[00:00:00] Justin Kendall: We're at the NBWA annual convention. Let's talk about it. Hello and welcome to the Brewbound Podcast. I'm Justin Kendall.
[00:00:18] Jessica Infante: I'm Jessica Infante, and
[00:00:20] Zoe Licata: I'm Zoe Licata.
[00:00:22] Justin Kendall: And this week we are on the road at the NBWA's annual convention and product showcase in Orlando, Florida. And what do you think so far? Because it's a very hard sports drink party.
[00:00:35] Jessica Infante: It's a deeply hard sports drink party, and I partook last night and I feel pretty
[00:00:40] Justin Kendall: good today. I did too. I feel hydrated. Can I say that?
[00:00:43] Jessica Infante: I think you can say that. The FDA is not coming after us. I feel refreshed,
[00:00:47] Zoe Licata: right? They're not coming after us for health claims. Maybe other people, but definitely not the journalists, I would hope.
[00:00:54] Justin Kendall: And you two weren't greeted by the good boy vodka light. Wacky inflatable tube man. So you all missed that on the way into the hotel.
[00:01:02] Jessica Infante: Well, we saw it this morning.
[00:01:03] Justin Kendall: Oh, you did see it. We did. He's back out there blowing in the wind.
[00:01:06] Jessica Infante: Yes, and very impressive.
[00:01:08] Justin Kendall: Thankfully no hurricanes.
[00:01:10] Jessica Infante: No, no, no, not here. I will say I think I drank the rainbow of super lights last night at the welcome reception. But then we headed to the lobby bar for a final final and I had a Miller Lite and I don't know, it was delicious. Like I feel like a good cold beer after all of those RTDs just really hit the spot. I don't know why.
[00:01:29] Justin Kendall: It's the convergence. It's the convergence. You're living it. I am.
[00:01:34] Jessica Infante: We are drinking across the spectrum.
[00:01:37] Justin Kendall: Everybody's drinking everything like Lester
[00:01:39] Jessica Infante: says. Everybody is drinking everything. What did you guys think about the general session so far this morning?
[00:01:46] Zoe Licata: It felt a bit like a motivational speech. It was a lot of buzzy words of, hey, we're dealing with this new reality. It's not going away anytime soon. Here's how we can protect ourselves as distributors in the face of everything that is happening with some suppliers trying to make some moves with the contracting distributor marketplace and with the amount of products that are out there. So it was definitely a Hey, let's rally together and continue to be leaders in this space.
[00:02:16] Justin Kendall: I think you knew that the franchise law conversation was going to bubble back up here this year, especially given everything that's going on in Colorado and elsewhere. So. I figured that would be on the table and Here we are. Craig talked a lot about franchise law protections.
[00:02:36] Jessica Infante: Yeah, he did. And Zoe, you were working on a story about Craig, but while you had dipped out to the press room, which is where we are right now, to write, there was a panel discussion that came up after. A little bit about, I think everything. I don't know that I could really put a hard title on it.
[00:02:53] Justin Kendall: It was 4 or 5 distributors all talking about convergence in their portfolios and the reliance of these offerings outside of beer. Although they say beer is the core, beer is not growing, they got to figure out how to get back to growth. But right now these other products like your surfsides, your sun cruisers, they're helping them keep their head above water. That and the non-Aks.
[00:03:21] Jessica Infante: The thing that really struck me from that panel was when Bubba Moffett from Crescent Crown said that traditional beer is now a little under 60% of their volume in Louisiana. Yeah. And the rest of it is everything you just mentioned.
[00:03:35] Justin Kendall: And beer used to be 90% of their overall volume across their business. Now it's 80%, so. Yeah, they've like that.
[00:03:44] Jessica Infante: Yeah. And then within that beer is lesson. It's just banana town. Yeah,
[00:03:49] Justin Kendall: so it's on everybody's mind here on how you get people out in social and you know that was going to come back around to. Talked a lot about how World Cup was a good thing, but it's like, have the consumers stayed in the on-premise?
[00:04:06] Jessica Infante: No, and we'll hear a lot more about that tomorrow, but Zoe, to your point, I think it definitely felt like a motivational speech. The vibes to me were a little bit more positive than they've been in the past. A few of these ago, we were talking about how it felt like we were in a Game of Thrones situation with all sorts of unknown. Enemies at the gates. And I think today seemed to have been much more about like, how do we reclaim our power and I remind everybody that beer is the social connector that drives the country. Yeah.
[00:04:36] Zoy Licata: Yeah, there was still a bit of a battle cry at the beginning when it was the chairman that was speaking. Steve. Yes, yeah, the chair of the board. There's a little bit of that like we're in a war talk. I felt like, but Craig Purser, who's the president and CEO of the MBWA, his speech felt a bit more, hey, we have to collaborate with everyone in the beverage alcohol industry and try to, to really rally around how we can keep protections going, keep growth for everyone. He also specified that distributors need to put some clarity out there about what their purpose is, how important they are to the economy and to the industry. He acknowledged that there's going to likely be a lot of turnover within just the legislative sphere and in politics and. You have to continue to educate those decision makers on what the three tier system is and how it operates. And so there's a bit of almost backwards work of, hey, let's remind people what what beer distributors do.
[00:05:38] Jessica Infante: One thing I thought that Steve said that was really helpful was he reminded everybody in the audience that it's when you get home from here, go home and pick out one relationship with either a local legislator or your congressional representative and build a relationship with them before you need it. Just reach out and say, Hey, hi, here's what we do. Here's why we matter in this community, because this whole industry, you know, the three of us know it really well, but general consumers probably are largely unaware. You know, they see the brands, but they don't know that the brands are served in their local market by these distributors. So. I think, uh, they'd all do well to just remember to go out and reach out to your local journalists, maybe make friends with them.
[00:06:17] Justin Kendall: I was in a morning session too on the legal landscape for consolidation and they were talking about some of the things that local lawmakers do and don't know. And when a bill has malt beverage in the title and not beer, the first question was, I thought we were talking about beer.
[00:06:39] Jessica Infante: Which is funny because yeah, of course that's beer, but maybe they're thinking it's malt liquor. Who knows?
[00:06:43] Justin Kendall: Did Craig mention hemp at all?
[00:06:45] Zoe Licata: No, there was no hemp talk, which maybe is surprising at first, but if you think about it, maybe not. It seems like distributors, from some conversations we've heard, it seems like distributors are putting a pause on it right now to see what happens, you know, with this impending ban that is happening in December and It seems like that's going to go forward. There hasn't been a lot of recent optimism of that being pushed.
[00:07:09] Justin Kendall: If you ask Irwin Simon, and he won't make predictions, but he will make predictions or he'll share what he's hearing, which was that he thinks it's going to get kicked down the road.
[00:07:21] Zoe Licata: Some other folks are saying, no, we think this is going to eventually it's going to happen and the regulatory stuff is going to get figured out after the fact. We've heard from some hemp suppliers that, you know, distributors have kind of held off even though some retailers are saying, yes, we want that product. The distributors are saying actually hold up, we need to, we need to pause purchasing these products right now. And so it seems like based on it not getting mentioned at all today, at least that the MBWA is taking a stance of, OK, we're going to hold off on commenting on it just now. They were always, I feel like a little bit neutral and not necessarily supporting it, but if it's going to be out there, they're going to put it on their trucks and going to help it be in the environment. But now, yeah, it seems like they're taking a little bit of a step back to just see what happens.
[00:08:05] Justin Kendall: So, before we continue the conversation, we should plug Brewbound Live, which is coming up December 9th and 10th, and we are also going to be talking about the convergence that's going on and just the shaken up middle tier distribution market. In California, Colorado, and beyond, we've got a great panel discussion coming with Columbia Distributing's Chris Steffani, Highmark Distributing's Peter Highmark. And Adam Bush from Omak Beverage Advisors. So get your tickets now. We also have a conversation coming up with two robbers, Vikram and Vivek Nayar. They're going to be our featured guests this week. Jess and Zoe are going to do the interview with them. So stay tuned for that.
[00:08:52] Speaker 4: Hey listeners, as of October 13th, lots of new beer jobs are live at CPGjobs.com, including from Dioni Life USA and Paradox Brewery, Garage Brewing, Serene Beer Distributors, and Boulevard Brewing Crank up the chase. Beer people, chase your next move at CPG. Jobs.com and find every listing on Brewbound, the beer business's daily read. Got a role to fill? Put it in front of brewers, beer sales leaders, and distributor teams who track the category on Brewbound. Post your job on CPGjobs.com today. Use code brewbound 26 to save money on a job listing.
[00:09:26] Speaker 5: The Bevnet CPG Media 2026 Awards honor top brands and people in beverage, food, beer, and spirits. Most categories close October 30th. Submit at win.Bevnet.com/awards.
[00:09:42] Justin Kendall: Let's switch gears a little bit. And you made the trip to Denver for the Great American Beer Festival, Jess.
[00:09:48] Jessica Infante: I sure did. It was a big year for GABF as for the first time in 25 years, this festival, the largest consumer facing craft beer event in the country, was not inside of the Colorado Convention Center. It was outdoors at a park about 5 miles south of downtown Denver. And I've got to say, it was great. It was so nice to be outside. It was sunny, it was hot, maybe a little too hot for some people, but you know I'm a lizard, so I thought it was great. And people were in a good mood. People were happy. brewers seemed happy. A few logistical kinks that I think they can work out. I only attended day one because then I flew here to meet you guys in Orlando, but we sat next to Brewers Association CEO and president Bart Watson at the general session here this morning and I asked him how day two was, and he said it was even better. They took some notes, got more bathrooms. The only notes that I would give the BA for next year are more bathrooms, more water, and more shade if possible, but it was great. Like I said, people were happy.
[00:10:49] Justin Kendall: I bumped into Bart this morning as well, and he said that both sessions ended up selling out. So Sunday sold out too, and that's a positive thing. He said it gave them a chance to work out some of the kinks like you were saying. So overall, it sounds like it's a real positive thing. They're going to do it again next year is my understanding.
[00:11:09] Jessica Infante: Oh, so capacity. 7500 people a day for a total of 15,000 people overall, which in the old days at the convention center, one session was 15,000 people. And when they first announced this change, I've been to so many GABFs and that was what struck me when I first got there on Saturday. I was like, I cannot believe that this is the great American Beer Festival. It seemed different from what it used to be. But change is good and change is hard and change is necessary and I think they made the right move. I wonder if this was a test balloon to see if they can take this event on the road. Because as great as it was, personally, I can't see consumers wanting to fly in from several states away just for this, because it's 200 breweries. And in the old days it was many times more than that. So I see the drive of that, but There are some regional beer festivals that get to that size across the country. So maybe if this does travel, it's a great way to meet new consumers in new markets. Another thing I will point out, I don't know, for the first hour, I felt like I was the youngest person I could see. Which is alarming because I am. I've been a legal drinker for 20 years. But eventually, you know, the youth gathered and the legal drinking age youth were in attendance. So it was a good mix as the day went on. I wonder if that's just because transportation, logistics or whatever, but a good time in Denver. I had fun. Thanks for letting me go. Not really any costumes, but it was hot.
[00:12:36] Justin Kendall: That's one of the things about GABF was there were costumes and the bagpipers and the music and the all the the add-on things, but the complexity of running a beer festival within a concrete structure like a convention center plus the cost, I totally understand why you would consider moving that.
[00:12:57] Jessica Infante: Yeah. Something that got brought up in a lot of the conversations I had was that it was really nice to be not in the convention center because you didn't have to shout to be heard. Yeah. There were still bagpipers. There were still pretzel necklaces. There was a
[00:13:09] Justin Kendall: band. Did somebody break the cup and scream?
[00:13:12] Jessica Infante: I don't know. You wouldn't know. Dropping a cup on grass is far different. Another thing that warm my nerdy little heart was to see lines at old craft stalwarts, like Sierra Nevada had a line, Allagash had a line, Russian River pretty much always had a line. I was not invited to attend paired, so I cannot comment on that. But yeah, I mean everything was kind of cool. What else happened? Boston Beer Company had their annual media brunch in the morning. This year's format was a panel discussion with Jim Cook and Sam Calionei and Bart and Jennifer Glanville was the moderator, and they said a lot of stuff about the state of the category. A lot of the stuff we've heard here today, that beer drives sociability and beer needs to remember that. Beer is the great connector. One thing that Sam said that I thought was super interesting was that he pointed out, I mean, Sam and Jim, they're both like quote machines, but Sam had said like we're in the driver's seat of a Trojan horse, meaning that with the way beverage alcohol is changing toward RTDs and flavor and variety and convenience, craft brewers are better poised than almost anybody else to really deliver on that in terms of their commitment to innovation over the years and the meaningful relationships they've built up across all three tiers. So some positivity. Yeah, yeah, it was generally positive. It was nice. I asked, you know, I was like, all 4 of you have been to, you've got like 100 JBFs between you. What will you be looking for to Consider markers of success that this new event has gone well. And Bart pointed out that he's got 3 big concerns. He wants attendees to have a great experience. He wants brewers to have a great experience, and he wants to make sure the financials work out. So he was feeling pretty good on all 3 of those fronts.
[00:14:57] Justin Kendall: That's good. Should we hit the news real quick and then get out of here to our featured interview? I believe we should. All right, let's talk about the big deal of last week, and that's Constellation Brands has acquired 100% of SpikedAde for $75 million but there is a performance-based earnout over the next 5 years that could escalate and add an additional $278 million to the deal. Which I think if you had the track record of Constellation Brands, uh, with M&A, you would want a deal that was structured in such a way to sort of protect yourself and $75 million to them upfront, not a lot of money.
[00:15:42] Jessica Infante: No, I get why they did it. Look, if you spent a billion dollars to buy Ballast Point and sold it for the teeniest fraction, I understand all of this completely, because when you say $75 million for a brand. As big as SpikedAde is in a rising segment as hard sports drinks are, it seems a little, but yeah. It was funny the way that this came out. They kind of like sneaky, sneaky, stuck one paragraph in their Q2 earnings report and then followed it up somewhat quickly with a press release about the deal itself, but I noticed that first and was like, Cool.
[00:16:15] Justin Kendall: And multiple emails after the fact about this deal.
[00:16:19] Jessica Infante: Yeah, SpikedAde, as I'm sure you've heard us talk about on the pod before, is a vodka-based hard sports drink or a vodka plus 8. I think we all still haven't really really known what we're calling this
[00:16:29] Justin Kendall: or legally able to call it, at least from a producer standpoint. Well, yeah,
[00:16:34] Jessica Infante: what we can call and what they can call it are different things. But it was a super early mover. They launched on the Jersey Shore last year and were blown away with the success. So they launched a bunch more markets. I think they were just about nationwide. It's founded by Jason Cohen, who is a serial, food and beverage entrepreneur, and this is what he does. He builds brands, he scales them, he exits. So.
[00:16:56] Justin Kendall: And he's exiting. That's what we found out after the fact is that he's not going along with it. This is going inside their beer business.
[00:17:04] Jessica Infante: Yeah, and they'll have a new variety pack launching early next year. They're right now, uh, I don't know, man. I would call them a distant number 2 to super light, and then everybody else is a distant everything else in the segment. They're about like 31% according to data, Justin, that you reported on towards the end of the summer.
[00:17:24] Justin Kendall: It was a 3 horse race essentially at that point, which was stateside super light in the driver's seat at 65%, SpikedAde at 31%, and then vodka at 4%. And then now you have the flood of other entrants getting in, whether it's Good Boy vodka, as we mentioned before, whether it's Mark Anthony Brands, now with Refresh Aid, you reported on Deschutes with their Firelight, which is an FMB, so we'll see if vodka matters. And they won't be alone. There's others, it's Gloso and whoever else. I fully expect that we're gonna see a glut of these things and to Your credit, Jess, like you sort of compared this to the hard seltzer gold rush, and I think that we may be reliving that a little bit.
[00:18:16] Jessica Infante: Yeah, it feels a whole lot like 2019 up in here. There's going to be a lot of entrants, and it's interesting to me that I think we're seeing some lessons learned from the hard seltzer gold rush days where everything that's launching right now really seems to be a pure play standalone brand. You're not seeing any. Extensions of existing brands because they think this product is so different that you've got to do that because there were, you know, Hard seltzers that launched with their beer sibling names and didn't really do that well. To your point, Justin, about the does vodka matter? Well, I think we're going to find that it does, because I think that's a conversation that happened in the hard seltzer days too. And a lot of these large suppliers were saying drinkers don't care. They don't really know. But it turned out they did care and they did
[00:18:58] Justin Kendall: know. And they were willing to spend more on something like High at noon.
[00:19:01] Jessica Infante: Right. The firelight thing will be interesting because they are focusing on We talked about this last week, didn't we? It's mostly concentrated in Deschutes' Western market and a lot of the states are launching in our control states. So this I get, but we'll see how it goes. I saw Peter Skurbeck at GABF. He's the CEO of Deschutes. He was in his alter ego persona of Party Bom Peter. He was manning their party bomb booth at the fest. He had the pleasure of doing a party bomb shot off of Shotsky. He said they will have some firelight here this week, so I'm excited to try it.
[00:19:31] Zoe Licata: It's very easy to see this as hard seltzer. I think it's also would be wild if these brands weren't capitalizing on just the volume of this segment right now. We've seen some of the numbers now. Super light it's like 4 million cases. We found out through the Constellation news that SpikedAde is 2 million cases. So that's a lot of opportunity there. I think it's really interesting that Constellation is using this segment or category. They want to. Kind of give their reputation back of being able to support an acquisition and an emerging brand. The CEO during their earnings call the day after the announcement really emphasized that they want SpikedAde to be a case study of what they can do. They think they have the capability to do it just in their distribution network and in the resources that they're able to give a brand. And so it's fascinating to see what they're going to do with it and if it's going to work the way they want it to.
[00:20:24] Justin Kendall: To me, that may be the real big news here is, yes, it's a big news that a hard sports drink was acquired, but the bigger news to me is that Constellation is back in the game. They, like you said, are using this as sort of the test balloon to see if it'll work. And who else are they going after and what are they going to try and build as sort of a platform of RTD brands going forward because I was at the beer marketers insights meeting in the spring and Townsend Ziebold from Arlington Capital Advisors had said, Scaled RTD brands are hot right now and the strategics are involved. Everybody wants them. There's not enough of them. And clearly this is a bargain deal compared to, at least upfront, compared to what Molson Coor spent on Monaco.
[00:21:16] Zoe Licata: Yeah, it seems like Constellation isn't totally opening the floodgates. Of, OK, we're just going to start buying up at the same rate as everybody else. They were still very clear that they're going to be cautious about anything. They don't want to just hop on hot trends. It seemed like from their comments during the earnings call that this was very distributor led. Their distributors were asking them, hey, can you participate in this because we're going to bring these products on with you or without you, which I think is really telling into how hot that segment is right now. But yeah, they're still being super conscious of, of what they're bringing on. But they, they've admitted you can't just not do it,
[00:21:53] Justin Kendall: and it speaks to the speed of this thing because Rather than try and build it and not have something out into the market until 2027 or something rushed, because I don't even know if they could have rushed something at this point with their mixed track record of F&Bs, but I mean, this gives them a fast growing brand to pair along with the Mexican imports, and I mean, it's, it's all incremental from there. All right, well, with that, let's get to our featured interview with Vikram and Vivek Nayar from Two Robbers.
[00:22:32] Jessica Infante: Our guests today are co-founders and twin brothers, Vivek and Vikram Nayir of Two Robber Spirits, a Philadelphia-based Bevel company that has been honestly a lot of fun to watch grow over the years. Guys, how are you doing? I'm so glad you're here because I know, I know you're busy and it's been a minute, so it's great to catch up with both of you. But what's new and exciting? How are you?
[00:22:52] Speaker 6: Doing well. You want to kick it off? Yeah, yeah, doing great. Thank you so much for having us. And yes, it has been a while, and uh I think. Like you were saying, the last time we spoke was probably at Blue Mountain Live, which was, I think maybe in what, 2022 or 2020203. I'm sure that was prior to us switching everything over to Spirit, so that was probably in our malt days. Yeah, in in beverage years, that's a long time ago, so. It's been a crazy past couple of years, crazy journey building this business, but, uh, excited to chat with you guys.
[00:23:24] Zoe Licata: Just to like give a visual to everyone, you guys are speaking to us from one of you is in Philly and one of you is in New York right now, right? That's kind of co-home bases for you all.
[00:23:33] Speaker 6: Yeah, it's always kind of been that way. I am, uh, based out of Philly. The business is based out of Philly, and the large majority of our sales are in greater Philadelphia, but Vic is based out of New York and we've always kind of had. A second home in New York there as well.
[00:23:48] Jessica Infante: As I was prepping for this, I listened to a couple of your other podcast appearances. We actually just had an interview with another RTD brand out of Philly, and it just got me thinking, why is Philly such a strong RTD market that's been your home base. You started as a hard seltzer, now you're doing spirits. The Philly Jersey Shore area is like a hotbed for RTDs. Why do you think that is?
[00:24:12] Speaker 6: It's a good question. I think for us, it was maybe less calculated. It was, it was more just about sort of at the time when we were starting this business around 2018, 2019, Vivek had moved to Philly for grad school and You know, we were in a sense looking more at kind of the national trends that were emerging at the time with White Claw and truly starting to become real significant brands and feeling like there was a space for a brand like ours in the category. But I think you're right, it's been interesting to see, you know, fast forward now to 7 years later, and some of the biggest brands, as we know, are, are from this area, the Philly, Jersey, Delaware area. I don't know that, what would you say? First off, I would say that the PARTD laws are definitely now a big part of it. Now that wasn't like. Certainly was not the driver behind one of the biggest brands in the country now, which is Surfside stateside that they had launched prior to any of those laws changing. But nowadays I would say that regulatory change has allowed for Pennsylvania to become, I think, a little bit of a, maybe even you could say like an innovation hub for this category. I do think also there is something to be said about like Pennsylvania being so close to. The Jersey Shore, and the Jersey Shore being such a huge marketing hotbed for this category. Like, when summer comes around, it's like that is where all the eyeballs kind of almost go, you know, and so there's something about that too, I think that plays into it. And then I would say like, it's just one of those things where it's, you know, you have a couple of companies that start up in the area, and they get some success, and it sort of becomes a beverage market, you know, it sort of becomes like a market where people are are going for it, so I think it's kind of all the above.
[00:25:51] Zoe Licata: Don't get Jess going on the Jersey Shore. We'll be here all day long.
[00:25:55] Speaker 6: Yeah,
[00:25:56] Zoe Licata: it's her passion. One thing that has also been, I think, a common thing with RTDs in the Philly space is sports partnerships, and you all have done this with this new Eagles variety packs that have been coming out. How did that partnership come to be and why is that something you wanted to capitalize on?
[00:26:15] Speaker 6: Yeah, I mean, it's so core for the Philadelphia market. Obviously, it's Philly is such a sports town, and we kind of got a taste of this. So just to kind of back up, you guys obviously know the context, but, you know, we had started the business in 2019, and for the 1st 4 years of the business, we were on the malt side of the category. It's only really the last 3 years where we've pivoted into the spirit side of the category. One of the best decisions we made as a business in hindsight, and I think, uh, we're obviously big believers in the spirits side long term. But when we were on the malt side of the, of the business, we got a taste of the value of sports partnerships. You know, we were new to this business, so certainly it seems like it could be a good marketing idea to align with the sports teams, but we have no idea how powerful in a city like Philadelphia it is. And we actually had a partnership with Citizens Bank Park back then to sell our hard seltzers, the malt seltzers in the Philly stadium. Through that, just saw like, as soon as they started selling it in there, we had retailers, you know, our, our rate of sale started increasing our retailers around the area and people were just kind of finding out about the brand a lot easier. And also I would say very much linked to the, the sales at the stadium. We would hear from retailers that customers would tell them that, oh, we tried this when we were at some Phillies game or whatever, right? It's sort of like the ultimate sampling weapon, you know, being able to sell in the stadium. People talk about how valuable sampling is, but It's even more valuable if someone pays for your product to try it and enjoys it that way, you know, so, fast forward, we obviously made the switch to the spirit side of the business in, uh, February of 2024 and launched our now current line of products, which is, uh, at that time was our vodka sodas, and now we, we have our teas and lemonades as well. And about a year into making that pivot, we started to similarly think about the question, you know, how can we leverage sports partnerships in the area. We started chatting with the Eagles, and they were kind of uniquely in a position where they were looking for a partner in, in the category as well, and it just sort of happened to be right time, right place, and we, like I said, knew firsthand how valuable it could be, so we went for it and it's been amazing so far. We're, we're now entering our 2nd year of the partnership. We really like everything in the business now, try to look at these things as long term partnerships, and we hope that the Eagles is something that we can kind of be, you know, that can be core to our brand for the next 20 years. That's really how we think about it. And so every fall, it's just a huge part of our story now and, and sort of how we go to market.
[00:28:46] Jessica Infante: Do you have any appetite to do this with another sports team in a different season, like the Sixers?
[00:28:52] Speaker 6: With any sports partnership that we do, I think something that would be really core to it would be, um, stadium distribution and, and making sure we have that stadium sampling experience. So the Sixers in particular, I would say it's, it's tough because the, it's all controlled by the Flyers for that stadium. That being said, would we want to do partnerships with other sports teams? Probably not in Philadelphia anytime soon. I mean, first off, all the sports team partnerships are basically locked up at this point. A lot of them by Surfside, stateside, or Anheuser-Busch or other, other companies. But to the extent that there were opportunities, I think we'd look at markets outside of Philly, but that would only be a, you know, when we're ready to grow outside and make those investments and kind of takes that lead.
[00:29:33] Jessica Infante: I have a crazy idea. What if you just partnered with Gritty himself? Just like a straight mascot partnership.
[00:29:40] Speaker 6: Yeah, it's funny, I see like, you see commercials now with like people on like the, the coaching staff of these teams, and just like random people who just become characters on these teams, and uh, yeah, Goody would be incredible. I saw this commercial the other day with Big Dom in it, and I was just like, this is amazing that he's signing commercials directly with brands, so, hey, you never know.
[00:30:02] Zoe Licata: Anyone could be an influencer these days, I guess is what we're learning. So beyond presence, you know, at the stadiums, how else are you kind of supporting the packaging rollout and the products, you know, throughout football season?
[00:30:16] Speaker 6: So the main thing, just thinking about that partnership, I would say there's two kind of main pillars to it for us. One is the stadium distribution like I mentioned, and then the other is obviously leveraging the trademarks and leveraging the trademarks, you can, it's almost, you can think about it as like. The sky's the limit in terms of what you can do. It's almost sometimes a question about how creative do you want to get with it. But the biggest thing for us has been, of course, leveraging it on the product itself. So last year we launched a variety pack, I should say we launched our variety pack, our existing variety pack with an Eagles version. We leveraged the, uh, the Kelly Green kind of design, um, the vintage Eagles design. And we put out a variety pack out there in the market, and of course it did great. I mean, we in Pennsylvania we're self-distributed, so we, we took it out to all our retailers and, um, you know, people were really excited about it and it, it helps you get some good shelf space, get, you know, to the, get stacks on the front of the store, all that kind of stuff, and we learned a lot too from last year. That was our first year doing it. So this year I think we tightened everything up in terms of what that rollout looks like and we also added a second pack, so we did not just our vodka sodas, but our tea and lemonades as well. And we also did a different design. That's the other thing I'll say is that we kind of want to have fun with it every year, and every year should be sort of like a limited edition release in our mind. That's kind of how we want to do it. So this year we did it with the modern logos, you guys saw the packaging there. We've been rolling that out for the past 2 weeks to retailers across eastern PA, Greater Philadelphia. That's been a lot of fun, and a lot of work too, building all the displays and getting the signage up and stuff like that. But we're also this year, the other big thing that we didn't do last year that we're gonna do this year is we are putting logos on cans as well. We're gonna launch that in early mid-October. That'll be sort of a separate release, and we're just gonna be selling that to bars and restaurants on premise only, which will be cool. That's, I would say like the main thing, and then beyond that, there's like a long list of. Other marketing ideas and fun things we do, whether it's, you know, merch or point of sale or uh events that we have or ticket giveaways, it's kind of, there's a lot of stuff and we try to make sure we're executing on all of it.
[00:32:23] Jessica Infante: You know, you guys walk through for the audience how you switch from being malt-based to spirits-based, but I'm really curious, what have been some of the biggest learnings you've taken away from making that switch, because it's a big one.
[00:32:33] Speaker 6: Yeah. Part of the switch was driven by, you know, when we launched the brand back in 2019, the 1st 23 years were You know, to some degree we were slightly ahead of the curve in the overall category, and so the brand just saw this huge amount of growth, you know, we scaled into a ton of retailers, a ton of states. And just got a ton of distribution across pretty much the mid-Atlantic and Northeast. And around 2021, 2022, I think what we didn't anticipate, I mean, we anticipated the category getting more competitive, but we didn't anticipate it getting like insanely more competitive to the point where it went from maybe 10 brands on shelves to maybe 100 at some retailers, you know, it's just, it was this, this huge influx of new brands. Every craft brewery, every, I mean, you guys remember, it was almost every week a new Hard Seltzer brand was being launched. Again, primarily on the mall side at the time, you know, in 2022, 2023, we're sort of looking around and saying, For us to really continue down this path and, and have a strategy that we feel good about long term, there has to be something about our product that we really feel like we can hang our hat on in terms of just differentiation. Otherwise, it's just gonna be too challenging. We're never gonna beat the bigger companies on marketing budget, even distribution at the end of the day, the large companies have a good hold on distribution and so. You know, we have to have something about our product that is truly unique. And while we started with some points of differentiation in 2019, by 2022, I think, with the amount of brands in the space, a lot of aspects about our product at the time were not differentiated anymore. So we sort of went back to the drawing board and we were like, OK, if we want from an ingredient standpoint to really stand out here relative to the crowd, how do we make this the best product it possibly can be? And where we really landed on and what we focused on was number 1 is wanting to be spirits-based, you know, partially because that's where the growth in the category was. But number 2 was really to focus on the fruit itself, where a lot of the, the products that had started to take market share were sort of leaning into this message of made with real fruit. And what we noticed about these products is if you take all of them, I won't name specific brands, but if you take some of the leading brands, whether it's a vodka soda or a malt seltzer. And you do some basic sort of testing of it. You just pour it out as an example, you'll see that they're crystal clear, you know, they don't have the smell, they don't have the taste of real fruit. And so for us it was, you know, let's actually take this a step further by not only using in our orange flavor real oranges, but actually specifying that it's Karakera oranges and specifying that we're sourcing this fruit from farms in Southern California. And now we have something that. Is a real point of differentiation and also will come through in the taste in terms of a better tasting product. So that was kind of the genesis of the pivot. And funny enough, we, we built a whole campaign around that and maybe naively in the early days, did some marketing where we sort of compared our products side by side with one of our main competitors, ended up getting uh some cease and desists from those competitors, so we had to, we, we had to sort of scrap that and rethink it, but The point stays the same, which is, you know, this term of made with real fruit is really heavily utilized by a lot of brands in the space. All you need to do is look at the liquid to sort of tell that that's not the case. And so for two robbers, it's been all about that. It's been all about ingredients and quality. Our oranges are from Southern California. Our pink grapefruit is made, grapefruit's from Texas, so on and so forth. Yeah, that's been really core to the pivot is just being hyper focused on quality and being hyper focused on being able to tell that story of quality differentiation. We felt that that was critical in order for us to be able to win long term. The other kind of big change in the business when we did that pivot was getting hyper focused on profitability. We had enough experience at that point to know that. Volume doesn't mean profit, you know, you can send a lot of product around to different states, to different distributors, but when we were kind of looking at it, when all was said and done, you know, you get hit with buildbacks, you gotta have a lot of reps out in the market, like there's a lot of cost to it too. And so I think part of what we wanted to do with the pivot also was really just be hyper focused on. Hunkering down, having high quality revenue with our account base in Pennsylvania, where we, we knew we could really, uh, build a good sustainable long-term business. Just to piggyback off of what I was saying as an example, like this is sort of a classic, I'm sure a lot of beverage entrepreneurs can, can relate to this, but like, We would spend so much time getting into a specific grocery chain, as an example in New York City, and we would just, it was like pitch after pitch after pitch, and then not only do you have to pitch the retailer, you have to convince your distributor to also in their meetings, pitch the retailer, and then you got to work with them on pricing and this and that. And then even after you get the mandate, you got to sort of fight to get your product on shelves, and you do all of this, and then you realize at the end of the day that when all is said and done with buildbacks and distributor margins and so on and so forth. You're not even making money on it, you know, and so it's like for us it was like, let's, we gotta go back to the fundamentals of like, how do we make sure that the core of our business is profitable before we spend so much time wanting to scale outwards.
[00:37:42] Zoe Licata: That is really great advice for folks to listen to in these times where we've, we've seen a lot of kind of refocusing in on, on what works best for your business and it's not necessarily going so big all the time. As we talked about earlier, there is a lot of, there's a lot of RTD business within Philly and your spaces, and particularly there's some big players in the vodka-based hard tea and lemonades market, and you guys came out with your own versions of these this summer. What have you found is the key ways to differentiate yourselves or connect with consumers when you're competing against these brands that have huge marketing budgets and have those established connections with folks?
[00:38:23] Speaker 6: Yeah, it's definitely interesting being in the backyard of the biggest brand in the country for that category, and I think it forces us to be brutally honest with ourselves about how we actually win. I mean, if you think it's hard to sell against High Noon and Surfside and other markets, imagine trying to sell against Surfside in Philly. It's, it's tough. And, you know, rightfully so, they've built an amazing business and brand. I think for us, the couple of things I will say is, number one, it sort of always comes back to quality in terms of how we think about our messaging and positioning. Our message to our customers is always typically focused around ingredients, whether that's talking about the actual fruit we're using, which even for the new pack with the teas and lemonades is, is actually using real brewed tea, or actually using lemons and the lemonade, you know, real lemons sourced from farms for the lemonade. So that's definitely a key part of it. I think another part of it has been getting creative on the flavors. So one of the four flavors of the new pack is our honeydew lemonade, which has just been like a standout, and The thinking for that one was interesting. We kind of came up with it because we saw how popular the honey deuce was becoming every year, and, and the honey deuce is basically a honeydew lemonade, for like, that sounds like a perfect flavor for that, and that honeydew lemonade has just been a standout product for us, and there is no competitor really for that, so that helps, you know, and when you're going into like, a lot of the bars, for example, in Philly, it's a lot of times it's not like, hey, we're going with one brand or the other, it's like they're selling like 4 or 5 RTDs and you're trying to compete for maybe 2 slots or something like that, you know. So, all of these little differentiations around the edges help. I think being local helps also. Obviously that company you guys mentioned is local, but if you think about other brands that are not from Pennsylvania, whether it's High Noon or whatever, being local gives us a big competitive advantage there. And then lastly, we have our own marketing investments too, of course, the biggest being the Eagles partnership, and that helps a lot too. A lot of people try our products, whether it's at the stadium or they see it with the Eagles logo on it, and that I think gives us a really strong just tool to walk into any account and confidently say that this product can actually move well for you guys. You know, there's a lot of proof points for that, whether it's other bars in the area or other stores in the area or whatever it might be. And one thing I'll just add is I think, as we've all seen, these categories, whether it's the carbonated vodka sodas or the non-carbonated, the teas and the lemonades, I think the categories themselves have just gotten so huge now that there's room for multiple brands is sort of our perspective. You know, we might not be the best fit for, just as an example, let's say a, you know, a high volume sports bar or something, but there's a dive bar in Fishtown where we're sort of preferred because we're, it'll be a better fit for sort of the The customers and for the vibe of the bar and the other brands that they're carrying, and so on and so forth. So, I think like that it's interesting to see like different places, different occasions might have different preferences in terms of the brands that they're gonna be relating to.
[00:41:16] Jessica Infante: I remember when you guys launched, one of the big things that set you apart from other brands in the space was that you'd paid really close attention to the on-premise, which a lot of branches weren't doing back then. How much does that factor into your business today and how do you treat that channel as different from the off-premise?
[00:41:33] Speaker 6: I mean, it's still huge, I would say. Actually, I think our biggest account that we have is an on-premise account, and a lot of our biggest accounts are on-premise accounts. The thing about the on-premise that's interesting is that like this category has totally worked in the on-premise, you know, a lot of people had maybe different opinions on, let's say 3 or 4 years ago, whether RTDs were going to be successful and on-premise or not, but for whatever reason, it's been a home run, and like most bars you go to now, they are selling a ton of RTDs, whether it's our brand or or other brands. So, I think it is a huge focus for sure, and it's definitely a big part of how we think about marketing today. Every placement is basically a billboard, and even just like I mentioned before, it's, I think when people actually pay for your drink and try it, and that's how they're experiencing your drink. Put aside the money aspect, but just the psychology aspect of that, I think is huge for how you win a customer over. So, that is, I think, like the ultimate customer acquisition tool. So, it's a huge focus for us for sure. What we are sort of constantly in search for is like the experience of having a bar, bringing the product, having one customer buy it, and the next thing you know, you know, there's 20 people that are, that are drinking the product because everyone sees the can and everyone starts ordering it, and that's like the best way for us to acquire new customers possible. So, that's an interesting aspect of this category in the on-premise is that, you know, once it starts selling, it really starts selling, and the velocities at on-premise can be really, really good.
[00:43:01] Zoe Licata: We saw after the hard seltzer craze, everyone's been kind of questioning, all right, what's the proper way to approach innovation and, you know, roll out new products, find new things. What is your philosophy around innovation and where are you looking for those sparks of, OK, this is probably a good avenue for us to go next.
[00:43:20] Speaker 6: Yeah, it's a great question. So, innovation in this category, I think is crazy, it's like nothing else. It, on one hand, I think moves very quickly, there's constantly new trends that are happening. On the other hand, I think that over time you're gonna see certain things shake out and certain, certain kind of product categories or subcategories within RTDs will have more lasting power than others. I really do think, for example, like the tea and lemonade is gonna have a really long lasting power, because the products are just They taste so good, and they, they're so easy to drink, but maybe some other innovation categories will be kind of more hot, you know, they'll come and go. I do really believe it is early days, even though it feels like, I mean, we've been in the better for you category now for 7 years. We've been in RTDs for 3 or 4 years, and RTDs have only been around for maybe 56 years, but I really do think it's early days, like, you haven't really seen any major breakout in tequila yet, for example, you've seen one breakout in gin really with long drink, but like, there's probably a lot more opportunity to happen there. There's, I think, still innovation to be had on the vodka side. So, I think you'll see a lot, a lot of different, um, trends and subcategories emerge over the next 10 years, let's say. Our take on it has definitely been to go slow, especially since we made that pivot. We try to be really thoughtful and methodical about what we launch and how we launch it, and anything that we jump into, I think we're, we're very sensitive around trying to make sure we're not jumping into emerging categories that feel like they have a lot of risk around them, that can come and go quickly, because. We've kind of lived through that with different innovations. You know, we innovated a lot on the malt side, and like, we just had SKU overload at certain points. We see that with a lot of brands, just way too many SKUs and things come and go. So, we try to go slow and steady with it. The tea and lemonade launch that we did earlier this year was our first launch in 2 plus years since we had made the pivot in the beginning of 24. We're starting to play around with a few other ideas now, but we'll see as to what the timing or kind of what's realistic for when we're gonna try to launch things. The other thing I'll just throw out there too is that we're fortunate in that we built a retail space as part of our business as well. So we have um a location in Fishtown where we sell our drinks, we sell cocktails, we sell burgers. It's sort of like a, a place for us to interact with our customers, IRL let's say. It has been and it's going to continue to be a huge part of our innovation strategy. We want to basically be able to innovate quickly in terms of getting products developed and liquid in cans, but go slowly in terms of. Making big launches or trying to put big dollars behind things, and the taproom gives us the perfect way to kind of test that out.
[00:46:01] Jessica Infante: No launches for like 2.5 years is an amazing amount of restraint, particularly in this business. So congratulations. That's wild.
[00:46:12] Speaker 6: I think you're the first person that's congratulated us for that, but there's never a shortage of ideas, so it's as much about saying no to things than it is finding new ideas. And the hardest thing sometimes is to um try to drive growth on your products without necessarily launching the next SKU, you know. Well,
[00:46:28] Jessica Infante: because distributors will say that there's too many SKUs, but then they'll say, Well, what's new? What's new? And it's like, well, you can't have it both ways, guys. I don't need either of you to respond to that. I know it. Puts you in a funny spot. So right now, we're in Pennsylvania, we're in New York. Any thoughts about expanding that territory?
[00:46:48] Speaker 6: I don't think anytime soon, to be honest. You know, in New York, we have a great relationship with our distributor there, which is, um, uh, Union Beer slash Blueprint Spirits. So, we have a good relationship, we have a good setup. But for any other market, again, from having the experience of having done it once, if and when we do it, we do want to do it eventually. Let me, I guess, start by saying that. But if and when we get to that point, it's important for us to do it the right way, which is have a rep in the market, have real marketing dollars to support it. And be able to do that with some level of confidence that the distributor is going to support you as well, and they're going to get you the distribution that you need in order to justify those investments. So, I think there's gonna be a time and place where it's gonna make sense for us to do that, but right now there's the other aspect of this, I would say is that there's so much white space still in eastern Pennsylvania for us, and that white space really is in velocity. We're seeing our velocity grow every year. And the gap between us and the biggest brands is still pretty large. So, the more we kind of invest and double down in this market, the stronger our brand becomes in this market, that makes our business stronger and more defensible. That feels like to us, like the right strategy for probably the next 1224 months, at least, and then maybe we'll kind of start thinking about expanding distribution from there. By far the most important thing for us is velocity. That's what we measure all day every day. And in Pennsylvania, like, in a lot of stores, we'll be the 2 or 3 velocity brand, and we focus on driving all the things that can improve that in any given store, whether it's where we're being placed or displays or support with samplings or marketing in the area or wherever it might be. But even in our best stores, we could still probably double our velocity or triple our velocity and still not be selling as much as the number one brand that we've referred to a few times. And to us, that is amazing, and that's the opportunity that we got to go after versus launching additional states, which, you know, you, you can do and it, and that opportunity is sort of always there, but even when you do that, it will be so much more successful if you have a product that is, you know, has the kinds of velocities we're talking about in, in the home market, so. Yeah, we're, we're laser focused on continuing to grow with our existing accounts right now and just getting more share of mind with customers.
[00:49:01] Jessica Infante: Great. Well, I think that's a perfect place to leave it. Thank you both so much for joining us. We know you're busy, so we always love hearing what's new with you and how things are going with two robbers, and we can't wait to see what's next.
[00:49:11] Speaker 6: Really appreciate you guys having us on. Thank you so much for the time.
[00:49:15] 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.
