Investing In Craft: The Benefits Of Boutique Brands Like IBG's Australian Bitters

Everyone can appreciate a luxury experience, whether it is VIP treatment at an event or lounge access at the airport. Often, when luxury is discussed, one's mind instinctively goes to price, when in truth, the defining attribute of luxury is also quality. Interestingly, one area of society where the expectation for quality is increasing is craft drinks; hand-made, high-quality beverages with a focus on experience, creativity and attention to every tiny detail.

Central to the creation of any craft beverage or craft cocktail are the ingredients used and their combinations. Cocktail bitters, a concentrated flavoring made from herbs and botanicals, are often used to accentuate the flavor profile of a cocktail for full enjoyment. Innovation Beverage Group IBG, the developer, manufacturer and marketer of a diverse beverage portfolio, is attempting to reshape the craft beverage industry with its preeminent cocktail bitters brands, Australian Bitters and BitterTales Bitters.

The Growth Of The Craft Cocktail Industry

The craft beverage industry is rapidly evolving, with craft brewers branching out from the dominant category of beer, into new areas like spirits or cocktails. Key factors driving the trend of craft beverages is a desire for locally-sourced and more sustainable products. Likewise, consumers have been craving more variety and premium quality, with a ‘ginnaissance’ seeing people paying more for brands that pay close attention to the origin of botanicals and how they’re distilled.

Similarly, the global craft cocktails market is growing. According to research by Virtue Market Research, it was estimated to be worth $304 million in 2022 and is projected to reach a value of $837.22 million by 2030, growing at a CAGR of 13.5% during the forecast period 2023-2030. 

With individuals also desiring more bespoke and personalized experiences, craft cocktails have become a pathway for exploration and enjoyment. As noted in VMR's report, customers want beverages that offer them an engaging, memorable experience that appeals to all of their senses, not just a way to quench their thirst. As such, a handmade cocktail can be a one-of-a-kind creation with premium ingredients and cutting-edge methods, which potentially further improves the drinking experience.

The accessibility of diverse food cultures within major cities has also helped to popularize craft cocktails. Earlier this year, Bar Convent Berlin, the largest trade fair for the bar and beverage industry, published an article detailing cocktail inspirations from global culinary traditions, with various bartenders describing how their appreciation for food from other cultures influences their mixology. 

Similarly, consumers are becoming more aware of the origins of their food and beverages and are gravitating toward products that reflect authenticity and uniqueness. To produce inventive and distinctive flavor combinations, many bartenders and mixologists are also incorporating locally obtained ingredients.

Bitters can play an important role in creating a cocktail, as it balances out the drink's taste profile. Cocktails primarily contain sweet and sour flavors. By adding another primary taste, bitter, to mixed drinks, a cocktail is given a more complex and complete flavor profile. As such, the quality of the bitters used within a drink matters, as it is often the lynchpin upon which a consumer will fully appreciate the mosaic of elements present within a cocktail.

IBG Aims To Have An Impact In The Crafted Cocktail Space With Australian Bitters And Bittertales Bitters

IBG is an Australia-based company with a global perspective. Focused on premium and super-premium brands and market categories that can disrupt age-old brands, IBG's Australian Bitters and BitterTales Bitters brands are striving to reshape the crafted cocktails landscape. According to Zacks, Australia is the second-largest global market for cocktail bitters, behind only the U.S. market, as such the learnings and insights the firm has gathered in its local market are aiding their expansion into the U.S. market.

Australian Bitters, IBG's most successful brand to date, is the first true challenger brand to a 200-year-old market leader, the company says. This has given it a market-dominating position in several territories, including a partnership in Australia with Coca-Cola Europacific Partners (CCEP). The Australian Bitters brand has four flavor offerings (aromatic, orange, grapefruit and barrel spice).

BitterTales Bitters is a contemporary take on an enduring cocktail staple. Reflecting "exceptional quality and unparalleled value," this product is unlike any other bitters brand on the market, the company states. Made with a proprietary mix of 20 herbs and spices, which the company says are seasonally sourced for optimal freshness and handcrafted in small batches, Bittertales Bitter could be a great ingredient for modern-day cocktail enthusiasts.

Within IBG's beverage portfolio, Australian Bitters and Bittertales Bitters are positioned as their value and premium offerings, respectively, potentially enabling them to capture different market segments. BitterTales is geared towards premium, cocktail-focused on-premises venues, whereas Australian bitters can be used for beginning mixologists or at-home cocktail makers, the company says. 

Both products have gained industry recognition for their quality and taste, with Australian Bitters receiving both gold and silver medals in LA Spirits Awards (2018) and BitterTales Bitters receiving Best In Show (2020), a Platinum Medial (2020) and Global Medals (2018 and 2021) at the LA Spirits Awards.

IGB is also expanding its distribution, as noted in their recent investor presentation; discussions are at the final stages for CCEP to increase the distribution of Australian Bitters in Europe, namely, the United Kingdom, Germany, Spain and France.

With 60 formulations across 13 alcoholic and non-alcoholic brands, the IBG is striving to be at the forefront of catering to evolving consumer preferences. As the firm expands into the U.S. market and globally, investors in IBG can participate in the potential growth of a company that is aiming to elevate the beverage landscape on my fronts.

For more information on IBG’s recent corporate activities and developments, read about their recent executive appointment and their partnership with Sysco SYY, a global leader in foodservice distribution.

Featured photo by Aleksandar Andreev on Unsplash.

This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.