Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 164

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 164
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 in the market
than beer, as the spirits volume occupies more of the consumer share, the value of that share for spirits as a percentage
of all alcohol dollars spent will be even higher. We believe we are leaning into the market just as the rate of increase in spirits volume
and value are set to achieve historic growth, making us well positioned to grow with the predicted growth of the overall spirits segment.

According to IWSR, in 2015, craft spirits volume
market share was just 2% of the total spirits market; by 2020, this had more than doubled to almost 5%. An even greater gain was seen
in value terms, with 2015’s market share of 3% increasing to 7% by 2020. IWSR predicts that by 2025, craft spirits are forecasted
to increase their volume market share to nearly 10%, and over 13% in market share value. This growth is in line with historic and current
trends across the craft beer market from its inception in the 1980s, which initially represented less than 1% of the overall beer market
and now commands more than 20% of the beer market by volume. IWSR posits that the driving force behind this growth will be the expansion
of national distribution of craft spirits, some of which will be the result of acquisitions by larger groups. Confirming the IWSR predictions,
the American Craft Spirits Association annual data project for 2022 shows that the market share for craft spirits has doubled since 2016.

Due to our position in the craft spirits segment
of the overall spirits market, we are situated in the fastest-growing segment of the spirits market, which itself is the highest growth
segment of the adult beverage market. In addition, according to the Distilled Spirits Council of The United States, consumers are
increasingly shifting towards higher premium products in the spirits market, with spirits brands in the U.S. enjoying a multi-decade-long
trend towards high-end and super premium products. Goldman Sachs Equity Research predicts super premium spirits products will soon represent
almost 38% of the overall spirits market, and spirits have also demonstrated to be recession resistant in the U.S. over time, with
a correlation coefficient of 0.002 since 1962 by volume.

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Our Brands and Products

When we first opened in 2012, we produced only a
limited line of traditional spirits products