Billed as being defiantly different, Clear Water Distilling offers enticing, exotic spirits that focus primarily on the experience rather than meeting arbitrary volume metrics. Thanks to its distinctly consumer-friendly management team and “hometown” feel, the company has become one of the most popular private investing opportunities offered on the StartEngine.com equity crowdfunding platform. Still, it’s fair to ask just how Clear Water Distilling stock garnered so much praise in a crowded alcohol market?
A recurring motif surrounding Clear Water Distilling stock is the willingness to throw out old conventions. Primarily, the underlying company places maximum emphasis on the flavor. As explained by Clear Water’s CEO Matt Eau Claire, mainstream alcoholic beverage companies focus on volume. Hence, the ingredients they incorporate cater to volume (and the bottom line) while eschewing the end-user experience.
Although unpalatable to Eau Claire and his team of industry experts, it’s also understandable why the competition will go this route. According to regulations set forth by the Alcohol and Tobacco Tax and Trade Bureau – an agency under the U.S. Department of the Treasury – alcoholic beverages must meet specific requirements per each beverage category.
Fall outside of these categorizations and your product will basically be classified as a “specialty.” This status is a characterization that mainstream alcohol companies desperately avoid; hence, their playing by the rules to the chagrin of spirit connoisseurs. However, Clear Water doesn’t just accept this outsider classification but embraces it.
It’s this boldness that has substantially boosted interest in Clear Water Distilling stock. Even Eau Claire himself throws caution to the wind, explaining his hometown approach regarding operations and long-term strategies.
I don’t think I’ve ever heard a CEO drop a few naughty words (though censored) as part of the marketing campaign. Though it may not be for everybody, here’s the thing – Eau Claire comes off as genuine and that is what millennials are looking for.
Clear Water Distilling Stock Cuts the BS from the Beverage Business
As you know, the novel coronavirus pandemic has been the gamechanger for multiple industries. In most cases, the disruption was awful. But a few resourceful organizations have stood out. Among them is Boston Beer Company (NYSE:SAM), makers of the Samuel Adams brand of high-quality beer.
With Covid-19 forcing many people to stay indoors as much as possible, only the most compelling products were sold. According to Fox Business, that apparently did not include Sam Adams, which saw a sales decline. However, that was in part offset by Boston Beer’s Truly Hard Seltzer brand.
It’s not hard to see why. Truly emphasizes light, crisp taste, which appeals to millennials more so than the bitter taste of mainstream beer. In addition, Truly’s packaging is lithe and attractive, which again speaks to young consumers.
Indeed, design is a huge element for the new generation of alcoholic beverage enthusiasts. According to a report by YPulse.com, 58% of millennials “bought a wine or beer just because they liked the packaging. In the age of Instagrammability, it’s not too surprising. After all, 52% say that it’s important that product packaging look good in the pictures they post on social media (with 29% saying it’s extremely important).”
Obviously, this bodes very well for Clear Water Distilling stock. One of the main standouts for the underlying company is its packaging. Featuring historical figures on their bottles that defied conventions and redefined what is possible, Clear Water has an in with the relevant millennial crowd.
Additionally, the Covid-19 crisis isn’t such a bad gig for Clear Water Distilling stock. No, I’m not trying to downplay the severity of this crisis (I believe that area has been well covered). Instead, I’m just pointing out that e-commerce has been a huge winner during this pandemic, with online sales representing an unprecedented 16.1% of all retail sales.
As it turns out, Clear Water’s main revenue generating channel is e-commerce, which aligns with our new normal. However, as YPulse notes, 52% of millennials are “interested in beer/alcohol delivery services.” That was before the pandemic. With it, the case for Clear Water Distilling stock becomes even stronger.
Don’t Get Too Punch Drunk with Alcoholic Startups
Although Clear Water presents a clear and compelling case as a private investing vehicle, there’s no such thing as a risk-free investment. In fact, equity crowdfunding opportunities are one of the riskiest ventures. Without much information available regarding the target company, you must perform extensive due diligence.
However, the Catch-22 is that extensive due diligence is extraordinarily difficult with private investing. Therefore, whatever questions you have, I highly recommend you ask the Clear Water management team on its StartEngine profile.
For starters, private investing ventures are prone to failure. But that’s especially the case with beverage firms, according to Drinkpreneur.com. Really, this is common sense. As one of the oldest known industries, there’s ample competition. Sure, Clear Water Distilling stock is imbued with creativity, of that there is no doubt.
But here’s the thing – every company says its creative. And with beverage-related organizations, it comes down to individual taste. That’s a variable you’ve got to consider, no matter how much you may appreciate Clear Water Distilling stock.
On a related note, not understanding the market is one of the biggest risks facing beverage startups. While Clear Water appears to have a market edge on enticing beverages, management also intends to expand to Europe and Asia. I’m not too familiar with the former but I am with the latter.
Specifically, the Japanese alcoholic beverage market is dominated by Suntory (OTCMKTS:STBFY). And believe me, if you go to Japan, you’re going to be inundated with an array of high-quality, high-flavor brands. Further, quality standards are simply higher in Japan than it is in the U.S.
Finally, the East Asian market features an extremely homogenous consumer base. Therefore, it’s inherently risky for a western company hailing from a diverse, cosmopolitan area to compete in the Asian market. Clear Water could break through but in my opinion, it’s not worth the risk.
An Intoxicatingly Good Opportunity
At first glance, Clear Water Distilling stock may just seem like another beverage startup. Drilling into the details, though, reveals an organization that is driving creativity and experience into their products. Moreover, this perfectly aligns with what millennial consumers are seeking.
It’s a smart and refreshing approach. If you want to invest in Clear Water Distilling stock, head on over to its StartEngine.com profile. But hurry! You’ve only got until Nov. 10 to seal the deal.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.