Established in 2018 by Joel Pawlak and Scott Bolin, the US-based company, Next Century Spirits, was initially involved in creating tailored formulations for businesses interested in joining the beverage market. The range covered diverse spirits including vodka, gin, whiskies, Tequila, rum, and Ready-To-Drink cocktails.

A number of its initial brands were developed in collaboration with celebrities, such as Bear Fight whisky with Seth MacFarlane, and vodka-based Ready-To-Drink Caddy Clubhouse Cocktails with golfer Greg Norman.

Over the past few years, the company has grown through strategic acquisitions, with the most recent acquisition being multiple brands from Texas-based Southwest Spirits & Wine. Next Century Spirits, headquartered in North Carolina, secured the majority of Southwest Spirits & Wine’s brands, inclusive of Nue vodka, The Other 49 Bourbon, George Ocean rum, and Calamity gin.

In an engaging discussion with Next Century Spirits CEO, Anthony Moniello, and Chairperson, Matthew Bronfman, Just Drinks explored the company’s approach to expanding their spirits portfolio, and their strategic approach to achieving rapid growth.

Next Century Spirits CEO Anthony Moniello: Nue vodka has set a new standard in the industry. We aimed at penetrating the vodka market to augment our overall business and currently, there seems to be two types of brands in this sphere. There are large, well-established companies that are grappling to retain their market share and maintain shelf space, and on the other end, there are unique disruptors who are growing at an impressive rate of 20% to 30%, albeit without a massive footprint when compared to the competitive set.

Nue Vodka is an emerging brand with an exciting potential in the given price range and category which aligns with our ambitions in this sector. Thus, it was a fantastic opportunity for us and one that we have been on the lookout for.

Also emerging is Henderson Whiskey, another notable brand with a solid growth trajectory. Current sales of Nue Vodka stand at about 220,000 cases. Henderson is just below 20,000, but it is gaining momentum in the value space. Considering a trend towards de-premiumisation in spirits that’s been prevalent for more than six months, we don’t foresee a downward shift anytime soon. As we evaluated the entire portfolio, it continuously became more enticing.

This acquisition not only catapults our growth but also presents us with some scale. While our innovative strategies and launched brands have been effective, we realized that we needed more scale. We needed to penetrate larger chains and expand into larger markets. This acquisition enables us to build upon the commercial value chain that comes with scale.

Moniello: Our primary interest lies in focusing on our base vodka and its range. The idea is to hold onto and understand our flavour strategy dynamics. The base continues to hold a large potential, but innovation is an essential component of this industry. Although our focus remains on the base vodka, the doors for innovation are never shut.

Chairperson of Next Century Spirits, Matthew Bronfman: Our future strategy involves the introduction of two new celebrity brands by 2025. This signifies our continued emphasis on celebrity partnership and not a diversion from it. We haven observed significant synergy in following this approach and we will continue to innovate and seek celebrity partnerships that can truly make an impact.

Moniello: Our production facility, located in North Carolina, spans almost 30,000-square-feet and is primarily used for production and bottling activities, along with a bit of barrel storage. In addition, we maintain two storage facilities; one for storing barrels and dry goods, and the other for housing finished goods.

The acquisition of Southwest Spirits & Wine is expected to pose a challenge when it comes to storage. The deal additionally brought about 330 barrels under our ownership, prompting us to seek short-term expansion opportunities in and around our current space.

Moniello: There is a lot that needs our attention domestically. Hence, our 2024 and 2025 strategy will be primarily focused on the US market. With this new deal, we have expanded our reach from a limited 38 states to all 50 states.

We do have plans for penetrating the international markets. In fact, some of the international markets we currently operate in reached out to us. Countries like Australia, Denmark, Canada, and a few others approached us proactively. While international markets are part of our long-term strategy, we realize we can only excel in a finite number of things. Right now, we are focusing on dominating the US, but we are determined to venture into global markets soon.

Bronfman: We envision ourselves to be amongst the top-ten whiskey suppliers globally. The real strength lies in our long-term vision. Our strategy is not to just buy a brand, get some short-term growth in a couple of years and sell out. That’s not what we aim.

Despite having a background in private equity, I do not believe in the traditional short-term, five to seven years, schemas. We have always adopted a different approach.

Moniello: Our primary focus will be to capitalize on the potential that our existing brands possess, especially Nue vodka. We aim to exploit its untapped potential at a national level very aggressively.

Additionally, we initiated the Numbskull Whiskey brand in a handful of trial markets. This is a whiskey with chocolate-mint flavors, and to our surprise, it became our largest brand just four months into this year. Its demand is so high that we can hardly keep it in stock.

Currently, we are seeing huge potential for growth with the acquisition of Nue vodka and the skyrocketing demand for Numbskull, along with significant double and triple-digit growth across the remainder of our product portfolio.

We are currently in a strong position, having concentrated our efforts on our product portfolio. We have moved past the products that were not delivering results and are now focusing on those that are. The next step is to scale these offerings and ensure effective execution.

Moniello: We’re preparing for a capital-raising round. However, I’m not sure about the specifics I’m permitted to disclose. But I can mention that any future funds will support our rapid growth. It’s not about survival; we’re already a robust company, and this acquisition only strengthens that. Any future initiatives will focus on enhancing momentum.

We intend to navigate this strategically, but it’s worth noting that the current funding environment is challenging for many brands. Despite these difficulties, we’ve managed to thrive in a strained economy and a tough market for smaller entities. Hopefully, we are growing out of the “small company” category now.

Moniello: Our observations show people continue to engage with affordable luxuries like spirits. Even though there’s a noticeable trend towards de-premiumisation, this doesn’t indicate that they’re just settling for anything cheap. There’s still a demand for superior propositions—lifestyle brands that resonate with them, their peers, and the moments they want to celebrate. We must always keep this in mind.

Everyone’s raising prices and reacting to supply chain and we’re attempting to stay disciplined and accept thinning margins. This decision might make our CFO uncomfortable, but we’re aware that consumers are keen on identifying brands they connect with and cherish memorable experiences with them, regardless of whether they’re spirit brands or not.

Consumer confidence, particularly closer to elections, is always tricky to anticipate. However, we do know that consumers still remain engaged with brands. They’re slightly more aware of costs but they’re not rushing to the cheapest options. They continue to seek a brand that resonates with them. We should stay completely alert to such insights, react swiftly, and maintain constant communication with our consumers.

Moniello: It’s paramount to keep our focus on sustaining our growth when the moment arrives. One must be extremely disciplined to recognize this brand or this possibility requires our attention and we should capitalize on it.

We chose to design a portfolio company, driven by possessing a few highly successful brands to develop around. We’ve just procured one and we are steadily defining the next two. The emphasis is always on our final ambition – becoming a widely trusted multinational spirit supplier.

““Nue vodka is a powerhouse brand with untapped potential” – Next Century Spirits CEO talks portfolio building” was originally created and published by Just Drinks, a GlobalData owned brand.

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