Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 178

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 178
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 from several sources, except for new oak barrels, which are available from only a more limited number of sources. As we have
historically sourced grains from farms with which we have personal relationships, we have few long-term contracts in place with suppliers.
However, these raw materials are sometimes affected by weather and other forces that could impact production and quantity.

Competition

The alcoholic beverage industry is highly competitive.
We believe the principal areas of competition include, among others, flavor, packaging and positioning innovations, pricing, and distribution
locations and shelf space, as well as promotional and marketing strategies. Our products compete with a wide range of other beverages,
including spirits, beers and wines, and other alcoholic beverages, and increasingly non-alcoholic beverages designed and marketed to mimic
the flavor of alcoholic beverages. Many of these products are produced by a relatively large number of companies, many of which have substantially
greater financial, marketing and distribution resources than we do.

Within the craft spirits segment of the market,
important factors affecting our ability to compete include speed of innovation, product appeal and differentiation to consumers, brand
and product image, taste and flavor of products, trade and consumer promotions, attractive packaging, product placement and distribution,
access to capital and other resources, marketing and pricing. We also rely on our distributors to provide stable and reliable distribution
and to secure adequate shelf space in retail outlets. Competitive pressures could cause our products to lose market share or experience
price erosion, which could materially impact our business and the results of operations. These pressures could include directly competitive
innovations, new products that are better aligned with consumer preferences, greater marketing spending, better placements, or a decline
in consumer interest in the craft spirits segment overall.

We have experienced, and continue to experience,
competition from new entrants in the craft spirits category. According to the American Craft Spirits Association, in 2021 there were approximately
2,600 active craft distilleries in the United States. Leading global participants entering and operating in the craft spirits market
through the acquisition of small brands include Rémy Cointreau, William Grant & Sons, Pernod Ricard SA (OTC: PRNDY),
Anchor Brewers & Distillers, Diageo PLC (NYSE: DEO) and Rogue Ales & Spirits.

While competition in the craft spirits space is
growing, most craft producers attempt to boast about a singular accomplishment, such as a singular product, a special package or a single
marketing idea. We believe we offer several advantages relative to our