produce a certain number of bottles.

Others may dip their fingers into your proceeds. When working with a private label distillery, it’s important to understand the terms of your arrangement completely. Aside from this one caveat, working with this type of system can benefit you greatly.

Cost Effectiveness

As we mentioned, the upfront cost of working with a private label distillery is much lower than setting up your own infrastructure from scratch. This is one of the main benefits and is why you’ll see so many private label spirits right now. The huge boon in craft spirits is driving this (and making it extremely profitable to be a private distillery right now).

Flexibility

Since private label distilleries have so much experience and so much equipment already set up, getting exactly the spirit you’re looking for is really simple. Plus, these types of distilleries usually have diverse connections for grains and other inputs to help you craft a truly special spirit.

Expertise

The expertise of private label distillers is bar-none. They’re in this business for a reason. Part of the benefit of working with them is their intense expertise. They can help you craft exactly the spirit you’re dreaming of so that you can share it with the world.

Customization

To touch on this again, customization is a huge perk, too. From labels to tasting notes, private label distillers are good at what they do. You can get exactly what you’re looking for, and easily market it to the world – if you want.How Does Private Label Differ from Contract Distilling?

Own Label vs Private Label

Another key term you’ll see in relation to private label spirits is “own label.” What’s the difference?

Own label producers are very similar to private label, but own label products tend to be sold to larger retailers. They aren’t “small batch” or “craft.” They also tend to be more niche and target specific markets. 

The brand strategy will usually differ, too. “Own label” will generally try harder to compete with the big guys on quality and price. Private label spirits tend to try to be ultra-unique and fill a gap in the market.

What Do Private Label Spirits Cost?

Obviously, prices will vary significantly depending on what the end-client wants to charge for their product. Consumer prices will also vary depending on how much the initial charge was to create the line of spirits and the private label distillery’s involvement in the whole process.

End-clients tend to be quite sensitive when it comes to pricing, though. Most of them like to pass these savings onto the consumer, but you’ll definitely find exceptions. Celebrity brands made with a private label distillery, for example, tend to have hiked prices simply because they’re linked to a well-known name.

Are Private Label Spirits “Worth It” for the Consumer?

The individual worth of spirits will obviously vary, but private label spirits tend to be unique, fun variations on the repetitive products you’ll usually find on liquor store shelves. If you’re willing to invest a little bit into a bottle you’ve never tried here and there, “private label” is a good option for you. Just keep in mind that these products tend to be the brainchildren of people with less expertise than, say, the master distillers at Maker’s Mark.

However, the fact that they’ve chosen to work with an experienced private label distillery can even this out. At the end of the day, collectors and those with a more daring disposition will probably be better suited to trying private label spirits.

For one consumer spin on this topic, check out the Straight Bourbon forum on this topic. Thoughts on private label spirits have changed a lot in the last 20 years.

Distillery Nearby: Find Unique Spirits, Private Label or Not

Here at Distillery Nearby, we’re dedicated to finding and displaying all of your local US options when it comes to distilleries. Our unique “by-state” directory can help you find distilleries near you to try. Check out our directory today to find a distillery near you!

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