Brewbound Podcast: Bronya Shillo on Selling Fishers Island Lemonade to Spirit of Gallo

[00:00:00] Justin Fonte: Next on the Rebound Podcast, Fishers Island Lemonade founder Bronya Shillo shares why she sold her nearly decade-old company and what comes next. Hello and welcome to the Rebound podcast. My name is Justin Kendall. I'm the editor of Rebound and I'm joined by Justin Fonte, the managing editor of Rebound. What is up, Jess?

[00:00:30] Fishers Island: Nothing. How are you?

[00:00:32] Justin Fonte: I'm doing well. How have you been? What everybody really wants to know is how you are.

[00:00:38] Fishers Island: Does everybody want to know that?

[00:00:39] Justin Fonte: I think they do.

[00:00:40] Fishers Island: I'm pretty good.

[00:00:42] Justin Fonte: Yeah, I'm pretty tired. Almost to the end of the journey.

[00:00:45] Fishers Island: Yes, almost. I think this might be our second to last podcast.

[00:00:50] Justin Fonte: Don't jinx it. Sorry. Yeah. Well, you'll return someday. I will be back. I'll still have Zoe Licata here. Zoe Licata, Brewbound Reporter extraordinaire. Welcome to the Brewbound podcast.

[00:01:04] Bronya Shillo: Thank you. Yeah, I'm not going anywhere.

[00:01:06] Justin Fonte: Awesome. That's all I needed. The reassurance there. That's what people really care about. Well, this week, as I mentioned at the top, we have a big guest and that's Bronya Shillo from Fisher's Island Lemonade, which just sold to E&J Gallo's Spirit of Gallo, Spirits Division. She's going to tell us all about what comes next for that brand, why she sold and so much more. So stick around for that. Also, a plug, we just finished one BrewTalks and now we're on to the next one and that one will be on July 12th in Boston. Tickets available now. Some of the proceeds will go to the Massachusetts Craft Brewers Guild and we'll have more details on speakers and talks very soon, so stick around for that. But let's get into the big news of the week. or week so far because now everybody's selling their brewery and the latest Flying Dog just sold to FXMAT.

[00:02:05] Fishers Island: Yeah, it'd be interesting to see how many more brewery acquisitions happen before I have this baby, because my money would be on at least one more. But yeah, I mean, Justin, you did the barrel math on this, combined these two make up a top 10 craft brewery by volume, which, you know, that's a list that has seen a lot of movement in the past few years. Didn't used to be the case, but with all the M&A that goes on, a lot of shakeup in the top 10.

[00:02:32] Justin Fonte: 264,400 plus barrels combined of beer. And that was just in 2021. We don't have the barrel figures as of this recording, but yeah, that would put them just into the top 10. And then we're going to probably subtract a few breweries unless, you know, some major shakeup happens with the Brewers Association and what they consider a craft brewery.

[00:02:58] Fishers Island: Right, but as of right now, of the next publication of the list, Stone Brewing would be out because of their sale last year. So there's at least one spot that FXmat slash Flying Dog can shimmy into. You know, this caught all of us by surprise, just, you know, by its timing. But if there's one thing I've learned in the past couple of years covering the craft beer industry, it's never be surprised. Or it's that always be surprised.

[00:03:26] Justin Fonte: It's a little bit of both.

[00:03:27] Fishers Island: A little bit of both, right?

[00:03:29] Justin Fonte: It's a little bit of both.

[00:03:30] Fishers Island: The more eloquent way to put that is anything can happen. And that is what just happened. So part of this deal involves Flying Dog is walking away from their Frederick, Maryland brewery, which a little bit of Flying Dog history is far from their first home. You know, brand started out in Colorado out of a brew pub in the Aspen area. They expanded to a a Denver production facility. And then in 2006, they bought the former Frederick Brewing Company in Maryland. And the following year announced that was going to be their home base. So they have been Maryland based since then, but started out West.

[00:04:10] Justin Fonte: Yeah, this is a combination of number 14, which is FX Matt and number 34, which is Flying Dog on the BA's list. And as you pointed out, their roots aren't in Maryland, you know, at least their founding roots. And the other thing that is interesting to me on this is we know that. Brooklyn Brewery owns 20% of FXMAT so there's all kinds of these legacy brewery connections that run through FXMAT and Flying Dog and Flying Dog was contract producing at FXMAT so it made sense. And they're going to shift the lion's share of their production there over the summer. And then I think, was it August they said that they would sometime in August that they said that they'd just be done in Maryland until they find that tap room?

[00:05:03] Fishers Island: Yeah. Yeah. And they're on the lookout for an R&D location in Maryland, but I don't think they could have that done by August. But you know, like I just said, you never know. But yeah, Justin, as you pointed out, FXMAT was contract producing a lot of volume for Flying Dog, so they are friends in that regard. They also last year announced this interesting partnership with the two of them, plus Harpoon here in Massachusetts, a project called Right Coast Spirits, which is basically cut out to make spirits-based RTDs, which is one of the few segments of the BevAlk industry that's growing. So we haven't really heard too much on that front. The first and perhaps only product to come out of that collaboration so far is an RTD called Vodka Whips, which is 7.5% ABV, vodka whipped cream inspired cocktails.

[00:06:00] Justin Fonte: Harpoon's in that collaboration. So we got our eye on you, Harpoon.

[00:06:05] Fishers Island: Seriously.

[00:06:06] Justin Fonte: We're on watch.

[00:06:10] Fishers Island: Flying Dog created its own Beyond Beer RTD division called Gonzo Drinks last year, which takes, you know, its name is a nod to Hunter S. Thompson, who was a regular at the brew pub that the brewery started from way back in 1990 and befriended founder George Stranahan. and really kind of had a lot to do with how the brand kind of, you know, styled and comported itself a little bit. He introduced Flying Dog to the artists that made all of their very recognizable and slightly creepy artwork. I think they'd be okay with me saying it's slightly creepy because it is. But Free Speech is a huge brand pillar for them that It pops up a few different times in their history. At their 20-year anniversary, they brewed a beer called Raging Bitch, which the state of Michigan deemed to be crude and denied them a label. They challenged this at the federal level and ultimately won with their six-figure settlement money. They created what's called the First Amendment Society. Unsure what that's done since. at my bridal shower, my bridesmaids, you know, like a thing that sometimes like, I don't know, basic girls have happened to them is their bridesmaids get them like a box of wine. And it's like, this bottle of wine is for like your one year anniversary. This is for your first fight. This is for your first at home date night. Open this for your first baby, like blah, blah, blah, blah, blah. So mine got me six packs of all sorts of things and wrote like a poem incorporating all of them. And one of them was raging bitch. And I believe the poem line was when you are being a raging bitch, please give one of these to Ryan so that to apologize for something. I don't remember. It was a long time ago now.

[00:07:59] Justin Fonte: I hope you drank all of them and didn't give him one of them.

[00:08:06] Fishers Island: I think I did. I think they lived in the fridge at my mom's house for a while. But there was like, you know, there's some dogfish namaste in there. I don't remember anymore, seven years ago, but that's my personal connection to Flying Dog. So anyway, this fight for First Amendment rights continued. Justin, you had a really thorough story on this at the time that happened back in 2017 when the B.A. announced that beers that have offensive, sexually suggestive names or images on their labels, I believe the ruling was that if those beers won medals at GABF or the World Beer Cup, they would not be allowed to use the BA's marketing assets on their labels, which breweries that win awards sometimes like to do. Because the BA, there's a fine line of what they can and can't have members do. So I think they maybe thought that this would be the way to be able to say, hey, you know, we're trying to promote an inclusive environment and making beers that say things like panty dropper is not really helpful, which is that's not a Flying Dog brand. But upon hearing this, Flying Dog had said, this isn't cool, this is censorship and we're out.

[00:09:21] Justin Fonte: And they've fought those battles for a while. The other two points I think that are interesting here is Ben Savage, who we know as their chief marketing officer, he's going to become the Flying Dog division president at FX Matt. So he's going to be the steward for this brand going forward. And the second thing is. Man, hard times in Maryland for large breweries because add Flying Dog to Diageo shutting down that production facility in Relay. And we're not talking about the Guinness Open Gate Brewery in Baltimore, but where is the lawmaker that's going to offer $500,000 to keep Flying Dog around?

[00:10:06] Fishers Island: Yeah, and Flying Dog was mentioned in the mix of that particular Baltimore County executive who wanted to offer half a million bucks to get somebody to keep contract producing Guinness Baltimore Blonde. But heavy seas, you're up.

[00:10:22] Justin Fonte: Yeah, this is the sign of the times for 2023 so far with sort of small brewer consolidation, craft on craft, and it's not stopping. It's only speeding up. For sure. And that brings us to our next MNA of last week. The founders of Appalachian Mountain Brewery are buying it back from Anheuser-Busch InBev. Both of you did a fantastic job of getting on that story quickly. So what are the details?

[00:10:52] Bronya Shillo: Something that's a little bit different or unexpected is co-founders buying back their brands. Something we've seen a few times, but Nathan and Chris, two of the co-founders of this Boone, North Carolina craft brewery have bought back the brand from Anheuser-Busch. We're not sure the financial details or how much they bought it back for, but Anheuser-Busch has had it for two, three years now since they did that whole takeover of the Craft Brew Alliance and their brands, added them to their Brewers Collective. Nathan and Chris haven't had full ownership of Appalachian Mountain since 2018 when they fully gave all the ownership over to CBA. But they've been involved still with, you know, advising on some projects, both AB and Nathan and Chris spoke pretty highly in at least press releases about each other and about working together. And they just seemed ready to kind of take the brand back and take it in a new kind of more local focus direction. comes at the same time as AB's craft strategy has been a little bit in question. We've seen what happened with Platform. They've kind of taken that away, moved all production to their other breweries. We've seen rumors and confirmations of a lot of layoffs at several of AB's craft brands. So it seems like it might be in the best interest of some of these smaller craft breweries to maybe go back to ownership that can focus more on them directly and not as part of this large collective of craft brands. Interesting move.

[00:12:27] Fishers Island: Yeah, I had a really nice chat with Chris last week. He called me from their tap room where it sounded like the celebration was pretty raucous. And he told me that they did not lose any staff in that wave of layoffs. So that was good news for them. But, you know, they'd been in talks to get this done for the past, like, seven or eight months. So it's something they've been working on for a while. What's interesting to me is that when the CBA brands got folded into AB's Brewers Collective, there's a couple of brands, there's a couple of markets where they double up a little bit. So to me, this makes sense. AB had already acquired Wicked Weed, which is in Asheville and Appalachian Mountain is in Boone, which they're not next to each other, but both Western North Carolina.

[00:13:17] Justin Fonte: What's AB want with a Boone, North Carolina craft brewery, you know, when you're already in Asheville.

[00:13:24] Fishers Island: Right. And Wicked Weed is certainly one of the few Brewer's Collective brands that's gotten a lot of focus lately. You can see their numbers in scan data. They've had some innovations like Pernicious IPA that have really popped. So obviously it looks like that's where the Brewer's Collective wants to make the investment. And I think you look at this if you're the founders of AMB and you say, hey, like, we're not really getting the attention here and we could do this ourselves. I think it solved a problem for both of them. We saw a lot of online chatter after this story posted and you guys both pointed out that it's There's a lot of other forces at play here, but a lot of people, you know, we had somebody saying like, I don't believe this. AB would never like, I'm sorry, except money for a brand that it probably didn't really like want to foster. Yes. AB would totally do that. Anybody would.

[00:14:20] Justin Fonte: This is the best outcome for A and B. This is the best possible outcome for that brand. You can either be platform or you can be A and B in this case. And I'm not saying that, you know, necessarily they would have done that, but totally, I would have been a little leery, you know, at the time of seeing what happened with platform.

[00:14:41] Bronya Shillo: Yeah, for sure. Platform was one of the smaller volume-wise breweries within that collection. A&B is also pretty small. It's like 4,000 barrels in 2021. So when you're on that lower end of the list, I'm sure it's pretty scary of thinking, okay, it's going to start shrinking. Who's going to be next here? So it's, yeah, it's best case scenario, I think, for everybody in this situation.

[00:15:05] Fishers Island: Yeah, Chris told me they did 12,000 last year. They'll probably do a little less this year. So the BA does publish data for the Brewers Collective brands, but they combine all the CBA brands. So we can't really always see who's broken out where, but I mean, look at Miami, like AB already had Vezasir and then they acquired CBA, which had Wynwood. So maybe that's another candidate for local ownership.

[00:15:32] Justin Fonte: that CBA deal, we all know why they made that deal. And that's Kona. And we got to see the rebrand, the renaming of Kona Brewing to Kona Big Wave last week. That's where their focus is, you know, even if they don't have Hawaii. And the other part of this is A&B had been really on a roll with that Bojangles collaboration. It was an FMV to hard tea.

[00:16:02] Fishers Island: So Bojangles, if you're not familiar, is like a chicken and biscuits chain in the South, heavily concentrated in North Carolina. I'm not sure how many other states, but yeah, this was Another Round of those, I thought pretty smart, non-alcoholic crossover products. Bojangles Hearty is going to stay with AB, and Chris told me AMB is going to consult on it. They've got a lot of good momentum. He's excited to see where it goes. But with having local control back over the brand, the plan is to focus on their craft beers and also their hard cider. Southern Apple Cider is something they're really excited to dig into. They had started it up before the CBA acquisition. and they're really excited to really give it some shine. They've got a contract producer for it up in New York, already lined up, but the next big step for them is gonna be finding a contract producer in North Carolina for their beers.

[00:16:58] Justin Fonte: And just so everybody doesn't think I'm a complete alarmist, AB is not above discontinuing brands that it's acquired. At the same time they were announcing this sale, they discontinued canned wine brand Babe and an energy drink called Highball because they can and they've got focus areas, you know, in a million different places. And although you would think it's in two different places at this point.

[00:17:27] Fishers Island: Yeah. I mean, if it's not working, why force it? Yeah. Yeah. You know, we've seen Molson Coors do a lot of that too lately and Boston Beer. Yeah. So good to see people being rational with their resources. But yeah, A and B is going to stay in their same distributor footprint. They're really going to focus on North Carolina. They're only in North and North Carolina, but 95% of their volume is in the North. So stay in the course there. And they've got a new tap room opening in Mills River, which is close to Asheville in about six weeks. So good luck to all of them on figuring all that out.

[00:18:03] Justin Fonte: Yeah. Well, let's get to the Beer Serves America study. And Zoe, let's just hit sort of the quick high points of this that just came out from the Beer Institute and the NBWA.

[00:18:16] Bronya Shillo: Yeah, so every two years, the BI and NVWA commissioned this study to see the impact of the beer industry on the U.S. economy. And this most recent study for the economic output in 2022, the beer industry recorded $409.2 billion. That's equivalent to about 1.6% of the U.S. GDP, which is consistent with the 2020 study. the output significantly above 2020 with about $75 billion above that, which I think we would expect. I mean, 2020, we're kind of dealing with the pandemic, so that was making a lot of changes, but consistent with that 1.6% which we were on a call with the MBWA and the BDI and including chief economist Lester Jones. And Lester brought up that that's a really good sign that beer is staying at 1.6% because it's meaning that they're keeping up and staying relevant even with inflation and continuing to contribute the same percentage to the economy. beer both outpaced wine and spirits for its economic output and also generated more jobs in 2022 than 2020. So we saw increases in jobs for beer producers, for suppliers, for retailers. Only change was a slight decrease in wholesaler jobs, which shouldn't be too unexpected because we've known they struggled with getting drivers and licensed drivers and those types of things. So a lot of open jobs in the wholesaling industry. But Lester said that with all those openings that is expected to change, we might see an increase in 2024 with the next report. So overall positive for BEIR and the MEWA and BEI and other associations will use all this info when advocating for BEIR with legislators.

[00:20:18] Justin Fonte: Yeah, they're running down to Capitol Hill with that data today. The other thing that came out last week was that the Massachusetts Alcoholic Beverages Control Commission has revoked the liquor license for GoPuff, effective immediately for allegedly selling alcoholic beverages and delivering them to underage consumers, many of whom were at Boston College. And this all stems from a March 7 hearing. We just found out about it last week. GoPuff told me that they're going to appeal this decision. Kind of interesting notes, though, in there, and one of them was one of the students busted for buying alcoholic beverages, told investigators, quote, it was common knowledge throughout the campus that minors could use GoPuff to obtain alcoholic beverages. So that's right from the documents from the ABCC. So we'll see where this goes, but you've got to figure that If Massachusetts is cracking down, they're probably cracking down elsewhere. Yeah.

[00:21:24] Bronya Shillo: Interesting that they only mentioned B.C. because we're so college heavy over here. But I mean, B.C., if you don't know, is very it's not directly in the cities kind of outside of things. So they might be able to get away with more in that more suburban area.

[00:21:40] Fishers Island: What a bunch of nerds. I can't. I'm sorry. I read that. I was like, these nerds would. Uh-huh. Whatever.

[00:21:48] Justin Fonte: The documents were interesting because it would be like the investigators would watch them load up, you know, and then drive and follow them. And then they'd see the car pull up and then like the suspected underage drinkers would come out with duffel bags or backpacks to load up the alcoholic beverages and take them in.

[00:22:10] Fishers Island: So what they were like, it was like meet me in the campus parking lot. It was not.

[00:22:15] Justin Fonte: I think in some of the cases it was. Yeah.

[00:22:17] Fishers Island: Oh boy.

[00:22:17] Justin Fonte: Yeah.

[00:22:18] Fishers Island: Wow. What is it? I mean, like this is obviously on the driver. Like you got to be checking ID. Yeah. A lot of fakes. Some of them said they had fakes.

[00:22:26] Justin Fonte: Yeah. Yeah. There were a lot of fakes on this.

[00:22:29] Bronya Shillo: Right. I'm not sure if GoPuff drivers like walking around with scanners and Fakes are pretty realistic these days.

[00:22:37] Justin Fonte: I think they may be now.

[00:22:38] Bronya Shillo: Yeah.

[00:22:39] Fishers Island: Yeah. I've had a sample delivery that came via Instacart where she had a scanner that like attached to her phone and it was having a hard time reading my ID. Like it took, it was like a clunky transaction, but I get why it happens. Yeah. But also like I'm ancient, so why are we bothering?

[00:22:58] Justin Fonte: There's no time to get into, like, the whole nuances of this, but I'll say, and we're worried about the U.S. Postal Service, who's been doing, like, delivery signatures forever.

[00:23:06] Fishers Island: Right. I don't know. Also, BC kids are nerds. Sorry. Wicked nerds.

[00:23:12] Justin Fonte: Not enough context there, but still. All right, before we get out of here, we got to mention the latest on Bud Light from last week, which you did a fantastic job covering. And that was that the HRC is not the rating for Anheuser-Busch. And I'll let you explain all that, Jess.

[00:23:34] Fishers Island: Yeah, so we are not done with the Bud Light story. So the Human Rights Campaign, which is, you know, an LGBTQ plus organization that does lots of things. But one of the things that they do is measure corporations and their corporate equality index. That determines, you know, how supportive and friendly they are to LGBTQ plus workers. Now, AB previously had a perfect score of 100. And when the company's response to the right-wing hatred they were getting about the Dylan Mulvaney video started coming out, which included, you know, a couple of statements from various corporate leaders that kind of, you know, they didn't offer any support to Dylan herself. They didn't offer any support to the employees of theirs that were getting harassed online. So the HRC sent them a letter in late April saying, hey, like, can we talk about this? We need you. to reaffirm where you stand on rights for this community. No response. They sent another letter earlier this month and said, if we don't hear from you in 90 days, we are going to revisit your score. So right now that perfect score has been suspended and they're not allowed to use the best places to work terminology as part of the HRC's index. So that's a big deal. But the other thing, did we talk about Miller Lite last week? I don't think we did.

[00:24:55] Justin Fonte: We did not. I think that that was too new for us to have talked about at that point.

[00:24:59] Fishers Island: All right. So the other thing that happened here last week is that a lot of these conservative social media users and media personalities and influencers dug up a Miller Lite campaign from March, which is, you know, Women's History Month. in which Miller Lite had tapped Ilana Glazer, a comedian and actress, to be the face of this new initiative where they kind of revisit the idea that, you know, beer advertising used to be super sexist and exploitative of women, you know, which Ilana traced the history of how, you know, the first brewers were women, like the making of beer was a domestic task that every household had to do because you couldn't drink water without having boiling it to sterilize it and all of that. And that's the whole thing that we are not going to get into. But women were brewers and eventually, you know, throughout the Industrial Revolution, that changed. And then men became the people who made breweries and the CDs. industrial settings. So Alana is just pointing out, isn't it odd that women basically began the brewing of beer and beer turned around and repaid us with girls in bikinis. So the point of the campaign is to collect all of this old marketing material that is not so correct today and compost it to turn it into fertilizer to give to women brewers to grow ingredients to make beer. So this was pretty clever. I don't know about you guys. I didn't see this in March when it came out.

[00:26:34] Justin Fonte: I did.

[00:26:34] Fishers Island: I saw it. Yeah. Cool.

[00:26:36] Justin Fonte: Good.

[00:26:36] Fishers Island: Good. I don't know where I was. So this showed it to me for the first time and I was like, Oh, all right. So, you know, the, the people online see this and they say that Miller Lite has gone woke and. blah, blah, blah. They started pulling from the same playbook they used for Bud Light. They started attacking Molson Coors employees for saying quote, unquote, woke things. And the Molson Coors team nipped this right in the bud with a couple really, I thought, pretty great statements. And it was really like night and day in terms of how to respond to something like this.

[00:27:14] Bronya Shillo: Yeah, quite different from Anheuser-Busch's strategy.

[00:27:17] Fishers Island: Yeah. Their first statement is, quote, this video is about two things, worm poop and saying women shouldn't be forced to mud wrestle in order to sell beer. Neither of these things should be remotely controversial. And we hope beer drinkers can appreciate the humor and ridiculousness of this video from back in March. When online trolls started going after Molson Coors employees who they've, you know, I agreed not to name because you don't really want them to get any more abuse than they were getting. And Molson Coors said this to say, people can take issue with our ads or our brands, but we won't stand by as people personally attack our employees, especially given that these are company decisions and are never made by one single person. We have thousands of hardworking people from all walks of life who are only doing what millions of other Americans do every day, working hard to earn a living, and we will always support them and stand by their work. A.B. said nothing like that. A.B. put two of their employees on leave.

[00:28:15] Bronya Shillo: It should also be noted that some of the leadership team at Molson Coors, who likely contributed to the response, are women. And so they probably have some more insights into this than AB's team does. But like, this is Michelle St. Jacques, who was chief marketing officer and is now chief commercial officer as of a couple months ago, has all been preaching since she started at Molson Coors about like changing this perception of beer advertising. And it's just been what they've been about for years now. So I was very glad to see that they are maintaining that even when kind of the pressures on them, instead of kind of stepping back and trying to make sure everyone feels comfortable.

[00:29:01] Justin Fonte: Right. And I mean, just this week, the Wall Street Journal put out a story titled How Bud Light Blew It. And part of that story talks about how the response was just so bad from Anheuser-Busch, just in every way possible.

[00:29:21] Bronya Shillo: You're not going to have success if you're angering everybody. Right. And so sometimes you do have to kind of make a decision somewhere.

[00:29:30] Fishers Island: Yeah. The Wall Street Journal, you know, in covering the Bud Light situation a couple of weeks ago had quoted an unnamed wholesaler who said like, I lost my cowboy bars and now I'm going to lose my gay bars. And he's basically like, I wouldn't even say they tried to thread the needle and appease both sides because they don't think they did that. No. But they just like turn their back on the one side completely. And the other side that they turned toward is just still too angry to even accept it. Yeah.

[00:30:01] Justin Fonte: Yeah. There's a passage from The Wall Street Journal that reads the result angered pretty much everyone, core Bud Light consumers, supporters and opponents of transgender rights, wholesalers, retailers, bar owners and the company staff, which we haven't heard much from people on the inside about how they feel about this.

[00:30:21] Fishers Island: No, no. And and. they're really, you know, kind of circling the wagons. So we don't really hear much at all. We did receive a statement from AB just reaffirming its broader external relations work, including with the LGBTQ plus community. They said, quote, we remain committed to the programs and partnerships we have forged over decades with organizations to drive economic prosperity across a number of communities, including those in the LGBTQ plus community. AB's listed as a presenting sponsor on the website for the St. Louis Pride Parade next month. I've reached out to them to ask what's going on. Nobody's gotten back to me.

[00:30:59] Bronya Shillo: Week and a half out from when Pride Month starts, so it's going to be interesting to see how everyone interacts with it.

[00:31:08] Fishers Island: And we do know that they have an employee research group for LGBTQ plus employees at the company, but I just hope all of those people are doing OK. Yeah.

[00:31:21] Justin Fonte: Let's just move on to something maybe a little cheerier and play a round of Another Round or Tabbing Out last week. I did a profile of Montucky cold snacks, and that is a one liquid four skew brand from Bozeman, Montana. That's chasing 1.4 million cases this year. We've seen this strategy from other brewers in the past, such as house beer, which is getting resurrected as you've reported on Zoe. Are you buying Another Round of single liquid limited SKU brands?

[00:31:57] Bronya Shillo: I'm in for Another Round. I feel like the word of this year for everybody is bed focus. And people are looking at their portfolios after a few years of a lot of innovation and getting into tons of different just kinds of bed elk. And the ones that seem to do the best are the ones that find something that they're good at and they stay focused on that. So as long as you keep your expectations, pretty set on, you know, not trying to expand too much too fast. If you are doing something right, you might as well just stick to doing that.

[00:32:34] Fishers Island: Yeah, I'd agree. I'm in for Another Round. If you're good at it, and it's working, why complicate it?

[00:32:41] Justin Fonte: Yeah, that brand has a lot of, I guess, you know, Pabst vibes from maybe like 15 years ago, when it sort of made a comeback. Might've been 15 years ago. I might be getting my years mixed, but still.

[00:32:56] Fishers Island: Close. Maybe a little, a little more than that, but like that, like 05, 06 era. Yeah. Yeah. Yeah. I was super confused by Montucky cold snacks when I was new here because I thought it was snacks. Yeah. The name throws me.

[00:33:10] SPEAKER_??: Yeah.

[00:33:11] Justin Fonte: Fair point.

[00:33:12] Fishers Island: Yeah. But I mean, I've, I've had, I've, I've dabbled in a cold snack. Pretty tasty beer. Not mad about it. Yeah.

[00:33:21] Justin Fonte: All right, well, let's do another. We've seen a lot of companies introduce brand families off their legacy flagships. And the latest is Dales. It's going beyond pale ale. It already did last year. I believe there's a double Dales and now there's a lager brand on the way. So Are we to the point where you're buying Another Round of these brand family extensions off of legacy brands, or are we to the point of Tabbing Out on this because a lot of folks are doing them?

[00:33:54] Bronya Shillo: I'm still doing Another Round right now, but TBD on maybe a year from now. I think that it seems to be a great way for some of these older brands to stay relevant and try to get back some of the growth they might've lost as new brands have come in. And I like the idea of taking a brand that people know of and maybe you're not into it because you just don't like that style and introducing it with that same quality, with a style that someone might actually like. And that's going to bring in new consumers with messaging that they're aware of or are already familiar with. So I'm with it for right now. It might get out of hand. And people, it might just be with everything else where everyone starts making a lot of, uh, keeps extending it further and further until it's kind of all a mush. But right now it's okay.

[00:34:50] Fishers Island: Yeah, I'm here for this right now, for sure. And I think it makes a lot of sense when you look at like the brands that are doing it. So when things like rogue dead guy and Dale's Oscar blues, Dale's pale ale were first launched, we didn't really have. the brand architecture that we have in craft right now. So how many people even know that Dale's Pale Ale is an Oscar Blues product? How many people drink this beer and just think the brand is called Dale's Pale Ale? So that to me seems like it was born out of some consumer insights that they found that said, people were like, oh, I just thought your brewery was Dale's. So it's like, well, if people think that already, let's give them some more. Gets you a little bit more shelf space. It gives you new stuff to talk about with your wholesalers. It can be a way to take you know, a popular style right now, like a light lager, and use that to halo back to your hero brand, Dale's Pale Ale. So I'm here for it. Let's see what happens.

[00:35:46] Justin Fonte: Yeah, I'm feeling it too. And I know that new Belgium did this before with fat tire, but it's interesting that their playbook this year was to go in a complete different direction and turn fat tire into sort of a gateway beer gateway gold nail instead of an Amber ale. I'll call it what it is, is a gold nail and not go this route. And like I said, I know that they went that route before, but it's just, you know, sign of the times.

[00:36:12] Fishers Island: Right. And, you know, New Belgium's interesting because they've done the whole brand new platform brand with Voodoo Ranger. But will we see the platforming that goes on there happen to Fat Tire? Probably not. And I think they tried it years ago with like another Fat Tire variant. Yeah. Yeah. So it's just interesting. I mean, like these beer brands that have been around forever and ever, like, you know, Fat Tire and Dales and Dead Guy and Boston Lager. You've got to do something to stay relevant. I mean, that's a whole conversation for another time. I mean, how many of your longtime drinkers then get a little pissed off and say, why did you mess with it? I loved it the way it was. But it's like, well, you guys really weren't drinking enough of it.

[00:36:58] Justin Fonte: It's usually what it comes down to, right? You weren't drinking enough of it. And that's why we made this decision.

[00:37:05] Fishers Island: Right. Which ties in pretty closely to the Bud Light conversation.

[00:37:10] Justin Fonte: Now, well, last one for you, Another Round or Tabbing Out on name, image, and likeness collaboration beers. And I'll do a little bit of explanation here. Sometimes you think you've got a big innovation and you're not the only one. And on the same day, Rheingeis launched Cincy Light in a collaboration with the University of Cincinnati's collective. Exile Brewing Company in Des Moines launched one with the University of Iowa's collective, which boo, but anyway.

[00:37:42] Fishers Island: I'm impressed you even deigned to write that story.

[00:37:46] Justin Fonte: Yeah, there is a part of me that definitely was hurting inside, but I did it. You know, I sucked it up for the team.

[00:37:54] Fishers Island: Very mature.

[00:37:55] Justin Fonte: Thank you. They're going to funnel some of the proceeds of these beers back into these collective, which give name, image, and likeness opportunities to student athletes. So basically now players or whatever team, you know, at the university can get opportunities to get paid for their name, image, and likeness. I feel like this is a pretty innovative way of doing it, but you know, what, what do you all think of this?

[00:38:25] Bronya Shillo: I'm still not quite sure I fully understand all these collectives work yet, but from the understanding I have, I think I'm in for it. I mean, this is going to fund things for multiple student athletes. They're used all the time for their abilities and their faces and everything to bring money to colleges, to networks. So supporting the student athletes, I think it's hard to argue with that.

[00:38:55] Fishers Island: Yeah, Zoe, I'm with you. I don't quite understand it, but I get that it's important. And I do think the kids need to be paid because, like, they are doing a job, you know? But the thing that just I have question marks about, and that's because of their age, you know, like I'm sure everybody involved in these brands is 21 at least, but it is interesting. You know, how is this going to play? Like I know Athletic was doing a lot of this and that makes total sense.

[00:39:30] SPEAKER_??: Yep.

[00:39:31] Justin Fonte: That is an interesting point because some of these athletes are, you know, 19, 20, maybe 18.

[00:39:39] Fishers Island: Well, so part of like the BI, like marketing code, anybody that's going to be in a beer ad has to be 25. So there's not even any question that they could potentially be underage. And I don't think you can be 25 and still playing collegiate sports.

[00:39:55] Justin Fonte: You can get close. Nowadays you could, or at least due to like COVID waivers,

[00:40:01] Bronya Shillo: Right. Yeah, there's like a basketball player right now is in there who's he looks like he's probably like 45, but I think he's 25.

[00:40:07] Justin Fonte: Yeah.

[00:40:09] Fishers Island: And there's like a like a Georgia football player that Ryan was telling me that with COVID waivers is like 25, still not done with school. I don't know, man, pay the kids. That's where I land here.

[00:40:23] Justin Fonte: Yeah. And I think this funnels it back to a third party or, you know, the third party collective, which will funnel the money to the student athlete. And I don't know that you'll ever see an athlete promoting the beers or anything like that. But who knows?

[00:40:39] Bronya Shillo: That was what's making me feel more comfortable with it. I think right now of like not not seeing as much of a risk for the breweries with it at this moment. They're not directly collaborating with any athletes.

[00:40:52] Justin Fonte: Well, let's get that cyclone beer going, please. And funnel that so we will. Anyway, with that, we'll get to our featured interview with Bronya Shillo. Earlier this month, Spirit of Gallo, E&J Gallo's Spirits division reached a deal to acquire Fisher's Island Lemonade. The deal will put the nearly decade-old brand in the same portfolio as popular spirits-based hard seltzer brand High Noon Sunsips. Joining us to discuss the decision to sell and what comes next for Fisher's Island is founder Bronya Shillo. Congratulations and thanks for joining us, Branya.

[00:41:30] Flying Dog: Thank you. Thank you so much. I'm excited to reconnect with you guys. I appreciate it.

[00:41:35] Justin Fonte: Yeah, we saw you in January at what Jess likes to call HarryCon, and now you're here, you're on our podcast. How long were you looking at doing a deal?

[00:41:48] Flying Dog: Ooh, yeah, January feels so long ago yet so close. The deal was, was, um, I don't know, sometimes it feels like it was a decade and sometimes it feels like it was two weeks, but ultimately, you know, Brit West from Spirited Gallow and I have an older relationship that, that stems back almost a decade. And he pretty much gave me a phone call and I guess I've been tracking Fishers for a few years that I wasn't quite, you know, too privy to. So we reconnected and just continued to stay in touch. So it formed fairly quickly after that.

[00:42:23] Justin Fonte: Were there a lot of other suitors? I mean, did you play the market or, you know, was it really that relationship that really solidified that that's where you wanted to be?

[00:42:33] Flying Dog: I definitely took other phone calls just to kind of understand what my options were and, you know, what the potential of this next step could be like. I wasn't entirely sure that it was something that I really wanted to do with Fisher's Isle Lemonade. You know, clearly something that's very near and dear to my heart and my community and personally my life. So there's a lot of thoughts that go into that decision-making process. But overall, I just took a lot of inbound emails and phone calls and just continued to listen to what options could be like. It's clearly my first beverage company and I didn't necessarily know what the right route would be. So just having a lot of conversations was kind of the name of the game for me.

[00:43:18] Fishers Island: So Bronya, Fisher's Island Lemonade is super personal for you. The recipe comes from your family's bar on the island, and you managed the bar, and you saw how popular this drink was, and saw how bartenders always had to step away to make you batches for it. You guys would just fly out of the bar. So given that you have such a close personal relationship to the brand, what made you feel comfortable entering a deal like this?

[00:43:44] Flying Dog: I would say there's a handful of things, but high-level, Spirit of Gallo is a family-run business that was incredibly attractive to me, given the fact that I run this company and it comes from a real place, such as my family's bar in a real island and community, Fishers Island, New York. So that was a really key part of part of my decision making process is what's going to happen to the brand, what's going to happen to everything that I've built and the relationships that have really stemmed off of our success. And it's been almost a decade of us in this industry. So 2014 of Memorial Day weekend coming up right about next week is going to be our ninth anniversary, which It's crazy to think that, you know, I have a 9 year old business, especially, you know, in the space, because that is such a new category in itself. So gallo is a great home for the brand and that was really 1 of the most like. secure things that I felt, you know, being able to continue to grow Fishers Island stay on with Gallo myself and with my team. So it's highly attractive to, you know, have conversations with Britt and Ernest and, you know, hear more of what, you know, they would do with the brand. And, you know, quite honestly, they're very interested in, you know, listening to, you know, my experience and things that I've done over the last better half of almost a decade. you know, really work together as partners. And, you know, I think that there's a lot of great potential for the future of us together and Spirit of Gallo as well as RTDs in general. And the fact that High Noon is, you know, been in their portfolio since the beginning, and they've built that from Another Round up too.

[00:45:29] Bronya Shillo: What are some of those things that you talked about that you see for the future of Fishers Island? What is going to come for the brand now out of this deal?

[00:45:39] Flying Dog: Well, I think, you know, really working our plan has been a lot of the messaging that we've been receiving. So, you know, we know our brand best, you know, Fisher's Island Lemonade and have been managing that and trying to strategically grow our brand outside of New England, you know, in the right manner. So, again, we've been in the business for nine years and we're only in 14 states. So, there's a great deal of white space left in the territories that we are in here in New England and mostly the Eastern seaboard, but ultimately to get fishers into more hands and to potentially expand nationally at some point in time. But. Take it at the appropriate pace for our business and for the Fishers Island Lemonade brand and how our TDs are continuing to develop and become more and more aware in the household of what liquor in a can really is versus a malt-based product or a seltzer.

[00:46:34] Bronya Shillo: Like you mentioned, RTDs are kind of having their big moment now or have the past few years. When you have a brand that's been in this space for a lot longer than some of these other brands have, how has Fisher's Island still stayed relevant and fresh in this getting increasingly more and more crowded marketplace? That beautiful can. It is a pretty nice kit.

[00:46:58] Flying Dog: Yeah, we've pretty much everything that we try to do is very well thought out and strategic from literally the design of the can to the ingredients that we put in there to telling our story and educating consumers and distributors, buyers alike. We really try not to compromise on much and continue to run our race. And there is a lot of noise out there over the last two, three years with seltzers going into canned cocktails and consumers knowing more about what they are consuming is more of a malt based or it is a spirit based now. So having those options continues to draw people to Fishers because of the premium product that it is. It's one of the only dual spirit based canned cocktails out there. And a lot of times distributors look to us because they're like, We don't know how to sell this. We haven't sold this in the past. It's not like you're creating another craft beer that has a path to go down for distribution. There's a lot of things that are challenging within our segment, but at the same time, very, very rewarding to continue to build a category. And now, especially with Gallo, I think that's going to be incredibly exciting to see what more we can do together off of the foundation that we've built. So premium RTDs I think are going to continue to plug the market over time. But right now we're definitely excited about continuing to educate people on the vodka, whiskey spirit base that we have with Fisher's Island Lemonade.

[00:48:31] Justin Fonte: When we saw you in Florida, you all were really working it. And I think you were setting up calls and making those trips. And, you know, now you have a major corporation behind you with a lot of resources. Beyond just investment in the brand, what was most attractive about what Spirit of Gallo can bring to Fishers Island that maybe you didn't have before?

[00:48:56] Flying Dog: I mean, without a doubt, strengthening our presence in the market. We've done a great job with our team. We're about a team of 10 to 12 people, depending on the time of the year. And it's maintained that number for the last three or four years. And we don't have somebody in every single state. So the fact that Gallo has A really large team of salespeople is kind of like right off the bat, one of the most attractive things. They're really well known for their training and their presence in market and how they go to market. And the respect there alone, I think, is something that our entire team is really looking forward to working with them and continuing to grow our relationships. you know, along the distributor side and retail side. So continuing to be able to sort of grow Fishers Island fill in a lot more of those white space that we've done pretty well at. But across the board, we've really only been in New England and a little bit south on the eastern seaboard. So I think there's a lot of opportunity left for Fishers Island Lemonade specifically.

[00:49:59] Justin Fonte: I'm not sure that you're in Iowa yet, so you might have a fan here.

[00:50:03] Flying Dog: No, we're not. But hopefully that'll be one of the states that we continue to assess and look to expand to. I think there's a lot of fun for us to continue to bring Fishers Island what we've been sharing over here on the East Coast. I know there's been a lot of people, a lot of inquiries over the last few years in our general inbox and on social media. And now with the Spirit of Gallo and the support of their team, I think that'll probably be something that we'll be able to review and figure out what's right for the next steps with the brand.

[00:50:32] Fishers Island: Rania, what does your relationship with the brand look like in the future? How involved do you plan on being?

[00:50:39] Flying Dog: Well, I'm really excited to stay on as well as my team to be able to transition. Something that was really important to me to be able to, you know, have that opportunity and transition with the brand. It is something that I love doing and pretty young, so I feel like there's a lot of opportunity left to continue to be a part of this journey. And so ultimately, I will stay on with Gallo and running Fisher's Island Lemonade as founder in chief and continue to sort of hopefully expand with the brand too. So not much has changed right now. So we're still very much running our daily agendas and continuing to meet people at Gallo and share a lot of the story and educate their team John Fischer's Island Lemonade and everything that we offer. So it's wonderful to be teaming up with them. I'm very, very excited.

[00:51:28] Fishers Island: That's great. I know, you know, we covered the news the week that this was announced on the podcast. And I think I had said back then that, that taking this brand and not making sure that you were going to continue to be involved would be such a mistake because it is, you are such a big part of it. You know, like it's such a, it's your family story and it's your family's island. Not that you guys own the whole thing, but you know what I mean? And you are integral to this brand. So I'm really glad to hear that you're going to be in it for the long haul.

[00:51:54] Flying Dog: Yeah, it's a fantastic opportunity. Everything that we've done as a team and as a brand for the last nine years has been incredibly exciting to build a brand and get to see how much people enjoy it. And I love asking the question how people got to discover Fishers Island and whether it was an event or a festival, a social media post or a friend that brought it over for you know an afternoon or evening of drinks they're like oh that stuff is so good I can't believe like you've never had it before and it's it's just so fun to be able to sort of have those conversations personally and look forward to having a lot more of them and from coast to coast.

[00:52:31] Fishers Island: How often do you yourself actually get to Fishers Island these days?

[00:52:35] Flying Dog: Well, I might be there in the next few days, but I absolutely love going back. My husband and I and family are constantly there whenever we get a chance to get back to just a little piece of paradise. just rejuvenating and refreshing to see family and friends. And it's a wonderful community. It's something that is very near and dear to my heart. And growing up there and helping run the family business, the bar was very integral in, I feel like, my career. And my parents did a great job with my sister and I and instilling a lot of those hard lessons and continue to do so. But it's a it's a wonderful place. And being in Newport, I get a chance to get back pretty frequently.

[00:53:23] Bronya Shillo: It's great. You mentioned a lot about getting into new markets. Are there any other kind of core opportunities that you see for the brand? Is there a certain channel that you really want to be more involved in? Are there new products that you're looking to get into? What's what's the big focus right now?

[00:53:41] Flying Dog: Uh, like I said earlier, you know, running running really our race is has been kind of the mission ultimately. So there's changes happening. Day to day, year by year with and whether that may be just more accessibility for this, this. you know, continued RTD segment is one of the most exciting things to see that develop and where things lead. But ultimately the last couple of months we've been really focusing our efforts on rebranding the packaging and then also releasing new flavors. So we recently just released Fisher's Island Nude Peach and Blueberry Wave as well as our second variety pack ever. So There's a lot of exciting things going in into the works with our team as we go through this announcement as well with Galo. So there's been some wheels turning for a couple of years. We've been in pack tech for a long, long time since day one, and that's fantastic. But we're realizing that it's a lot better for merchandising. And as we expand on the shelf space or in the cooler, that we'll be transitioning over to a four-pack wrap. So that'll allow us to show a lot more of our beautiful design and the lifestyle components that go into our messaging around the story of Fishers Island Lemonade and where people can enjoy that. So, for example, we're transitioning the name from Spike T to Half and Half, which is going to have a little bit more of a golf thematic on the can. Nude Peach, which is one of our new flavors, is going to have a little bit more of that beach vibe. Some of the play on the name, Nude Peach, with some of the flying bathing suits are a little bit more fun for the summer months. Pink Flamingo, just continuing to show a little bit more of the creative side of the brand. We got some fun tools in our bucket here this year for people to explore and have a lot of fun with out in market.

[00:55:43] Justin Fonte: And this was all clearly in the works well before Gallo even entered the picture for you. So that's pretty exciting that you've got this innovation pipeline already sort of chugging along.

[00:55:55] Flying Dog: Yeah, absolutely. I mean, from the beginning, we had the original 9%, which was, you know, the one that kind of kicked it all off in 2014 that, you know, was served at our family bar for generations. And six years later, I developed our first ever flavors, which was a pink lemonade, pink flamingo. uh which is a little blush of cranberry to make it pink and then our half and half which is our Arnold Palmer type skew which is real black tea that we use and you really get that on the nose as soon as you pop open the can as well as Fisher's Island fizz and our spirit popsicles which are some fun innovation outside of the can But ultimately, innovating with really approachable, familiar flavors, but still high quality is really the name of the game that I try to continue to track down that path because consumers want something that they already know in a convenient package, but continue to follow Fishers for the high quality side of the spirit base and the real ingredients that we are known for. But at the same time, you know, innovation is very, very important, but it's just a balance of being able to understand how much your team can bite off and what's the appropriate timing for that. So we felt the variety pack that we released last year was just continuing to double down on our efforts with pink flamingo and spike tea. But because those were released during COVID, we weren't really having as many opportunities to sample in person and do the whole liquid to lips things with Tastings and events and just all the in-person things that our industry so much love and value. And then this year, it's all great timing with everything with the graphics refresh and the packaging transition. Our relationships with our distributors are very, very strong. So they are very excited for us to make this transition to because it makes things a little bit easier on their end, less turning of the cans from the pack tech and just being able to build really awesome displays with all the options that we have and flavors that we offer.

[00:58:02] Justin Fonte: Was there a lot of overlap with your distribution with Gallo already?

[00:58:05] Flying Dog: Yeah, I'd say there's a pretty decent amount. Naturally, we you know, had some overlap, whether it may be, you know, some of the New England spirit houses or even some of the Southern markets with breakthrough. So I'd say that there was quite a bit of, you know, synergy there. And then, you know, we also have a little bit of, you know, beer distribution from the early days. And honestly, we've just tried to make the best decision for each market and not necessarily do one fell swoop with any one distributor or spirits versus beer. So I think that that's also somewhat of an attractive thing about our brand and how we went to market, which was, you know, trying to assess RTDs in general and how to sell pans. You know, every state's a little bit different and funky with each team. So that's really a lot of the things that we do is just sort of take our time and making sure that we're making the right decision because sometimes you're signing up for life.

[00:59:03] Fishers Island: For sure. Bronnie, how would you characterize your distributor network? It sounds like it's a big mix, but is it like equal parts beer and spirits wholesalers or do you lean more toward one or the other?

[00:59:12] Flying Dog: It's slightly more spirit now just because of how we've expanded. Last year we went into North Carolina and Florida with Breakthrough, but it is almost 50-50. You know, we have a handful of Miller Coors beer houses. the New Jersey and Connecticut area, some craft beer wholesalers as well. They're all great, honestly. The distributor management as well as the sales team, they really thrive with our product and I think they take a lot of pride in working with us and continuing to sell our brand. I think it's also somewhat unique too in the fact that we're one of the first ones out there and we continue to develop and give them the tools that they need to continue to believe in the product and the category.

[00:59:59] Fishers Island: Yeah, I remember seeing friends, you know, drink Fisher's Island on the beach years ago now and looking at it being like, oh, wow, this actually has like vodka in it. You know, this is different. So you guys are certainly a first mover. But where do you see your biggest opportunities in the next year and two years ahead? Is it going to be distribution expansion to new markets? Are you going to try to get into more different channels for you guys? What does the next little bit look like?

[01:00:28] Flying Dog: Yeah, I think you answered that one pretty, pretty spot on. It's a lot around distribution. You know, Gallo is a great partner for that. So we can continue to unfold those opportunities together. But ultimately, it's just continuing to expand and get more cans into more households and onto more menus. I think there's a lot of exciting times ahead where, you know, we're coming out of this COVID fog and we're able to get back to the things that we love to do and share and experience together. And, you know, the timing with Gallo that has that muscle is fantastic. So I really do look forward to this summer. There's a lot of exciting things that I think are all going to come together quite nicely.

[01:01:10] Fishers Island: Awesome. I mean, you said more menus, which to me means on-premise. So how important is that channel for you?

[01:01:16] Flying Dog: It's huge. I mean, Fisher's Island Lemonade was born in the on-premise behind the bar. So it's one thing that myself and our team have constantly, you know, brought up in conversation, whether it's a distributor sort of, you know, sales meeting and continuing to prioritize on-premise as an option for our product is something that we are definitely the squeaky wheel on. Pre pandemic, our numbers were almost close to double digits, like, you know, getting into the 10% range and even after, you know, when things started opening up again. We continue to go over to. bars and restaurants that were actually struggling with the employment side, you know, bringing bartenders back and, you know, getting them trained up to make the quality of the cocktails that, you know, they wanted to offer. And with Fisher's being a premium RTD, again, with the whiskey and the vodka component, natural lemon and honey, whether it's 9% at our original or 7% with our flavors, or 5% with the fizz as a lighter option, there's really a variety there. So it's great because our sales team has the ability to say, oh, you know what? Try this one instead. This might fit your menu. And they really do have a lot of options to pick from. So our motto is definitely there's no account that really shouldn't be offered the opportunity to sell fishers. There's quite a few out there. And whether it's a seaside place, or a pizza place, or an Irish bar, or a golf course, Honestly, Ski Mountain, we don't count anybody else.

[01:02:49] Justin Fonte: Awesome. Well, congratulations again to you on the deal. Very excited to see where this takes you all.

[01:02:57] Flying Dog: I appreciate it. Thank you very much. I look forward to an exciting summer ahead and continue to follow Fishers Island Lemonade. We got lots in store.

[01:03:05] Justin Fonte: Awesome. Well, thanks again for your time, Branya. And that's our show for this week. Thanks to our one man audio team, Joe. Thanks to Jess and Zoe for all they do. And thanks to you for listening. We'll be back next week.