Why Iconic Brand's Niche-Based Strategy May Be A Recipe For Success In The Celebrity-Inspired Alcohol Products Sector
Celebrity, private and specialty labels add to a more than $1.7 trillion global alcohol beverage market opportunity. Iconic Brands adds Hooter's restaurant chain to its growing client list
New York, New York--(Newsfile Corp. - March 5, 2020) - The alcoholic beverage sector is a $1.7 trillion market that is a glaring case study for how a mixture of quality, combined with innovative and strategic marketing, can yield billions in sales. Placing even earned considerations on actual product quality aside, products like Grey Goose, Patron, Casamigos, and Jägermeister were once just modest proposals. But, through ingenious promotional campaigns that strategically positioned each product, they have each earned their status as a premium spirit in a highly competitive landscape.
Of course, a success story to rival the brands above takes more than just a tasty product and a saavy branding idea. To really pull it off, a company must have high-level relationships with industry partners that can help take a concept and turn it into a final product. And, one company, in particular, comes to mind that has assembled the professional pieces to become a significant long-term player in an industry that is relying heavily upon speciality-labeled, celebrity inspired products - Iconic Brands (OTCQB: ICNB).
Iconic Brands, Inc. is a publicly-traded lifestyle branding company that specializes in the comprehensive development and marketing of alcoholic beverages for itself and third parties. Far from a newbie in the sector, Iconic benefits from long-established industry relationships, allowing them to conceptualize, create, market, and distribute to retail and wholesale shelves throughout the United States.
Moreover, by targeting a niche market that can disrupt the status-quo of traditional branding practices, Iconic Brands is focused on showcasing its expertise in the development of "celebrity-branded" beverages, partnering its products with world-renowned celebrities and creating a personalized, high-quality product that is attracting the eye of consumers. And, for those that aren't aware, the market is booming.
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The Dollars Explode With Celebrity Branding
Taking a step back before checking into the specifics of Iconic's portfolio, investors must understand just how lucrative similar celebrity branding opportunities have proven to be. For a case study of one of the more recent examples, take a look at the tequila company Casamigos. Casamigos is a line of tequila that was developed by American actor George Clooney and friends Rande Gerber and Mike Meldman. The trio originally commissioned a distillery in Mexico to design them a high-quality tequila they could drink on a casual basis and provide as personal gifts.
According to press releases at the time, there was initially no intention of making the Casamigos brand available to the public - but as the men continued ordering pallets of their custom tequila, they and the distillery realized the opportunity at hand. Retailing at around $55 per bottle, the brand had been projected to generate around $55 million in sales for 2017. But, in June of that year, Clooney and his team entertained a different offer and decided to sell the Casamigos brand to British alcoholic beverage company, Diago, for $700 million upfront, with an additional $300 million possible depending on brand performance. Yes, people claim the product is good. Others claim the branding was better. But there's more.
For another example of how successful branding transformed a digestive aid into a revenue-generating juggernaut, investors should look into the history behind Jägermeister and its performance in the United States. Introduced in Germany in 1935, Jägermeister was initially formulated as a digestif, an alcoholic beverage intended to drink before or after a meal to aid digestion. The spirit was targeted to, and generally only ingested by, older wealthy German men for years until American businessman Sidney Frank obtained the importing rights in 1973. Frank, who was also the mastermind behind the promotion of Grey Goose vodka, had the idea to begin promoting the beverage to college-aged students as a drink for parties - a far cry from its original intention. Despite this unorthodox approach, it was a major hit - and now it's rare to see this spirit served in bars without a beer alongside it or an energy drink mixed in. One thing for cetain is that strategic branding generated hundreds of millions in revenue.
Finally, there's Patron. For many, there is a belief that this top-shelf tequila is generously poured as a result of hundreds of years worth of meticulous indigenous refining. The truth is far different. The real story evolves from the mind and passion of John Paul DeJoria (also the co-founder of Paul Mitchell Hair Products), who decided to enter the Tequila business on a bit of a whim. According to the story, he had asked his friend, Martin Crowley, to bring him back some Tequila from Mexico where Crowley was on a work assignment. While pursuing the request for a good quality tequila, though, Crowley came across a hand-blown bottle that triggered an idea. Why not produce a quality tequila, place it in a distinguished-looking vessel, and start their very own tequila company? Well, jumping ahead, it's obvious that he did and the two built the Patron brand of tequila into one of the most successfully marketed spirits of all time. Again, great product, better branding.
From 12,000 Bottles To A $5.1 Billion Sale
And, few argue that they didn't create a smoother tasting tequila. But, the machine behind the growth was a creative label and the marketing savvy of an already wildly successful hair care product entrepreneur. Thus, while they expected success from their freshly distilled 12,000 bottles, which they priced at $37 each, neither of the two probably expected what happened in 2018. It was then that DeJoria sold his 70% stake in this smooth, refined, and well-designed and marketed product to Bacardi Limited in a $5.1 billion deal. But, there's a point to these stories.
While the brands mentioned above epitomize the opportunity that combined quality and marketing can deliver in terms of financial windfalls, the derivative opportunity provides an almost equal amount of bottom-line opportunity - and that comes from the producers contracted to produce the products.
Iconic Brands Combines Quality Product With Major Celebrity Figures
And, it's to that end that Iconic Brands is starting to shine brighter than its competitors. Maybe Iconic tries harder. Or, perhaps, they are smarter. Whatever the reason for Iconic's growth, it's happening quickly.
Off to a fast start, Iconic Brands is already leveraging its relationships with internationally recognized celebrities like Christie Brinkley, and Chaz Palmenteri...who have each inspired top-shelf products made possible by Iconic's brand and product development expertise.
It's Bellissima Prosecco, a line of premium and sparkling wines, for instance, brings to market the quality wines inspired by Christie's healthy lifestyle that uses only vegan and organically sourced ingredients. Behind the magnetic name, Iconic Brands stands by its commitment to producing the most beautiful collection of Prosecco and Sparkling Wines, that is embodied by their unique processes that create full-bodied products from a well-nurtured vineyard. Focus is further placed in reverence to the Italian soil and the natural cycles of the vines, to the environmentally-friendly materials used in the brand packaging, and to the dedication to preserving the natural beauty of the world from which they produce.
Notably, Christie Brinkley is not just a name-drop for the product. She is actively supporting and refining her brand to make it one of the best lines of Prosecco and Sparkling Wines on the market, and as she has noted, maintains a vintage that is imbued with her Bellissima spirit. And, as her commitment extends to the sales of her products, Iconic will inevitably become a prime beneficiary of its growth.
Vodka, Hooter's, and NASCAR's Chase Elliot
Beyond wine, trendy and smooth tasting vodkas have reintroduced millions of consumers to a new class of liquor. BIVI vodka, a premium, and mild tasting spirit inspired by Chaz Palmenteri is an Iconic Brands product that positions BIVI as a superior option to the vodka faithful. This brand was developed by using only the finest semolina wheat and only the purest mountain spring water of Sicily. The result - a distinct and pleasurable taste that is gaining market share through the brand quality as well as from its celebrity-inspired prominence.
Although celebrity endorsements can drive sales and create enormous brand recognition, consider what can happen when as association like NASCAR gets associated to the niche market frenzy. And, that just happened. This time, Iconic may be positioned to benefit from both a national restaurant chain as well as from the NASCAR faithful.
Early in March, Iconic Brands put out a release telling its readers that the world-famous restaurant chain, Hooters, chose Iconic Brands as their choice to produce its premium line of spirits that includes vodka, gin, rum, tequila, and their famous heat cinnamon whiskey. Adding an exclamation point to that announcement came when Iconic added that these Hooter's labeled spirits are now proudly displayed on NASCAR favorite Chase Elliot's #9, Hooter's car.
Moreover, with Chase Elliot often in a lead car, these brands will be prominently positioned to the more than 9.1 viewers that were tracked during the 2019 season. Again, the more support that Hooter's earns from its association with NASCAR, and from its customers, the benefit to Iconic grows from being the manufacturer and supplier of these premium brands.
Having The Infrastructure To Drive National Sales
While having a quality brand and a high profile endorsement can start a brand's growth, it's the companies with a diversified infrastructure that will succeed in national and even global product placement. Iconic Brands checks the box as ready to do business.
Unlike most similar size companies competing to win shelf space, Iconic has a distinct advantage. It already benefits from a valuable contract with federally licensed, United Spirits, an asset that makes Iconic Brands one of only a few private label developers that can import and sell to authorized wholesale distributors in all 51 markets in the United States.
It's a license that not only opens the door to national accounts from US-based clients, but that same license allows Iconic Brands to capitalize on its ability to procure superior and unique products from around the world and brand those products with internationally recognized celebrities.
Moreover, the above licenses are tremendous assets that not only represent value in terms of dollars but, more importantly, allow clients substantial time-saving benefits that can facilitate a "hit the ground running" distribution plan in its effort to enter the spirits industry. There are more value added features, as well.
Evaluating the potential from Iconic Brands is multi-faceted. The company has experienced management, they have valuable licenses, and they have a growing list of internationally recognized celebrities already on its client list. Moreover, they have secured working relationships with industry distribution giants and secured deals with national chains as well as with the hugely popular NASCAR family of events.
Low-Float And An Increasing Shareholders Equity Account
From a capital structure perspective, Iconic checks off the right boxes. As of its November 13, 2019, quarterly filing, the company had only 13.3 million shares outstanding. The low float leaves ample room in the treasury for growth through acquisition that can utilize stock as currency. While dilution can impact price, accretive dilution, a distribution that creates immediate value, can have a uniquely positive effect. And, with conscientious management instilling prudent measures to create shareholder value, investors saw a rise in total assets to $4.1 million at the end of Q3 2019 compared to just $563,239 at the end of Q4 2018. Shareholder's equity at the end of that same period rested at $4.1 million, a roughly 628% rise over the year-ending 2018 number.
Obviously, for those paying attention to what's been shaping the trends in the alcoholic beverage sector during the past five years, they have noticed a shift toward celebrity-inspired, top-shelf products that are being brought to market by smaller and more agile companies. Although the giants of the industry can respond by acquiring emerging industry superstars, the popular opinion resides that it will be the agile companies, like Iconic Brands, that can stay positioned to react and implement new programs responding to consumer demand.
And, whether Iconic Brands continues to build their own product and marketing empire, or whether they will become attractive to a suitor looking to buy its growth, the near-term has Iconic Brands in a position to leverage its already increasing client book and drive growth across all fifty states.
Hence, as an investor, client, or a customer... any of those scenarios may certainly raise your spirits. (pun intended).
Soulstring Media Group
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