Meetings—in the corporate sense—are a somewhat new addition to the daily working grind for Woodinville whiskey co-founder Brett Carlile. Woodinville was acquired by Moët Hennessy (LVMH) in 2017, a move that allowed the Washington distiller to ramp up volume and expand beyond its home state. A lot has changed in the nearly seven years since that deal was struck, including Carlile’s role. “Prior to the acquisition, I was very hands-on, literally on the distilling floor working the shifts alongside the other distillers,” he says. Now, Carlile is in charge of all production at Woodinville and was also involved in an expansion of the facility post-acquisition. In Quincy, Washington, over the Cascade Mountains from Woodinville, the company built a barreling and bottling facility in 2020, which Carlile oversees as well. 

A bigger, more cultural change has also come into play. “I’m more involved in meetings than I used to be,” Carlile says. “Before, my meetings consisted of [co-founder] Orlin [Sorensen] and I driving to go fishing somewhere or enjoying a whiskey after work while discussing business. But obviously with LVMH being headquartered in Paris and Moët Hennessy USA in New York, there’s the need for more collaborative meetings to keep everybody in the loop.” 

Carlile’s experience isn’t unusual. Craft distillers who have sold to large conglomerates—and there have been dozens of such transactions in recent years—face new procedures and requirements but also enjoy the security that a larger company with plentiful resources can bring. Many of these distillers have expanded and transformed with the injection of new capital and increased expertise that comes via acquisition. 

Flurry Of Craft Deals

Literally thousands of distilleries have been launched in the U.S. over the past decade. Many sputter and fail, a smaller number carve out some sort of niche in their home market, and a few gain enough traction to expand beyond their state or region. At some point along the way, some of the better-performing companies have the opportunity to sell to a larger firm, including some of the biggest players in the North American beverage alcohol sector. 

The rush to acquire began ramping up in the mid-2010s. Constellation Brands purchased Utah’s High West Distilling in 2016. That same year, the company also acquired a minority stake in Tennessee’s Nelson’s Green Brier, then expanded to a majority stake in 2019. Constellation also bought a minority stake in Virginia’s Catoctin Creek Distilling Co., though that one was sold back to Catoctin in late 2023. Among other craft deals, Constellation acquired Copper & Kings in 2020 and Austin Cocktails in 2022. And in addition to its deal for Woodinville, Moët Hennessy acquired a minority stake in Vermont-based craft player WhistlePig. 

Pernod Ricard has been equally active, if not more so. The company’s craft distiller purchases over the past decade include West Virginia’s Smooth Ambler; Kentucky’s Rabbit Hole Distillery; Texas distiller Firestone & Robertson; Castle Brands, the parent company of Jefferson’s Bourbon; and others. Diageo is also in the mix—its most high-profile craft distiller purchase happened in 2022 when it acquired Texas whiskey company Balcones Distilling. That same year, Campari purchased Kentucky’s Wilderness Trail Distillery. 

In February 2022, Heaven Hill Brands made a splash when it snapped up Samson & Surrey, a deal that included the portfolios of artisanal players including F.E.W. Spirits, Brenne French whisky, Ocho Tequila, Widow Jane American whiskey, Bluecoat gin, and Vago mezcal. Samson & Surrey was doing $40 million in sales at the time. Robert Furniss-Roe, who co-founded the company with Juan Rovira, says the acquisition added a second layer to the relationship his company had already carved out with its brand partners. “Building those partnerships and getting to know the founders and building relationships was critical, in the same way that’s been critical for the partnership with Heaven Hill,” adds Furniss-Roe, who continues to serve as CEO of Samson & Surrey, which operates as an indepenedent division at Heaven Hill. Rovira, who serves as COO, says Heaven Hill’s acquisition of Samson & Surrey allows for a new phase of being able to expand its brands to increase distribution and global presence. 

“We had partnered with brand founders to accelerate their brands, to bring them to a wider audience, to make them famous, to put them into broader distribution networks, to back them properly with capital to make more whiskey, for example, or to have better facilities, to put more money into marketing, and so on,” Furniss-Roe adds. “We did that within the best of our abilities and the already considerable fundraising that we achieved, but we were still relatively small in scale.” 

Distribution Development

For the Samson & Surrey brands as well as the others, the key driver is access to expanded distribution. “The partnership has opened the door to aligning our distributor footprint in the U.S. and basically being part of a dedicated sales division,” says Rovira. “In that sense, basically you have a sales team that is providing a higher level of focus behind our portfolio, and over time that will translate to even larger acceleration in terms of how we increase distribution and our penetration in the market.” 

Jill Burns and Kelly Gasink, co-founders of Texas-based Austin Cocktails, were part of Constellation Brands’ Ventures program, through its Focus on Female Founders initiative, before Constellation acquired their operation in 2022. Burns and Gasink point to myriad benefits of being aligned with Constellation, not least of which is distributor support. “Just having the leverage of being within a portfolio that the distributor cares about is probably the biggest change,” says Burns. “Arguably, the reason why it’s so hard for small brands to succeed on their own is because it’s so hard to get distributors to focus on the hundreds of good brands that are knocking on their doors.” 

She adds that even with the credibility of being a Ventures investment with Constellation prior to acquisition, Austin Cocktails had difficulty getting distributor attention. “Any time they would care for maybe ten minutes about your brand was a pretty big ask and a pretty big deal,” Burns says. 

Before it was purchased by Pernod Ricard in 2019, Jefferson’s Bourbon had an already robust distribution footprint. The acquisition, however, gave the brand an additional boost, according to founder Trey Zoeller. “We were in all 50 states prior to the acquisition; however, we’re much denser now,” he says. “Our points of distribution have increased significantly, as has velocity. With many more feet on the street and such a powerful portfolio, we seem to get more attention from our distributors.” 

Meanwhile, Greg Lehman, founder and CEO of Watershed Distillery, had a much smaller footprint when he sold his operation to New Jersey-based Marussia Beverages last year. “When I started the business, the idea was to make some products and sell them in Columbus, Ohio, and then maybe in Cleveland or Cincinnati,” Lehman says. “As we grew, it came with fun and successes but also challenges. So when Marussia came along, it was a great way to overcome some of those barriers. A small craft distiller trying to break into 50 states alone is a big task to undertake.” 

He says the Marussia deal was “a huge win for us because they have distribution in 50 states and they have money to expand our production.” At the time of the purchase, Watershed brands had limited distribution in five states. With Marussia backing, Lehman expects a “methodical” ramp up to new markets. “In 2024 we’ll probably be in that three-to-five range of markets that we open,” he says. “We’re not going to go crazy with it. We’re going to try to make sure we’re supporting what we’re opening.” 

Production Shifts

On the production front, Lehman says groundwork is being laid for an expansion. “We’re planning to increase production. We had a pretty good plan, then with Marussia on board we beefed it up a little,” Lehman says. “It is a little bit more aggressive and rightfully so—they’re looking at not only the 50 states in the U.S. but some export markets.” 

Like Marussia, Moët Hennessy USA wanted more liquid from Woodinville whiskey, but Carlile says collaborating was key. “They didn’t come in and tell us what to do,” he says. “They consulted with us and listened to our input—we wanted to continue making whiskey the craft way we always had. The way we make whiskey today is the same way we’ve always made whiskey. We just added more stills and larger cooking and fermentation capacity to achieve the larger production goals.” 

For Jefferson’s Bourbon, having a new corporate owner allowed for some portfolio shifts. “We’ve consolidated our portfolio to give a more consistent offering of Jefferson’s expressions, allowing what was once an annual release to be an everyday product,” Zoeller says. “Which means that we also cut some products. That being said, we launched two big innovations this year with our Marian McLain and Tropics expressions. We will continue to launch new products every year as well as launch several distillery-only products once we have the new distillery up and rolling.” 

A $250 million investment over five years by Pernod Ricard, that new distillery will be a state-of-the-art, carbon neutral facility, with related aging warehouses in Marion County, Kentucky. The investment also includes the build of a visitor center. Zoeller says the facility, which is anticipated to produce 115,00 barrels and 7.5 million proof gallons a year is expected to open this fall. 

Austin Cocktails will also open a hospitality center, part of Constellation’s investment in the RTD brand. In terms of production, Gasink says not much has changed. “One of the neatest things about Constellation is they never asked us to change a single thing about our production process or our drink development process,” she says, noting that “we had done our own research and development but theirs is obviously another level, which has been helpful.” The one downside is timing. “I think it takes a little bit longer to launch things in a big company,” Gasink says. “So we would’ve loved to have launched another SKU [in 2023], but it’s held off until 2024.

Rovira of Samson & Surrey says Heaven Hill’s ownership has allowed for more aggressive production and expansion than would otherwise have happened. “We’ve been doubling the size of the company every two years and we’re planning to triple the size of the company in the next five years,” he says. “So that requires more liquid, more supply.” 

Furniss-Roe adds that it’s not just capital investment that Heaven Hill provides. “It’s also about expertise,” he says. “For example, if we had an engineering debate to do with building a distillery facility, we would have to go externally and find a spirits or distillery engineering expert somewhere for hire. That’s now internal.” 

Old Roots And New

The deeper pockets of multi-national owners have allowed these and other craft distillers to reach new heights of production and distribution. But not every model works for every company. Catoctin Creek Distillery went down the path toward multinational ownership but ultimately backed away. 

Constellation Brand Ventures acquired its minority stake in Catoctin Creek in 2017 and invested in substantial improvements. It also was instrumental in increasing production and warehouse capacity, improving supply chain efficiency, and expanding distribution in the U.S. But, by mutual agreement, that partnership was dissolved last year, and Catoctin Creek reacquired Constellation’s stake. “Simply put, our interests diverged over time,” says Scott Harris, founder and general manager of Catoctin Creek Distillery. “We had been with Constellation for about seven years, and in that time, the strategic directions of the two companies drifted further apart. It became obvious that we would be better off on our own to pursue growth in the whiskey sector.”

For those who pushed forward with full acquisitions, life afterward is often a bit different, in good ways and bad. Sorensen, Carlile’s co-founder at Woodinville Whiskey, left the organization in early 2023. Carlile says Sorensen “was more entrepreneurial-spirited” and bristled at the idea of working for someone else. When Moët Hennessy USA wanted to be more involved, “that just wasn’t for Orlin.” 

At Samson & Surrey, Furniss-Roe says a balance has been achieved. “We haven’t been absorbed into the mothership, but neither are we—nor should we be—utterly independent out here, doing whatever the hell we want,” he says. “I think we’ve got to a place that’s as good as, or the best of both worlds as it’s possible to get. With consumer facing functions we have a high degree of autonomy and yet we are able to fall back on all of the [Heaven Hill] resources that are at our disposal internally. Of course, being a bridge between our organization and the parent organization takes some time. But it’s been a wholly positive experience for us.”

For Lehman of Watershed Whiskey, day-to-day life is much the same as it was pre-acquisition. “I’m still doing all the same stuff, and the company still feels very community focused,” he says. “Sometimes it doesn’t feel like anything has changed, and then every once in a while I have to go meet with my boss. And when I say it out loud, it just sounds funny and strange.”