AleSmith Turns 30 with Party Tricks, Espresso Martinis and Big Contract Volumes

[00:00:00] Justin Kendall: Heading to CBC? Kick things off the day before at Brewbound's meetup at Love City Brewing in Philly, Sunday, April 19th from 5 to 7 p.m. Connect with beer industry leaders, grab a drink, and catch up with the Brewbound team. It's free to attend and walking distance from the convention center. Head to Brewbound.com slash lovecity.rsvp. And don't forget to catch the Brewbound team at booth 956 during CBC. Party Tricks, espresso martinis, and contract brewing. We talk Alesmith's 30th anniversary next on the Brewbound Podcast. Hello and welcome to the Brewbound Podcast. I'm Justin Kendall.

[00:00:50] Jessica Infante: I'm Jessica Infante. And I'm Zoe Licata.

[00:00:53] Justin Kendall: And how are we all feeling after this past weekend?

[00:00:56] Brewbound Podcast: Zoe, I'm sure you have much more interesting things to share.

[00:01:00] Jessica Infante: I'm good. Fantasy went much better this weekend so far anyway. Looking like it's going to be a win for both teams. Ferrari, not as good. Very chaotic weekend. So highly recommend checking out highlights of that because that was stressful. And then Bad Bunny live streamed his final concert in Puerto Rico. So we had a little soiree around that and got some mofongo, which I have not had since I was in Puerto Rico a few years ago. So good. And then, of course, we were drinking some of the Madea's beers, which still hold up. Nice.

[00:01:38] Justin Kendall: I profess my love this weekend for Corona Sunbrew to you both. You did.

[00:01:44] Jessica Infante: Was unexpected, honestly.

[00:01:46] Justin Kendall: Well, yeah, I know. We rarely share about our weekend beers. So I was just watching AEW All Out and that was my beer of choice. Beer holds up. I'm a big fan of Corona Sunbrew.

[00:02:00] Brewbound Podcast: Interesting. Did I drink the most craft beer this weekend? I think you did. That's saying something, because I don't really drink anything anymore. Yeah, because I don't know how to have a life outside of work. I volunteered to do a round of judging in the North American Guild of Beer Writers annual competition. And I took my laptop to Notch where I sat in the corner, logged on and read a bunch of beer journalism and drank a bunch of beer. It was nice. Taproom was busy.

[00:02:31] Justin Kendall: Is that an unfair advantage? You were in a crap brewery.

[00:02:35] Jessica Infante: unfair advantage. Oh, for craft beer and something? Yeah, definitely. Yeah.

[00:02:40] Justin Kendall: You were actually able to leave your home.

[00:02:43] Brewbound Podcast: I left my home. I specifically planned for this. In the morning, I had said to my husband, I need a break from being a mother. So I'm going to go do something that feels a lot like work.

[00:02:55] Jessica Infante: It sounded lovely. Your giant pretzel and a large ice cold glass of beer. Oh, so good. What did I drink?

[00:03:02] Brewbound Podcast: I had a Rauchweiss beer, which was delicious. And I needed something lower ABV for round two, so I switched to their Berliner Weiss. I was convinced to get the raspberry syrup. I regret that. It was still good, but I don't know. It wasn't really the vibe for the pretzel plus mustard plus Obatza. And for the third beer I got there, a special Czech Pils variety they have on tap. And then Ryan and Cora came and met me because you know, moms only get three hours off. And Cora ate the rest of my pretzel and was picking up the salt kernels and eating them. And basically just ate the remainder of that mustard container. So I think I am raising a future beer fiend. Nice. Yeah. You're welcome everybody.

[00:03:55] Jessica Infante: I am really helping people out.

[00:04:00] Brewbound Podcast: And in, Only 19 years. Will it pay off?

[00:04:06] Jessica Infante: Wow, she's so big. I wonder where Craft Beer will be at in 19 years. I don't know.

[00:04:12] Brewbound Podcast: I wonder where we'll be in 19 years.

[00:04:16] Justin Kendall: I'm showing off this dogfish head koozie that they sent me. It's the steal your face one with the Grateful Dead. And Sophie was playing with this over the weekend. And it was about 10 a.m. And she's like, Daddy, do you want a beer? No, no, not at 10 a.m. No, no.

[00:04:38] Jessica Infante: She's trying. She's also trying to help the cause.

[00:04:40] Justin Kendall: Yeah. She just kept saying koozie over and over again. Like, what is a koozie? So maybe we're both helping generation. What is the generation? Alpha.

[00:04:53] Jessica Infante: Alpha.

[00:04:53] Justin Kendall: Alpha. Okay. Scary.

[00:04:56] Jessica Infante: I purposely avoided going anywhere outside of my house because Boston was an absolute I don't even know what to call it. It's Oktoberfest season. There was a rodeo downtown. A lot of other things going on in the city as well. Politically, it was quite a weekend. So unfortunately, I think Oktoberfest is doing the opposite of what it used to do, where it used to draw people out. And now I feel like It's too much now, too many crowds. I don't really know anybody who's going to any Oktoberfest festivities this year. Who was this weekend? Just Harpoon? Sam Adams was this weekend. Also, a lot of cruises in town, which are beer drinkers apparently, according to my local insights. I'm very curious to see if cruise ships are seeing notable changes in drinking behaviors of folks, because it is a very large drinking occasion. But I don't see why they would change their habits too much in that occasion.

[00:06:00] Brewbound Podcast: Well, what did you notice? You were more recently on a cruise than either of us.

[00:06:04] Jessica Infante: I mean, it was a lot of frozen drinks with rum. How much rum is in those drinks? In the actual drinks themselves, not much. The key is you have to always ask for a floater and then you know you have at least an ounce and a half or two ounces. Beer wise, I want to say it was Bud Light and not much else. Are there RTDs? On some of the restaurant menus, there are RTDs. And then we just found out last week that now Carnival Cruise Line has this new non-alcoholic package where you can get non-alcoholic beer, wine, and spirits included. So it seems like there is some changes maybe.

[00:06:43] Justin Kendall: This is going to dovetail nicely with this week's news section where we're going to talk about a beer brand that was on Carnival Cruises. We're going to also talk about a celebrity non-ALC beer brand. We're going to talk about the new CEO of Molson Coors. And we're going to talk about a win for Boston Beer Company in the Team Conrad versus Team Jeremiah debate. After we do that, we'll have our featured interview this week with Brandon Richards from Alesmith. He's going to talk about their 30th anniversary. Jess and I did the interview with him and we covered a lot of ground.

[00:07:18] Brewbound Podcast: Yeah, we did. Really great chat. Lots going on out there. Nice to hear that they're feeling good and positive as they turn 30, which not many people do.

[00:07:28] Justin Kendall: Stick around for that. Also, join us in Marina Del Rey, California. This December 10th and 11th, we will be doing Brewbound Live, our annual business conference for beverage alcohol professionals. You can find out more at brewboundlive.com, but we just confirmed our keynote speaker, and that's gonna be Leah Wong Ashburn from Highland Brewing. She's got a lot to talk about as a second-generation craft brewery owner. Having gotten to the other side of Hurricane Helene's aftermath, and seemingly they're doing well, they've donated some money to hospitality workers, she will have a lot to discuss.

[00:08:10] Brewbound Podcast: I'm super psyched about this one. I interviewed Leah a lot last year in the aftermath of the hurricane. And in honor of us naming her the person of the year, which she quickly refuted to say team of the year, she's so smart and has really a ton of wisdom and insight. And I can't wait for her to share all of that with our guests.

[00:08:30] Jessica Infante: Yeah, and the keynote really sets the tone for the event. Whatever kind of main themes come out of the keynote go on throughout the discussions throughout the conference. So I think there's going to be a lot of great insights from Leah that carry over into our discussions just about the resilience of beer and the people within the industry. And so it's going to definitely be a worthwhile conversation.

[00:08:52] Justin Kendall: Join us there in December and also join us in Las Vegas at the NBWA's annual convention. We'll be recording episodes of this podcast there. Reach out if you're interested in being on the podcast. You can hit us up at podcast at Brewbound.com and we look forward to hearing from you. Let's get into the news. Bit of a surprise last week in that another celebrity is getting into the non-alcoholic beer segment. This time it's Charlie Sheen. He's launching Wild AF. It's a non-alcoholic lager brand. Cold Gold is the beer, and he's partnering with Harpoon and The Silent Group, which is a brand creation marketing group.

[00:09:40] Brewbound Podcast: Yeah, Justin, you had a super early jump on this. How? Where did you, like, how did you come across that?

[00:09:46] Justin Kendall: There's a whisper network.

[00:09:49] Brewbound Podcast: He has those Charlie Sheen connections.

[00:09:51] Justin Kendall: There's a lot of whispers in the non-alcoholic beer world.

[00:09:55] Brewbound Podcast: Was the video already on YouTube?

[00:09:57] Justin Kendall: The video had been on YouTube since like September 9th, but it had only around 100 plays or so when I first looked at it. And I'm sure about 10 of those were me watching it over and over again. And then the website was live, so they're taking pre-orders for the beer already. It ships in mid-November, just in time for the holidays. But they've been pretty quiet about this, which I guess when you're working with a group called The Silent Group, they like to keep it on the down low. But Sheen's been everywhere lately. He's got a new book. He's got that Netflix documentary, aka Charlie Sheen. I just watched it a couple nights before, and then I started hearing about this, and I was like, oh. Well, that's interesting. So a surprising Friday news dump from us, not them. And I guess they'll be announcing this week.

[00:10:51] Brewbound Podcast: You've brought the views up to 177.

[00:10:52] Justin Kendall: Oh, wonderful.

[00:10:57] Brewbound Podcast: Real talk, as we were talking about all of that and I was thinking about Mr. Sheen's checkered past, I could have sworn his tiger blood winning days were like 20 years ago. But no, it's only like a little over 10 years ago. I don't even know what is time.

[00:11:15] Jessica Infante: Yeah, it was quite prominent during my high school years. I feel like I've talked about this on the podcast before, but both cars that I've had have had some sort of link to Charlie Sheen in their name. My first car ever was Charlie Sheen. Part of that was inspired by the character from Jimmy Neutron. The other part was it was a very beat up car. And we were like, he's been through some things. And so being around Charlie Sheen's hashtag winning during developmental years became Sheen. And then when I got my current vehicle, much better shape. So it was like a more like sobered up Charlie Sheen. So now my car is Charlie. So that is how that came about. But hashtag winning in Tiger Blood was I mean, it's how everyone now says whatever the kids are saying in their, you know, lingo. And now I sound really old, but that was, that was the thing. You couldn't go through a day without hearing it.

[00:12:12] Justin Kendall: There's still people who say winning.

[00:12:16] Brewbound Podcast: Just having flashbacks. We really should have looked this up on untapped, how many tiger blood iterations there have been.

[00:12:24] Justin Kendall: Wasn't that a mighty swell seltzer?

[00:12:27] Brewbound Podcast: It was. Yeah.

[00:12:30] Justin Kendall: Well, this isn't Charlie's first dalliance with non-alcoholic beer. He's been sober for eight years, I guess. So, you know, you mentioned 10 years since the winning in Tiger Blood. So he gets sober, you know, two years after that. And he was doing, in 2012, an ad for Bavaria Zero Zero. So we rewind way back. And have either of you watched this?

[00:12:55] Brewbound Podcast: Yeah, I watched it when we were working on the story.

[00:12:58] Justin Kendall: That was the first time that I'd seen it. To think 13 years ago, you could do an ad like that where he's driving away from a rehab facility and all he sees is like people drinking beers. There's a pregnant woman drinking a beer everywhere he goes and he ends up back home and everybody's partying at his house. This seems very on point. And then, you know, he's drinking a Bavaria zero zero.

[00:13:21] Brewbound Podcast: Yeah. Was the reveal that everybody else also was?

[00:13:24] Justin Kendall: I don't know. Was it? That would make a lot more sense with a pregnant woman drinking a beer, right?

[00:13:29] Brewbound Podcast: I think so. And also it didn't air in this country. I want to say it aired in like South Africa. But yeah, it did feel like everybody was taunting him.

[00:13:36] Jessica Infante: It didn't seem very nice.

[00:13:37] Brewbound Podcast: Yeah.

[00:13:38] Jessica Infante: I mean, look at the difference between non-alcohol beer culture then versus now.

[00:13:43] Justin Kendall: That's true.

[00:13:43] Jessica Infante: It's so different.

[00:13:45] Brandon Richards: Well, this is starting off, as I mentioned, pre-ordering online, and then they're gonna look to get it into brick-and-mortar retail stores next year.

[00:14:16] Justin Kendall: Let's talk about Molson Coors and its new CEO. Six months after Gavin Hattersley announced that he would retire at the end of 2025, the company is named Chief Strategy Officer Raoul Goyle its next CEO. And he is a longtime Molson Coors employee. So we're talking 24 years with the company.

[00:14:37] Brewbound Podcast: Yeah, he's had a bunch of different roles. He's been in general management, he's been in IT, he's been in finance, he's been in M&A work, and he's been chief strategy officer for the past little bit. And he's also worked for Molson Coors all over the country. Started in Denver, went over to the UK to Burton-on-Trent, ran things in Mumbai for a few years, now he's back in Chicago. I think if you're looking for your next leader and you want somebody who knows your company inside and out, backwards and forwards, this is a really good pick.

[00:15:08] Jessica Infante: Yeah. I think too, when you're, it seems like Molson Quartz is in a bit of a reevaluating what they are as a company with all their separate ventures that they're in, whether it's, you know, non-alcoholic beverages, whether it's beer, whether it's their wine and spirits business, that's gone through quite a few changes. So having someone that kind of knows operationally how everything works and how they could probably be a more cohesive unit would be really helpful.

[00:15:35] Justin Kendall: And he's taking over at a time where it's been not the best year for the company. I think they've lost a half point a share or more this year in Cercana scans. And they are still The Summer two volume company, but they are The Summer three company by dollars in Cercana off-premise channels through early September. So definitely will be interesting to see what he is able to do.

[00:16:02] Brewbound Podcast: interesting is exactly the word I was just going to use to describe the past few years that they've had. Because in 2023 with AB kind of on the ropes in the wake of the Bud Light boycott, Molson Coors' core brands, you know, Coors Light and Miller Light, saw some really nice gains. And whether or not they've really been able to maintain them is kind of up for debate. If they still have the placements they got during that time, they don't really have as much momentum anymore. So it'll be interesting to see how they're able to regain their footing because those gains in 2023 really could have transformed a lot for them.

[00:16:38] Justin Kendall: Yeah, I don't think that they were as sticky as the company had hoped that they would be, because that was a term they kept using was sticky. The brand that has sort of carried them a bit this year, though, is Banquet. And they're really fortunate that that brand was kind of organically incorporated within Yellowstone. And then they formed the partnership afterward. But I mean, that was really an accelerant for them.

[00:17:09] Brewbound Podcast: Yeah, definitely right beer, right time, right cultural moment. Another area where I think they've haven't really been able to find their footing as they're beyond beer stuff. Their hard seltzer brands really haven't caught on. They killed cord seltzer almost as soon as they started it. Vizzy is a question mark. Topo Chico hangs on, does all right, but Simply Spiked was big for them and hasn't really been able to maintain its momentum. It's interesting. I mean, obviously the industry is in so much flux right now with the broader beer category and then, you know, the hard seltzer and F&B segments are going through it.

[00:17:50] Justin Kendall: Yeah. Let's talk a little bit about Island Brands and they are being sued by a couple of investors and you wrote about this Jess, so I'll let you take it away.

[00:18:01] Brewbound Podcast: Oh, I did. So Island Brands was a company we used to hear a lot about and a lot from. They had a pretty strong aggressive PR strategy, it felt for a few years. They were positioning themselves to be like a coastal, like definitely like Southeast coastal, Southeast US and Caribbean. They were based out of the Charleston, South Carolina area, trying to be a lifestyle brand. They had Island Active, which was their attempt at making like a, Jimmy Buffett-inspired Mick Ultra. They also had a regular lager. Then they started branching out into hard seltzers and RTDs, always a contract brand. And you would always kind of hear whispers about them burning various production partners and people generally not really being too happy with them. They had gone the crowdfunding route. They had landed on the Inc. 5000 list of the country's 5,000 fastest growing companies, which sometimes is spot on and sometimes is not. So eventually some people who had invested in the company, they were personal friends of the co-founders who are no longer involved. This couple kind of realized that they were just getting duped. They had sunk $500,000 into this brand. only to find that it was never really invested. And they alleged that the co-founders, Scott and Megan Hansen, were using what they thought was their investment money to go on trips and subscribe to Netflix and go to Starbucks. So that lawsuit's making its way through the courts in South Carolina. We reached out to the brand now, which has been sold to an unaffiliated third party group, just trying to get it back into distribution. So we'll see. They, you know, they were very clear with me, like Scott Hansen is no longer involved. But then when I said, cool, well, who are you? They stopped answering.

[00:19:55] Justin Kendall: And they have also made an offer to their former investors, I guess it would have been, or the brand's former investors to rebate them half the price. Is it half?

[00:20:08] Brewbound Podcast: If you had invested in that crowdfunding round, which was up on StartEngine and raised like millions of dollars, like we're talking a lot of money here. If you buy an Island product between now and next March and submit your receipt, they will give you a 50% refund. for your troubles. So if you're salty about having given these people money, give them a little bit more money and then you'll get some money back.

[00:20:33] Justin Kendall: Well, it's other people you're giving the money to, but I mean... Other people, different people. I don't know if I were one of those investors that I would have the same affinity to be willing to buy the product again.

[00:20:47] Brewbound Podcast: No. No. No.

[00:20:50] Justin Kendall: I think I'd be more angry and want my investment

[00:20:53] Brewbound Podcast: Yeah. They closed their last star engine crowdfunding round in November of 2022, which is a while ago now. They raised a million and a half dollars according to an SEC filing. The parent company of Island Brands was called American Beverage Holdings. It was dissolved earlier this year, so no longer exists. Like we said, new owners in charge. I did look at their NIQ numbers and There's some green shoots here. So it'll be interesting to see. I think most of the momentum is behind Island Coastal Lager. Dollar sales are up a good bit in NIQ data that we've had parsed by three-tier beverages. Something to watch.

[00:21:36] Justin Kendall: Maybe people are getting those rebates.

[00:21:39] Brewbound Podcast: Yeah, maybe. Here's how to juice your scan data. Offer to give everybody half their money back.

[00:21:46] Justin Kendall: Well, I mentioned a brand was at one time on a Carnival cruise ship, and they were at least on some.

[00:21:55] Brewbound Podcast: Yeah. Yeah, they were. They had an official partnership with Carnival. They're not the brand that had a brewery on a cruise ship.

[00:22:02] Justin Kendall: No. That's somebody I don't know.

[00:22:04] Brewbound Podcast: I don't like the Miami area.

[00:22:05] Justin Kendall: Yeah. But they did have a boat that was branded Island that was in a lot of their press materials. I mean, that could have been Photoshopped too, but...

[00:22:16] Brewbound Podcast: I was looking at their socials and a couple weeks ago they were calling for models for a photo shoot. So it seems like the new owners are trying to make it work. If they ever tell us who they are, I'll let you know.

[00:22:29] Justin Kendall: We will be waiting. Let's wrap up the news section here with a bit of a spoiler. So if you haven't watched The Summer I Turned Pretty or plan to, you can fast forward a few minutes here. Zoe, let's get into it because it looks like Boston Beer has picked a winner.

[00:22:47] Jessica Infante: I know, I didn't know I'd become The Summer I Turned Pretty correspondent. Congratulations. I apologize to real fans for any inaccuracies. But yeah, Boston Beer chose correct and Team Conrad got the win. Belly and Conrad went off into the sunset.

[00:23:07] Brewbound Podcast: Are together. Is Conrad the nice one or the naughty one? I'm so sorry.

[00:23:13] Jessica Infante: The nice one with the repressed feelings. Not Jeremiah the frat boy with a wandering eye.

[00:23:22] Justin Kendall: Congratulations to the happy couple.

[00:23:25] Jessica Infante: Congratulations to Belly and Conrad and to Boston Brands and Boston Beer, I guess. I don't think there's any appearances of the beer in the TV show, but apparently there's a movie in the works. So they can still capitalize somehow.

[00:23:42] Brewbound Podcast: Yeah. Well, if they get married, you can serve Boston Beer at the wedding.

[00:23:47] Jessica Infante: So there you go. Congrats. I don't have any other updates. I guess we'll see if there's any spikes in Boston Beer sales anytime soon. Also in similar news that came out recently was Anheuser-Busch just signed a big deal with Netflix too. So it seems like the beer companies are paying more attention to these big viral TV shows. I think they're following what we were just talking about of what happened with Gore's Banquet, of how they were able to capitalize on that. And so other companies are seeing how can we follow suit.

[00:24:23] Brewbound Podcast: I look forward to seeing how many McUltras get drunk in the pods.

[00:24:31] Jessica Infante: The kids on Stranger Things are going to be drinking Bud Heavies. Are they old enough to drink? No.

[00:24:37] Justin Kendall: Probably, by now, right?

[00:24:38] Jessica Infante: I mean, in real life, yes.

[00:24:39] Justin Kendall: The actors, yeah.

[00:24:41] Jessica Infante: In real life, yes. On the show, I think they're still supposed to be like 14 years old.

[00:24:46] Brewbound Podcast: Yeah. We did three episodes, and I was like, I can't.

[00:24:50] Justin Kendall: I'll be tuning in. Well, with that, I think we should get to Alesmith and Brandon Richards.

[00:24:59] Brewbound Podcast: Ale Smith President Brandon Richards is here to share how the San Diego Craft Brewery is celebrating its 30th birthday, which I assume is not like how I celebrated mine, which was bullying my husband into throwing me a party and weeping uncontrollably when I thought it wasn't happening. So, Brandon, how are you doing?

[00:25:18] San Diego: I'm doing awesome. We're getting towards the middle to end of our 30th year. It's pretty wild. We're having a lot of fun, though. It's been a really good year with a lot of things that we've been working on for a long time coming to fruition right now, which is really cool.

[00:25:34] Brewbound Podcast: Awesome. We've got a bunch of questions about the specifics. You've got a lot of fun product stuff, but just tell me about the general celebration. I assume you've been having parties all year, right?

[00:25:44] San Diego: We have been. We started off with a couple cool barrel age collaborations at the beginning of the year with McKellar, who have been longtime friends of the brewery. And it's been in our logo for the whole year as well. So we've just been celebrating 30 years. For the actual anniversary party, it's the start of beer week here, which has been... Perfect. downplayed a little bit more recently from what I've seen from other breweries and from the organization, but we're gonna try to kick it up and do a tiki-themed party. We're gonna have some fun cocktails because we're serving those in our tasting room now. And we have a beer specifically for the event. And we're honoring Skip. Skip is someone who started Ale Smith 30 years ago. Peter actually bought the brewery from Skip after nine years. So on Friday night, the night before, the actual party for the customers were honoring Skip, who founded the brewery and is super well known in our local beer community. So it's going to be a really fun weekend.

[00:26:45] Brewbound Podcast: Shout out to Skip. In addition to all of that, like I mentioned the product stuff, you've got a ton going on in the contract side of the business. But I do want to focus a little bit on the Alesmith brand itself. You're seeing double digit gains in Scandata, which is almost unheard of for a brewery of your age and size. What's driving that? Because I am sure there's a bunch of people out there who want to know your secret.

[00:27:08] San Diego: We found that our Party Tricks and our tropical Party Tricks were the right answer Island Brands for us to really travel outside of San Diego. For those who've known the brand, they know Speedway Stout, they know 304 Payalels being the big players. Three years ago, we really introduced Party Tricks, this West Coast IPA, and We figured that this was going to brand that was going to be able to travel out of town for us. And we've really seen that in the six pack, 16 ounce category where we've seen growth along with some of our other great Southern California brands. And you're right. We're the second fastest growing brand in California right now. And I, when the market's down here in Southern California, it's even better. The category is down to eight and we're up almost 20 something. It's pretty wild. 24.

[00:27:56] Brewbound Podcast: Congratulations. Well, so you mentioned West Coast IPAs. I have to assume your whole crew is thrilled about that style having a bit of a resurgence after a few years kind of in exile due to all the haziness in the world. What's up with Party Tricks and when did you start to see those styles come back into fashion?

[00:28:16] San Diego: I think Southern California has really never gone too far from IPA, and we did have the hit on hazies, and I think that the large breweries like Hazy Little Things from Sierra Nevada and some local craft that were doing hazies pretty well, but I never really saw them go way down here. With our Party Tricks, we're bringing in some of the same hops that everybody else is using. We just like the way we're blending it. We're actually filtering it and fermenting it a little different than we have a traditional IPA. So it's helping us with shelf life, which has been great. Good on the aroma. So we're using some of those new techniques in the beer. that most people are probably using, but it's the first time we've used them outside of our traditional beers. We've made ales with IPA for a long time, which is also in our grocery stores, but this is the one that's really taken off and really turned the business around in the last two years, to answer your question. Saw it really hit the stores two years ago, and in the last 52 weeks, it's really started to come on strong.

[00:29:19] Justin Kendall: So what is it about the PartyTrix brand that has resonated so well with consumers?

[00:29:25] San Diego: I think first off the name is fun and the packaging is bright yellow with some blue. We've done some nice programming around the word party and the word tricks. You know, show us your Party Tricks and what do you do when you're at a party? We've done some fun marketing in the area. So this brand's really resonating with consumers that are into craft beer that might be a little older that understand craft beer, what a good craft beer is, but we're also hitting that younger consumer who likes the name and the packaging, and they're trying it for the first time. Also, Justin, the ABVs, we think at the right amount. You know, it's under seven. You could drink a few of them, and you're not going to get that hard-hitting IPA that some people get scared of sometimes. So what's your Party Tricks? What's my Party Tricks? Ooh. Yeah, put you on the spot. Has no one ever asked you this? No, my Party Tricks is like, guess where I was born? Cause you know, nobody ever gets it. Cause I was born in Brazil, which makes zero sense. My parents lived down there for two years, but like, that's my weird fact. Like, what's my Party Tricks? I don't think I have one.

[00:30:32] Brewbound Podcast: That is a very fun fact though.

[00:30:34] San Diego: What's the weirdest Party Tricks that somebody's said so far? We've seen some weird things happen with ping pong balls. That's been one. We have seen the yarn through the nose. That was one that we saw when we did a little thing on Instagram and people were sending, submitted us some videos. That was weird. But we've also got like Party Tricks, like how do you make your ice cubes in advance or like use different things in your house or Party Tricks has been another one too that we've used. That's cool. And that's where we actually learn things that's like mom tricks like those have been really cool to see those ones come through. I wish I had more examples of what those ones were.

[00:31:19] Brewbound Podcast: I mean, I don't think either of us are hosting parties anytime soon, so.

[00:31:22] San Diego: That's true. You've got some time. We love life hacks and Party Tricks, so we do some good things with the brand.

[00:31:29] Brewbound Podcast: Can we talk footprint a little bit for that beer? Obviously it's doing really well in San Diego, but how's it doing beyond your backyard?

[00:31:37] San Diego: This is the brand that's taken us outside of San Diego that we've been able to get really going for us. And I think everybody has a great IPA close to their home, and it's probably fresher. And this is the one for us that we've been able to take into the rest of Southern California, to Northern California, to Arizona. And then we have some great partners in Ohio, Minnesota, Illinois that bring in our IPAs and do pretty well with them. We send a little bit up to Oregon and Texas. But really this brand is, for us, is close to home just because that regional IPA has been such a big player.

[00:32:13] Brewbound Podcast: The other product I really wanted to make sure we got into on the beer front is Sunpath. So new-ish, launched earlier The Summer, fruited light lager. Wasn't really on my bingo card for Alesmith. What is this beer doing for you? And I assume it's bringing you some new drinkers, maybe? Tell us about that.

[00:32:31] San Diego: This is the beer we're probably most excited about, to be honest with you. We looked all over the world at drink trends and beer trends, and one of the stories I heard once is that in Thailand, they're pouring their local lager from their big producer, and they're putting pineapple or squeezing pineapple or mango into it. Well, we saw a trend out of the UK that one of the fastest growing beer brands was a lager with other fruit and says, you know, specifically the brand's called Jubal and it's beer cut with peach. And we took inspiration from that and we've never really looked outside of the US for what's going on, but we, we did. And we think that we've always made great beers and the traditional style. So we took our base Pilsner, which we absolutely love. and introduce fruit to them slowly over time. And what we found is that the people in our tasting room love drinking them. You can drink more than one. And as you look to where consumption is going, you know, with this younger demographic, they want the beer to maybe not taste like beer. And this is a very high peach flavored, it's beer, but you have to sometimes seek the beer out. And I'm very surprised by some of the conversations I've had. I'm 44. I've got friends anywhere in the range from, you know, 40 to 60, that I've had friends come to me who are older than me, younger than me, that really enjoy this beer. And it's like, I can drink multiple. I can drink it during the daytime. It's 4% ABV. We started with Peach. We will transition into a variety pack launching in spring for our local grocery stores, which will have brands like Lemon, Grapefruit, Passion Fruit. I think we're waiting on a fourth or fifth flavor, but it will round out at four. We're really excited about that brand, Jess.

[00:34:23] Brewbound Podcast: That's great. What are you hearing from retailers about it?

[00:34:25] San Diego: It's in our local Arborsons Vons Pavilions, performing really well in a six-pack 16-ounce can. That's the package type that really does pretty well here in Southern California for the regional local craft brand. And it happens to be on sale this week and probably selling a bunch of it. I saw some displays this morning. So it's doing well, being received well. And I think it's great for The Summer that's looking for something a little bit lighter and ABV and full flavored. And we're seeing other brands do it, you know, in the category. I told you the story about the international brands, but we're also seeing it with like Hooray Girl beer and some of those other products that are similar. I know we have great friends at other breweries over the country that are doing similar things. So we're excited about this one. Jess just spoke with Ray, in fact.

[00:35:15] Brewbound Podcast: I did.

[00:35:16] Justin Kendall: She's great.

[00:35:17] Brewbound Podcast: For Taste Radio with the other Ray.

[00:35:22] Justin Kendall: Well, you've got another innovation that is maybe unexpected, and that's Speedway Espresso Martini. Why did that make sense to jump into RTDs now? And what's the feedback you're hearing from drinkers?

[00:35:36] San Diego: The Speedway Espresso Martini is 18 months in the making. We looked at our business back in November of 23, and we're like, where's everything going? The writing was on the wall with RTD Growth. We just figured we had to get our license to be able to produce spirits in our facility, which you may have been to before. It's 106,000 square feet. It's pretty large. So we started the process, and then as we started thinking about what we were going to do, the natural thing for us was to look at our flagship brand with Speedway Stout. We're known for that product all over the world. We love working with coffee. Our barrel-aged beers routinely show up in the top 50 in the world. So Vietnamese coffee with espresso martini, the espresso martinis are hot at cocktail bars. We think this is a great night starter for like an occasion. So in the on-premise, maybe you find it at a hotel, you take it on your trip so you can drink it before you go out. We think it's a fun play for a first drink at a sports venue, which we have a few partnerships here in Southern California. but also could just be a great thing to pour out. So we are putting it on nitrogen. It's nice and sweet. The reception, Justin, has been really good. So it's been on tap in the tasting room for about six months and we're sending it to retail next week.

[00:36:55] Brewbound Podcast: Zoe loves an espresso martini. So I'm sure on our next trip out to San Diego, she will probably want to seek that out.

[00:37:03] San Diego: Well, now we'll just send her some and she doesn't have to seek it out. Perfect.

[00:37:08] Brewbound Podcast: But I think we would also like to come to San Diego in general. Yeah. So in addition to that, something we were just talking about before we hit record here is hop tails. And I'm gonna let you tell the story, but I don't think this exists anywhere else right now. So tell us about that product.

[00:37:26] San Diego: We don't think it does either. What we found is that we really like drinking hop water. Boston Beer drinkers sometimes want a break from maybe the malt, but want something a little bit more refreshing that has some bubbles in it. So we've been putting spirits in our hop waters for a while now as a group. I have a vice president of sales, Chantal, who came from Lagunitas, and they've launched great hop waters over there. And when she first started, we were drinking their hop waters in the office, and then come Friday afternoon or over the weekend, we started putting spirits in them. It's like, why wouldn't a brewery make something called a hop tail? And we're like, let's go have some fun with this. And it's different varieties of hops with a light vodka. They'll be vodka to start with different citrus and different hop character. And we found ourselves in hop tails, which I can't believe we found the name. and just super refreshing. I think this one just like Sunpath is really a new drinker for us as well because we also have people obviously that we don't hit on that don't like beer. but maybe could find that they like hops and they do like seltzers and that maybe they're drinking high noon. We have a lot of high noon cut water in this area. Cut water is big nationally, but also huge in our backyard being that they started here. So we think we have something that if we can get this in the right people's hands, this Spearhead RTD could be fun for us as well.

[00:39:00] Brewbound Podcast: And how prominent are the hop names on the product? Is that something you guys are leaning into?

[00:39:06] San Diego: We're not leaning into it. And the reason for that is when we started thinking about the names, it's like, if we start to really go hard on what the hops are, we're talking to the beer customer again. We love our beer drinkers. We're all beer drinkers at heart and IPA drinkers. But if we start to get into hops and make it too hard to understand, The Summer might get a little scared of it.

[00:39:30] Justin Kendall: Let's switch gears and talk about your contract brewing business, which has become a pretty big chunk of your business now. And I'm curious, how much of the overall business is it at this point?

[00:39:43] San Diego: On a volume basis, Justin, it is now past the Alesmith volume in barrels. We set out to do that and told the whole team with wide eyes that some day in time we will make more of other people's products than we will of our own. And it took about 18 months to get there, but we're there and that's where we find ourselves now. And we will produce about 60,000 barrels this year. 28,000 barrels will be A.L. Smith and 32,000 barrels of other people's products who are great partners. We love working with them. And we think The Summer increases up to almost 90,000 in 2026. So now with the introduction of spirits, we can make spirits, cider, beer. We can meet all the many brands needs regionally. And we think it's our path to growth for the size of building that we're in, along with complimenting the Alesmith brand and what we're doing. Contract has become very important to us and our long-term plans as being profitable.

[00:40:47] Brewbound Podcast: Do you guys have a pasteurizer?

[00:40:49] San Diego: We have a flash pasteurizer. We're looking currently for tunnel pasteurizers. We have other stabilization techniques that we've used that most people are familiar with.

[00:40:58] Brewbound Podcast: Great. I mean, that opens the door for a lot.

[00:41:01] San Diego: It sure does. But yeah, that tonal pasteurizer really gets us into looking at more non-alcoholic products. I don't think we set out on this venture to make a lot of better-for-you non-alcoholic drinks with probiotics and all those fun features, but maybe we find ourselves there someday, and the tonal pasteurizer gets us there.

[00:41:21] Justin Kendall: Just to rewind a slight bit, you have about 60,000 barrels of capacity earmarked for a contract, or is it more than that?

[00:41:29] San Diego: It's 60,000 as a company for 2025 is where we plan to land with 35 of it coming from contract. Gotcha. Roughly.

[00:41:40] Justin Kendall: And with the expansion, how much will you be able to do?

[00:41:43] San Diego: We're looking at 90,000 barrels for next year. And we have space. We do this, our business a little differently. We build it as the customers come. We haven't said, let's build it and they will come. So we've been very strategic about when we buy stainless steel, when we buy new pieces of equipment. We have some good size customers coming to us here in the fourth quarter. And that's really the investment we've made in the more recent term is Getting a change out part for our canning line that allows us to do slim cans or sleek cans, excuse me. So now we can do every can size as well. We also added some packaging change out time because now we're really looking at uptime and optimizing really the full day, 24 hours and making sure we're operating for 20 of them very efficiently.

[00:42:35] Justin Kendall: So what are the conversations you're having now with those contract partners? What are you hearing from them? What's the demand like? What are the needs?

[00:42:45] San Diego: Now we're getting to a nice blend of beer and spirits. So I think everybody's experiencing the same trends. I think we're in a little pocket of the country right now in California with all of our distributor changes that's impacting most of us probably with what's happened with Stone Distribute selling to the Hand family and New Sunset. So I think a lot of our customers happen to go to Sunset Distributing. and they're kind of getting their feet under them. So what we're seeing is that it has been a little bit of a slowdown, but we also have multiple brands that we're working with that have had some of their best months in their company history recently for making a change from where they were to Sunset. So our brands that we're working with now are all flat to growing. We're also working with great brands out of Northern California where their capacity and their facility and we're just supplementing some of their volume. Those are the best ones to work with. They've got a great brand and they've decided not to use their dollars on putting more stainless steel in their building or buying bigger buildings. And those are the types of customers that they're in a great place when they still have their own brewery. But we're working with a handful of customers that don't have a brewery at all. We're here, we can help them do their recipes. We can carry forward their recipes if they had them. So we're really doing it all. And what I think what people didn't know about Alesmith is that when we moved into this facility 10 years ago, we were always making beer for our friends. We just never made it part of our business. Now it's like intentionally part of our business to grow it. And we've been working on it for 18 months and it's happening.

[00:44:29] Justin Kendall: Is there a particular size of client that works better for Alesmith than others?

[00:44:34] San Diego: Well, there's four large contract producers here in Southern California. We feel like we fit the hole for the regional player where we know where High Noon's produced. We know where some of these very large brands are produced. And that's probably not our best fit right now is that they're doing thousands of barrels a day. We're looking at 200 to 500 barrel customers per week. maybe doing 10,000 to 20,000 barrels a year. And we're still working in barrels because we're a brewer. A lot of those companies like to talk in cans and ounces. But 10,000 to 20,000 barrels, Justin, is really the sweet spot for the customer we're looking for. And either growing on the East Coast and want to get West or starting out on the West Coast, because this is such a great place to incubate our brand. Prove it here, make it with us, and then take it across the country.

[00:45:30] Brewbound Podcast: Inputs are getting really expensive and we've been here before, but how are you navigating that?

[00:45:36] San Diego: Yeah, I think the thing that's probably hurt us the most is malt and aluminum. And we haven't started to see the aluminum hit yet, but it feels like it's just right around the corner, you know, at 10% and when 10% turns into a penny and a half it's going to hurt. And The Summer behavior on spending right now is tough in this area as well. So being able to pass along that 10% isn't something we're going to see in the near term, we don't think. So right now we're eating it, and it absolutely cuts into that margin. But really, those are the two areas. And maybe we get some relief on Malt here at some point, but we do know that some of that had to come out of Canada more recently. I think we're better than most, though, in terms of our agreements have been so far into the future that we feel a little bit isolated. So we'll see what happens here. If there's anything else that really hurts the industry beyond those two items.

[00:46:31] Brewbound Podcast: What other challenges do you run up against on the contract side? Is there anything that we're not thinking of that we should be?

[00:46:37] San Diego: just the ability to meet demand on brands that are starting up. It's like sometimes they don't know that they have a new program coming to them and they don't own their own facility. So when they have a win as a brand, it's a win for us. But the hardest thing is like, hey, we need you to make product in four weeks from now. But we're planning out a little bit further. But our goal is to be able to make everybody's product. We love it when our customers are winning, because that means we're winning. So we try to help them as much as we can. But I would just say it's those jump balls that everybody's trying to get in when they land with a contract customer. It's a little bit harder to get into this schedule at the size that we're growing into with now five customers currently up to eight starting in the beginning of next year.

[00:47:26] Justin Kendall: Are you getting a lot of calls in the aftermath of 21st Amendment? Because they were doing contract and I know some of the players there are looking for new production partners. So is your phone ringing?

[00:47:40] San Diego: It is yeah, we've received 2 phone calls already. We think that potentially we, we end up partnering with 1 of them. We think that the other 1 might, we might not be able to produce because of facility constraints. Currently doesn't mean we can make the purchase to be able to do it in the future. So yeah, we are. And I think the other thing is we've now identified some of their better customers as well. So we'll go try to find them. They might not know we're here, but we're going to go find them and we're going to call them rather than them call us.

[00:48:13] Brewbound Podcast: Smart. Brandon, before we let you go, I do want to ask just kind of your observations on what's up in San Diego, because San Diego to me is always kind of been like the canary in the coal mine for craft. because it's a very established market, very mature, a national leader, a little bit saturated. And I think what San Diego goes through, eventually the rest of the country goes through too. So I know you had a spate of closings a while back, but what are things like right now? What are you seeing among your drinkers, among the craft breweries in town? What can the rest of the country expect to happen in the next, call it six months or so?

[00:48:48] San Diego: That's great that you think that we're going to drive what happens to the rest of the country. I think you are right. I think we've stabilized in terms of brewery count. There was a period of time about 12 months ago where we were getting a lot of phone calls about breweries that were either going to close to see if we could help them, buy them. And those calls have totally settled down, which means that most of the groups in San Diego, from my opinion, have kind of found their sweet spot. They're making adjustments in their business, whether they're investing in their direct-to-customer, on-premise plan, or on-premise. or they're working on their wholesale plan. But I feel like our brewery count in San Diego has stabilized. I can name about 10 breweries here that are all pretty large, over 10,000 barrels, and they seem to all be doing pretty well. And there's just great beer down here. It's fun. It makes us up our game, and we're always trying to improve. And we're doing it, we think, with some of these new products. I love the camaraderie we have. I talk with many of the CEOs in town about what they're doing, and it just still feels like the olden days a little bit. At the same time, we're competitive about what we do. We're still having fun.

[00:50:03] Brewbound Podcast: I still want to quote Ron Burgundy here, but that's like 20 years too late. But it sounds like you're staying classy.

[00:50:10] San Diego: It works. It works. You can buy that shirt in every gift store in San Diego. Very good.

[00:50:17] Brewbound Podcast: Oh, unfortunately, in my hometown area, you can buy shirts that say Jim Tan Laundry. And that is our show for this week. Thank you so much for listening. A huge thank you to Brandon for joining. If you enjoyed the Brewbound Podcast, please give it a five-star rating on Apple Podcasts and Spotify. Follow, subscribe, leave a review on your podcast platform of choice so more people can find the show. As always, a big thank you to Joe, Joshua, Ryan, the whole Brewbound BevNET technical team, and to Justin and Zoe for being the best co-hosts. We will see you back here next week.