Maximizing Spirits Brand Value in the Current M&A Landscape

Guys, before I even introduce myself, I want to start with a big thank you. Thank you to the Park Street team for hosting and organizing us, thank you to each of you for being with us and to those watching, and a big thank you to my co-presenters. Honestly, I’m humbled and honored to share the stage with each of you.

The word that comes to mind when attending these seminars is wisdom. There is a tremendous amount of wisdom we’ve already heard. Looking at my photo on the screen, here’s a guy with plenty of gray hair, and I hope to bring some of that perspective today—predominantly drawn from abroad.

My name is Chris Tanca. If you can’t place the accent, you wouldn’t be alone: I’ve had the privilege of living in six different countries across three continents over the past 20 years of my career. During that time, I’ve worked with large brand owners—building global brands, designing them, launching them, acquiring them, and relaunching them.

Today I call Italy home, living with my Italian wife and two daughters. I also have a third baby: I am the founder of an Italian aperitivo called Cordusio, a 100% natural red-berry aperitivo. Over my career across the US, Scandinavia, Greece, the Middle East, the UK, and now Italy, I’ve worked with major brand owners focused heavily on premium beverages, ready-to-drink (RTD), and non-alcoholic alternatives. When we launched Cordusio about three years ago into an industry rapidly moving toward premiumization, RTDs, and non-alcoholic options, I felt right at home.

I operate out of Milan with a small team recruited from premium and luxury backgrounds. We act essentially as an outsourced innovation hub, and today I want to talk about the current M&A landscape and how to maximize your brand’s ultimate enterprise value.

The Current M&A Landscape: Putting the Down-Cycle in Perspective

I won’t shock anyone here by saying that the current M&A landscape is in a tight spot. We are unquestionably in a down-cycle.

The large global strategics make the lion’s share of acquisitions in our space. Over the past three years since Cordusio launched, stock prices and valuations across several major acquirers have declined anywhere from 55% to 75%. Total deal flow across beverage alcohol M&A is down roughly 37% to 47%.

┌─────────────────────────────────────────────────────────────────────────────┐
│                       THE MACRO INDUSTRY TIDE CYCLE                         │
├─────────────────────────────────────────────────────────────────────────────┤
│ • 7 Years of Expansion ➔ Steady global growth through post-COVID peaks.     │
│ • 3 Years of Contraction➔ Portfolio rationalization & compressed multiples.  │
│ • Historical Reality   ➔ Commerce in beverage alcohol spans 9,000 years;    │
│                          cyclical ebbs and flows are natural.               │
└─────────────────────────────────────────────────────────────────────────────┘

The tide goes out, and the tide comes back in. The question founders constantly ask is: “When will it return?”

Nobody has a crystal ball. If I did, perhaps I would have reconsidered launching an aperitivo brand exactly three years ago at the onset of a contraction. But rather than obsessing over when, we need to focus on what—specifically, what happens inside large strategic brand owners during each phase of the cycle.

Inside the Large Strategics: The Ebb Tide vs. The Flow Tide

Having worked inside large multinational brand owners, corporate behavior during macroeconomic shifts follows a predictable pattern.

┌──────────────────────────────────────┬──────────────────────────────────────┐
│       THE EBB TIDE (CONTRACTION)      │        THE FLOW TIDE (EXPANSION)     │
├──────────────────────────────────────┼──────────────────────────────────────┤
│ "Fewer, Bigger, Better" cost focus   │ Growth mode & portfolio expansion    │
├──────────────────────────────────────┼──────────────────────────────────────┤
│ Production lines run under capacity  │ Facilities approach peak capacity    │
├──────────────────────────────────────┼──────────────────────────────────────┤
│ Protect core profitable "power SKUs" │ SKU proliferation & new line launches│
├──────────────────────────────────────┼──────────────────────────────────────┤
│ Retrench to primary domestic markets │ Aggressive global geographic growth  │
├──────────────────────────────────────┼──────────────────────────────────────┤
│ Divest non-core brands & trim books  │ Bolt-on M&A & high-multiple buyouts  │
├──────────────────────────────────────┼──────────────────────────────────────┤
│ Innovation pipelines slashed/frozen  │ Empty pipelines demand new brands    │
├──────────────────────────────────────┼──────────────────────────────────────┤
│ "Product re-engineering" (Cost cuts) │ Re-invest in premium packaging/craft │
├──────────────────────────────────────┼──────────────────────────────────────┤
│ Shift headcount from R&D to sales    │ Re-hire innovation experts & scouts  │
└──────────────────────────────────────┴──────────────────────────────────────┘

What Happens in the Low Tide:

• “Fewer, Bigger, Better”: Corporate leadership directs focus entirely toward preserving core cash-cow brands.

• Underutilized Capacity: Production lines sit idle, pressuring operational margins.

• Geographic Retrenchment: Exiting marginal export territories to defend home turf.

• Divestitures & SKU Rationalization: Cutting complexity and selling off non-core assets (as seen in recent portfolio cleanups).

• Innovation Freezes: R&D pipelines are shut down, and innovation budgets are reallocated toward near-term commercial sales pushes.

• “Product Re-Engineering”: A corporate euphemism for cheapening the liquid formulation or reducing the cost of dry goods and packaging to protect quarterly margins.

What Happens When the Tide Returns:

Eventually, corporate balance sheets stabilize, consumer spending recovers, and strategics shift back into growth mode. However, because they slashed their internal innovation teams and froze product pipelines during the down-cycle, their internal innovation pipelines are completely empty.

They suddenly need fresh, differentiated brands to fuel growth—and that is precisely when they turn outward to acquire independent, premium challenger brands that survived the downturn.

Maximizing Brand Value: Building Timeless Brands

Maximizing brand value is not about reacting to current market headwinds, nor is it about timing the next up-cycle or the down-cycle after that.

True enterprise value comes from building timeless brands.

┌─────────────────────────────────────────────────────────────────────────────┐
│                     THE FOUR PILLARS OF TIMELESS BRANDS                     │
├─────────────────────────────────────────────────────────────────────────────┤
│ 1. EXCEPTIONAL CRAFTSMANSHIP ➔ Zero compromise on liquid quality or design. │
│ 2. INCLUSIVE LUXURY          ➔ Elevated and aspirational, yet welcoming.    │
│ 3. HERITAGE & INTEGRITY      ➔ Anchored in real provenance and performance. │
│ 4. IRRATIONAL BRAND LOYALTY  ➔ Turning casual consumers into lifelong fans. │
└─────────────────────────────────────────────────────────────────────────────┘

Consider premier luxury fashion houses like Bottega Veneta or Gucci—it would be unthinkable for them to compromise on craftsmanship, materials, or design integrity just to survive a bad fiscal quarter.

If you maintain uncompromising standards in your liquid, packaging, and brand ethos, you build deep, defensible consumer loyalty. Brands that capture consumer passion during difficult cycles become the exact assets that large strategics compete to acquire when the tide turns back in.

Thank you very much.