Dive Brief:
- Palcohol plans to auction off the proprietary manufacturing process of its powdered alcohol product to the highest bidder in each country, starting next year, the company recently announced.
- The company attributes its decision to the expertise and understanding of individuals and companies in different countries who might better understand the liquor laws and distribution channels for that region.
- Palcohol did not invent powdered alcohol, but it claims to be the first to develop a cost-effective and commercially viable way to manufacture it and is currently the only manufacturer to receive approval for the product in the U.S.
Dive Insight:
Palcohol's decision to not only sign a manufacturing and distribution partnership with another company but to auction off the rights to that partnership is a compelling business move. Palcohol offers financial projections on its website to help predict potential sales and ROI. But having other companies bid against each other could result in a better deal for Palcohol if manufacturers in each country believe the product is viable.
Or Palcohol could hear crickets. While the product received federal approval in the U.S., half of U.S. states had already banned the product — just months after the Alcohol and Tobacco Tax and Trade Bureau greenlighted labels for it.
Other countries may take similar issue with powdered alcohol, particularly those like the UK that are already cracking down on alcohol consumption.