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EAST: Eastside Distilling on the shelves in Texas. Another celebrity backed whiskey is announced thereby validating Eastside’s collaboration with John Rich on Redneck Riviera Whiskey.

05/08/2018
By Ian Gilson, PhD, CFA

NASDAQ:EAST

Eastside Distilling (NASDAQ:EAST) on the shelves in Texas. Another celebrity backed whiskey is announced thereby validating Eastside’s collaboration with John Rich on Redneck Riviera Whiskey. Florida’s biggest spirits retailer will carry the whiskey.

Bob Dylan has announced the formation of partnership to make whiskey under the name of Heaven's Door. Priced at $49.95 a 750 ml bottle. The first bourbon has received mixed reviews by the press. The partnership is with Marc Bushala who founded Angel's Envy Bourbon that was sold to Bacardi for $150 million in 2015.

Another acquisition was High West's Bourye (a bourbon rye mix), this time by Constellation Brands (STZ, $221.28) in 2016 for $160 million

The number of celebrity spirits now includes George Clooney's Casamigos Tequila (sold to Diego for $4 billion); Jay Z's collaboration with Dusse on Cognac and Diddy Combs with Diago plc on Ciroc vodka and DeLeon tequila. Most of these are premium brands with very high selling prices.

The entertainer Drake and Brent Hocking, an award winning spirits producer ( who had founded DeLeon tequila) have collaborated on the production of Virginia Black, an aged bourbon whiskey launched in Sept. 2016. This brand sold over 60,000 9-liter cases in its first 15 months (4,000 cases a month) after its introduction.

On the basis of past acquisitions of craft spirits "labels" $150 million does not seem to be an unreasonable target for a successful craft spirits company.

ABC Fine Wine and Spirits will sell Redneck Riviera Whiskeys in Florida. This s a 52 year old family owned alcohol retailer headquartered in Orlando with over 150 stores. Sales in 2013/14 (last available data) were $500 million. Eastside has delivered close to 100 cases to them. It takes time to deliver, distribute and advertize product but this should have a small but positive impact in 2Q18 and a bigger impact in 3Q18.

Spec's, a large retailer in Texas, now has Redneck Riviera Whisky on the shelves and it is being advertized. It is priced at $23.99 for a 750 ml bottle or $129.54 a case of 6 bottles.

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