UK-based spirits maker Distil has given Global Brands the full distribution rights for its portfolio in the UK and Ireland.
The agreement grants the VK alcopop maker rights to distribute Distil’s portfolio, which includes RedLeg Spiced Rum, Blackwoods Gin and Blavod Black Vodka, in the on-trade, off-trade and e-commerce channels in the two countries.
Global Brands was appointed the distributor for Distil’s UK grocery, cash and carry and convenience channels in March last year, according to a stock exchange filing from Distil.
The new deal comes into effect as of 14 February, according to Global Brands.
Distil’s agreement with Marussia Beverages for UK on-trade and “premium off-trade” distribution, in place since September 2022, will consequently be brought to a close.
The new agreement is expected “to accelerate brand growth”, with Distil being able to benefit from Global Brands’ “extensive sales network, and proprietary logistics and warehouse capabilities”, Distil said.
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By GlobalDataThe distribution news was announced at the same time as a trading update on Distil’s third quarter.
In the October to December 2024 period, Distil saw revenues drop 59% to £233,000 ($286,400), while volumes slumped 56%.
Gross margins also shrunk six percentage points year-on-year to 42%, while advertising and promotional spending dipped 55%, attributed to a “slower rate-of-sales in stores”.
In the trading update, Don Goulding, the executive chairman of Distil, said its new agreement with Global Brands was a “response to these challenging marketing conditions” and aimed “to ensure we are putting our brands in the best position for growth”.
Distil has worked with Global Brands since 2019 to produce RedLeg Spiced Rum and Franklin & Sons ready-to-drink cans for the UK off-trade.
Goulding added: “The Global Brands portfolio, which includes VK, Hooch, and Franklin & Sons, alongside third-party brands Shanky’s Whip and American Beverage Marketers (ABM), offers important synergies with Distil brands in terms of target consumers and trade accounts.
“The Global Brands team has demonstrated clear understanding of Distil’s brands and ambitions, and we are excited by the opportunities that will be opened-up as part of its portfolio. The sales force is considerably larger than we’ve dealt with previously, and they’ve demonstrated strong relationships with key national groups, as well as operational efficiencies and organisational excellence.”
Global Brands managing director Julian Atkins added the deal was a “significant milestone” in its own roadmap for growth.
“With our growing sales team and strong infrastructure, we are well positioned to grow these brands while actively pursuing new opportunities for third-party collaborations.”
Commenting on the spirits market outlook alongside the trading update, Goulding said the “medium-term” would remain “challenging”, with the spirits market staying “soft in response to increased pressures on consumer spending and further duty increases in the UK”.
He added Distil was positive its new distribution deal with Global Brands would “put our brands in the best position within the market and offer important opportunities for growth across the portfolio and we are working to mitigate the impact on the full-year”.
