[00:00:00] Speaker 1: More SKUs, more data, more complexity. The beverage industry is changing fast. VIP helps suppliers, distributors, and retailers stay ahead, turning purpose-built beverage data and technology into smarter decisions and better results. For more than 50 years, VIP has helped power the beverage industry. Now, they're building what's next. VIP, empowering smart decisions. Visit VIPinsights.com for more information.
[00:00:38] Justin Kendall: Hello and welcome to the Brewbound Podcast. I'm Justin Kendall.
[00:00:42] Jessica Infante: I'm Jessica Infante.
Zoe Licata: And I'm Zoe Licata.
[00:00:45] Justin Kendall: And we're back together again as the courts mandate.
[00:00:49] Jessica Infante: We've been forced together.
[00:00:50] Justin Kendall: Good that we're here together for the start of August.
[00:00:53] Jessica Infante: Yeah. How many weeks have we been apart now?
[00:00:56] Justin Kendall: Quite a bit, at least two.
[00:00:58] Jessica Infante: Look, it is summertime and we have places to be and things to do.
[00:01:02] Justin Kendall: That's right.
[00:01:03] Jessica Infante: And an unlimited paid time off.
[00:01:07] Justin Kendall: That newsletter doesn't put itself out.
[00:01:09] Jessica Infante: Shockingly, no, but thanks for holding it down last week. I had a nice week. Good. My review of the weather is mixed.
[00:01:19] Zoe Licata: I think that's the state of things these days.
[00:01:21] Jessica Infante: Yeah, man, what a weird summer. I'm back in Massachusetts from our long stay in New Jersey. I do want to give a shout out to friend of the pod, Scott Burney of Vault Brewing. Scott recently joined us in this listener journey, like starting like probably after I'd left the shore last summer. and was listening to the podcast and heard us talk about me being down the shore and dropped me a note. And he also spends his time in beautiful Lavalette, New Jersey. So nice to always meet a fellow beer person at the shore. And he invited us over for beers and really great stuff. Nice. So thanks, Scott.
[00:01:55] Justin Kendall: Leave us a five-star review, Scott. You can leave us a five-star review too. That would be appreciated.
[00:02:03] Jessica Infante: Very much so. Maybe a nice note.
[00:02:06] Justin Kendall: This week, we have a pod conversation with LakeHour CEO, Michelle Ivey. Jess, you conducted this interview. What's Michelle got to say?
[00:02:16] Jessica Infante: Michelle is feeling really energized and excited about Lake Hours plans. They're a spirits-based RTD that is kind of born out of COVID and they just launched Texas. They're kind of all over the map in terms of distro, which is interesting, but their home base is in New York. The lake in question is the Finger Lakes in their name. And they've got some really interesting flavor combinations, yuzu, rosemary. I just really appreciate what they're doing. Their branding is gorgeous. And I'm excited to kind of see where they go. They just launched Texas in the Austin area with Reyes, but they've got some pockets of distribution in the upper Midwest in that lakes area. Yeah, it's just a really interesting approach to a brand. Michelle is a longtime beverage veteran, both alcohol and non-alcohol, and she was just a delight to chat with. So I think you will enjoy it.
[00:03:14] Justin Kendall: We've got Brewbound Live coming up December 9th and 10th in Los Angeles. We've got great guests joining us. We've got a keynote by Allagash Brewings, Rob Todd and Celine Fru. We also have an on-premise conversation with Lester Jones from the NBWA and Jennifer Hawk from DraftLine. They're going to go over why occasions are the story this year, not cases. That's really playing out too in a lot of the data that we're seeing, especially driven by the World Cup this year. Exciting stuff to get into there. You can get your tickets now. You can also find your next job on the Brewbound job board. Jess, have you ever wanted to go to Stanford?
[00:03:54] Jessica Infante: I've been there. My cousin graduated from there in 1996 and we took a big family trip out and did all of California. And I remember being a little baby who was like, I love this place. I want to live here. And now I don't think I could ever live in California, but beautiful campus.
[00:04:08] Justin Kendall: Well, you know what your cousin missed the opportunity to be? The lead brewer at Stanford University. That is one of the jobs right now on the Brewbound job board. It's part-time, it's temporary, but it could turn into full-time. They are launching a new on-campus brewery.
[00:04:25] Jessica Infante: I am going to send this to him because I think he's actually looking for a change. Does he know how to make beer? No.
[00:04:32] Justin Kendall: Can he lift 55 pounds? Probably. That is one of the qualifications. So if you're out there and you want to be the lead brewer at Stanford, you can be check it out on the brew bound job board. Lots of great jobs there. Also, if you're looking to hire, you can find your next star employee on the brew bound job board head over there, but we got a lot of news to cover. Let's start with cannabis. Just a real quick thing there. The Senate approved a 30-day hemp deadline extension. So this could be the lifeline that the industry is looking for, at least for now. The U.S. Senate passed a continuing budget resolution over the weekend that extends the deadline until December 11th. So we could even have a hemp-based conversation at Brewbound Live and we could live on the edge right up until December 11th, whether this thing's gonna survive or not.
[00:05:31] Jessica Infante: I think we put up on the screen behind the panelists a text to vote, will it, won't it? And we'll just have like a running tally all day.
[00:05:40] Justin Kendall: I like it.
[00:05:41] Jessica Infante: I like that. With a countdown clock. Can we get Steve Kornacki?
[00:05:45] Justin Kendall: I don't think we can afford him.
[00:05:47] Jessica Infante: That would be fun.
[00:05:48] Justin Kendall: He might have better things to do in December.
[00:05:51] Jessica Infante: We'll get him a board. Yeah.
[00:05:53] Justin Kendall: Maybe we'll get you a board. Maybe you can be our Steve Kornacki.
[00:05:56] Jessica Infante: I could try it.
[00:05:57] Justin Kendall: Why not?
[00:05:58] Jessica Infante: I look bad in khakis.
[00:06:01] Justin Kendall: I do too. I don't know what to say.
[00:06:04] Speaker 3: I don't think anyone looks good.
[00:06:06] Justin Kendall: No.
[00:06:06] Speaker 3: Except Steve.
[00:06:07] Justin Kendall: Unless somebody listening to this is wearing khakis, then you, you are looking real good in those khakis.
[00:06:14] Zoe Licata: You look great. Yep. I guess we're just waiting until then again. Painful. It's such a weird time. And in the meantime, folks are still making their products. Some are coming out with like versions that are going to be acceptable under the new rules, but it's so limited that who knows what consumers will get those. I did have an interesting conversation with Dave Thibodeau, who's the co-founder of Ska Brewing today. And he mentioned that they have a low-dose THC beverage. They're in Colorado, so the sales of what you can sell outside of dispensaries is pretty limited. But the product they do, they sell to-go at their taproom. And he said it sells double into-go sales what their top beer to-go is. Wow. So it's pretty popular.
[00:07:03] Justin Kendall: It's such big business and that dovetails to the Tilray Brands investor call that I covered last week. And Irwin Simon, the CEO of Tilray reiterated that. if there was federal legalization in the US, it's a billion dollar business. And this was all during his sort of spiel that their stock is undervalued and that they are not just a cannabis company anymore. His quote was, we are no longer defined by one category, one market, or one regulatory outcome, which I don't know, as a longtime listener, on these calls. A lot of the conversation is about legalization. what might be and he covered some of that, but he's also like, we've got all this other business that we're doing in beverage and hospitality and wellness and beverage jumped really big in the quarter with the addition of BrewDog as you would expect. And they've spent a whole lot of money on that to stabilize the business. He did not mention accepting any offers from anybody to buy the brand either. Because they're going to ride this horse. That's one of their main horses. Surprisingly not their national brand. Maybe surprisingly, maybe not. Those are shock top in Carlsberg.
[00:08:26] Jessica Infante: Did he have any messages for James Watt?
[00:08:28] Justin Kendall: He did not. He dropped no James shade. He also didn't talk about throwing parties at his house or anything.
[00:08:36] Zoe Licata: How disappointing. Yeah, the Tilray calls have been forever since we first started listening because of their craft acquisitions. They were always saying, you know, we're setting ourselves up for when federal legalization happens. But at the beginning, they're saying we don't see it happening necessarily anytime soon or it's not reliant on this happening because we're going to set up other things. Now, it seems like they're being a bit more honest and saying, OK, we kind of thought something would have happened by now, but also we have done what we said and have set up enough other things that we're still going to be OK.
[00:09:10] Justin Kendall: Yeah, and should that day come, they have all this infrastructure that they're able to tap into and work through and already brands that they've built in Canada. So will be fun to watch play out, but craft beer is kind of the horse that they're riding at the moment until then.
[00:09:30] Zoe Licata: It's a wild statement. Yeah, who would have thought?
[00:09:36] Justin Kendall: Well, I guess I'm downplaying to their wellness and other businesses.
[00:09:41] Zoe Licata: Yes, they are still a global company with a lot going on beyond just the stuff here.
[00:09:48] Justin Kendall: Yeah.
[00:09:49] Speaker 3: Your inbox should reflect the parts of CPG that matter to you. Choose from BevNET's seven free newsletters covering beverage, food, beer, spirits, careers, education and more. Sign up and select your favorites at cpgmedia.com slash newsletter.
[00:10:06] Justin Kendall: So should we talk about AB's call or should we talk about Lester's webinar? Which direction on this choose your adventure should we go down?
[00:10:15] Jessica Infante: I think I would like to hear about Lester's webinar.
[00:10:18] Justin Kendall: All right, let's do it. Zoe, you sat in on the call. I listened for as long as I could, but I had to hop off.
[00:10:25] Zoe Licata: Yes, we had our latest quarterly call with Lester and with Eric Kaiser from FinTech. So normally they're going over, you know, FinTech's invoice data, seeing what trends are happening in both the on and off premise. But because of the World Cup and all we saw with the impact of that on bars and restaurants, Fintech did a separate survey of retailers and was asking them, how did the World Cup meet your expectations? Did it exceed them? How were out of stocks? Were you prepared enough for the World Cup? And they found that about a third of the retailers that they surveyed, and this is purely on responses, this is not actual concrete sales data. A third of them said they ran out of at least one alcoholic product, and that was mainly due to them not expecting as big of a sales boost as what happened. They knew there was going to be something happening with the World Cup, and they knew there was going to be some sort of boost, but it was more than what a lot of folks thought was going to happen. Of course, there were still some people where it said, oh, it didn't meet expectations, particularly in California. They kind of talked on the call that was due in part to, you know, California had multiple host cities for this event. It's already a big soccer culture there. So I think they had pretty high expectations for it. And maybe it didn't necessarily meet the level that they expected. But other host cities and other states that didn't even have games going on, they had way more of a boost than they thought.
[00:11:52] Jessica Infante: So it's kind of cool. I wonder if this enthusiasm for soccer will return next summer for the Women's World Cup. Yeah. It'll be interesting to see, like, what was the special sauce here? Was it the fact that we were the host country or what? Because we will not be the host country next summer, but the U.S. women's team is usually quite successful.
[00:12:12] Zoe Licata: Yeah, I'm curious too. This is purely speculation, but I feel like if anything, there might be slightly more boost than previous Women's World Cups just because since the last one, there's been so much development in women's soccer and women's sports here in the US and fandom and everything than there was four years ago. So I think that is definitely going to help. But yeah, we'll see if the turnout changes at all. Another thing that I thought was really interesting from the survey was it wasn't just the on-premise that was seeing more than expected sales, even though in scan data that we've looked at, it doesn't seem like there was necessarily a massive boost from the tournament. A lot of the off-premise retailers in that survey were also saying that sales exceeded their expectations at technically a higher rate than on-premise retailers.
[00:12:59] Justin Kendall: Given that that hasn't shown up in the scans, that's a little surprising, but FinTech is also able to tap into a lot of things that we don't normally get to see on a weekly or monthly basis.
[00:13:11] Zoe Licata: Yeah. And again, these are purely just people's responses. So again, this could just be purely, they had really low expectations and it wasn't as low as they thought.
[00:13:22] Justin Kendall: Lots of talk of zoos too on this call. Yeah. More than you would anticipate.
[00:13:26] Zoe Licata: Yeah. Fintech is kind of continuing to expand the types of accounts that they're getting information from. So they get the invoices from retailers and they've said they've added a lot of zoos that have surprisingly a significant amount of beverage alcohol sales. Zoos, hotels.
[00:13:44] Justin Kendall: Retirement homes.
[00:13:45] Zoe Licata: Yeah. Things we're not necessarily looking at all the time that they're adding to their database, which is super cool.
[00:13:51] Justin Kendall: Lester loves diving into the olds drinking.
[00:13:54] Jessica Infante: Yeah. He also loves to complain that sometimes beer goes places where it doesn't belong. And I swear I've heard him include zoos in that list before.
[00:14:02] Justin Kendall: And barbershops and lots of other things. Yes. It's burned in the back of my brain. this sort of, was it post-COVID or was it pre-COVID? I think it was pre-COVID. Yeah.
[00:14:15] Jessica Infante: The world has changed. I always think of him every summer when we're at the boardwalk and like the Seaside Heights Boardwalk has somewhat recently-ish added a bar, two bars. And they've like demarcated the area where you're allowed to walk around and have your drink. And I always think like, what would Lester Jones think of this?
[00:14:32] Zoe Licata: I mean, Lester did say there has been, his words were, a structural shift in how consumers are buying alcohol and interacting with alcohol. And so it kind of has shifted away from that thought and more to people just want to socialize and have a beverage. And that could be in any place, really, as long as there is a occasion for it.
[00:14:54] Justin Kendall: Eighty percent of the new beer selling accounts are in the on-premise channel.
[00:15:00] Zoe Licata: Yeah, lots of new on-premise retailers opening up and trying to sell more alcohol. They're seeing where the consumer is, where the demand is, and responding to it.
[00:15:11] Justin Kendall: Well, you can check out more from Lester at Brewbound Live, also in Zoe's recap of this FinTech webinar. Become a Brewbound Insider today to get full access to that. And before we get out of here, I wanted to briefly touch on the AB call, which they're not always that fun. I'll be honest. You're always mining for something out of this.
[00:15:35] Zoe Licata: They're a bit tight-lipped in what they share.
[00:15:38] Justin Kendall: Michelle Dukaris had one quote that stood out to me and that was, we are the competitor in spirits, which is hunted becoming hunter, I guess, a little bit. Yeah. Since they are still room to grow there. If they've grown fast with cut water and neutral and we can throw beatbox in there now is, you know, oh, it's wine based, but whatever. Their flavor portfolio is growing. Their presence in spirits is growing. They've on the verge of becoming a top five supplier. Cutwater, I think it was the second largest growth brand in their portfolio this quarter. So they're making big strides there.
[00:16:21] Jessica Infante: Good for them, I suppose.
[00:16:24] Zoe Licata: I mean, look, they had a goal and they have achieved it. Yeah, I think it comes to something that Bump Williams Consulting dove into recently. We've been talking about a lot of these, especially spirits-based RTD brands so much, and they continue to grow. But when you dive deeper into the portfolios of some of these big beverage alcohol companies, Those products still are a tiny piece of their business and there's still lots of space for them to grow, whether it's just their distribution footprint or the places that they're selling. And so even though they seem to be these hot items that we continue to hear them talk about as driving their growth, they still have plenty they can do with those products to maintain that and to continue to expand their presence in that space. Very splashy, but very small.
[00:17:14] Justin Kendall: Yeah. And that gets back to route to market and where these products can go and whether that conversation shifts on equalization ever or not.
[00:17:25] Zoe Licata: Yeah. Justin posed last week of when or if some of these big beer companies will ever switch their narrative about when it comes to some of these things like tax equalization because they're starting to rely on these other products.
[00:17:41] Jessica Infante: I can think of one that I wouldn't be surprised if they changed their tune after being the ones to start that whole conversation five years ago.
[00:17:49] Zoe Licata: Yeah.
[00:17:50] Jessica Infante: But we'll see. Do you guys want one last beach banner plane report? Yes. Yeah, absolutely. The report is there is no report. I didn't see a single traditional beer brand advertised in the skies over the beach. Super Light, Surfside, and Suncruiser. And that was it.
[00:18:10] Zoe Licata: Right? Get in on the banner plane action, people.
[00:18:14] Justin Kendall: Anybody grabbing share in the patio umbrella market?
[00:18:20] Jessica Infante: No, very, very obviously dominated by Suncruiser. Hmm. And Spike Jade had significant share in the boardwalk bars on the one night I went out. I'm so not cool anymore.
[00:18:36] Justin Kendall: Do they have a pretty good on-premise presence, Spike Day? Did you notice them in the bars quite a bit?
[00:18:41] Jessica Infante: Yeah. On the few occasions I actually like went out and about, it was always Spike Day. It was never super light. But what everybody was drinking and what everybody was talking about was super light.
[00:18:53] Zoe Licata: Really?
[00:18:54] Jessica Infante: Yeah. In terms of on the beach and like at my friend's houses, everybody kept being like, have you had this? And I was like, oh, yeah.
[00:19:00] Zoe Licata: Yeah, and they're really starting to actually show up this summer around here.
[00:19:06] Jessica Infante: I wonder what the difference was between like Spike Dade and Superlite. How is Superlite taking off in such a crazy manner? I wonder if it's a name?
[00:19:15] Zoe Licata: Maybe.
[00:19:17] Justin Kendall: Distributor support.
[00:19:18] Zoe Licata: Yeah. I mean, around here, it's Spike Dade that is prominent. Interesting. Even though it's technically the older product, I think because they just recently expanded here. But I don't know.
[00:19:31] Justin Kendall: They taste fucking good.
[00:19:33] Zoe Licata: I know. They do.
[00:19:36] Justin Kendall: Well, let's get on to our featured conversation with Michelle Ivey.
[00:19:43] Jessica Infante: Our guest today is Michelle Ivey, CEO of Lakehour, a thoughtfully crafted vodka and tequila based RTD brand founded by actor Wyatt Russell and producer Rich Pete. Michelle, thanks so much for joining. How are you? I'm doing great. Thank you so much for having me today. I'm so glad you're here. Michelle, you joined LakeHour late last year after helping build larger beverage businesses in both BevAlc and the functional space. So what attracted you to LakeHour?
[00:20:07] Michelle Ivey: Well, I was looking at entering the spirits-based RTD space, potentially on my own with some ideas that I had. But I really wanted to look around and see what was out there. And I certainly wasn't just looking for another beverage company. If I found one that I was interested in, I wanted to have the right brand and the right founders and, of course, the right liquid. We always have to talk about that. I was introduced to Y. Enrich and the LakeHour brand through a mutual industry friend that we all had, and I was blown away with the brand that they built. The fact that they had built this beautiful feeling of family and slowing down and the Lake concept. And then once I tried it, I realized it was one of those, oh, actually brands that when you take a sip, you're like, oh, wow, actually, this is great. This tastes so good. And so I was so impressed with what they did and what they built two years in as startup founders that have had no experience in the industry. We started meeting and talking and I realized it was just definitely a fit for me.
[00:21:10] Jessica Infante: The branding is gorgeous. You don't see that too often in this space where it's just like a really beautifully crafted brand. And this is probably a silly sumshot on my part, but we've been getting press releases about Lake Hour basically since it founded. And I had just always kind of associated lakes with the upper Midwest, Minnesota and stuff like that. But this is actually draws its inspiration from the Finger Lakes in New York, which is not too far from where I went to college. So I know it's a really beautiful part of the country.
[00:21:38] Michelle Ivey: Yes, it's a stunning part of the country. And that is true. Rich and Wyatt came up with this idea when they were spending a lot of time together with their young families towards the end of COVID, as we all did. They were spending time outside of the city, and they were in the Finger Lakes area, which is where Rich Pete is originally from, and they were spending time there together. Wyatt himself grew up on a lake in They just shared a mutual history of that family time and connection. And that is where Lake Arrow was born, in the Finger Lakes region of New York.
[00:22:09] Jessica Infante: You mentioned the liquid. I mean, you need to talk about that. Lake Arrow's flavors are really creative. It reminds me of like an earlier time in hard seltzer, really, where you saw brands coming up with like really interesting flavor combos. And some of that fell away. So I'm really glad to see it come back. What feedback do you hear from drinkers and trade partners about the flavor varieties?
[00:22:28] Michelle Ivey: Again, that comes in with this oh actually reaction because some of the flavors are a little bit scary to some people at first. We have a rosemary yuzu flavor, which for some people, they're like rosemary in a cocktail, in a drink. But you do see rosemary in cocktails on menus in high-end cocktail bars all the time. It's a fantastic flavor to add. And so when Rich and Wyatt were thinking about this brand, they really wanted something to drink that was adult. They weren't looking for another cherry. They weren't looking for another strawberry. They weren't looking for another lemon. And so they worked with some great formulators and came up with some really fantastic, exciting flavor combinations that remain light and fresh.
[00:23:13] Jessica Infante: And just different. I mean, you're right. There's so much repetition throughout the space that this stuff really is, it stands out. And the rosemary yuzu is exactly what I had in mind when I wrote that question. So I'm glad you mentioned it.
[00:23:24] Michelle Ivey: The other one is the honeysuckle ginger. That one's actually my personal favorite. I feel like people really gravitate. Rosemary yuzu or honeysuckle ginger, they're quite different. One goes a little towards sweet and the ginger one goes a little towards a little bit of a spicy flavor. I think they're both outstanding.
[00:23:39] Jessica Infante: What does the innovation pipeline look like right now? How many more of these creative flavor blends can we expect to see?
[00:23:45] Michelle Ivey: So at present, we have nine different flavors across our tequila seltzers, vodka seltzers, and our vodka iced teas. So that is encompassing the entire line, nine different SKUs. At the moment, we are considering some different innovations and looking at things that would be just as exciting in the flavor profile. I think there'll be a little bit down the way for us. And in the meantime, to bring some new items to market, I'm very excited to consider in our innovation pipeline, we're looking at some exterior packaging. We're looking at doing some things with cartons to develop something specific for some of our markets, especially new markets we launched in like Texas and Georgia, and really use that exterior carton, which is a unique thing available to this category, as some additional out-of-home advertising.
[00:24:30] Jessica Infante: I love that idea. That's so smart. You need to have something like that anyway, so you might as well make that space work for you. Let's talk about package formats. What are you rolling with right now?
[00:24:39] Michelle Ivey: Six packs, eight packs, four packs? So for our individual flavors, which as I mentioned, we have nine different flavor availabilities, they're in four packs. And then we have some variety packs available. Our traditional variety packs that we've had are in eight packs. There's a variety pack of seltzers and a variety pack of iced teas. We did just do a new release that we're super excited about. It is literally coming to market this month, and it is a 12-pack of just our two tequila seltzer flavors. So it's a tequila 12-pack, two flavors. That's passion fruit, tangerine, and watermelon cucumber, and there's a huge hit. And I do not say this lightly, and I'd say it with no shame, we have the best tequila seltzer on the market.
[00:25:22] Jessica Infante: Well, I can't wait to try it. I noticed I was, I spend part of the summer in New Jersey at the Jersey shore, which is where I am right now. And I was looking on your website and I noticed that you were in New York and you were in Pennsylvania, but I was a little island in the middle. Can we talk about your footprint a little bit? Because the states that Lake Hour has gotten to, it interests me. I feel like you must have had either really strong relationships with wholesalers in various markets. Like how did this map shape up?
[00:25:48] Michelle Ivey: Sure. So obviously we wanted to establish a meaningful presence in New York. That's our home market. So that is there. Pennsylvania is where we are currently produced. We have our co-packer in Pennsylvania. And Pennsylvania at the moment, through some very recent, less than 24 months old law changes, there's some advantages to having distribution in that market as a Pennsylvania product. So We wouldn't want to pass up on those advantages, meaning we can sell direct from that manufacturer into accounts, which is a unique situation in the PLCB. Plus, Western New York and Western Pennsylvania are really a market. Regionally, they're a market together. So we market and sell that region together. It just happens to cross the state line. So New York and Pennsylvania are very key for us, and they're our core markets. I'm sorry about New Jersey, but just so you know, we are available direct to consumer in almost 40 states. So you can definitely order. That is there. Additionally to that, early on, the founders really looked at Lake Life and Lake Community. So we do have a good presence in Wisconsin and Minnesota, which make a lot of sense. We talked about, you mentioned the Midwest. And then over the last many months that I've been involved, along with our National Sales Director, Jess Brown, we have launched what we do consider to be some fantastic long-term partners in markets we have deep relationships with that are excellent growth markets for this product. And that is Georgia and Texas, as well as Colorado.
[00:27:17] Jessica Infante: And is Colorado online right now?
[00:27:19] Michelle Ivey: Colorado is online right now. So one of the reasons for Colorado, a couple reasons on Colorado, I talked about long-term partnerships. They're very important to build the right long-term partnerships for a young brand. And so we are with Empire. And so we have that Empire relationship across Georgia and Colorado because they are such a relevant distributor in both of those markets. And Aspen, Colorado is Wyatt Russell's home base. So that is his actual home. Totally. So he has the founder home in Colorado. So our two founder homes are New York and Colorado. And then with regards to Texas, we've had a wonderful start of a relationship with Reyes, who, as we know, has been in the news tremendously for their really forward-minded growth happening in the market these days. And we had a long conversation with them around where Lake Gower is going, where Reyes is going, and we decided to go ahead and launch with them this summer, specifically with Capital Reyes, which is only the Austin market and the surrounding counties, so that we knew we would be able to manage that. Anybody who's worked in this industry and done a launch in Texas or managed Texas knows it's really like running four separate states. So we are only conquering one of those at the moment, and we're doing that through Capital Reyes in Austin.
[00:28:33] Jessica Infante: And that's really recent. What are the early reports coming out of Texas?
[00:28:37] Michelle Ivey: They're really good. So I do have a relationship there. Texas was the number two market for many years for Illegal Mezcal. I happen to be a Texas resident myself for many, many years. Even though I do spend a lot of time in New York, that just happens to be work related. So we've had fantastic reception. We're really building this brand on the on-premise and Austin is a wonderful place to do that when you have the right connections with the hospitality groups there.
[00:29:03] Jessica Infante: Absolutely. We talked a little bit about Reyes. They really, I think they have like kind of best in class execution, but they can be a larger wholesaler with a pretty big book. How do you make sure that Lake Howard doesn't get a little bit lost in the shuffle?
[00:29:19] Michelle Ivey: Well, that is certainly our responsibility. That is the brand's responsibility. Distributors don't build for you. You have to build for you. You have to earn that attention, and you do that through proper investment in the market, in my opinion. You have to invest in the sampling, the retail execution, on-premise activation, your social media and consumer awareness, and proper field support. That answer probably sounds really boring because it's not magic. You have to just be there daily and do the everyday work that it takes to build and sell your brand. Because as I'm sure other people have been on this podcast and said, the distributor doesn't sell your brand for you. So you go there, you sell it. And as you're doing that and you're doing all those activities on a day to day basis, attention will come to you in that book because what's going to happen is your reps that are working for Reyes are going to be walking into accounts and As you're building your reputation, the reps will have accounts asking for you. And as that happens, you'll start to become a priority for them because you're making their life easier.
[00:30:23] Jessica Infante: Let's talk a little bit about your launch strategy. We mentioned social media sampling. What else are you doing to support the brand in new markets?
[00:30:30] Michelle Ivey: Because we are building this to be a premium beverage brand, we are not considering this just a spirits-based RTD. This is not a trend in a can. We are building a brand, so we are building this in on-premise. We are doing a lot of on-premise activations, and we are trying to think outside the box and make sure we're very prevalent on the lake, so we're hosting some things. on some of the boats on Lake Austin and Lake Travis, having the bartenders out for their Mondays off and hosting them in the afternoons, trying to really make sure that we win that bartender's heart and make sure you get their peace of mind. A piece of the bartender's mind to make sure that you're that drink in a can that they recommend across the bar.
[00:31:12] Jessica Infante: Specifically, when we think about the on-premise, any interest in larger can sizes right now for venues and stuff like that?
[00:31:19] Michelle Ivey: Four of our SKUs come in a 16-ounce can. And I don't want to say this too far in advance, but you're going to be seeing us in some very relevant stadiums coming up this football season, and hopefully the hockey season. And they will be our 16-ounce format. We do, after doing a lot of Discussions, really, honestly, my favorite way to do research is just to ask the people who are involved. So after talking to a lot of buyers, talking to a lot of stadiums, talking to a lot of concerts, I know there's the 19.2 version, which a lot of Spears RTDs have come out with. We are doing the 16-ounce cam. We think that is the best way to serve this product. And it seems like it was a win because we have some placements coming this fall that are gonna be really relevant for us, and it'll be in that 16-ounce format with certain stadiums, and we're excited about it.
[00:32:07] Jessica Infante: Now, when we talk about regular bars and restaurants, the traditional on-premise channel, what can size do those accounts prefer? Do you see a mix across the board?
[00:32:15] Michelle Ivey: Really, I see in the traditional just bar space, restaurant space, our demand has always been in the 12-ounce can. And I will point out, we do stand out a bit in this space because we serve our product in a standard 12-ounce can, which is, for anybody who doesn't know what that is, that's just a beer can. We're in a regular beer can. We're not in that tall slimline can.
[00:32:36] Jessica Infante: Which is different. And do you make any recommendations about whether or not servers should pour it into a glass over ice, serve with a straw, garnish extra? Do you have any, a playbook on that front?
[00:32:46] Michelle Ivey: So we are starting to develop a playbook because I know being a drinker of this myself and having also spent a significant amount of time at the Jersey Shore like you, I had a place in Wildwood for a long time where they essentially put a can of Surfside in your hand. We all know that there is a lot of people out there that like it poured over a glass of ice and served with an extra shot of booze. And so I don't know if you drink yours that way. I do that with mine sometimes. Why not? Some people actually use it like a mixer. So we are developing some programming. We'll be doing some placements on menus where it's actually paired with a shot. You can pour it over ice, throw the extra shot in there, but we definitely always have it designed and encouraged to be served at least with a can alongside, because you never want to lose that branding opportunity.
[00:33:32] Jessica Infante: No, no, that's huge. So you mentioned your DTC e-commerce business. What is that looking like right now? And what lessons have you been able to learn from the data that you can get from that?
[00:33:43] Michelle Ivey: Our D2C business is still definitely growing and it's young. We are working presently to develop some programming around content that is going to drive a new site that we are launching next month that will be working on driving a subscription model that we're releasing. And with that, we are launching the subscription model with different types of variety pack bundles that'll be unique to that subscription model. The way we develop those is through the learnings we already received. And those learnings are, we know our D2C consumer, you get that feedback immediately. It's the best source of information, because even though we might have a smallish sampling size, we know exactly what they buy, how often they buy it, and what flavors they're buying, and which ones they rebuy. So we've taken that information to help us develop some variety pack bundles that we're going to specifically release to some subscription plans that we're offering to our D2C consumers. And our D2C model, the third party partner that we're working with, that the brand has been working with for two years, has availability to ship in 38 states. So it's pretty widely, it makes us pretty widely available to the consumer who's willing to order.
[00:34:53] Jessica Infante: That's awesome. I can't wait to hear how these subscriptions end up going, because that's really interesting. So, you know, as we think about that and we look down the road a little bit, what do you think success looks like for LakeHour in the next, say, three to five years?
[00:35:07] Michelle Ivey: Success for Lake Hour looks in three to five years that we have established ourselves as a premium brand with an eye towards profitability through sustainable growth. I don't think it really is targeted around a case number because we are not here just to ride trends. We are here to be a forever brand and be a newly established forever brand in our industry.
[00:35:29] Jessica Infante: How has your vision for the company evolved since joining seven months ago?
[00:35:34] Michelle Ivey: You know, when I came in, they were still a very early stage startup. And I have really taken the time over the last several months, specifically the last six months to really focus on operations, forecasting the people and supply chain so that we can grow into a scalable company versus a startup, which can look quite different. And I'm very excited to say that we have been putting all those pieces into place and we really have matured. You know, we're growing up out of our toddler years and maturing a little bit.
[00:36:04] Jessica Infante: We've talked a little bit about your market expansion thoughts. Can we expect to see any new states in the next like six months before the year ends?
[00:36:12] Michelle Ivey: No, not before the year ends, but certainly in 2027, we have some eyes on some of the other growth markets. Once again, we'll do them very targeted. We have consideration for Florida, but to me, Florida is like Texas. You need a very specific, narrowed regional plan. So we're discussing that and evaluating it at the moment. And then there are some other markets that make a lot of sense for this product. that are a little out of the box. I would be very excited to launch Missouri and do a big Lake of the Ozarks project all next summer. I think that would be outstanding for here and also in Michigan. So we have some thoughts around those particular states and we're working on developing that commercial plan for 27.
[00:36:53] Jessica Infante: Amazing. Well, I can't wait to see what's next. Michelle, this has been such a great chat. Thank you so much for taking the time. I know you're busy and this has been great.
[00:37:01] Michelle Ivey: Thank you for having me. I really enjoyed talking. And that's our show for this week. Thank you for listening.
[00:37:07] Jessica Infante: The Brewbound Podcast is a production of BevNET CPG. Our audio engineer for the Brewbound Podcast is Joe Cracci. Our technical director is Joshua Pratt and our video editor is Ryan Galang. Our social marketing manager is Amanda Smerlinski. 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 at Brewbound.com. On behalf of the entire Brewbound podcast team, thank you for listening. We'll be back next week.
