Capitalizing on technology is what often separates winners from losers. LQR House (NASDAQ; LQR) intends to be on the right side of that proposition. And it’s likely they’ll check that box, not from a coincidence of being in a booming sector, but rather from doing things differently to generate sales from an alcohol beverage market that has seen a resurgence since the days of COVID.
In fact, the industry has exploded higher, resulting partly from the surge in smaller brands that produce high-quality, attractively packaged products that reach targeted demographics. But products are just part of what’s contributing to the resurgence in the younger generations drinking harder spirits. A more significant contributor to sector growth is that companies have learned how to get their products into consumers’ hands. LQR House is one of them.
LQR is doing so well that they are changing the face of the spirits sector, replacing the old tired one with a fresh, updated look that utilizes 21st-century technology to drive sales. That facelift takes one word to describe- Digital. But LQR isn’t one of those boring subscription clubs that keep you from quitting. No, LQR is leveraging “digital” in the right way, proving that mastery of using digital technology to more efficiently manage supply, sales, and distribution in the spirits beverage market can profoundly affect growth.
A Better Approach To Generating Sales
That’s happening at LQR, a result of LQR transforming itself into a one-stop shop for everything related to the booming spirits sector. That includes actively creating value by acquiring, building, marketing, and distributing premium brands through its exclusive online networks. If all stays on plan, this small company could disrupt the status quo and, at the same time, become a sector powerhouse by leveraging the power inherent to e-commerce and digital channels.
That’s not a long-shot proposition. Nor will it happen overnight. However, from an investor’s perspective, taking advantage early may return the most significant bang for the buck. Why LQR? In simplest terms, LQR has styled its operations to embrace the digital age, which in many ways has given them a head start on maximizing the potential of doing business in a more user-friendly and efficient manner. In other words, competitors like Anheuser Busch (NYSE: BUD), Molson Coors (NYSE: TAP), and Constellation Brands (NYSE: STZ), while having the ability to shift strategies, are massive ships to turn. For them, it takes time. That time is providing LQR a chance to earn an appreciable competitive advantage.
Products That Can Drive Growth
It also takes having the right products. LQR has good ones, including Soleil Vino and SWOL Tequila, which epitomize its non-commodity-styled approach of providing premium products that pay attention to consumer demands. Other represented brands are equally impressive, which are controlled through LQR through an approved marketing agreement providing them exclusive marketing rights with CWSpirits.com, including exclusive rights to market on the CWS platform, sell marketing placements to other brands, and establish a network of social media influencers to further drive revenue.
Here’s where it gets interesting. Brands pay LQR to design comprehensive marketing campaigns to increase brand awareness and online sales through exclusive marketing channels. Those include premium placements and services related to E-commerce, brick-and-mortar, importing, direct-to-consumer, and business-to-business. Its brick-and-mortar placements span seven locations across San Diego, and its Country Wine & Spirits revenue is currently above the $20 million mark. Similar results are expected through its import channels, noting its strong working relationship with a producer in Jalisco, Mexico, which produces its exclusive SWOL Tequila blends. That’s not all.
Additional value drivers accrue from LQR’s exclusive partnership with CWSpirits. That relationship allows LQR to ship the most popular and hard-to-find bottles and brands not only across the United States but directly to a consumer’s home. Of course, B2B business is also expected to ramp from LQR, providing volume discounts, vast selection, corporate client reach, and relationships with some of the largest companies in the sector.
Maximizing The Power Of E-commerce
All the above have led to appreciable growth at LQR. Its e-commerce segment is doing incredibly well, evidenced by significant sales increases through its e-commerce site, cwspirits.com, and online ads leading to thousands of unique weekly sales, providing an ROI of 6X, according to LQR. While impressive, LQR expects it’s revenue-generating trajectory to steepen.
It’s not through coincidence, either. Instead, LQR intends to ensure growth accrues by leveraging its decades of experience in spirits, finance, technology, marketing, and distribution. That expert team gets a head start from promoting proprietary brands in demand and managing an impressive pipeline and acquisition opportunities. Adding more value is LQR’s innovations in branding and packaging, ping its products get positioned in high growth, stable, and mature industry segments. Factor in industry relationships to advance its brands, and LQR exemplifies what a recipe for business success looks like. It also helps to have a clearly defined financial vision and simple capital structure that can attract an investor base and, as importantly, keep them satisfied by providing ample disclosure.
While it’s a significant undertaking, LQR is committed to revolutionizing the alcohol industry by leveraging the value of relationships with decades of industry experience. When successful, LQR House Inc. believes it will be the new full-service digital marketing and brand development face of the alcoholic beverage space. That mission is in progress, and to date, LQR boasts its primary business already includes the development of premium, limited batch spirit brands, establishing an exclusive wine club, and marketing internal and external brands through its agreement with CWSirits.
Appreciate the connection to CWS. The CWS platform is one of the largest online liquor retailers in the United States, curating an assortment of the most popular SKUs. The best part of the CWS platform is that it gets over 2.5 million unique views per month, which is more than a value driver for revenues; it supports that the platform is durable and efficient in handling mass volume.
Unique Strategy Puts Profitability In The Crosshairs
Indeed, while LQR’s approach to building shareholder value may read simple, it isn’t. Many moving parts work together to create pathways to generate revenues that other companies can’t or aren’t doing. And the particulars expose how using aspects of the digital world can have a massive impact on growth. A large part of the LQR strategy is to tap into the strength of influencers, use website banners, send ads through email, utilize SMS advertising, and leverage value from an e-commerce platform built to handle the increased user volumes expected in the coming weeks and months.
LQR’s ambition, in fact, could become the next reality. Not purely from organic growth but through an influencer network that is 255 strong, more than ample to create viral campaigns and generate enormous consumer interest. While the influencer list is long, consider their impact in a better way: combined, LQR can benefit from a following in its network that is over 38.4 million. From a collective “like” perspective, it benefits from over 559 million generated. Those metrics are excellent ingredients in a recipe for success. Those, by the way, are from March 2023. As LQR advances, expect those already solid numbers to rise. After all, they do.
Put it all together, LQR is more than primed for growth; they are positioned than ever to achieve it, with the groundwork laid this year alone able to fuel appreciable growth across all its business segments. Admittedly, LQR didn’t invent using digital applications to drive revenues and earnings higher. Still, they are better-positioned than many to exploit the benefits from it. And from doing so, the back half of this year could be transformative, with credit going to implementing a strategy that takes advantage of and maximizes the power of digital. Thus, whether one partakes in the beverage or not, the results expected could be something to toast.
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