Brewbound Podcast: AriZona Emerges as a Twisted Tea Challenger

[00:00:00] Justin Kendall: Heading to CBC? Kick things off the day before The 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 The Brewbound.com slash lovecity.rsvp. And don't forget to catch The Brewbound team at booth 956 during CBC. Has a Twisted Tea challenger emerged? Arizona Hard Tea's Lou Fabiano joins us next on The Brewbound Podcast. Hello and welcome to The Brewbound Podcast. I'm Justin Kendall.

[00:00:51] Jessica Infante: I'm Jessica Infante. And I'm Zoe Licata.

[00:00:55] Justin Kendall: And happy birthday, Jessica Infante. Oh my goodness, thank you so much. A day late, but you know that we actually got it right, at least.

[00:01:04] Jessica Infante: Yeah, a day early in real time, but then a day late in podcast release time.

[00:01:11] Lou Fabiano: Wild. If there's any timeline that we're using here that could make me be several years younger, I'd appreciate that.

[00:01:18] Justin Kendall: Would a Notch gift card work? Sure. We can make that happen.

[00:01:25] Lou Fabiano: Would certainly get used. You know, one of the chorus favorite places.

[00:01:30] Justin Kendall: She's got that tab. She's got to clear the tab. So we're willing to put some money toward her tab. Thank you. So this week's podcast, as I mentioned at the top of the show, we have a conversation with Lou Fabiano, VP of sales at Arizona Hard Tea. And we had tried to get one of these crossover brands The Brewbound Live to be on stage. Zoe did a great talk with Al's Brew, Fisher's Island, and New Belgium, which has, what is it, hard charging tea.

[00:02:02] Jessica Infante: Voodoo Ranger hard Hard Tea. Yep.

[00:02:05] Justin Kendall: Already messed up the name, but you did a great conversation with them.

[00:02:09] Jessica Infante: It's a hard one, though.

[00:02:10] Lou Fabiano: It's not your fault.

[00:02:11] Jessica Infante: Yeah, it was an awesome conversation. Other than you know, Twisted Tea, the dominating Hard Tea in this space. And then right after them, the kind of other big participant there other than the people we had on stage were these crossover brands.

[00:02:26] Justin Kendall: And Arizona has posted what, $19 million in sales and off-premise channels tracked by Cercana year to date. So Jess and I are going to have a conversation with Lou Fabiano. He's very bullish, I'll say that. He's a force of nature. He is a force of nature. So stay tuned for that. But let's get into the news of the week. It is end of year webinar season. We've just cleared a bunch of those and you'll be reading some of those on the website. Brewbound Insiders can get the full rundown The Brewbound.com. Also, you know, through our newsletter. But Jess, I'm going to start with you because It was not a cheery end of year webinar with the Brewers Association. And even the predictions that chief economist Bart Watson put out there maybe didn't tinge on the optimistic side for 2024 being a brighter time for craft brewers.

[00:03:24] Lou Fabiano: No, and I think Bart does try really Hard Tea keep things as bright and cheery as he possibly can. And he had a Hard Tea with this one. So the recap of 2023 is that this is the first time that craft volume has declined in a year other than 2020. And that is, you know, obviously 2020, we kind of throw that out because it's a wild year. But this is really the first time in the modern era of tracking craft breweries that the volume has declined. And there's a lot of reasons for that. So Bart went through them all. And the biggest one I think is that consumer demand is just not really growing. Every year, and you guys covered this over the summer, every year the BA teams up with Harris Pole to do a consumer sentiment poll about craft beer. And this year, an equal amount of people who consider themselves to be craft drinkers, an equal amount said they were drinking more and an equal amount said they were drinking less. Those two numbers in the past have been pretty far apart, where most people who drink craft beer were drinking more of it. And I mean, some of them are drinking other things that have alcohol that aren't craft beer. That's the biggest bucket where all these things are going. And Bart pointed out that a lot of the new entrants in the BevElk market space, they offer drinkers a lot of the same stuff that craft beer did and does, variety and flavor. And you can find that now in spirits-based RTDs. There's a lot of flavored spirits. If you were coming to craft because you like having a lot of choices and you like having a lot of flavor, you can get that itch scratch kind of anywhere else in Bev-Alc now. It doesn't have to be from a craft brewer. So that's one big thing. Another big old problem for craft beer is that distributors are kind of losing either interest or patience, or they're just looking at their own realities of their own markets and saying, nobody's buying this. You know, every month, Lester Jones, the Chief Economist for the National Beer Wholesalers Association does the Beer Purchasers Index, and we do a great job covering it every single month. And it's a pretty simple survey. He just asks, you know, people who buy beer at the wholesaler, are you buying more of this or less of this? And they have been buying less craft beer since February of 2022. Every month, craft beer has gotten a reading on this survey under 50, which means it is in contraction. So if the people that are responsible for getting craft beer to the broader market, excepting at the brewery sales, are buying less of it, there's just not going to be much out there in the world. So those are some of those big problems. And the other two really, really big problems are draft beer. Draft beer really has not rebounded from 2020. And it was on the decline to begin with, but it's way below where BART would have ever expected it to be. And BART's one really dire prediction is that in 2024, we are going to be drinking less draft beer in this country than before World War II, which is a super long time ago. And so, you know, Bart's explanation here was to say, you know, he talks to a lot of brewery owners and they say, well, my, you know, my draft sales at my brewery are fine. And that's all well and good. But Bart just said, you know, not all beer is drunk at the brewery. So if people are falling out of the habit of ordering a pint when they're out at a bar or restaurant, eventually they're going to fall out of the habit of ordering a pint at your brewery too. And draft is a huge channel for craft. Craft has like a 30% share in terms of, you know, all the kegs that get sold in our country. So even if you've got your own brewery where you can sell, you know, pints and flights and whatever and be fine, like this is not something you want to see decline the way it has.

[00:07:04] Justin Kendall: Yeah, the one thing on draft, Bart threw up the warning flare was him saying, This is a quote, I worry we're getting to reach a critical point where Americans have stopped learning how to drink draft beer. Draft is not part of their equation. And then that might catch up with breweries as well. So what he's saying, essentially, is because consumers aren't drinking as much draft beer, they won't be thinking about that when they get to a brewery. And that might factor them out of their equation altogether, right?

[00:07:38] Lou Fabiano: Right. I mean, what do you do at a brewery other than drink draft beer? You might not even go anymore. Who knows?

[00:07:46] Justin Kendall: I mean, that's the worst case scenario, but theoretically, I mean, that's something that could happen or, you know, not that we've seen that yet.

[00:07:56] Lou Fabiano: Yeah. And just like a personal anecdote, one thing that I noticed a lot of lately is bad draft lines. I have certain bars and restaurants that we go to where I will just order a bottle or a can. I know people will say that, well, consumers don't really care. And it's like, yeah, maybe they don't, but maybe they don't even know that they're supposed to care. I can't tell you how many times I've gone and ordered beers that I know really well from local producers here in Mass, ordering a pint at places around my town that I'm like, this is wrong. This is not what this beer tastes like. but I'm informed enough to know what all that means.

[00:08:35] Jessica Infante: Right. But I mean, even if consumers are going to get that draft, if it's not done properly, then that's going to turn them off from potentially future drafts. So it's only going to worsen the situation.

[00:08:46] Lou Fabiano: Exactly. You know, like, I feel like Paul Gatz has said this at that CBC, God, like what, 2017, just talking about quality. Don't fuck it up. Same thing here. Consumers don't know that something's potentially wrong. They will just think it's bad. Yeah. So the other thing that Bart got into was openings and closings. And we have covered a ton of that stuff lately. And we still had more breweries open than closed. And this was not the highest number of closings ever. You know, that honor goes to 2020 still so far. And Bart even pointed out when I asked a couple of follow-up questions that in the early 2000s, we saw more closings than openings. So, you know, things on this front have been bad and worse than they are right now, but we also didn't have this many breweries.

[00:09:32] Justin Kendall: that first shakeout wave is what you're talking about there. And now we're at a point where the gap is only 35 breweries at this early read on the data between openings and closings. So there are 35 more openings than closings.

[00:09:50] Lou Fabiano: And this varies by market. Like most of the closings are happening in very mature craft markets that were probably a little oversaturated anyway. Right. But Bart also pointed out, he was like, hey, you know, like in hospitality, bars and restaurants close all the time and nobody is freaking out that the sky is falling and the hospitality industry is going away. So I think maybe the openings closings ratios are not necessarily the doomsday predictor that people act like they are.

[00:10:18] Jessica Infante: Yeah, Bart has emphasized a lot over the past couple of years now, at this point, that this is how other industries operate. And so craft beer has just been in this much, I guess, skewed reality for a while. And it's kind of an adjustment for everybody. It doesn't mean that craft is dying, it just means it finally reached kind of a normal plateau. And so you have to do more to stand out and survive in that space other than just like, oh, here's another craft brewery, people are going to come to you.

[00:10:51] Justin Kendall: And I believe Bart said that it's unlikely that we hit 10,000 breweries at this pace, right?

[00:10:58] Lou Fabiano: That feels like something I have heard him say, yes.

[00:11:00] Justin Kendall: I feel like there was a part where somebody asked him a question during the webinar about reaching 10K. And the answer was, it seems unlikely at this point.

[00:11:11] Jessica Infante: Yeah, but we're also so close. But you're right. And also, some people say we're already there. Those numbers are always kind of confusing and I don't know how accurate. I mean, we've heard some people say there's been 10,000 breweries for a couple of years now.

[00:11:25] Lou Fabiano: Right. And the closing number is tough too, because it's not like people shout from the rooftops, hey, we're closing. Yeah.

[00:11:32] Justin Kendall: It seems to be quite a few more though that are saying, you know, goodbye, at least in some social media posts. And, you know, we come across it eventually. But the thing that I would really like to know, it's getting back to one of your favorite sayings, and that's hermit crabbing. I'd like to know what the percentage of breweries that close end up with another brewery in that space in the future.

[00:11:57] Lou Fabiano: I don't know. That will be interesting.

[00:12:00] Justin Kendall: There's a Toys R Us by me that has been closed for the better part of, well, probably since they, you know, went under long ago and nothing has gone back in that space. And I think that the craft beer spaces, you know, the brewery spaces are those that are, they're built in such a way that they almost have to be something like that, right?

[00:12:25] Lou Fabiano: Yeah. Like what else could go into a brewery? But I can tell you a spirit of Halloween could easily go into a Toys R Us.

[00:12:32] Justin Kendall: It definitely could. Yeah, they can go in anything. They're magical that way.

[00:12:39] Lou Fabiano: I mean, how many breweries will turn into that?

[00:12:42] Justin Kendall: Who knows? I would like to see the first brewery spirit Halloween.

[00:12:48] Lou Fabiano: Definitely could happen.

[00:12:50] Justin Kendall: That wasn't the only webinar we were paying attention to last week. And Zoe, you covered Nielsen IQs or NIQ. I'm sorry. Don't, don't get mad at me. NIQ. You covered their end of year webinar and they really focused on four points. And I think this was more of a consumer focused discussion, which gets back to Bart's points, but take us through what some of the main points were.

[00:13:17] Jessica Infante: Yeah, so this was with folks from NIQ and from CGA, which is their on-premise arm. So we got to hear kind of perspectives on both on and off-premise and looking ahead to what they expect from 2024. The four key aspects were a shift in shopper behavior, changing demographics, continued premiumization and also some more flavor forward trends. And you can dive into all of those in the report. But one of the big things that stood out about that first point was consumers are really looking for convenience right now. And that means kind of two things. One is like we've seen C stores, the convenience channel has been a big area that basically the only area that BevElk is finding growth right now. Consumers are going to see stores to make BevElk purchasing decisions across all categories, but they're also looking for convenience in terms of how quickly can I get my alcohol, how quickly can I find the brands that I'm looking for, how they can speed up that process. Kaylee from NIQ, who we had on at Brewdown Live as well, she described it as consumers are time starved right now. They are doing a lot of other things right now and they don't want to be bogged down by maybe browsing the millions of beer shelves that are in a liquor store or a Total Wine or something. They want to be in and out pretty quickly. They expect that to just continue in 2024, if not accelerate. We'll see what that looks like in terms of maybe there'll be more digital purchases or beverage alcohol, maybe we'll see C-store sales continue to grow. I expect so. I just don't know what would make it change yet. And then a lot of that conversation was what we've talked about a lot about how consumers are changing in terms of demographics and how the younger legal drinking age consumers are shopping. And it's a more diverse consumer base. It's a more like drinking diverse consumer base and like the amount of things they are drinking, what they're looking for, and also where they are shopping in terms of on-premise versus off-premise. I was surprised that Andrew Hummel from CGA pointed out that the on-premise is becoming especially more important for Gen Z consumers. which we've seen the on-premises struggled a lot, particularly for beer on-premises struggled since the pandemic, if not before that. And for Gen Z, they're looking to the on-premise for a lot of their Bevel purchasing. They may not be drinking at home, but they're going out and have an experience of being in a bar and a restaurant and buying a cocktail or a beer that they see on TikTok or that they want to share with their friends on social media. And so we might see some changes in those on-premise trends. I think that probably is going to be more beneficial for things like spirits where it's more of a like, hey, look, this is my fancy cocktail that you can share on social media or that consumers are finding through TikTok videos or Instagram reels. So it's going to be interesting to see where beer fits into that.

[00:16:35] Justin Kendall: One of the things that jumped out at me is Kaylee ran through some of the flavor trends to look out for in 2024. So are you ready for Sweet Heat Summer?

[00:16:48] Jessica Infante: I'm so ready for Sweet Heat Summer. This is like my ideal flavor profile, so I'm excited. I've been preaching for spicy beverages since I've been at BrewBout, I think. It's either the sweeter ciders or it's spicy cocktails and beers, so I'm very excited. You are a spice evangelist. I'm very, very excited.

[00:17:09] Justin Kendall: The other one they pointed out is indulgent flavors, and that's something Flavor Man brought up too. But the Flavor Man review or predictions for 2024 said that they'd be more health conscious. So it'd be like a sugar cookie, but without the calories. We've seen brewers play in the pastry stout space. I don't think this is necessarily what they're talking about. What's your feel on some of this, Jess, with the indulgent flavors, but with a health conscious bent?

[00:17:43] Lou Fabiano: I personally think it's not worth it. You know, if you want something that tastes like a sugar cookie, you want it to not also taste like aspartame. Yeah, that's fair. I don't know. I mean, I could be wrong.

[00:17:57] Jessica Infante: I'm sure this is a factor of a lot of those hard seltzers where people are looking for those more health-conscious, quote-unquote, beverages, but they're looking for more flavor now that they're possibly sick of those lighter flavors from the hard seltzer craze. I also could see it possibly be influenced by espresso martinis being super popular right now and somehow still growing. I think BevNET had a report recently that espresso martinis are continuing to grow and people are just changing how they're drinking them if they want a less sweet espresso martini but still want that chocolate flavor and coffee flavor. The other flavor that they pointed out, which also points to some of those changing demographics, is Hispanic-influenced flavors are going to be really popular next year. So that's like your Mezcals, or tropical fruits, or maybe a little bit of that spice. But we've seen the Hispanic demographic has been increasingly more and more important for beverage alcohol right now. Those consumers are out there and are contributing a lot of dollars to the total industry.

[00:19:06] Justin Kendall: Do you know something else that I would like, but I don't want to substitute for?

[00:19:13] Lou Fabiano: What?

[00:19:13] Justin Kendall: Doritos. And that brings us to Another Round Tabbing Out.

[00:19:20] Hard Tea: This episode is brought to you by the Craft Brewers Conference, where big ideas, bold beers, and brutally honest shop talk collide. Join thousands of industry pros leveling up their game. Don't miss it. Register now at CraftBrewersConference.com.

[00:19:40] Justin Kendall: I think we should just jump in here because this is one of those PR things that got out there. Empirical is releasing Doritos Nacho Cheese Spirit. It's supposed to taste like nacho cheese Doritos, basically. And I cannot see the ABV because I'm old. I mean, I think we can just assume it's high. It is high. You can make drinks with this. I've seen the Financial Times reported on this or, you know, gave the I tried this so you don't have to. It's 42 percent ABV. You get it in a 750 milliliter bottle. So last week, I believe I said that I just don't care anymore about these type of things. But we talked about this. I think you basically said you're a witch now, Jess, because you said that big CPG is bound to encroach on Bev Alk. And here is Frito-Lay with a spirit, you know, with the Doritos, nacho cheese Doritos.

[00:20:47] Lou Fabiano: I mean, it's like distilled Doritos, right? It's not even like, we couldn't even say like, hey, it's a Doritos flavored tequila.

[00:20:54] Justin Kendall: Yeah. I think that I read that there is the definitely feel of like the nacho cheese dust.

[00:21:02] Lou Fabiano: Yeah. Yeah. No, I'm out on this. This is terrible. No.

[00:21:07] Justin Kendall: I think we should all be out on this. As much as I admit, I am old man yelling at a cloud at this point. I think that we are really at a breaking point in this industry of where things are headed. Yes, this is fun and a one-off and, you know, we'll probably never see it again, or it's going to be hanging around on a shelf. I feel like these CPG companies are just here for the cash grab and not the love of the game. Go figure, you know, but like, I feel like there are implications that eventually come from this that, you know, have been warned about before, but we are so far crossing over into these things where it's like, there's some potential for loss of shelf space eventually when these things like fade out. And just clearly, like, we all met this with like an eye roll, which, you know, we're paid to pay attention to this stuff. But is it really getting to the point where a consumer is going to care about this as well? It's just so over the top.

[00:22:18] Lou Fabiano: No, well, we also have like, I don't know, a dozen of these a year. This isn't like it's not even an original idea. Just happened to me a few years ago. I think it was Arby's made vodka from their French fries. Yeah. Why?

[00:22:33] Justin Kendall: There's Kentucky fried chicken over the summer.

[00:22:37] Jessica Infante: the Eggo whatever cream. I'm so tired. I'm so tired of this.

[00:22:42] Lou Fabiano: Yeah. Unfortunately, it keeps working because like content farms just hear about it and then churn it out and it just keeps going and then these companies are hardened by like the media hits that they see and then they go oh we know this earned media and then you can send it to like TikTokers and be like oh look what I get to try and it's just like I'm so mean, but can somebody with half a brain please intercede here because this is old and tired and honestly, it's fucking gross.

[00:23:09] Jessica Infante: Yeah. Sorry. It's disgusting. Literally, vacuum distilled Doritos nacho cheese is what the bottle says. That's horrendous.

[00:23:20] Lou Fabiano: Horrendous. And here's the thing, I'm not even a snob. I will happily eat a Doritos Locos taco, sure, all day. Yeah. a step too far. Everybody involved needs to calm down.

[00:23:33] Jessica Infante: I enjoy these kind of crossovers when they're making a product that actually seems like it would taste good or has a purpose to it. We were talking about oyster stouts a week or two ago. If there was a oyster company that collaborated with a brewery and made an oyster stout, where there's these other outside companies that are collaborating with Bevelc to make a product that makes sense and maybe provides something new. these are just, they want to be BuzzFeed headlines and be in these TikTok try videos. They are so often now that one, you can't even remember any of them that happened. I'm sure there are tons of brands where We've joked that, oh, now this company is going to have a bevel. And they probably already have. And we just forgot about it because so many have happened. Or it's just like it doesn't even it's not as shocking and surprising anymore because everyone is doing it.

[00:24:38] Justin Kendall: When every day is April Fool's Day, then what is April Fool's Day at this point? It's going to be a nightmare scenario, I feel like.

[00:24:48] Jessica Infante: We talked about it last year where like, I feel like April Fool's Day almost seemed tame because they were just doing everything all year round. Yeah.

[00:24:56] Lou Fabiano: Like half the silly April Fool's pitches we get where somebody's like, we're being so silly and it's like, no, you're silly product. Somebody actually makes, and it is a silly product, but there's this company that makes it. Yeah. You know, the 364 other days of the year too.

[00:25:10] Justin Kendall: Which brings us to our next one, Red Tree Beverages, which is Coca-Cola's firewalled separate entity for BevAlc, which I think I understood to be sort of like, ah, we'll just, you know, handle our partnerships through there. But they're actually launching a beverage out of there called Minute Maid Spiked Flavored Wine Cocktails. You know, it's 13.9% ABV. It's coming in a multi-serve bottle. It's coming in three flavors, lime margarita, strawberry daiquiri, and pina colada. So one and a half liter multi-serve bottles. That's what it's coming in. It's being co-packed by someone that's not one of the major Bev-Alc companies that you would have expected from a Coca-Cola partnership, like Constellation Brands and Molson Coors at this point.

[00:26:06] Lou Fabiano: Yeah.

[00:26:08] Justin Kendall: Does this product meet a consumer need?

[00:26:11] Lou Fabiano: You know who I see this being for? Boomer women. Yeah. Like I could totally see my mom and like her widow social club buddies taking this to the beach.

[00:26:22] Jessica Infante: Yeah. It speaks to what we were talking about earlier within IQ with the convenience factor of people are looking for a quicker one stop shops and this has everything you need in it with your mixer and your alcohol. So possibly from a consumer standpoint, I'm a little confused by it. If I think if I saw it on the shelf, I wouldn't quite understand what it was. Like it looks like one of those pre-made mixes that you add alcohol to on the shelf. And so I don't think I would get it right away.

[00:26:53] Lou Fabiano: So I think they were smart to put 13.9 on the front, pretty big. Yeah. Using the Minute Maid name is interesting because Like, I don't know, when you guys hear Minute Maid drinkable product, what do you think? Because I think of breakfast.

[00:27:08] Justin Kendall: I think of the tube. I think of a Minute Maid tube of like frozen goo. The concentrate, yeah.

[00:27:16] Jessica Infante: I think like a little plastic bottle of Minute Maid pink lemonade, which is what I drink a lot as a kid. So this also trenches into that territory a little bit.

[00:27:28] Lou Fabiano: Yeah. I mean, this bottle does not, to me, it doesn't look like they're going after Gen Z at all. Like this, to me, screams mature lady.

[00:27:40] Justin Kendall: Yeah. For the woman who enjoys Seagram's Escapes.

[00:27:44] Lou Fabiano: Exactly. Another new product we did not get into and could have.

[00:27:47] Jessica Infante: Yeah. My grandfather might be into it then. He's a big Seagram's Escapes fan. I see. So is my mom's Widow Social Club. Yeah. So maybe just that general older demographic is going to be on top of this.

[00:28:01] Justin Kendall: As Lester Jones pointed out, they have the money.

[00:28:05] Lou Fabiano: They have the money. They have the time.

[00:28:07] Justin Kendall: Yeah. While they may not want some spirits that taste like Doritos, Minute Maid, what else? Lipton Hard Tea? Maybe that is where the demos are going on some of this. Like, I think you were onto something there.

[00:28:23] Lou Fabiano: Well, yeah, you know, last month, Justin from Beatbox, one of the co-founders, spoke at the Beer Marketers Insights Conference, same conference that, you know, Jenny Dowdy from Red Tree spoke at. And he shared that a majority of their drinkers are older than 42. And I was chatting with them at the happy hour. I was like, guys, like, this is not who I thought was drinking Beatbox. And they were like, no, you know, like older women of color really love sweet drinks. So they like our stuff. And then I was like, okay, like I get all that makes total sense to me. So. Yeah, I mean, that's, that's a smart demographic to go for. Because, you know, once you get older, over a certain age, a lot of CPG companies stop targeting you because they just want the younger people. But because of the way the boomers have created our society, they're the ones with the money and the rest of us just kind of have scraps.

[00:29:14] Jessica Infante: Yeah. And we've heard from all the economists, the People are getting older and they're getting more diverse. So like if you're answering both of those needs, then yeah, maybe you're gonna have some success.

[00:29:27] Justin Kendall: Totes. I'd launch this thing right next to the villages in Florida.

[00:29:33] Lou Fabiano: Right? I would love a season of Bachelor in Paradise, but at the villages. Now that we've Hard Tea Golden Bachelor and it worked, people loved it.

[00:29:42] Justin Kendall: I don't know that you want that.

[00:29:45] Lou Fabiano: Before we wrap, because this is our last show before the holiday, I wanted to share with you guys a fun thing that I discovered that I think we all need to know. And the original Dominara Gay Apparel verse of Deck the Halls used to be in the original Welsh fill your cups and drain the barrel, and I think that is what we all needed. And the only reason that I know this is because that is the way it is sung on the version recorded by my new favorite recording artist, Casper Baby Pants, who is the singer of the presidents of the United States, like the Peaches guy. But now he sings baby songs, and this is my life. But like, I think craft brewers could have used this like 20 years ago, maybe. Get this in people's brains. The key to getting craft sales up, change the song back, fill your cups and drain the barrel.

[00:30:44] Justin Kendall: I'll never sing it another way. Continuing our crossover beverage talk, let's talk to Lou Fabiano at Arizona Hard Tea. A couple weeks ago, we discussed Hard Tea challenger brands during our Brewbound Live event in Marina Del Rey, California. One of the elements of that conversation that we didn't get to cover was the perspective of a non-alcoholic brand crossing over into Bev-Alg. Well, here today to discuss is Lou Fabiano, VP of Sales for Arizona Hard Tea. Welcome, Lou.

[00:31:21] Brewbound Podcast: Happy to be here, Justin. Thanks for having me.

[00:31:23] Justin Kendall: So obviously, Arizona has a lot of experience in the tea space, to put it mildly. But the opportunity that Arizona sees in Hard Tea, I'd like to get into that because that's a space that we all know has been dominated by one player. They own about 90% of the market. But what do you see is the opportunity Arizona has here to launch this Hard Tea brand?

[00:31:50] Brewbound Podcast: We think the opportunity, Justin, is immense. And, you know, just strictly looking at the segment and the category in and of itself, Hard Tea in this country represent around $1.3 billion in sales. Right. So it's the fastest growing segment in malt beverage. It's outpacing and now has eclipsed seltzers. So we look at ourselves right with the equity that we have in tea and juice and we'll spend some time talking about some tremendous innovation. But we think Hard Tea is just the first entrance for us into FNB. But obviously from a company that has over one point two billion dollars in share and almost a 30 percent share of throat in equity. in non-out tea and juice in this country. And quite frankly, just in dominating that NA growth, we thought it was a perfect marriage. It was the right time, the right segment. And quite frankly, the consumers are showing very quickly, we got the right liquid, same model that we have for non-out. We got the right liquid. We feel we perfected the liquid in the taste profile. Our packaging is always second to none. And we priced it correctly. So we're going directly at that FNB competition. But we have an uncanny ability to enter into a category again as a market leader in the NIOC. This is something that provides an amazing opportunity. And, you know, speaking for some of our distribution partners and looking at the IRI initially, our wholesale network is signing up. And what they believe is that we can capture a 20 share very quickly in Hard Tea. So if you think about it, how many times in a career, Justin, could a chief sales officer stand up and say, we have the ability, very aspirationally, but we have the ability and very quickly to become a 250 to 500 or half a billion dollar Brad Avery quickly. And think about this for a second. When we launched initially in the Northeast, and Don was quoted in Forbes, Justin, accurate. we're going to sell by year end in a six-month period, we're going to ship and sell two and a half million cases of Arizona hard tick, almost 50 million units. And very candidly, my sales team and operations would tell you, it was such a phenomenon initially that we had inventory concerns and issues, very honestly. So that could have been four million in our sleep. So you take a look at the Northeast where we launched first, The last 13 weeks—think about this, Justin—the last 13 weeks in IRI, we've done over $6 million in retail sales. Mike's Hodder did $9 million. Truly did $21 million. Twisted, right? $46 million. did lion's share of that volume. But we did six million in sales, we're the number six selling F&B brand, as measured by IRI in the Northeast, and Justin, and only about 17% of the distribution. So you extrapolate that volume. And as chains launch in the springtime, we think we're going to quickly rise very quickly to the number three F&B brand in the Northeast. And in C-Store in Vermont alone, we're the number one market share leader. And in New England, built their brand. In the New England IRI market, in small format, if you look at that data, our big can's number one and two going toe to toe with the market share leader. And listen, they're a formidable opponent. Justin, I was at Diageo in Guinness. I have a great deal of respect for Boston Beer and what they do, especially executionally. But with our liquid and the imagery and the equity with our brand, a 20 to 25 share in Hard Tea is not within the realm of our capability. And that's what we're aspiring to. And we think we'll get there.

[00:35:59] Justin Kendall: I hope you get a nice bonus check coming at the end of this year after all that.

[00:36:03] Brewbound Podcast: You want to be my agent?

[00:36:05] Justin Kendall: Let's talk.

[00:36:08] Lou Fabiano: So Lou, you mentioned your wholesaler network and how jazzed they are. So what houses are you in and how did you put the network together?

[00:36:15] Brewbound Podcast: That's a great question. And I'll tell you what, Jessica, I'm not an attorney, but I feel like one. And I didn't stay at Holiday Inn Express last night, but we've been immersed in contract negotiations and building that network. And I'll tell you this. in my 25 years in the business, ALC and non-ALC. Again, 12 years at Guinness Diageo, right? Guinness is a lot like Arizona, very collegial, right? Hard-hitting into some of my non-ALC experience with brands like, like Vitamin Water and Body Armor. So from ALC to non-ALC, worked on a lot of successful brands. I have never seen receptivity in an ALC network in my career. And there's a lot of reasons for that, Jessica. Let's talk about how it frames up right now. Justin, you make a joke. We're proud of the fact that in nine months, we basically built about 95 percent of the U.S. network. That's with one head of sales, one attorney, a ton of help here, operationally, and a shout out to the Arizona team, operationally, from a finance standpoint, certainly sales, we're a thin organization for a multi-billion dollar brand. And to build that network so quickly is testament to the receptivity of that network. At Jessica, here's how it breaks out fundamentally. About 90% of our network is through the AB system, About 5% is Molson Coors Endor Constellation, and about 5% is Spirit based in a company in RNDC. So that's interesting too, right? So 90% AB, why isn't it 100%? We have incumbent partners. There are certain nuances in certain markets. Certain markets are more independent in nature verse chain. But fundamentally and strategically at the end of the day Jessica a B fit and their portfolio voids. fit our portfolio strengths, okay? They're void in many respects in FNB. They're doing a great job also building their non-ALC portfolio. We can talk about that. But predominantly, they do not have Twisted Tea in their portfolio, and they need a strong FNB. So I believe pretty much across the board, east and west, the reception was off the charts. Did we have work to do contractually? We did. But for the most part now, our network and footprint is built. We have two or three states left to go. And again, so far, we can't be more pleased with the performance of the network. It rivals when we launched Smirnoff Ice at Diageo, and that goes way back, Jessica, when F&Bs were maybe just blossoming, but again, across the board. And if you read some of the quotes out of Forbes, if you talk to that network, I've heard time and time again, guys, and this is really cool, that in the history of a wholesalership, It was either the number one or two most successful launch in the history of many AB houses. I've heard that time and again. That makes us feel good, because when the right brand with the right liquid meets the right network, prime for execution, our owner would say, Jessica, and this is what we said to our network, we're giving you a hammer, a veritable hammer. to go toe-to-toe with any F&B brand that exists. And Hard Tea is just the beginning. So we could probably spend an hour talking about the innovation. We could spend hours, Justin, talking about other national brands, ALC, non-ALC, that are knocking on our door now to say, hey, wait a minute. You guys are a top six FNB brand instantaneously. So with our rate of sale and our velocity is off the hook. How many times can a brand come along in upstate New York and some of the most premium grocery chains in the country And when we had inventory flowing, because it hit us, right, the wave of volume hit us. But in some of those chains around Memorial Day weekend, when brands are built, we weren't a top five F&B brand in those chains. We were a top five beer brand. Our Variety 12-pack, guys, was a top five brand in some of these customers. So to wrap up that conversation around the network, We were down in the mid Atlantic. And what that network has done with our brand has been beyond incredible. And they told us instantaneously in a massive house a massive A.B. house your top five brand for us in six months. With your innovation, you'll be a top three brand within a year. Again, Justin, been doing this a long time, ALK and non-ALK. Some of the non-ALK brands I worked on took 10 years for those to bear fruit. This is the gift that we'll give instantly through the right network, again, looking for really a fun battle. And that's just the beginning. So Hard Tea is the initial site. and we've got to get that right. We are doing this too, if you think about it. We launched at an unconventional time last year. We launched around this time on our own trucks in New York, And then ultimately, Florida. And that came off the heels, if you know this or not, guys, off the heels of a massively successful test in Canada. So through that Molson Coors Network, we launched in COVID in 21, challenging. We didn't know. But in 22, when that got lifted, we did almost a million EQs. Aha. And some of that was also spirit-based. So Malton spirit based and companies were telling us if you're doing a million up there in basically one Providence you have a 15 million case friend here instantly. OK, so if you're asking me aspirationally, if we don't do 12 to 15 million cases next year, Justin, I'll give you back that bonus. How's that? OK. And we can say that because we use facts and we look at the IRI and we understand what we are in NA. And so when we went to the network, we said, listen, if I could give you an analogy, we're bringing you a house pre-built. that house on the inside is furnished. And we also planted and landscaped around the front and backyard, and we put in an underground pool for you. So wholesalers that were reticent, initially, I said, this is instant equity. So let's not worry about a divorce and a buyout. Let's talk about the marriage and the opportunity. Without question or hesitation in my voice, We're a two to three to $400 million brand on Hard Tea because we haven't even launched Safeway Albertsons and Kroger and Publix in the spring with our variety pack and the sales team and the convenience side where most of beer is purchased from Circle K's to Sheetz to Wawa's to Chevron's to Maverick's to East and West Coast. Our distribution is going to explode upon the scene. So again, we do the math. If we're doing 6 million in the Northeast alone, it's 17 percent distribution. And now all the chains come in line and brand awareness and our social media campaign kicks in. We're going to become quickly a 25 to 30 million case Brad Avery each quarter. And I don't know a lot. I'd love to check the history books on this, guys, but I wonder if we're not going to ultimately break records.

[00:44:36] Justin Kendall: You asked me to be your agent. I don't think you need an agent, man. You've got your numbers down and everything. I think what I want to know, though, is how much overlap is there between the non-alcoholic Arizona drink and the hard beverage? Obviously, you have a huge opportunity to reach an existing fan base, but I'd like to know, you know, how many are coming along for the ride and how many new drinkers you're making through this Bev?

[00:45:02] Brewbound Podcast: You know, I'm not sure what, you know, and I would defer to our insights director. I'm not sure what that source of volume would look like. Here's what I can tell you from a retail perspective. And if you look at at our non ALC household metrics Justin our household penetration obviously rivals brands like Red Bull and Monster even even Diet Coke and brands of that ilk. but our loyalty and our repeat purchase is off the charts. And the other real key point I need to make here, guys, is over the last five or six years, in our non-ALC world, in the division that I'm responsible for, but my team is responsible for, inconvenience. It's important to note, Justin, you may or may not know this, but we've pivoted through the chains to a non-priced Arizona can option. So what that showed us, and the demographics of our data showed us across income levels, all demographic levels, that people loved our brand. They loved the liquid in the can and the resealable that we had. And it wasn't necessarily about that value proposition. So as we migrated away from that and proved that our volume wouldn't implode, it's actually exploded. told us a lot, but what we see on the retail side, for certain, and retail is if they're listening. We are absolutely bringing in incremental consumers that were not in the FMB category. So we have billions of fanatical fans that might not have been a fan of Hard Tea or twisted or even some of the Mike's derivatives. But what we show and what the data is showing is we're bringing in new consumers. How do we know this. Here's a number that I've never seen in my career. What we were told is that the number one brand in the New York market lost around 14 share points. Number one brand, we know who they are. But they also, as they lost 14 share points, their sales grew at 16%. So maybe not at the 30, 40, 50 clip, Justin, that they were running at, but they grew dollar sales. Think about that ratio. That tells us a lot. That tells us we're driving all the growth. But because the category is growing, we're bringing in new consumers. And here's what else. I mean, it goes without saying. In some markets, Again, overall in a C-store, where right impulse, right beer, Justin, we have around a 30 share in non-ALK tea and juice. But in some markets, our equity in tea in an impulse category is close to 50. We have a 50 share in Florida, in California, maybe a 40 share, all now non-priced. So when these big can and variety party packs become available, Who gets trial instantaneously because of our reputation, our consistency? Again, Justin, you got to appreciate too. All done as a family-owned, American-made company. And again, we're proud of that. And, hey, guys, before I forget, I told everybody I would give them a shout-out. So, from the small format, large format sales team, you guys are the best. Operations, finance, our attorney, Keith Gitman, been with me every step of the way. Justin, people have tried to enter from non-ALK to ALK, and they haven't even been successful building a network. So we've put in double duty over the last nine months. And again, speaking for my team here, it's one heck of a job that we're certainly proud of because we're not quite done yet, but we'll be there soon. So hopefully that answers your question on the consumer side. But again, without question, the retailers that say, Are we just going to basically steal one customer for another? We're not showing that. OK. And if we're going to get into this, Jessica, maybe it's the right time. When we talk about innovation, that's what gets us even more excited. So we are basically poised and set and our network is aware of this basically this week. So here's hot off the presses, maybe, Justin. We're going to launch a juice and lemonade line in two slimline 12-pack variety packs, where immediately we have state and regional approval to do this. But you want to talk about receptivity from the network? If you want to talk about opportunity to take out the number two or three player in FMB, I think that's as immense an opportunity as even the Hard Tea. Obviously, Twisted being the lion's share of that done in one segment, Hard Tea. But we think we're going to basically, no pun intended, corner the market on our juice line. That almost goes uncontested from a flavor standpoint. And our lemonades, from straight lemonade to pink to strawberry to mango, Justin, we had reputable C-store retailers, too many to name, that told my national account team a couple of times I was there that the juices and lemonades that they tried were some of the best tasting malt liquids they've ever tried in their career. Guys, trust me when I tell you the watermelons, the mangoes, the fruit punch, the kiwi strawberry, The imagery alone on the can and the packaging in a glossy 12-pack is going to set industry standard. I will never overtly bash Another Round, but I'll tell you this, I've tried some of those other brands, especially on the lemonade side and that end of the spectrum, And those brands do not hold the candle to what we're set to launch on our juices and our lemonades. And think about this for a second, guys. On brands like Mango, Watermelon, Fruit Punch, to a lesser degree, Kiwi Strawberry, I reference numbers. We're a 30 share. We are a 25 to 30 share in USC store. not out. One third of every tea and juice purchase is one of our brands. But in mango, watermelon, fruit punch in Southern California, in Florida, in Texas, we have a 70 share of throat on anything mango, fruit punch, watermelon. It does, in some markets, skew to a certain ethnic demographic. And that shows up in the data as well. So we think we capture pretty much all ends of the spectrum. And Our bullishness or our excitement around that, guys, is just as evident as it is on Hard Tea. And again, how often do you hear those types of comments from a retailer? The best tasting malt liquids I've ever tried. So we're beyond excited about that. We have major national retailers that are telling us, I know you're going to be late coming to the table maybe for spring sets, but I want that too. Justin, I don't know a lot either, but how many C-store chains are going to carry two to three flavors of variety 12-packs for a brand plus their single-serve can that barely launched in the summer? And guys couldn't even really get to the entire network with operational constraints, and we'll talk about that in a second. But all these numbers that I'm throwing at you is we just launched Florida a month ago. and Publix, and Wawa, and all the chains down there. Texas has only been maybe six weeks. California, four weeks. We're in the process of setting up Illinois. Those are the top four beer markets in the country, and we haven't even launched there yet. Initial reads in LA, San Diego, and Frisco, off the hook. Some other markets, very chain-driven, got to wait till their timelines, but many leaned in immediately. And we've hit The Brewbound running since. So I gave you a little bit of a semi-exclusive there, guys, on the innovation. And I will say this, from an FMB standpoint and from a non-ALC standpoint, We have 10 flavors. We're a little bit like when I sold Monster back in the day. We have 10 flavors that proliferate from green tea to our Arnold Palmer to our juices and RX Energy that all sell well. So we've only just scratched the surface on the Hard Tea and we've only scratched the surface on the juices. So our ability to create and pivot flavors I think are second to none. And the nationally recognized, Justin, when I was a younger man, cooler, very hip companies are talking to us and our CEO about partnership because there's no denying the first six months and who knows where it could lead.

[00:55:16] Lou Fabiano: So Lou, the timeline for the juices and the lemonade sounds awesome, by the way. I'm 500% interested in trying this. You said you'd be a little late for spring resets. Can we expect it before, say, Memorial Day?

[00:55:29] Brewbound Podcast: OK, so what did I mean by that? So we're producing our variety packs. The plan is this week. So it states that we're fully ready to go. We're going to start shipping out probably just after Christmas. What I meant by that, Jessica, was to some degree for the March resets, both C&P and large format, we've probably missed those windows. But yes and no. That's why I made the point some are so bullish on it that they're waiting for it. And usually, In the national account retail world, that's sort of taboo, but they're so pleased with the variety pack T results that they're giving us some extra time. So that won't be 100% chain wide. However, it's states like Pennsylvania that also aren't chain wide. We probably did close to 400,000 cases from June to November. Think about that for a second, guys. 400,000 cases in one state in six months with inventory problems. If we Hard Tea supply chain, we would have did a million cases in this, which is an ice tea state. It is. But a million cases in the state of Pennsylvania. We have a metro distributor in that market that thinks they might do a half a million cases next year. Those are numbers that new brands, when they launch, wouldn't be upset with nationally. Again, you got to appreciate, Justin, brands take a lot of time to incubate, but our brand is self-baked. The equity is baked in. We use the same fine quality teas, 100% fruit juice. We take pride, our owner takes pride in what he puts in every can, in every container. And the consumer is showing it. And listen, a big part of our marketing platform and our social media team. I'd be remiss if I didn't thank them. But you know we're doing things as a company we've never done before. Let me can I ask you guys a question. Sure. So for a multi-billion dollar brand just on the non outside what do you think we spent in conventional marketing last year. 130 million cases, what do you think we spend per case? Is that two bucks a case, a dollar, three?

[00:57:54] Lou Fabiano: I'm going to say it's probably low because your brand is just so strong. You don't have to do a lot. I would say maybe $1.50 a case.

[00:58:02] Brewbound Podcast: Okay, so around 150 million. Our marketing budget is big, but it's not that big.

[00:58:09] Lou Fabiano: That does sound big when you say it that way.

[00:58:10] Brewbound Podcast: Our marketing department consists of a gentleman who's six foot eight. And our conventional marketing budget is zero. We don't do any TV. We never have in the history 31 years of the company. We do no at home. It was built on the liquid, the trust of the consumer, the imagery, the creativity and how it makes you feel. But what we have done is an amazing job now because we are getting in right need to get into the 21st century to a degree and digital and the social media dynamic. We can reach our core consumer very strategically surgically. now. So our profile and our platform is taste matters. Don't get twisted. So maybe a direct shot there, but don't get twisted.

[00:59:06] Justin Kendall: Maybe a direct shot.

[00:59:08] Brewbound Podcast: Maybe. And we are ramping up in that regard. And not only that, but very creative retail partnerships with delivery mechanisms and target marketing and all that.

[00:59:21] Justin Kendall: Now, the juice that's obviously going to have the Arizona name, is it going to be Arizona Hard Juice or how are you branding it?

[00:59:29] Brewbound Podcast: Arizona Hard Mango, Arizona Hard Watermelon. Obviously, again, sensitivity here, strong differentiation like we did on our teas to our juices. So we're cognizant of the compliance, Justin, but no, basically straight flavor profiles under the Arizona Hard bandwidth. and also lemonades, which again, guys, spring, fall, winter, summer, consumers are going to enjoy those immensely.

[01:00:01] Justin Kendall: You've laid out an incredibly compelling case for why Arizona Hard Tea works. What do you think it is about why that works that maybe Arizona sunrise with Heineken didn't work?

[01:00:14] Brewbound Podcast: A little tougher for me to answer was new here, but I would say this. It takes the right liquid at the right time in the right category with the right partner for magic to strike. And all arrows are aligned and point towards success on Hard Tea. with the sunrise. And I have an amazing amount of respect for the Heineken organization and know many people there. But I'm not sure the partnership, the timing, the category was right at that time. And, you know, listen, Justin, I mean, it's not just Twisted, right? Friends like White Claw, truly, if they're listening to this podcast, I think they might be saying, given what's happening in the segments, are they at risk? So from what I'm hearing from retailers, more dedicated space to more bountiful and flavor profile type brands, notably non-carbonated. So again, right time, right place. And at the same time, we did try and embark on creation of a brand new brand called Sunrise. So I would say maybe that's it, but you never say never. Again, who knows where Don's creativity could take him, and so I don't rule anything out.

[01:01:38] Lou Fabiano: So Justin, I'm glad you asked the first kind of bummer of a question, because I feel like the vibes were so high that I didn't want to be the one to drag them down. But Lou, I got one that's a little bit less fun. We've seen talk of increased regulation for Bev-Alc products that are crossovers from traditionally non-Alc brands, whether that's like, these things can't be merchandised in the same area of the store, you need to make everything very clear. You know, the website is very obvious, there's a giant Sorry, I had to remember my shapes for a moment. Giant hexagon at the top of the page says warning, contains alcohol, 21 plus, we ID. So it looks like you guys are being super responsible on your end, but how concerned are you about when the product makes it out into the world? Are you worried about the chances of increased regulation? What steps are you taking on your end to maintain that responsibility?

[01:02:28] Brewbound Podcast: Listen you know social responsibility is paramount to our strategic message certainly as it relates to the merchandising element through our wholesale network. We repeat that message. And Jessica Mott I'm not sort of sidestepping this, but I would say, you know, listen, from a compliance standpoint, states do their due diligence. And it's been over 12 years since I've been at Diageo and Bev-Elks, so a lot of learning again for me. But we did our diligence in terms of compliance. And quite frankly, we have received state approval, I think, because of the differentiation. At the end of the day, we don't ever condone having it merchandised or messages, because you got to appreciate this, Jessica, too. In some instances, we have a distributor that is both alcohol-based and non-alcohol-based for us. So our field teams, our lead sales teams are very cognizant of that. And the message is never to be merchandised next to it. And we think we've done a tremendous job differentiating the packaging enough that it does stand out. At the same time, let's also be honest, trying to keep the fundamental core branded message there to the consumer that knows you. I would say this, guys, because this has been bantered about too, and the question may be coming, but we're working hard right now on other line extensions, right? So when you look at segments and you look at the category, I could name on one hand the brands that can also ultimately morph into an RTD. So companies of a spirit nature, our own aspirations might lie there too one day. In both vodka, maybe tequila-based, right? So we think our brand has crossover there. We think our brand absolutely resonates in the on-premise as well, which we really haven't talked about. But, you know, Jessica, I'll let I'll let the local politicians and states tell us what's right and wrong. And I would say right now we've done a really good job. getting the brand approved where we needed it.

[01:04:43] Lou Fabiano: Awesome. Honestly, I think in something like this, it helps to not be first. So fortunately, you've had somebody else, you know, run through these walls for you.

[01:04:51] Brewbound Podcast: I tell you what, I've been fairly direct today, guys, right on that one, I was probably skirting that one. I'm acting like a politician. But no, we take that seriously. And, and we'll go from there. For sure. Let's talk about the on premise.

[01:05:07] Lou Fabiano: What's the plan there? Is that part of the strategy at all? Or is that something that's more of a nice to have than a need to have?

[01:05:13] Brewbound Podcast: Listen, we think, especially in pockets, especially seasonality wise, especially juice and lemonade based, we think there's a tremendous opportunity. And one thing that Seltzer has definitely proved and certainly spearheaded was it was cool to drink a can again in a bar or club. So we think in our slimline offer it's going to provide a ton of on premise opportunity. obviously above legal drinking age, but in those towns that are highly driven, like Buckhead, Atlanta, and others, right, we think we can play very well there in a slimline can. We're also taking a look at packages that might cater to that channel. So is it a straight can in a 30-pack to service the bars and restaurants? We do. But to be real candid, Jessica, I would say with the amount of attention that we can apply to it, with the amount of team members that we apply to it, our focus was setting the network up first, going independent, small format, large, where we could immediately, but then also trying to develop that on-premise strategy, maybe as that third tier option. But it is an opportunity for certain. And again, guys, disclosure here, we are expanding the team. We have hired a person to run Hornell Brewing starting the first of the year. I'll save that and disclosure for now. But to answer your question, Jessica, that's got to be a big part of what we're doing. The ski slopes, right, those seasonal areas in Florida that I mentioned where we have a 70 share in mango, I mean, we can play in a lot of different settings on premise. You know, that's what I can tell you what we're not experts in yet. So I can't BS that that's a strategy that's going to be developed over time, but certainly one that's a key component of it for sure.

[01:07:21] Justin Kendall: With the core line, you launched in three flavors, peach, green tea and lemon. Do you look to add flavors? And what do you see as the biggest opportunity flavors to cross over to Hard Tea?

[01:07:34] Brewbound Podcast: That's a great question. We are getting set, guys. And I know we're doing our job to get it approved statewide. But the sweet tea is going to become one of the flavor profiles in the variety teapack. And, ultimately, we're going to produce that in a big can. I wish I had it. But if you know our sweet tea, much different than this, but, essentially, that's our sweet tea. And, obviously, a very strong flavor for us regionally in pocket certainly in the southeast. That's interesting too. You know when I got here I really wasn't aware about the regionality of the tea taste profiles for us. In other words lemon is going to be probably and will be our strongest entrance in the northeast. That's a strong flavor for us there. Obviously green tea dominant nationally but certainly more so in pockets. But sweet tea strong in the southeast. I mentioned our juices and lemonades have those regional pockets as well. But like I mentioned The AB network keeps telling me raspberries a strong FMV flavor for the competitor raspberries a strong flavor for us. We could bring back some retro flavors. I know we're talking about that. So again our flavor opportunities are limitless.

[01:08:57] Justin Kendall: We appreciate the time, Lou. Thank you so much. It's awesome to get to meet you and hear about what's going on with Arizona, because I think a lot of us had questions as far as, you know, what the plans were, and you all sort of put out the playbook on Forbes and, you know, getting to talk to you, it helps drive home the point.

[01:09:17] Brewbound Podcast: I guess I'll leave you with this, Justin and Jessica. You know, talking with our senior leadership team and ownership and the family, We fully expect and believe that this is going to be game changing for us for a brand that's a multi-billion dollar brand. We have no doubt this could double the revenue of our company. very quickly. So I guess I would say, is anybody out there listening? We're posting jobs on the outside. We're building our team. We're certainly going to need more people to help execute it. And the future is bright here. Guys, I thank you for the platform. It's been fun for me. And anytime you guys want to have us, I'll get the marketing group together and the people that really drive the bus here. So thank you.

[01:10:05] Justin Kendall: Thank you. Thanks, Lou. And that's our show for this week. Thanks to our one man audio team, Joe. Thanks to Jess. And thanks to all of you for listening. We'll be back next week.