Levante Capital has invested $1 million in Scotch, a startup focused on modernizing the liquor supply chain with advanced POS solutions, to address inefficiencies in a $75 billion industry.

Target Overview

Scotch is an innovative company focused on transforming the liquor supply chain, addressing longstanding inefficiencies that emerged following the establishment of the Three-Tier System in 1933. It aims to revamp manual ordering processes, inventory management, and trade spend decision-making within the alcohol industry, which has largely remained stagnant in terms of technological advancement. Today, Scotch seeks to empower liquor store operators by providing them with a sophisticated POS system that enhances their operational efficiency and data management capabilities.

The liquor store industry in the United States represents a considerable market with approximately 45,000 stores generating $75 billion in annual sales. By implementing effective distribution strategies, a high market share can be quickly achieved, especially given the average revenue per store of approximately $1.7 million. This positions Scotch to capitalize on the market's potential, akin to the successes seen in commercial kitchen management and alcohol distribution by companies like Encompass and VIP.

Industry Overview

The liquor retail sector in the U.S. operates under a unique regulatory framework established in response to Prohibition, leading to the Three-Tier System which segregates producers, distributors, and retailers. This