[00:00:00] Justin Kendall: Next on the Brewbound podcast, how Outlaw is weaponizing Price. Hello and welcome to the Brewbound podcast. I'm Justin Kendall
[00:00:20] Jessica Infante: and I'm Jessica Infante.
[00:00:22] Justin Kendall: And Zoe Licata is not with us this week. She's off celebrating a big birthday.
[00:00:28] Jessica Infante: A big birthday. Not to, you know, stress her out or anything. But Zoey is a, she's growing up.
[00:00:37] Justin Kendall: Yep, Gen Z consultant to senior reporter to doing a lot of stuff behind the scenes here.
[00:00:46] Jessica Infante: Yeah, yeah, Zoe, yeah, well-deserved time off. I hope she is enjoying celebrating somewhere, and she will. I think she'll be back on the pod next week. The 3 of us have a lot of travel for various events coming up, so that's why if it seems I'm a little iffy on the schedule, it's because I am. I've got the Massachusetts Brewers Guild conference this week, which is happening on Zoe's actual birthday when she will also be off. We started a little tradition of taking off on our respective birthdays, and I love that for us.
[00:01:15] Justin Kendall: Yeah, it's pretty great. Yeah, well, you can look for coverage of the Mass Brewers Guild, that'll be up by the time you listen to this, and so much more, we're gonna get into all the news of the week. And this week we have a featured interview with Ari Epsall from Outlaw Light Beer. They are growing fast in the lager space, and they were up there with garage beer as really charging forward.
[00:01:44] Jessica Infante: Yeah, they're a huge part of the light lager story that's been happening nationally, and they scaled real fast.
[00:01:53] Justin Kendall: Real fast. So, stay tuned for that, but we gotta throw out the plug for Brewbound Live. The agenda is live, like flashing lights. This is not a drill type thing. You can see the full agenda now for Brewbound Live. It's December 9th and 10th in Marina del Rey. It's a great lineup. You can see for yourself at Brewboundlive.com and get your tickets.
[00:02:17] Jessica Infante: Yeah, yeah, definitely don't miss it. I'm, I'm really excited for a lot of these conversations.
[00:02:22] Justin Kendall: It's gonna come up fast. I said that months ago, and now we're about 1 month out. Anyway, you know, last week was, uh, Halloween, and I loved writing the feature and digging into Halloween trends and stuff, and something arrived a little too late. I was hoping to do this on last week's podcast, but one of the promotions that Garage beer ran was Terrors at the Tailgate, and it was like a 1990s style tribute to, uh, I think it was like a Coca-Cola Monsters of the NFL or something like that. And they put out trading cards, and I know among the older male generation, maybe not even older, like some of the younger men, they love card breaks. This is wild to me, and I got two packs of cards here to break. So I'm, I'm gonna rip these open and uh we're gonna see what I've got in here, and I'm gonna to preserve these cards, I'm gonna cut them open, and I know that's probably blast. That's
[00:03:22] Jessica Infante: why you were getting scissors. Yeah,
[00:03:24] Justin Kendall: that's why I was getting scissors.
[00:03:26] Jessica Infante: I cannot stress enough how far of a territory this is to me.
[00:03:30] Justin Kendall: I don't want to wreck these cards, so, uh, maybe, maybe I'm going to get the Jason Kelsey. We've got the uh cooler raider.
[00:03:39] Jessica Infante: Oh,
[00:03:39] Justin Kendall: very cool. We've got the parking lot profit. Oh, the Kingsford card. Oh boy, I know this is thrilling. Ah, I got him. You did, Jason Kelsey. Who
[00:03:56] Jessica Infante: would have thought
[00:03:58] Justin Kendall: shirtless as a. You would expect that's a lot. The face paint fanatic. Have you ever face painted?
[00:04:07] Jessica Infante: No, as an adult, no, at a carnival, as a child, yeah, maybe. Oh,
[00:04:12] Justin Kendall: this is one after my own heart, the table smasher. Oh, for those Buffalo Bills fans out there.
[00:04:18] Jessica Infante: I was just gonna ask you if that happens outside of Buffalo, because that is my exposure to that.
[00:04:24] Justin Kendall: Outside of Buffalo and professional wrestling, I'm not sure it does.
[00:04:29] Jessica Infante: And to be clear, my association is strictly through. One very rabid Bills fan who is my bestie. OK, known, I'm sure to many listeners of this pod, Megan Baker Wilson, formerly of Boston Beer, formerly of Harpoon.
[00:04:45] Justin Kendall: So these, oh, interesting. So they're all the same, basically, they're all the same cards, you get the same ones, but they're numbered on the back out of 500, and uh, where's my Jason Kelsey. 308 of 500.
[00:05:03] Jessica Infante: All right, so there were 500 packs made.
[00:05:05] Justin Kendall: So only 500 of these cards were made, and I have number 300 and 308. So I'm sure somebody that got number one. What's
[00:05:14] Jessica Infante: that? How do people acquire them?
[00:05:17] Justin Kendall: You could buy them on the garage beer site. So it's like what Liquid Death does. They do these like merch drops. And it's limited edition stuff, and so people, sometimes they sell out.
[00:05:30] Jessica Infante: Wow, people spend their money in very interesting ways.
[00:05:34] Justin Kendall: Yeah, so I imagine if you got the number 1 of 500 Jason Kelsey card, you'd be very happy.
[00:05:41] Jessica Infante: Do you keep it or do you sell it? What's the culture?
[00:05:44] Justin Kendall: Do I keep it?
[00:05:46] Jessica Infante: Not you personally, but whoever got number one.
[00:05:49] Justin Kendall: It depends. Yeah, I think if, if somebody got number 1. And they got really into it. If they were really into card collecting, they would probably send it away to one of these services that would grade it and be like, oh, is it going to come back out of like 9 out of 10 or whatever? And then, uh, yeah, you might try and sell it.
[00:06:08] Jessica Infante: I do have some friends who have gotten into cards lately, and I make every effort to not know anything about it, so.
[00:06:15] Justin Kendall: I can't blame you.
[00:06:16] Jessica Infante: It seems like their wives are pretty upset about it.
[00:06:18] Justin Kendall: Like it's a lot of money. Maybe cards are taken away from beer purchases,
[00:06:24] Jessica Infante: you know, as possibly, I think so.
[00:06:27] Justin Kendall: You've got gambling, you've got OnlyFans, you've got what else?
[00:06:33] Jessica Infante: Cards,
[00:06:34] Justin Kendall: life, cards. Gasoline,
[00:06:37] Jessica Infante: yeah, gasoline is definitely up there. Do you remember when everybody was saying like, we don't really think gambling and sports betting is eating into beer shopping? How could it not? How could it not? Yeah,
[00:06:51] Justin Kendall: young men out here gambling, some women, I'm sure, playing the parlays.
[00:06:55] Jessica Infante: Kind of related, kind of not. Did you see all the chatter recently about how like The rate of people hosting dinner parties has gone down and it was just like, here's one more thing for wine to explain its shitty condition on. I
[00:07:08] Justin Kendall: would love to
[00:07:10] Jessica Infante: host a dinner party. Yeah, it was a couple of weeks ago and people are like, no one is hosting anymore. It's like I would love to have people for dinner, but one, I need to have some friends, and 2, I need to have some time, and 3, I need, I need to move because I don't have room, but mortgage interest rates are keeping that from happening.
[00:07:29] Justin Kendall: Well, and money too. Can you imagine what it costs to host a dinner party at this point?
[00:07:34] Jessica Infante: Crazy, crazy. I understand why, you know, beer might be looking at sports betting now and wine might be looking at the lack of dinner parties, but I think uh we just need everybody else to reconsider how expensive it is to live.
[00:07:50] Justin Kendall: And this podcast is brought to you by DraftKings and Calhi. It is not, but
[00:07:56] Jessica Infante: it is not.
[00:07:57] Justin Kendall: It is not,
[00:07:58] Jessica Infante: but every other podcast is, yeah.
[00:08:02] Justin Kendall: Anyway, let's get into the news of the week and let's spin the wheel, make the deal. What do you want to do first? We've got 3 options. We can go Voodoo Ranger. We can go Til ray, or we could go rationale. Which one do you wanna start with?
[00:08:18] Jessica Infante: I will take our, uh, spooky skeleton friend, please.
[00:08:21] Justin Kendall: All
[00:08:21] Jessica Infante: right,
[00:08:22] Justin Kendall: the embargo has lifted on
[00:08:25] Jessica Infante: congratulations.
[00:08:26] Justin Kendall: Yeah, right. It was a long time coming. I can't even remember which month it was that I went to the New Belgium distributor meeting, but, uh, it's been embargoed for this long, and now that has lifted, and We're able to talk about it. I guess I would start by saying that they are very much looking at Voodoo Ranger as sort of like in this next chapter of the brand, and it's been, I guess, 2027 will be its 10th year. So we're talking a decade of cartoon skeletons here.
[00:08:59] Jessica Infante: Wow, well, happy birthday. Well,
[00:09:01] Justin Kendall: they're repositioning this brand not to just be a craft single, but to be. One of the top players in singles. So, very much attacking the convenience store channel and trying to get all four of its top SKUs in the door. So, that's what they're looking for this year, growing with existing accounts, getting more of their top singles in the cooler, and competing with the likes of Buzzballs and Beatbox and You can name it, Carveless, Surfside, Sun Cruiser, and not positioning so much as a craft beer.
[00:09:40] Jessica Infante: Yeah, all that makes sense to me. I mean, it's just a very flavor forward, high octane beverage alcohol product, as are a lot of those things.
[00:09:50] Justin Kendall: And you can kind of see why their ambitions are so high too, because they hold a 40% share of Kraft 192s, so. It's pretty nice in the uh convenience channel, and from their numbers, Voodoo Ranger singles account for 77% of all 192 growth. Wow. Their 192 business has become huge.
[00:10:12] Jessica Infante: Have they shared how high is high for their share of 192s? What's the goal? Is it 60? Is it 90?
[00:10:18] Justin Kendall: It's to close a lot of those gaps. Right now, they ranked number 16th in CStore singles, and they're trying to close the gap on the 14th and 15th player, which are Smirnoff in 4 loco, and they think that they can do that next year. And they really pushed rate of sale of their products compared to those brands, as well as even top offerings like Twisted Tea, which is number 4.
[00:10:44] Jessica Infante: Wow, that's big for tea. Yeah. I guess I shouldn't be surprised by that, but yeah, I mean, I get it. They're beyond craft now and they've got big plans.
[00:10:55] Justin Kendall: Well, and they keep having these major launches this year, G-Force, their 11% juicy IPA, it's the top craft launch of the year, it's the top single. And it hasn't really cut into either Voodoo Ranger Imperial or Juice Force Hazy. So those two have remained very steady, and they keep growing. I think they're #1 and #2 right now in, in sea stores.
[00:11:21] Jessica Infante: How much of the other forces been capitalized?
[00:11:24] Justin Kendall: I think Tropic Force and definitely Fruit Force have taken some hits, and it's hard not to see why, but GForce definitely grew the pie for them. I think they were at 485 or they'll come in somewhere at 485,000 barrels this year of singles alone, and I think 70,000 or so are attributed to GForce. And they even said, you know, this would have been a bigger launch too, if we would have done other packs, but we very much made this a CST play, and next year they're going to rectify that. They're going to launch 6 packs of G-Force, and they're going to test out 12 packs.
[00:12:03] Jessica Infante: I think I just got a hangover hearing that information. I mean, cause, you know, like they launched what Juice Force was first, Tropic and fruit came after, and like you said, there was cannibalization there. And this doesn't seem to be doing that because the value proposition is a little different. Those guys are like 9%, right? And this is 11%. And I mean, what happens? Are we just in like an ABV arms race? Are they going to try to push it higher than that?
[00:12:32] Justin Kendall: They are not, as far as I can tell, but they're gonna stay in that high ABB space. Next year they're gonna launch Voodoo Ranger Mango Fuerza, mango lime IPA with salt. You see where this is going?
[00:12:46] Jessica Infante: I'm listening. I'm listening, yeah.
[00:12:48] Justin Kendall: They're chasing, and they really don't have to, the Hispanic consumer,
[00:12:54] Jessica Infante: right? And what's the ABB on that?
[00:12:56] Justin Kendall: 9.5% line price with the others. So when they say 4 in the door, this or tropic force could be that fourth. I mean, fruit force could too, it's not going anywhere, but those are their fourths that they're really pushing. Big flavor.
[00:13:14] Jessica Infante: Yeah, Voodoo Ranger Imperial, G-Force,
[00:13:18] Justin Kendall: Juice Force,
[00:13:19] Jessica Infante: Juice Force, and then the 4th force is optional. Crazy, interesting. I'd like how much are they targeting, cause this doesn't seem like a chilada occasion to me, but the flavors are there, yeah.
[00:13:33] Justin Kendall: I mean it's an IPA so it it's sort of, but their IPAs, I mean in this force are more flavor-ish, even twisting toward more FMB I feel like than IPA.
[00:13:47] Jessica Infante: I think a lot of these are kind of IPAs in name only. I knows, if you will.
[00:13:52] Justin Kendall: Here's something that they threw out there is why this works, because apparently Hispanic consumers are already massive fans of the Voodoo Ranger family and especially the Force brands, and Karen Chakrabati said they've actually spent more than 50% more on Juice Force this year than they did last year. Hispanic
[00:14:14] Jessica Infante: consumers, yes, that's really interesting. Yeah,
[00:14:19] Justin Kendall: you can see them lighting up at the idea of attracting this, this consumer base that's already sort of there for them, but they haven't expressly reached out to yet,
[00:14:31] Jessica Infante: right? I mean, I feel like that flavor is a great way to do that in a way that doesn't feel pandery, you know. Yeah, I mean, that makes sense. I mean, that is the Hispanic community is a huge drinker base for beer in general, so. As long as spending power remains the same or increases, you're probably on good footing, but you know that didn't happen in 2025 for a lot of reasons. Interesting. And that's a place where nobody else is really playing. You know, Constellation doesn't quite have anything on that end of the ABV spectrum.
[00:15:06] Justin Kendall: Right? Maybe they will next year, but the other thing that they're going to do, and we just finished Halloween. But the Halloween partnership is going to continue into 2027, and it's gonna show up in the C store as well, with Slasher IPA being the seasonal move in in the fall.
[00:15:27] Jessica Infante: Cool.
[00:15:28] Justin Kendall: Yeah, so 192s of that as well, which is another, I wanna say 9% or 7.5%.
[00:15:37] Jessica Infante: Oh, well, that just sounds reasonable,
[00:15:40] Justin Kendall: right? A more sessionable 7.5%.
[00:15:46] Jessica Infante: Lord, I'm clearly not the target for any of this.
[00:15:51] Justin Kendall: I mean,
[00:15:52] Jessica Infante: you know what I think I would love to see happen is a a little uh New Belgium voodoo ranger partnership with the uh Salem, Massachusetts branch of the US National Park Service, as I posted on LinkedIn the other day. I live in Salem, Mass. We have a spooky Halloween parade. And every year the Park Service marches in our town parade, and they have a giant skeleton in a park ranger uniform, and it took me until this year to realize why it looked familiar. But it's very cool.
[00:16:19] Justin Kendall: I mean, your lives are just melding. Yeah.
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[00:17:16] Justin Kendall: Let's switch gears and talk a little bit about Tilray and the restructuring that they've done. It's been going on for a while. They called it Project 420 at one point, then they said Project 420 was over, and then they kept consolidating.
[00:17:32] Jessica Infante: Yeah,
[00:17:32] Justin Kendall: they did. Consolidating their production footprint, they're working on consolidating a massive, massive number of distributors, and then they're also cutting workforce.
[00:17:45] Jessica Infante: Yeah. So let's start with the workforce cuts. They unfortunately had to eliminate about 30 positions across the whole network, and they didn't want to get into what roles and where, but they said they're handling everything with care and respect, which, you know, you should. Listeners of this podcast know that Tilray has built a massive beverage portfolio that has come through 23 really major acquisitions. First, they bought a bunch of brands from Anheuser-Busch's raft portfolio. Then they took 4 breweries from Olson Coors, and then earlier this year they bought Brewdog. So I did the math on this. I counted 14 potential craft brands in their portfolio with physical brewing locations. They announced that they had cut the 10 down to 6, and we have, you know, known that they have ceased production at a couple breweries that, you know, they have kept the taprooms open, but they have really localized production. At 6 of them. And those are. The Sweetwater brewery in Atlanta, Georgia, which was how they started all of this. They acquired Tilray, was then called A Frea, a Canadian cannabis company, bought Sweetwater in 2020. They're producing there. On the East Coast, they've also got Patchogue, New York, which is Blue Point, which they bought from AB. Then as we move out west, they've got Columbus, Ohio, which is the the Brewdog facility that they acquired earlier this year. They've got Breckenridge Brewery, which they bought from Anheuser-Busch, has a big production facility in Littleton, Colorado, just outside of Denver. And then they actually have two breweries in Oregon. They've got Widmer Brothers in Portland and 10 Barrel in Bend. And that's the network. So, you know, they explained that the geographic spread is going to help them ship out to their their distributors across the country with more logistical ease. And the other thing that really needs to be kept in mind here is that a lot of this is being done with an eye toward the beginning of their partnership with Carlsberg, which will start in January. They're expecting Carlsberg to add about a million cases to their portfolio next year, which is like 72,000-ish barrels. So that's where they've, they've narrowed down their, their production footprint to that, but they're also working on cutting their or streamlining their distributor footprint. So like we had said, you know, they pulled craft brands from ABM Olson Coors, which are obviously completely disparate distribution networks. So they've been working on this since January of 25. They have dropped their distributor count by 9% since then, but they've got a ways to go on that. So
[00:20:20] Justin Kendall: you're let's
[00:20:21] Jessica Infante: see. Yeah, I mean they started with 750 distributors and 975 different locations to ship to.
[00:20:30] Justin Kendall: That was just what they had in their annual report because I mean, that was the most recent one. They probably had more than that when they took on all this from AB and and Molson Coors.
[00:20:43] Jessica Infante: Yeah, and now they are trying to get down to between 450 and 500.
[00:20:49] Justin Kendall: Insane.
[00:20:51] Jessica Infante: So we'll see. Boston
[00:20:52] Justin Kendall: Beer doesn't even have that many distributors.
[00:20:55] Jessica Infante: No, I know that doing this is difficult and complicated, and I had asked like what costs you anticipate being associated, and they said none. But We'll see I mean, there's got to be at least legal fees, right?
[00:21:11] Justin Kendall: Oh yeah, nothing's for free.
[00:21:14] Jessica Infante: Nothing's free. You can't just leave. So they've done that and they've also worked to cut their SKU count, which is massive. So they've cut about 28% of their SKUs. Since January of 25, and they said that, you know, skew rationalization is, it's not a one-time thing, it is ongoing, and I'm glad they recognize that.
[00:21:37] Justin Kendall: They're always adding.
[00:21:38] Jessica Infante: Well, yeah, massive acquisitions are forever. Yeah. I cannot wait to see what Irwin decides to buy next. So we'll see what happens. Tilray is a massive player in craft. They're the 4th largest craft brewery in the country by volume, and they make a lot of stuff that's not craft beer. They've got Some RTDs and FMBs in their portfolio, some non-Ak things. There's
[00:22:04] Justin Kendall: a lot. Well, we'll be watching that as always, because, I mean, they keep it interesting.
[00:22:12] Jessica Infante: They do keep it interesting, that is. That is a true statement.
[00:22:17] Justin Kendall: I want to throw a wild card in here before we hop to the next story, and I want to talk a little bit about Jester King and Suarez Family Brewers. I think that's worth us touching on here, and we're gonna have more on Jester King on this podcast in the, in the coming weeks, but um. Yeah, Chester King is in Austin is looking for either investors or buyers.
[00:22:42] Jessica Infante: Yeah, they are, and they, you know, just posted it right on their Instagram and said like investors, possibly you. Basically just. Basically just acknowledging that the industry is in a weird place and Jester King needs a little bit more resources than current ownership is able to give it. So they're looking for somebody to help. They were very clear in saying that we are not closing, which is important, but interesting to see a really beloved brand go this way, because I don't know, 10 years ago, I think anybody that wanted to put their craft brewery up for sale was definitely Do it on the DL with lots of like elbow nudges and winks and hey, do you know a guy because I know a guy, hey, here's our prospectus.
[00:23:32] Justin Kendall: Sounds like a drug deal. Well,
[00:23:35] Jessica Infante: yeah, a little bit, so that's what's up with them and we'll get more into that.
[00:23:38] Justin Kendall: You're definitely right. The winds have shifted on acquisitions. I mean, look at just the first time Stone stole. There was barely a blip on the radar of like, oh, they sold out even with a boilerplate that said, you know, vowing to never sell to the man. It had gotten to the point where it just didn't register anymore, you know, either people didn't care or they were numb to it, which I don't know if either of those are great, but I mean, it wasn't like when wicked weed sold and everybody was pulling out of festivals and vowing to boycott them. You know, we are at a very different stage, and, you know, we are at least 10 years probably removed from that sale, the wicked weed sale, and
[00:24:24] Jessica Infante: I think it's about 9 years. Yeah,
[00:24:27] Justin Kendall: it might as well be a different lifetime at this point in this business.
[00:24:31] Jessica Infante: Yeah. And we see small craft breweries owners all the time saying brewery for sale. That's everywhere. But most of those are kind of local neighborhood operations for the most part. Nothing that ever rose to the level of national prominence. Prominence is something like a Jester King. But yeah, I mean, how long lived do you think was the craft nerd pearl clutching phase? I don't think it was 10
[00:24:57] Justin Kendall: years. Longer than I expected it would be, but then I think COVID really worked out a lot of that in folks. I mean, you just see it in like the foot traffic after the fact and how things haven't fully recovered. And I mean, honestly. People get to different stages in their lives. You read, you know, the Suarez thing, and there's much more important things going on than what's happening at a brewery, you know.
[00:25:25] Jessica Infante: Right. Maybe I don't remember. What was the reaction like when New Belgium sold? People were not freaking out the way they freaked out about Wickedweed. Obviously the buyers are different.
[00:25:37] Justin Kendall: New Belgium was an ASOP too, and what comes out of that is so many of those people who had, you know, put their blood, sweat, and tears into New Belgium, they got paid. Yeah, they get paid really well,
[00:25:50] Jessica Infante: I think that like the only time an ESOP ever really worked out?
[00:25:55] Justin Kendall: I think it might be. It might be like the shining example, and I don't know, certainly the exception that we'll ever get to that place again, but that is one of those instances where you're like. They took care of their people, and I, I think it's a lot harder to criticize something like that, but then, I mean, It's always been weird. People all have different ambitions for what they want their business to be and what they, I mean, look at spike date, you know, it's like nobody's shitting on them for selling after, you know, a year and a half or whatever like. Give me $75 million you know, after one year of, of putting something out, like that's, that's the dream, man.
[00:26:38] Jessica Infante: Yeah. I mean, I will forever maintain that like Tony McGee, I would do the same thing. If a global brewery gave me a billion dollars, you would never hear from me again. I would be so
[00:26:49] Justin Kendall: gone. Oh yeah, I mean, I would talk to you, but you know, like if I had a billion dollars, but you know. You wouldn't hear me on this podcast if I had a billion dollars.
[00:27:00] Jessica Infante: No. Oh my God, no. I would be on the beach with a book every day till the end of time. The thing that I think these overtures like what Jester King has done, are no longer met with the same hand wringing, is that like AB is not going to buy them. That shopping spree is over. It was fun while it lasted. It was fun to watch.
[00:27:27] Justin Kendall: If you look at that comment section, it's like the fear isn't Anheuser-Busch, the fear is private equity. Yeah. That was the bulk of the comments that I saw, and I didn't read everything, but that was the biggest fear people had was PE firm swooping in. I don't know that that would happen, but I don't mean, I hope these, these guys either get the investment they want or the exit that they desire, and I think that that's a good way to transition to the next story, which is rationale. They are partnering with. LA libations and Homestead Brands, which is their Bev Alc offshoot, and they are doing a, a seed round of funding for $3 million but they are very vocal about what they're trying to do here, which is sell the company within the next 24 to 36 months, which would make them the first, and I use this term now loosely, I wouldn't have before the conversation. Dedicated non-out craft brewer to sell, and we've seen KDP invest in athletic brewing, but they don't outright own it. Jamie Fay and and Wendy Pickett and the crew over there at Rationale are looking to get out of the business eventually, and they're doing it by expanding the portfolio into mid-strength beer with something called Half Rational, and exotic libations, which is more of a fruit forward, non-out beer. That they've developed through a partnership with the University of Texas.
[00:29:02] Jessica Infante: Can they still be considered a dedicated non-alc brewer when they make a mid-strength?
[00:29:07] Justin Kendall: Not anymore, but not in 2027 when these launch, but their focus is moderation, and they see some of the winds changing with Sierra Nevada, Tuer and Dad Strength and Small beer and these companies that are coming in with the mid-strength plays, and they say, We want to be a moderation company, so we have our non-alcoholic beer, but we also can give you like a lower strength beer too, and they're gonna start with that on draft in California, and we will see how it goes, and if they're able to succeed here and find the way out and a partnership with LA Libations, which Molson Coors has an ownership stake in, is, is pretty interesting.
[00:29:51] Jessica Infante: Hm, I didn't even think about that, yeah, because They don't have too many irons in the NA fire.
[00:30:00] Justin Kendall: No, I mean, it's like Coors Edge and the Blue Moon, which is, I really like the Blue Moon, but.
[00:30:08] Jessica Infante: Yeah, interesting.
[00:30:10] Justin Kendall: We shall see.
[00:30:11] Jessica Infante: I just appreciate that Jamie was super straightforward with you about like, we are trying to sell this and go. I like that everybody is being a lot more open about that now.
[00:30:21] Justin Kendall: I think it's better to be transparent about where you see things going. I mean, we heard distributors at the MBWA talking about the non-elk brands that they bring in, and when we talk about the non-elks they're bringing in, we're talking the poppies and the lollipops and them, and wanting those folks to be upfront and transparent with them about their intentions because obviously, I mean, Different rules there, no franchise law that beholds them. So if PepsiCo comes calling, you know, you're going to that network, right? That's what we're watching right now. Stay tuned, but let's get to our featured interview with Outlaws Ari Epsall. All right, let's bring on our featured guest, Tivoli Brewing CEO Ari Epsall. Thanks for being here,
[00:31:08] Speaker 5: Ari. Thanks for having me, Justin, and any opportunity to talk beer, I'll always be there.
[00:31:13] Justin Kendall: Tivoli is obviously the maker of Outlaw Light Beer. You all had a nice presence at the NBWA's annual convention showing off the new lime flavor that is hitting in 2027. So that was cool to see.
[00:31:29] Speaker 5: It is, and I don't know if you got a chance to try it, but the liquid is phenomenal. Huge kudos to our brewing team. You know, obviously, the goal here was to kind of be disruptive with lime in traditional outlaw fashion from a price perspective. So, you know, one of the things that we really challenged ourselves on is, is the idea of introducing lime at a parody to Outlaw. So when you look at The rest of the category, when you start getting into flavor, whether it be, you know, lime or cheladas or so on and so forth, they typically trade to the consumer at a premium. But what we wanted to do was actually line price lime with Outlaw, which is what we've been able to do. So huge kudos to the brewing team for finding a way to get a, a phenomenal liquid at a pretty reasonable liquid cost. So we're pretty excited about it.
[00:32:19] Justin Kendall: Well, that's one of the reasons I wanted to talk to you because I've seen some of your pricing and it is jaw-dropping to see some of the specials that you all run. And I mean, you want to talk disruption, you all are being very disruptive when it comes to price and everything I've heard in the last 10 years of doing this job is. You don't wanna try and compete with the macro brewers on price, and you are doing just that.
[00:32:48] Speaker 5: yep, we are. There's a lot of reasons behind that. It's not simply a, a low price strategy. I, I think there's a lot of different things that go into it. So number one is, and I, I've been a staunch advocate of this for years now after launching Outlaw, which is beer by design should be affordable. Unfortunately. Most of the macro players that play in the domestic space have taken price on domestic beer, and, and whether you're talking the premium category, the sub-premium category, you know, they've taken price to a point where you can easily as a consumer make a decision for the exact same price point over to a bottle of Tito's vodka, or a good bottle of rum, or even a good bottle of whiskey. And when you start pushing consumers to make that decision, I think we're seeing that in the numbers, right? You look at macro beer performance and generally it's down. I mean, kudos to, to Ultra and Busch, you know, they've had a, a really strong run here over the last couple of years. But, you know, a lack of innovation, driving, you know, and, and I mean the price increases, the conversations that I have with our retail partners, which have been just incredible in the last couple of years, is like, man, we're getting pretty sick of this like two price increases a year on beer. And, you know, to be fair, look, you gotta run a business. You want to be profitable, you want to be able to drive, you know, results for your shareholders, but if you go check the quarterly earnings report for Anheuser-Busch, they're making plenty of money, and yet they continue to take price. So, you know, from where I sit, that kind of baseline fact, which is beer should be affordable, I think that's something that needs to get revisited. And then, you know, from our perspective and, and our strategy is, look, we can go run a shock and awe price promotion for a week or for 3 days and Typically, where we can legally, you know, we will actually restrict with partnership with the retailer, restrict it to, you know, 212 packs or a single 12-pack, and then the, you know, the 3rd or 4th purchases back up to the, to the regular price. And we're really, we're doing that for two reasons. One is we want to drive trial, right? And when you look at The cost of third party sampling. You look at the cost of, you know, I've always said like one of the best sampling vehicles is venues, right? You can get into uh a major NFL stadium, get into a major NBA stadium, NHL stadium, or arena. It's an incredible trial, but guess what? The sponsorships are millions of dollars a year just to get your foot in the door. So, instead of allocating millions, and if you're, you know, Anheuser-Busch, allocating hundreds of millions of dollars into advertising, I'd rather go to my core consumer and say, hey, man, like, we're gonna throw you some awesome deals. If you're already drinking Outlaw, you're gonna be able to pick up, you know, a screaming hot deal on Outlaw for Labor Day weekend, Memorial Day weekend. And at the same time, instead of investing in, you know, these enormous advertising budgets, we'd rather invest in price. Now, I think that, you know, most recently, I don't know if you've followed some of our, uh, we almost won with, uh, Bubba Wallace and the, the 2311 NASCAR team down in Phoenix this past weekend. We've started to push some of our dollars into marketing, but again, I want consumers to have a very low barrier of entry to try our product. And again, when you compare the cost of third-party sampling and, and major, major marketing deals to drive sampling, it's actually way more cost efficient to pulse price and give consumers an opportunity at a very low risk to try the product. That's kind of been our, our MO.
[00:36:35] Justin Kendall: And I gotta tell you, you're not lying when you say a screaming deal, because I've had people sending me screenshots of the sales, and, you know, I've seen 12 packs for under $6. I've seen in yep, in one case, I saw 12 packs for under $5 I think it was like $4.98 dollars or something like that.
[00:36:55] Speaker 5: So the race car that we were on this past weekend, the NASCAR race car, was number 23, and then we actually ran a $2.30 12 pack for a two-day special down in Arizona.
[00:37:07] Justin Kendall: So what's the outcome there? It's like, what are you hearing coming out of running that type of special?
[00:37:13] Speaker 5: Enormous, enormous trial and brand awareness, and I, and I think obviously, you know, you get the incremental display space, you get the shock and awe factor, you know, you get all that, and I think That one of the mentalities that beer is getting wrong is this, oh my God, you can't do that, you're gonna devalue the brand, you know, oh, don't do that, people will never pay the regular price. Well, I call BS. I, I actually, especially with the current economic situation in the US and, and inflation and challenges on fuel costs, like, people love the deal. For whatever reason, the alcohol industry oftentimes Has a very short-term memory, right? So, I remember, I was working at Anheuser-Busch here in Colorado. We ran buy one, get one free to consumers. And yet, you know, I'm the guy now throwing a $6 twelve-pack, which is normally a 9 $99 12-pack. Well, that's actually not even as deep as a buy one get one free. And so, you know, again, I think the big macro suppliers and their brands have gotten so obsessive over the economics, and I get it. They're, they're publicly traded companies. They're not beholden. Anheuser-Busch does not have a fiduciary duty to, you know, Justin who drinks Bud Light. They have a fiduciary duty to their shareholders that are publicly traded on Wall Street and their quarterly earnings, right? So, I think they've leaned so far into that from a financial perspective that you lose the Fun, you lose the ability to grab new consumers, and look, I'm, you know, maybe half of the people that picked up a screaming hot 12-pack of Outlaw, maybe half of those people are never gonna have our beer again, but they tried it. Maybe they didn't like it, no harm, no foul, but the other half, that might be their new go to beer. And so again, I, I think about, you know, what is the most efficient way. To drive trial and drive awareness when you don't have hundreds of millions of dollars in marketing budget, I'm gonna use price, and I'm gonna get people to try our product and look, we look at the data, I don't want to share which retailer this is, but one of the retailers, big box grocery retailer, we've been very, very closely monitoring. OK, we go do this pulse, right? That creates a really aggressive price point. Is our velocity post pulse? Increasing or decreasing over time, right? So, what I'm looking for is, well, are people just waiting for it to go on discount, or are people buying the beer, trying it on a deep discount, and then paying regular price. And what we're seeing is the velocity is exponentially growing off promo price because of the promos, so it's working, and I think we're gonna continue to do it.
[00:40:07] Justin Kendall: That was my next question is, what are you learning about repeat on this, as far as, are these consumers coming back? Are they willing to pay more? Are they, you know, becoming brand loyal?
[00:40:18] Speaker 5: They are. All the data that we're looking at is that velocity and VPO is increasing in every non-pulse period over time. So, as we pulse, obviously your rate of sale goes through the roof, and then we want to see, OK, that following 4 weeks, compared to the 4 weeks where we weren't on promo, you know, the month before, the 2 months before, the 3 months before, we're seeing that velocity increase. Every single period. So, that to me is telling me that people are trying it on a hot deal, they're liking it, and then they're coming back and paying the standard retail, so it's working.
[00:40:57] Justin Kendall: What's the feedback that you're getting from your retailers and your whole, well, you mentioned some of the retailers and they love to see some of these deals, but you know, what's the feedback you get from wholesalers on pricing like this and how do you get that math to work out for everybody in the chain?
[00:41:15] Speaker 5: Nobody in the chain is footing the bill. We're footing the bill, right? So, you know, our, our wholesale partners think it's great. They're making full margin, full GP, not having to pay the bill, and they're moving a ton of cases. Our retail partners are much less focused on the economics right now. They're looking, and I, I've heard this from our top 3 retailers on a national basis. Every one of their consumer studies and surveys is value, value, value, value, right? And so, their consumers are getting stretched on the wallet, and so the retail partners that we have love this because it gives them an opportunity to tell their consumers, hey guys, like we're finding suppliers. That are bringing value. We're not just remaining the status quo, we're not keeping the same price, the same beer, no change, and so from a retail perspective, you know, we're getting an enormous amount of traction and commitment from them because of what we're doing. And, you know, we get asked all the time, like, is this sustainable? And what I respond with is, believe it or not, The deep discounts or the deep promos, we're not doing them EDLP. This isn't every day that you can go get an Outlaw 12-pack for $5 right? Typical average across the country is $9 to $11. But where we are delivering it. Again, compared to the other vehicles, such as major marketing or huge third party sampling. It costs me less to do it this way than to go the other route. And I think, you know, and, and once I kind of explained that to a retailer, they say, I hadn't thought about it that way. You know, instead of spending $10 million on marketing and sponsoring some NFL team, you're investing in price and it's actually costing you less, and you're getting more exposure, more trial. That's fantastic. And oh by the way, now we're generating excitement around a really stale category being beer at retail again. So for me it's absolutely sustainable, and we will continue to invest in it. It's been a model that's working.
[00:43:29] Justin Kendall: Does that open up an opportunity to get in sort of the retailer flyers and that sort of thing? 100%,
[00:43:36] Speaker 5: 10 100%, yeah, you're getting put on ad, you're getting put on the floor, you're getting huge display real estate. You know, for me, again, it's the constant David v. Goliath. Generally, the programming for beer is dominated by the macro players, especially domestic, right? I would love to have Outlaws sold in every NFL stadium in the country, but the NFL has got a multi-billion dollar deal with Anheuser-Busch. Outlaws not going into those stadiums. So for us, it is again, a really efficient way to gain that floor space that otherwise would be really, really difficult to get.
[00:44:11] Justin Kendall: Which consumers is this really breaking through with? Do you have the sort of demographic data that you can share on who this is appealing to?
[00:44:20] Speaker 5: Yeah, it's like domestic beer drinkers, which by definition, we lean more male than female. We have a great female consumer following, but, you know, we lean way more male than we do female. And when we look at the kind of socioeconomic data within the brand, it does well with high income, low income, middle class, race, agnostic. I mean, one of the things that we're seeing that I think is really interesting. is we're seeing a pretty heavy uptick in Hispanic consumption, which is something that, you know, even during my time in Anheuser-Busch, we're trying to figure out how do we get Michelob Ultra in Hispanics' hands. How do we get, you know, Budweiser in Hispanics' hands cause obviously Modelo and, and Corona were just eating and eating and eating that market share. And so we're seeing it and the demographic data that we look at. We fall within the light beer category. We're not pulling people off of, you know, fine Napa cabs. We're pulling people from Bud Light, Coors Light, Bush Light, Miller Lite, High Life, and those are consumers. What I think is really interesting about the data is we kind of have a dichotomy. We have the 21 to 26 year olds that are probably very budget conscious, that are certainly hooking into the brand. But what surprised me is our second largest demo is actually 45 to 60, which is shocking because that's probably the most brand loyal, you know, my dad's a little bit older than that, but that's my dad who was a staunch, he, he's not anymore, I've, I've converted him, but, you know, a staunch, either Budweiser or Michelob Ultra guy. That consumer group, you're seeing flip on over to Outlaw. I'd love to tell you that I knew why. I don't. I don't know if it's they're looking for a change. I don't know if it's that the marketing isn't resonating anymore with that demo, but it's interesting that that's kind of our dichotomy. We've got this kind of older generation. That should be super brand loyal to the existing brands. And then we've got this younger generation that is candidly just looking for something that wasn't their dad's beer.
[00:46:30] Justin Kendall: Well, and it also feels like at this time with the price increases that we've seen, the price segments are inching closer together. They're not getting further apart. They're closer together than they have been.
[00:46:43] Speaker 5: Yeah, they're getting compressed. I don't know why it's not being talked about more, you know, Harriet over at um at his BBD wrote about it earlier this year or end of last year. Beer pricing from an index perspective compared to spirits and wine and RTDs has never been more compressed. So people are now having to make the decision or have the luxury of the decision. Do I want beer or do I want something else? Versus before it was, man, a 24 pack gets me, however long it takes somebody to drink a 24 pack, but it was a known price and it wasn't hurting the wallet. Now, you know, you got places where premium light domestic beer is pushing mid 20 bucks. That's no longer in that like, don't even have to think about it anymore equation.
[00:47:32] Justin Kendall: We talked about lime. That's a big opportunity for 2027. Yeah, but what are the other big opportunities do you see? Are there other package plays that you're looking to do? Are there other price promotions? Like, what is some of the 2027 strategy you can share?
[00:47:51] Speaker 5: You're gonna see a couple of things from us. One, you're gonna see the continued promo price support because it, it just, it's working. Wonderfully well, and it's disruptive. 2, you're definitely gonna see more investment from us around brand awareness and marketing. Obviously not to extreme levels, but if you ask 100 Americans, you know, have you heard of Outlaw Light beer, you might get one today, maybe not even one. Even though the volumes are substantial. It's still from a brand awareness perspective, like very low. So, we want to drive that up and find ways to do that, you know, like I said, we've really kind of dove in headfirst into NASCAR, and I think we'll continue to look at other investments to drive brand awareness and brand equity. And then the third one for me is just continued distribution. I mean, we've, we've got a nationwide footprint now. You know, there's certain states where we do extremely well. There's other states we've got To work on our performance and our volume. We obviously, we do really well with, with Kroger, with Walmart, with Safeway Albertson's, with Circle K. I'm forgetting retailers here, so hopefully nobody gets mad at me, but there's still major retailers that don't carry us. And, and I mean, I'll be perfectly candid, like Publixx in Florida. They do not carry Outlaw. That's a huge gap in a huge beer market. In the US. And what's amazing is, you know, Florida is our 2nd or 3rd largest market in the country without Publix, which is pretty amazing. And so, you know, I think you're gonna start seeing a lot more incremental distribution from us. And the last kind of key to the puzzle for me, I'd always been taught, you build a brand in the on-premise, and then the off-premise comes, right? Well, we did it completely ass backwards. We built the brand in retail. And we really didn't get much traction in the on-premise. Well, that's now changing. There's, I can't say who yet, but there's 3 major national on-premise retailers that will be launching and mandating outlaw nationwide next year. Think big. That's gonna be a big driver from a trial perspective and awareness when you see us on menus starting towards the end of Q1. And so that to me is kind of the final domino is major on-premise chain. Do they serve wings? No comment. Doesn't every bar serve wings? I'll, I'll leave it there. But you're gonna start seeing some major on-premise attention given to Outlaw, and I think we've earned it. And, you know, I was candidly, like I said, I was surprised. I thought that on-premise would actually be the early adopter, especially with the aggressive price model, but in this instance, it was backwards. We did retail. We still need to do a lot more in retail, but now the on-premise dominoes are falling in a big way, and I think that's just gonna be fuel on the fire for us from a growth perspective.
[00:50:43] Justin Kendall: You launched buckets earlier this year, 24 cans, you know, 19 bucks in, in some markets. What did you learn from doing that?
[00:50:52] Speaker 5: We're gonna do more and we gotta do more. This goes back to my whole mentality of beer should be fun. Beer lost its way. It got very corporate, got very price-driven, very margin-driven. Beer should be fun, and that shouldn't be limited to just. Fun advertising, fun events, fun interactions with consumers. Bring innovation and fun to packaging. Bring innovation and fun to liquid. We've got a few tricks up our sleeve on some LTOs for next year, but we were talking about what could we do differently. With packaging, right? And we kind of started at the, well, maybe we should do something like Coors Light and the mountains turn blue, and I'm like, guys, that, uh, no, like that's been done. We're not doing that. Well, could we do something with packaging that, you know, is like a wacky pack? Yeah, sure, like, we could go run a 50 pack and try to sell it in Costco or something. Uh, that's fine, it's a cool marketing stunt. And I do a lot of, of home improvements myself. And so I'm a, I'm a frequent at Home Depot, and I've gotten to a point where I no longer get a shopping cart when I go to Home Depot. I just get a bucket, right? So I get a bucket cause you can never have enough buckets, that's my theory. So, I always shop with a bucket, I throw everything in my bucket, I check out, pay for the bucket, and take it home. And so I'm, I'm sitting there with the team and we're, we're, we're ideating and we're actually talking to one of the major retail partners about this as well. So I don't want to take all the credit for this idea, but It just came to life, and it was like, wait a second, what if we put 24 beers in a bucket, sold the bucket with the beer, and everybody kind of was like, How the hell is that gonna work? You can't run it on a packaging line. It's odd shapes for distributors to handle on a pallet. The freight gets a little weird. Is the consumer gonna be like, what is this? Wait, there's a bucket. Do I get the bucket? Is there actually beer in here? When we first rolled it out, we had consumers that were emailing us thinking that the bucket was just full of beer. Not canned beer, that there was just beer in the bucket, and we're like, no, no, no, no, there's canned beer in the bucket. But again, from a marketing perspective, those buckets cost 2 to 3 bucks a bucket, right? We've sold 50,000, 100,000, I, I haven't even looked at the numbers, like, they're huge. And guess what? I now have buckets living in 500,000 to 100,000 people's garage, beer consumers' garages. And next time they're washing the car, cleaning the paintbrush, doing whatever it is you do with the bucket, they're gonna see outlaw light. So for me, incredible marketing opportunity, again, bringing fun and excitement to the category. We are absolutely gonna run some buckets next year. I think it was a huge success.
[00:53:49] Justin Kendall: So when you run something like that, is it difficult to get wholesalers on board? Clearly it limits the type of retailer that you can potentially go to, unless uh Home Depot is getting a, a liquor license.
[00:54:05] Speaker 5: Justin, I've always said that if Home Depot ever wanted to get into the beer game, they would be the number one beer retailer in the country, like overnight, so. Whoever the CEO of Home Depot is, if you wanna talk about, you know, bringing Outlaw in, let me know. There was definitely some raised eyebrows, but to the team's credit, you know, our team's credit and, and our distributor team's credit and the retail credit. We figured it out. Our mantra from day one has been, you know, challenge the status quo, think differently, be persistent, you know, and be willing to try things and, and look, it could fail, you know, buckets might have been a total disaster, but they were a huge success. And so we're gonna continue to look to do that in ways and, you know, kudos to the distributor and retailer partners because, yeah, they, they raised some eyebrows at first, but again, there's so little. Excitement in the beer category right now, that people are willing to try just about anything, and buckets are a good example of that.
[00:55:04] Justin Kendall: What did you learn from launching the tea beer?
[00:55:08] Speaker 5: I love beer tea. I have it in my fridge. We have not formally DQ'ed it. We've got a couple of markets that it works well in, but The biggest learning is, and I should have known better. When we launched Outlawed, it was 100% focused. Everything we did was focused on Outlaw at retail, at distributor, as a team. It was 100% focused. T was kind of our, and I'll own it from my position down. T was like, uh, uh, seems like a cool idea. Let's try it and see what happens. There wasn't enough of a plan. The execution wasn't there. We didn't get it far enough in front of it with our distributor partners. I'd like to take another run at T, but certainly we're taking the learnings from T. Over to Lime, and, you know, look, effective Jan 1, my team is gonna have 100% focus on Lime. Now, not that we're gonna turn our backs on, on Outlaw, but Lime, we're not gonna allow the lack of focus or distraction component to be an element. We are gonna give it everything we got and bring it to the market. And, and look, I think lime's gonna be An absolute monster, and I'd like to take another run of tea down the road with the kind of focus that we're bringing to line.
[00:56:29] Justin Kendall: What's lime hitting the market in with packaging formats?
[00:56:33] Speaker 5: It'll be 12 packs, 24 packs, and 30 packs.
[00:56:38] Justin Kendall: So going big, yeah, have to. Do you do a, a big single business?
[00:56:44] Speaker 5: Certain markets, 24 ounce cans do particularly well, but what we found is we've used our 16 ounce cans as a single to hit a disruptive price point at 99 cents a can. So when you see like, And granted, I, I'm pulling prices completely out of thin air here, but you look at the 24 ounce domestics or 25 ounce in some instances, you know, anywhere from like $1.49 to $2 a can, some markets it's higher. You know, we said, wait a second, what if we actually went smaller to get to a lower price point to be disruptive. So we've rolled a 99 cents, it's been out all year, 99 cents, 16 ounce can. Out in the market and it's, it's a monster, and it's driving a lot of trial and a lot of repeat buys, especially in the convenience channel.
[00:57:34] Justin Kendall: As we're looking at the end of the year here, how are you pacing? Do you have a barrel figure that you're expecting to hit or a case number by the end of the year?
[00:57:44] Speaker 5: Yeah, so our, our run rate right now, if you take, you know, the last, and, and what's fascinating to me is like the last 3 years with Outlaw, we've seen kind of the standard seasonality curve, kind of start picking back up in March, April, big months in the summer, and then you kind of tail off and you do it again. We're not doing that right now. We continue to grow month over month over month into October, and we're looking at forecasted orders for November right now, and they're bigger than October, which for light beer brands like, whoa, that's different. And so we're outgrowing the seasonality, which is incredible. You know, right now we're running at about a 250,000 barrel clip with a single brand being outlaw. You know, I think that next year, and, you know, plenty of people tell me I'm nuts, I think we'll eclipse. 3 to 400,000 barrels and axless across lime and Outlaw. We're gonna finish this year about 150,000 barrels. Again, that run rate puts it closer to about a quarter of a million barrels. We picked up so much chain distribution in March and April of this year. This year that those 1st 3 or 4 months were kind of quiet, and then it just took off. So we're expecting some pretty big volumes. I mean, this year has been amazing. I would say it's vastly outpaced my expectations, and I think we can 2 to 4x it next year.
[00:59:08] Justin Kendall: Wow. So, end of the year, what number do we hit?
[00:59:13] Speaker 5: 150,000 barrels
[00:59:15] Justin Kendall: sold. 150,000, yep, that's a big figure. I mean, that's top 25 craft brewery, even better than that.
[00:59:24] Speaker 5: Well, I always try to remind people, I say, look, like, you know, I look at the TTB ranker or, or who is it, brewers Association that puts out, you know, top breweries in the US. You know, I look at like the guys that are in front of us, I'm like, yeah, they're doing that with like 40 brands. We're doing it with one. That's nuts, and we want to continue to stay focused. We'll extend off of Outlaw, but we have no interest in additional brands coming into the, to the focus, at least not right now.
[00:59:55] Justin Kendall: What do you see is the overall goal for Tivoli and Outlaw? Is there an eventual exit, or is this, uh, we're gonna ride this as long as we can to see what we can do here?
[01:00:07] Speaker 5: We are certainly not marketing an exit. We don't have any interest in selling the brand. You know, I've said from day one, launching Outlaw just in the state of Colorado that Outlaw should be the number one beer brand in the US, period. That's our mission. And, you know, it's gonna take. Hell of a lot of capital to do it, you know, the infrastructure conversation starts getting really interesting when you start talking about, well, you can contract brew, but that has its own complexities and risk. Building breweries is a monster undertaking, especially on a national footprint where freight continues to just be a brutal, brutal hit to the P&L. So, the closer we can produce to where that beer's gotta go, helps enormously. And so we're gonna continue to, to manage against that. I mean, we've got planned volumes up to half a million barrels ready for next year, so no concerns on out of stocks or being able to keep up. Kind of the good and the bad things about the industry right now is there seems to be like endless capacity. There's capacity everywhere. You can find capacity. This isn't 2015 where, you know, nobody's got capacity for anything. Right now. You can call just about anybody and they've got capacity. And so, we want to continue to push towards that goal, not gonna happen next year, not gonna happen in 2 years, could take 5, 1015 years. Bud Light didn't get to #1 and, you know, I think it took what, 3 decades to get there. So it takes time. I don't know. What partnerships might come along the way. We're a pretty open book, you know, any strategic or partnership that would be accretive towards our goal of, you know, getting Outlaw to be the number one beer in the US we would certainly entertain. But right now we're heads down and pressing forward.
[01:01:58] Justin Kendall: And Top skew is the 12 pack, right?
[01:02:01] Speaker 5: Correct. Well, 30 pack is right there with it now, so it's, it's right back and forth between the, the 30s and the 12s.
[01:02:10] Justin Kendall: What's the sweet spot price on your 30 pack?
[01:02:14] Speaker 5: $1799 to an 18 to a 1999, that sub $20 mark, you know, Bush, depending on what they're doing with Price, Keystone, Natty, Miller, all kind of hover in that like 18 to 22 range. We wanna kind of slip right under him for right now, continue to deliver on that value which consumers are responding well to.
[01:02:37] Justin Kendall: You mentioned it's not an everyday thing that you're running these, you know, shock and awe prices. When is the right time to run those?
[01:02:45] Speaker 5: My rationale and thinking towards it has always been promo around experience. So, I do believe, and I, I think, you know, you can listen to some of the best marketers in the world, experiential drives such strong marketing resonation with the consumer, and it also drives loyalty, right? I mean, that's a, a huge, huge component of it, and so, If we're gonna invest in a promo, especially some of the more aggressive ones that we're running, I want it to be more likely that that beer is being consumed around an occasion, rather than every day or every week or whatever you wanna call it, normal consumption. So, that typically then falls on key holidays. Typically, people are getting together with family and friends, Memorial Day, Labor Day, July 4th, Veterans Day, but again, we want to lean into Our own versions of experiential, which is why like, we ran that crazy $2.30 12-pack because we were on the 23 car in Phoenix. Now, we only did that in Phoenix. So, we didn't go run that nationwide. We ran it in a market that we were on a top-performing NASCAR team's race car for that weekend and my hope is that Consumers that went to the race, were buying the product. I'm hoping that consumers that were watching the race bought that product, and typically that's gonna be around an occasion or experience that's gonna drive that memory and that brand awareness.
[01:04:16] Justin Kendall: Nice. Well, I appreciate you taking the time out, Ari. Thanks so much.
[01:04:21] Speaker 5: No problem. I greatly appreciate the time and like I said, I, I hope that other people get on the, the train. I've always said like, almost my entire career has been in beer. I love beer. I think it's been neglected and abused for the past like 10 years, both from a political standpoint, from a health and wellness standpoint, from an RTD standpoint, THC, Delta 9, Delta 8, I mean, the list goes on and on and on. And to me, I mean, beer has been bringing people together for as long as history has been written, and I just can't imagine a world where beer isn't thriving and You know, I don't wanna just be cheering our success, I want beer to be successful, but I think a lot of things have to change for that to happen.
[01:05:05] Justin Kendall: Completely agree. So thanks again.
[01:05:09] Jessica Infante: And that's our show for this week. Thank you for listening. The Brewbound podcast is a production of Bevnet CPG. Our audio engineer for the Brewbound podcast is Joe Cratci. Our technical director is Joshua Pratt, and our video editor is Ryan Gilang. Our social marketing manager is Amanda Smerlinsky. Our designer is Amanda Huang. If you enjoyed this episode, please share it with your colleagues and friends and review us on your listening platform of choice. You can find our work at Brewbound.com. And we also welcome feedback and suggestions at podcast@brewbound.com. On behalf of the entire Brewbound podcast team, thank you for listening. We'll be back next week.
[01:05:57] Justin Kendall: All right, let's talk about the California Craft Brewers Association's annual summit coming to Irvine in a few weeks, and it's gonna kick off with a beer festival on Saturday, November 7th at the Torrance Municipal Airport. Tastings from 80 California craft brewers. And here to talk all about it is Kelsey McQuaid Craig, the executive director of the CCBA. Good to chat with you again.
[01:06:24] Speaker 6: Yeah, great to be here. Thanks for having me again.
[01:06:27] Justin Kendall: So let's dig into the summit and the festival, because the festival came back, what, a couple years ago, and now it's a major staple of the summit.
[01:06:37] Speaker 6: Yeah, so this actually It is the first time we're having it since COVID lockdown. So it had been an annual tradition. It was held near the state capitol for years, and then in 2019 it was held in Long Beach when our conference had to shift locations. And then, as we all know, everything changed in 2020. And the board of the California Craft Brewers Association decided that this year was the year to try and bring it back. And we've seen the success of some of the local guild beer festivals, and the person who runs the LA Independent Beer Festival has come on to help us with this festival. And so I'm really optimistic about it. It's a really cool venue. It's Zamperini Field, Torrance Municipal Airport. They're shutting down part of the tarmac for us. The Western Museum of Flight is putting historic planes out in the tasting area. You can also go check out the museum. Uh, you can't drink beer in the museum because they have exhibits and stuff, but, you know, you can still check out some really cool aircraft history. And drink beer from places like Monkish and Russian River, and Ism and Radiance, and even like Mountain Rambler, which a lot of people don't get out to Bishop, California. It's a really cool opportunity to try beer from across the state, and we have a ton of World Beer Cup and Great American Beer Fest winners pouring, so it should be really cool and really unique. I haven't had a chance to Drink beer on an airport tarmac, and the runway will be open, so you'll be able to watch like historic planes and Cessnas take off on the runway on the other side of the airport. So, oh, that's wild. Yeah, it should be a very unique beer festival
[01:08:41] Justin Kendall: for sure. I can't think of another beer festival like this recently, and especially with the quality of beer brands that you have there. We're excited. This is pretty unique because I mean, it's a little mix of consumer facing as well as, you know, you get into the trade and the educational sessions and everything. And that's all gonna start on November 9th through the 11th in Irvine. You have the opening night party and then everything gets rolling on Tuesday, the 10th. So, I guess, you know, for those coming to this year's summit, what are you looking forward to, you know, what should they be looking forward to?
[01:09:19] Speaker 6: Yeah, so we have a lot of great talks picked out for this year, and a really great exhibit hall too, if you're looking to source new vendors. But really, the whole point of this conference, it goes to the theme, which is refining the craft. We all know that. The success of craft beer right now really lays in the details and how you work on perfecting and refining your hospitality skills, your beer quality. Beer's never been better. The quality of beer is so amazing right now. And it's all because we've worked so hard on refining those little details that go into the business of craft beer. And so that's really what we're looking at this year. is how do you refine your business model? How do you refine your beer? How do you make it so that you stand out amongst the crowd? And the talks that I'm really looking forward to, one of them is a technical talk, and I can't do it justice completely, but what they're calling it is an on flavor sensory. So typically we do off flavor sensory analysis of, you know, what kind of taste and smell. would show that a beer isn't gonna come out the way you want it to. So this would be an on-flavor sensory course. And looking at what flavors and profiles do you want to see present in order to elevate other flavors in the beer. So this is only the 2nd time. Li Lehman's giving this talk. So it will be fresh. It will not be something that you have heard before. So for the brewers out there and the highly technical folks, this will be a really great course to sit in on. We'll also, if you're, you know, on the marketing side, we'll have talks about how to bring people into the tap room and keep them coming back. We'll also have talks on everyone's favorite topic, compliance, and how to not run afoul of ABC. We'll actually have Lee, who works on the compliance side at California ABC. There with a panel talking about ways to make sure you don't violate pay to play laws and the things that no one likes talking about, but can really devastate your business. We'll also have some discussion on if you are distributing or want to get into distribution, what are the pros and cons, what do you need to look for. And we'll also have some talks about, you know, building culture and building. Your brand and your organizational culture to really line up with who you are as a business and making sure that it's not just your team that feels it, but it's the customers and that everyone understands that. That's the culture of that brewery. That's what they're about. That's where I want to keep spending my money. So that'll actually be the keynote address that's going to be focused on that, on how do we build a culture within an organization, within a business that reflects the mission and the vision of that company and spread that beyond just our internal team culture, but into the entire tap room and the customer base and really becoming That community and building that family that keeps coming back to the brewery. So those are some of the big ones that I'm excited to hear. You know, we're bringing back the consultation corner this year. So, if people wanna get direct one on one advice on retirement plans for their employees or health benefits, I know healthcare costs keep going up. I know as an employer, And the CCBA sponsored health plan will be there to talk to people about what rates are out there, what they can maybe get and stuff. And then we'll also have the craft beer attorney there. To do some consultations on ABC compliance. We'll also have the former chief counsel of ABC Matt Bodding there to give a talk in Q&A. It should be a very good program, and I think basically anyone on a brewery's payroll can find something they will take away and be able to implement the next day when they go back. I have to give a shout out to my event manager, Daniella, and our fundraising and events committee, which Laurie Porteritz Mog City chairs and has deemed the fun committee because they really do have a lot of fun putting this conference together and the beer festival. So, shout out to the volunteers who have reviewed all the proposals and put together a, a really good program.
[01:14:16] Justin Kendall: Yeah, it's a great program, and it's something that I, I've got a few things that I've like, checked, like, oh, I'd like to check that out, you know, like the distribution management talk with Smog City and El Segundo and Sierra Nevada. You mentioned the keynote speech, which is definitely of interest, and you pack so much into really a day and a half of educational sessions. I mean, it's gonna go by real fast.
[01:14:44] Speaker 6: Yes, and that's again, shout out to Daniella, she is the mastermind behind this conference, and she makes it so that everyone gets a really good bang for their buck.
[01:14:55] Justin Kendall: I want to talk to you a little bit about the state of the industry right now. So, if we were to pulse check it, how would you describe the state of the industry in California at this moment?
[01:15:05] Speaker 6: I would say from a beer perspective, just the quality of beer is fantastic. We're seeing amazing beer pop up all over. I think in California, we faced the downturn a little earlier than other states did. And so we're also leveling before other states, and you're still going to hear about closures. Everyone likes to talk about that. No one talks about all the openings. We've seen a lot of openings as well. In the last couple of quarters, we've seen about equal openings and closures of licenses, and we've even seen some places open in locations that had previously closed.
[01:15:48] Justin Kendall: Our favorite thing, the hermit crab.
[01:15:50] Speaker 6: Yes, there's at least, you know, 1 or 2 in Sacramento that have done that, and it's nice to see those places get revitalized. Right now in California, the issue is not the beer, it's not the beer consumption. It is the death by 1000 cuts for small businesses. I love California. I lived in California most of my life. I don't plan on moving from California, but We really like to over-regulate things. And so right now, one of the biggest problems I'm hearing from members is I got hit with a payroll lawsuit or an ADA disability lawsuit. And there's no right to remedy. There's no way to show that I was trying to act in good faith, and I have to pay lawyers to try and clear my name or to have to settle and act like I was doing something wrong when really I just want to do the right thing, but the cheaper option is to settle. And so a lot of what we have been doing at CCVA. is engaging in the legislative and regulatory arena on what would be called like traditional business type legislation. It's not even beer as much or alcohol as much, which we still do plenty of that. Don't get me wrong, but a lot of the heavy lifts have been on the business side, and how do we try and make business more affordable in California, and the one that's really drained a lot of our time. Is the extended Producer responsibility EPR Bill, SB 54, which was passed a few years ago and is finally starting to get implemented, and that has been probably since August, July or August, just consumed most of my and our lobbyists' time is trying to get a fix for craft brewers. That's really where the industry is. When I hear that someone is struggling or tightening their belt, it's because they had to pay a lawyer. For XYZ issue or the cost of rent went up or liability insurance went up. So really, The beer is good, the beer is fine, people love beer, but the business side is, is really where people are getting pinched.
[01:18:09] Justin Kendall: You can sort of understand where that comes from too, because California is one of the most, I mean, it's #2, I believe, in beer consumption next to Texas, if not #1, and likely #1 in a number of craft breweries. So, it's that outsized size that sort of, you know, makes everything look larger there, but uh, Absolutely interested in hearing your talk to with Chris Walker on the legislative priorities, and that's gonna be a feature at the summit. And you mentioned the extended producer responsibility, and that's something that we've been tracking as well and have talked about on the podcast is, you know, what does this mean for producers? And the answer that I, I believe is the fines are starting to roll out in January, right?
[01:18:57] Speaker 6: Yes, so this is something that a lot of breweries do not have on their radar. Admittedly, I can't blame them. Even the administrator of the program, the California Circular Action Alliance, has admitted that they can't fully implement the program. So when the entity tasked with implementing the law says they can't fully implement the law, how are small and mid-size and even larger breweries supposed to understand what they need to do? So, EPR was put in by SB 54 a few years ago. It was passed through the legislature. It was said that it was going to be a single-use plastic bill. We were trying to prevent plastic forks and Styrofoam takeout containers and all of that stuff. And there was an exemption for things covered by the bottle recycling program. So, admittedly, craft beer said, OK, cool, our stuff is exempted because it's regulated under the bottle bill. We're good. Well, there's this line in SB 54 that says that caliber cycle can regulate. Any other product it deems necessary. So basically, they've decided, hey, you know what, we're gonna go after all plastic, and it's actually counter to a lot of their recycling goals. Because craft beer is already a very, especially in California, a very sustainable business. We've got, you know, Sierra Nevada with the first solar panels. The solar panels have already gone through their entire life cycle and had to replace them. We do brews to barns, we donate spent grain. To farmers and ranchers, we have water sustainability efforts. Everything that craft beer does is very conscious of the resources that it uses. Without water, we don't have beer. Without grain, we don't have beer. So we need to be good stewards of the environment. But this bill, because we're already such a good stewards of the environment, our plastic use targets are already really low, and so it's very difficult to cut plastic use, unless you're looking at things like pallet wrap. And are you going to not wrap your pallets? That's a workers' comp violation waiting to happen. That's a serious injury waiting to happen. But under EPR in California, guess what? You have to report your pallet wrap. And that's not something that a lot of people have considered. They think, oh, it's Pact-Tex. Well, it's anything that has your logo on it. So if you have a cardboard box that is lined with a type of plastic, so that it doesn't disintegrate when it's in the grocery store shelves, that plastic lining has to be reported. Your keg wrap, your pallet wraps, that all has to get reported. We're at the point of trying to determine if the glue onto your labels has to be reported. So, there is a level of minutia, and I have seen from some member breweries who have already signed up and registered through Circular Action Alliance and have done their initial baseline reporting. That they also distribute to other states with EPR programs, and they've shown me the spreadsheets and the Colorado spreadsheets, like, just a little bit. It's super easy, super simple, and then California is just line after line and tab after tab of data, trying to figure out what in the heck they're supposed to report, and the entity to oversee it isn't getting back to people. It'll take a month or two for them to respond. And so how are you supposed to know that you are accurately reporting and trying to be in good standing with the law. When Circular Action Alliance doesn't even get back to you for 2 months, and fines start getting issued in January, and we have already heard from Cal Re Cycle and Circular Action Alliance that there is a baseline level of fines that they need to issue to function and to operate. So it doesn't matter. What your actual plastic reduction was between 2024 and 2025, 2025 to 2020206, which by the way, you have to back report. So I hope you remember how much plastic you used over the last few years. The fines that start coming out next year are going to be divided amongst the people that filed, essentially, and they're gonna find a way to make up that amount that they need to issue to operate.
[01:23:46] Justin Kendall: That's wild.
[01:23:47] Speaker 6: It is wild. It is gonna be devastating. And if you don't pay your fines, and you're not in compliance under SB 54, you technically could lose your business license in California. So this is all a lot of doomsday, and I feel like every single presentation I give on it is like a scared straight type of presentation. And terrifying people, but that's the reality we have right now. And the talk Chris Walker and I give, it's gonna go into a little more detail of some of the things we're working on to try and pause the implementation or. At least pause the fees on this. There are a lot of entities that are involved and a lot of stakeholders that want to get the money from the fees that'll be levied. So it's an uphill battle, but we have a couple of different avenues we're working through, and we're hopeful that by summit, we will have something to tell the membership beyond, you know, we're working with legislators to try and get a reform. But it's definitely something that if it is not on your radar, it needs to be. And if you are distributing or doing business in other states that have EPR, California's Circular Action Alliance will require you to register and you will be impacted by this. So, start wrapping your pallets, unwrapping them, and weighing the amount of plastic, and multiplying that out by the number of pallets you do, cause at the bare minimum, you're gonna have to report that.
[01:25:23] Justin Kendall: Wow, I'm interested in hearing more at the summit and seeing what solutions that you all have and, you know, what you're hearing from lawmakers because that's a lot for brewers to take in and then definitely worth going to the summit and seeing where this is going. I guess before we get out of here, tell folks how they can get tickets to the festival and also how they can get tickets to the summit and anything else they need to know before they go.
[01:25:50] Speaker 6: Yes, so, everything can be found through the CCBA website, californiaCraftbeer.com. If you go to the events tab, you can find both the Summit Festival and the Summit conference. Summit Beerfestival.com is the festival, uh, website, and tickets are sold through Eventbrite. You can also go to CA Craft Beer Summit and get your conference tickets through there. The online ticket sales cut off on the 31st for the conference, but there will still be tickets available at the door. So you can still buy tickets on site. We'll still let you in. We just need to print name badges. But everything can be found through the website, californiaCraftbeer.com. And you can also follow us on social media and get updates through there, but we're really looking forward to seeing you in Torrance and in Irvine, and looking toward the year ahead and what we can do for craft beer in 2027.
[01:27:00] Justin Kendall: Well, I'm looking forward to being there and uh seeing it all. So thanks for doing this, Kelsey. Yeah,
[01:27:06] Speaker 6: thank you, Justin.
