From Malt to Partner Brands – Growing with Supply Chain Allies with Destihl, Briess and U.S. Beverage

[00:00:00] Justin Kendall: Heading to CBC? Kick things off the day before at Brewbound's meetup at Love City Brewing in Philly, Sunday, April 19th from 5 to 7 p.m. Connect with beer industry leaders, grab a drink, and catch up with the Brewbound team. It's free to attend and walking distance from the convention center. Head to Brewbound.com slash lovecity.rsvp. And don't forget to catch the Brewbound team at booth 956 during CBC. Hello and welcome to the Brewbound podcast. I'm Justin Kendall. I'm Jess Infante. And Zoe Licata is not here because she's on a boat.

[00:00:47] Matt Potts: Zoe's on a boat.

[00:00:49] Justin Kendall: Yeah.

[00:00:50] Matt Potts: Zoe's on a cruise. She's on a family vacation. We hope she's having a wonderful time.

[00:00:54] Justin Kendall: Yeah. And getting some much deserved rest and relaxation. At least we hope.

[00:01:00] Matt Potts: Dude, there's nobody that works harder than Zoe. I'm not really well-versed in the world of cruises, but I hear you need to get a special bracelet to get all the drinks, so I hope she has at least two.

[00:01:08] Justin Kendall: Well, you all get Jess and me this week, and you also get two interviews, actually. Our last interviews from the Craft Brewers Conference were going to be joined by Destihl founder Matt Potts and Briess director of marketing Ron Schroder. They're going to discuss their partnership, the growth for the Illinois Craft Brewery, and navigating supply chain issues.

[00:01:30] Matt Potts: I chatted with Kris Sjolander of US Beverage. He's the VP of Brand Development. Really interesting chat. Chris is super friendly and was just a lovely person to talk with, but we talked a lot about their plans for craft brand development. I think they have a lot of really interesting ideas and they can certainly be I don't want to say stopgap because that's not right, but for brands that are looking to grow and just need the marketing and sales support, U.S. Beverage could be a really great solution. So they do a lot of that. And Chris and I talked about that. We also talked about how if you can't keep up with demand, they can help you sell. But if you also need to create more demand, if you want to up volume, they can help with that too. So they work with brands on kind of both ends of the spectrum here.

[00:02:12] Justin Kendall: Yeah, their portfolio includes Uintah, Moosehead, Captain Lawerence.

[00:02:17] Matt Potts: Yep. Captain Lawerence. Another thing in U.S. Beverage's portfolio that I find super interesting as a person who has consumed far too much reality TV content coming out of the state of Utah is Dirty Pop. It's their new RTD that's modeled after dirty sodas, which obviously, if you have watched Real Housewives of Salt Lake City or The Secret Lives of Mormon Wives. It's something that particularly women in that culture get into. Whether or not there is alcohol involved, but there's a ton of soda chains out that way. And people have taken to basically mixology, but with sodas. So this is US Beverages take on that with alcohol, 5% ABV, and they're brand new. I really should have talked to Chris about this, but I figured it was not really in the spirit of the Craft Brewers Conference. So maybe we'll get him back on the pod.

[00:03:02] Justin Kendall: Yeah, well, I'm sure you'd be excited to chat about it, but we've got a lot to cover in a short amount of time. And let's start with some news. Tilray is shaking up its leadership in its beverage team. Ty Gilmore, who was the president, is out. Prince Pinaket, who is their chief growth officer and who started as chief marketing officer is now going to lead the beverage business. Going forward, they've also retooled their spirits division and their intoxicating hemp division, and it all ladders up to Prins. So that's what Tilray is doing there. And I wouldn't call it exactly a surprise, but it definitely came out of the blue following a lot of the things that we've seen from them from closing large scale operations at Hop Valley and Revolver and also just recently shuttering the Red Hook Brew Lab.

[00:03:58] Matt Potts: Yeah. And the comment that you got from Tilbury HQ seems to indicate that they do plan to find another home for Red Hook in Seattle. I don't want to be the negative Nancy here, but I have to assume that it's not too terribly high on their priorities list right now.

[00:04:14] Justin Kendall: No, I wouldn't imagine so when you're looking to close operations and claw back a lot of money. And this is something that Irwin Simon, the CEO talked about recently. They saved, I want to say it was $25 million from the closings of those two breweries.

[00:04:33] Matt Potts: Yeah, you reported that, which is a lot of money. So that helps. But just knowing what the real estate situation in Seattle in particular, what can the brand health of Red Hook possibly be to merit that kind of investment right now? Not that I want to poo-poo Red Hook. It's a super important brand in craft history. But when you're trying to scrimp and save and turn over the couch cushions to find the dollars the way that they have been, I don't know that opening a brand new taproom is really going to move that needle. The other thing that I think was interesting that we also asked about was whether or not Ty specifically would be backfilled because the way this reads right now is that Prince is taking his job, but basically is going to have two jobs. And both of those are very important jobs. So Prince, I hope you have some nice work-life balance and good stress relief techniques in your repertoire.

[00:05:20] Justin Kendall: And if you want an inside perspective from the Red Hook Brew Lab, there's a Reddit thread out there that we link to that you can read and decide for yourself how they run things as opposed to Anheuser-Busch and Bev and make your own conclusions from there.

[00:05:35] Matt Potts: Yeah. Over the weekend, I found an old Hop Valley hat on our coat rack. Our coat rack was just like overflowing with stuff and I was like, let's clean this off and see what's here. And I found it and I was just like, oh, this is a relic. And then I put it in a textile recycling box because I'm not going to wear it. And also I don't think I could find anybody that would want it here in the Commonwealth of Massachusetts.

[00:05:59] Justin Kendall: Well, eons ago, I visited the Red Hook Brew Lab, and it was under the CBA banner at the time. This is probably late 2010s, I want to say. It would have had to have been. So it was a very cool space. I enjoyed visiting it. And I thought that it's one of the things that they pointed out in that Reddit thread was it wasn't designed to really make money, which You would think it would. It was all about showcasing brands and obviously trying to help drive some off-premise traffic to those brands.

[00:06:30] Matt Potts: Yeah. And everything online seemed very positive. It seemed like a cool space. People enjoyed going there. Yeah. To everything, there is a season.

[00:06:37] Justin Kendall: Yeah, there really is now.

[00:06:39] Matt Potts: There was a Red Hook brewery out here in Portsmouth, New Hampshire for a time. CBA was running like a triple branded Red Hook, Widmer Brothers and Kona. It was the first brewery that I had ever gone to that was not the one I worked at.

[00:06:52] Justin Kendall: And they recently stopped production there where they were making wicked weed at the end and the taproom had closed.

[00:06:58] Matt Potts: Yeah. So insiders can read all that and more on Brewbound.com. What else can insiders read?

[00:07:03] Justin Kendall: You can catch up on what's going on at Dogfish Head and how the Grateful Dead Juicy Pale Ale is helping reverse some of the negative trends they've experienced. Zoe's got a pair of recaps of the latest Bev Bites distributor surveys. We've got an update from you on Stone's grocery trends. We've got an update on White Claw and their approach to market, which is focusing on four pillars and axing a lot of maybe confusion. I think that's how it was described.

[00:07:33] Matt Potts: Yeah. And to me, at least like the newsiest bit out of that story that you wrote was that they have axed their vodka-based RTD line. And I can't imagine it was setting the world on fire for them ever at all, which is why they are saying farewell to it. But right before we hopped on, you, me, and BevNET Spirits editor, Ferron Salniker, had a great chat about these vodka-based offerings from originally cane sugar brew brands like White Claw and Truly and how their foray into spirits didn't really work and why didn't it work? So stuff to think about.

[00:08:01] Justin Kendall: Yeah. And we talk a lot about those things. We talk a lot about how hard seltzer has really retracted to top brands. And it's really a one horse race at this point with White Claw holding 70% of the dollar share out there. And then you have truly in second Topo Chico and third happy dad and fourth at this point.

[00:08:27] Matt Potts: Yeah. Well, I mean, for a while, Truly was a close second, but now they're pretty distant. It's funny to see because it seems like in the earlier days of hard seltzer, like in the immediate post-pandemic time, Truly was just releasing flavors and style families like it was nobody's business. There was just so many because I think they found, okay, lemonade works. Let's try tea. Okay. Tea, maybe. Okay. Let's try punch. Okay. Now let's try margarita. Like it was so much.

[00:08:52] Justin Kendall: Yeah. Let's try spirits.

[00:08:53] Matt Potts: Yeah, well, White Claw wasn't doing that at all. And then they started to, and I think then they realized that that was a mistake and they have pulled back. I think they pulled back a lot quicker than Boston Beer did on Truly. And Truly, I think, got into spirits before White Claw did. Truly had a vodka version and a tequila version, and both of those seem to have disappeared from their website. And these conversations that we used to have when hard seltzer was new was, do consumers understand that this is fermented cane sugar? This is not hard alcohol. And what do consumers think it is? Because that comes into the tax rates and the market access and all of that. And cane sugar has a benefit that it's taxed and regulated as a beer, so it can go more places. But, you know, consumers like the idea of spirits. They'll pay more money for it. You know, it's just the tradeoff. Do you want the margins? Do you want the volume? Do you want to have to explain to your blue in the face that no, this is not alcohol? OK, yes, this is. And by alcohol, I mean spirits like, no, this is not spirits. OK, yes, this is spirits, but it's the same name. But it's spirits. That's why it cost me.

[00:09:46] Justin Kendall: You know, like, I just think, why can't I get this at a grocery store in a control state?

[00:09:50] Matt Potts: Yeah. I think it was just a very confusing, tiring, losing battle. And I think the crew at Marc Anthony has recognized that.

[00:09:56] Justin Kendall: I totally agree with you. I think there was a lot of consumer confusion and hopefully we are on the path to clarity. So if you're an insider, you can read all of that.

[00:10:08] Ron Schroder: 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.

[00:10:28] Justin Kendall: Let's play Another Round or Tabbing Out before we get to our featured interviews. And Zoe, our Gen Z correspondent isn't here, but this story popped up and it was basically UK pubs are saying Gen Z doesn't know how to line up at the bar. They're making single file lines similar to a post office and they just want people to come up to the bar and order and I think some of this is understandable in that some of the social cues got lost during the pandemic and now we have very polite single file lines, but I don't think that's making anybody too happy.

[00:11:06] Matt Potts: No. And look, I personally think it depends on the bar. There are a few brewery tap rooms that ask you to make a single file line. I've seen that. There are a few where people do it anyway, much to the chagrin of the owners of those breweries. I have a local example in particular where I am fine with the lining up situation, but apparently the people who work there are not. I think it just depends. But you know what? I think you're right. It really comes from if you were newly 21 in 2020 and 2021, everything you encountered, you were probably like, what the honk is happening out here? This makes no sense. And it didn't make any sense. It was like a temporary thing we all did.

[00:11:43] Justin Kendall: So I get that. I'm going to give them a mulligan on this one because they don't know that we just need to help them out. And shaming them with post office signs probably isn't the way to go.

[00:11:52] Matt Potts: No, not at all. But I mean, the other thing is, like, I never had a hard time getting a drink at a bar back in the old days before I was old and tired. But like there was one bar in college. where Wednesday nights was called flip night, where you ordered a beer. It was like the one craft beer bar in the town where I went to school and they had like 40 taps. You ordered a beer, bartender flipped a coin. And my best friend, Katie, she's shorter than me, so she could kind of get in. But Katie was not very good at calling the flips. We would always end up paying for those beers, but I was much better at calling flips. But you know, if there were a single file line, I think things would be different.

[00:12:26] Justin Kendall: be totally different.

[00:12:27] Matt Potts: Right. Stand in line, get up to the bar, call heads, heads, tails, pay for no beer.

[00:12:31] Justin Kendall: Hey, I think we've all been there where you're standing at the bar and somebody else comes up and you've been waiting there for five minutes and they've been waiting there for 30 seconds and they get their drink in. You don't. It can be a frustrating experience.

[00:12:44] Matt Potts: It can be a frustrating experience. And you and I are not obnoxious people.

[00:12:48] Justin Kendall: No.

[00:12:48] Matt Potts: There are obnoxious people who can do that very well and feel no shame.

[00:12:51] Justin Kendall: Yeah, I mean, we were just at the crappers conference and there was a crowded bar and we ended up being able to order. But definitely one of those experiences that if you're new to it, you don't quite pick up the social cues.

[00:13:04] Matt Potts: Yeah. So I don't know if I'm Tabbing Out on this or getting Another Round of it, but I would just like to say that I see it and I understand it.

[00:13:11] Justin Kendall: I'm the same way. And this feels a little bit like the Simpsons meme of old man yelling at cloud. And we pile everything onto Gen Z at this point. And it's like, I'm going to take this one off him. And you didn't know. Now, you know, just go up to the bar.

[00:13:26] Matt Potts: Yeah. And smile and be polite. Yeah. That has always gotten me a drink very quickly.

[00:13:29] Justin Kendall: The other thing that has come across our desk recently is the collaboration between New Belgium and Chicago's own Malort. And here is the ad copy for this. Brewed to weed out the weak and reward the rangerous, this six pack includes four cans of smooth Voodoo Ranger-Malört Juicy Haze IPA and two cans of an exclusive limited edition Malort inspired IPA with its signature bitter wormwood flavor that will leave your taste buds begging for mercy. The catch, all the cans look the same. Enjoy or don't. The concept I love because it's fun and they're doing bar events and you can just see this being something you're 21 or in your 20s and you're going out and your friends are into craft. They'd be digging this or they're into Malort. Who the hell is into Malort? Who is into Malort other than Josh Dowell? But I could see this being a fun night out where you go and you're trying it, you're doing the taste test, and then you get the malort and it's awful. And I love the concept because it's one of those fun things that this industry really needs right now.

[00:14:38] Matt Potts: How often have you malorted? That sounds like a euphemism for vomiting.

[00:14:41] Justin Kendall: enough to know the distaste for this.

[00:14:45] Matt Potts: I've done it exactly once.

[00:14:46] Justin Kendall: Yeah, I think that's probably enough. Yeah. I know that I've done it once.

[00:14:51] Matt Potts: I was in Chicago for work. It was a big work event, a lot of coworkers around, and I could see a small cluster of people all fighting over not taking the last shot that was being held up for a round and everybody else was holding their shots and waiting for this last shot to be claimed. And my dumb ass was like, I'll do it, just give me that. And then I realized why everybody was fighting over not taking it. You're right, this is a super fun idea. The cynic in me thinks that this is just a really easy way for them to get rid of Juicy Hayes cans, because they're going to discontinue it. I've seen the scan data. What a fun way to go out. If I'm wrong, I will apologize. But Juicy Hayes, fare you well.

[00:15:27] Justin Kendall: Might be a fun way to turn some trends, who knows?

[00:15:29] Matt Potts: Or that, too.

[00:15:30] Justin Kendall: I like it because there's a lot of creativity in this. It partners with a pretty well-known brand, an infamous brand at that.

[00:15:39] Matt Potts: Well, and I also feel like Malort's kind of having a moment. Is it? I'm seeing a lot of Malort content on the interwebs. And I mentioned Mr. Noel because he has a book out about Malort somewhat recently, within the past year, for sure. But yeah, his book can't be responsible for this Malort renaissance because it's happening among, like, people who I assume don't read books. But yeah, I feel like Malert's kind of having an online moment. So you're right. They're striking with a brand that's as hot as you can be as a product that everybody understands. No one wants to drink.

[00:16:09] Justin Kendall: So I'm buying Another Round and I'm hoping that you show up to drink it.

[00:16:14] Matt Potts: I will. I will also buy Another Round, theoretically.

[00:16:17] Justin Kendall: Well, with that, let's get to our featured interviews. Brice has been providing specialty malts and ingredients for nearly 150 years, and one of the companies that's been working with them from the start of the brewery is Distil Brewing in Normal, Illinois. Joining me now to chat at the Craft Brewers Conference is Ron Schroder, Brice Director of Marketing and Chief Historian. Thanks for being here, Ron. Thanks, Justin. Good to be here. And Matt Potts, Destihl founder and CEO. What's up, Matt? Hey, Justin. Good to see you again. I'm up. You're up. Ron's up. I'm up. So let's vibe check a little bit about how we're feeling at the 2025 edition of CBC.

[00:17:04] Kris Sjolander: Yeah, I haven't been for a couple of years. I was in Nashville, but I think it's been a great vibe. It's great to see our suppliers, especially Brees. We've been hanging out a lot with the Breeze team because we've had such a long relationship with them, so that's been great. Usually my goal now, because we're starting to run out of room in our breweries, is actually just go around and say hi to our vendors. You know, when we have more room to expand and add more equipment, then a lot of this will be a lot more relevant at the trade show. But it is a great time to see the longtime suppliers, brewery friends, etc.

[00:17:36] Potts and Briess: Yeah, and even though there are some challenges and opportunities in craft brewing right now, the vibe at CBC this year has been really good. It's been a great show and I think it's a representative of the resilience that exists in craft brewing.

[00:17:51] Justin Kendall: Well, one of the things I want to talk about is the brewer-vendor relationship. And this is a great place, as you've said, to make those connections, just kind of check in. But now, with everything that's going on with trade policy, it's an even better time to keep those conversations going a little longer. So, Ron, what's your advice to suppliers now on how they should be communicating with vendors?

[00:18:16] Potts and Briess: I think the main thing right now is to make sure that the communication is happening, first of all, and being upfront about what the challenges are and how the partners can work through it. And the industry has such a great history of partnership and collaboration and innovation, and it's just good to keep those conversations going and continue to look for trusted partners where you've always been able to find those solutions and be able to continue to think creatively.

[00:18:46] Justin Kendall: And Matt, you're obviously being very proactive in doing those conversations.

[00:18:51] Kris Sjolander: Yeah, all the time. We're really benefiting right now, even from a tariff standpoint or whatever. Their malt is mostly grown in Wyoming, Montana, and even Ardom makes their aluminum coils and their cans in the U.S., so we're not as exposed, I think, as some companies. But there are challenges. I mean, the costs of all of our materials have gone up so much, but Reece has been such a really good partner to try to hold those costs down for us, which has been great, even through You know, all the inflation that we've experienced for the last few years, our mall prices, even hot prices have been really stable, even through all that, which has been great.

[00:19:29] Justin Kendall: I imagine it does not hurt to have that conversation going back and forth as you clearly do with each other. Yeah. Yeah, that's right. So there's a lot of things going on in the industry right now, but I want to know what kind of trends you're both watching. And I'll start with you, Ron. You know, when it comes to specialty malts, what are the trends that you're tracking and what are the products that everybody's kind of looking for at the moment?

[00:19:54] Potts and Briess: I would say the key word is divergence. On one hand, for instance, there continues to be an explosion of alcoholic beverages and N.A. beverages. And for new products, there's been a lot of new products on the high end of ABV and also N.A. products and more sessionable styles. So it's interesting that consumers are looking for different things and on different occasions. And we heard some of that yesterday when consumers are drinking N.A. beers, for instance, they may not be an N.A. consumer, it's just an N.A. occasion that they happen to be at. And while there's continued interest in new styles of beer like sours, there's also a return to some traditional styles like lagers and pilsners. And a lot of craft brewers are making really great lagers and pilsners that are multiple steps above what we've experienced during the last, you know, 50 to 75 years in the U.S. And a lot of new ingredients as well coming in, whether they're certain types of botanicals or the hemp-derived CBD. There's been a lot of talk about that in some of the presentations here this week. And interesting to see how some of the behaviors are different across generations, too. Some of the presenters have talked about that from Generation Z to baby boomers and how those are continuing to evolve.

[00:21:15] Kris Sjolander: I'd kind of say, too, like, We were kind of caught in the trap of chasing every new trend that was out there, you know, and usually being behind the trend because somebody else came out with it like a year or so before. So whether it's our contract brewery side or just our main distilled brands like Deadhead and Wild Tower series, we've just been focusing on beer right now. Again, we need more space at a tunnel before we feel safe to do NA products, whether it's temp derived products, NA beer, et cetera. That's the only way. personally feel safe because of our distribution footprint. You're distributing beer in 43 states, we want those to be shelf-stable, anything that's NA. So I'm not comfortable leaning into that until we have the space to do it. Last week, we added a couple more tanks. We're literally full right now in our facility after only being there in the new brewery since 2017. The other thing I've noticed, at least for our own brands, we used to also chase that rotation. Everybody like, oh, I've tried that. What else do you have? What do you have that's new? And we were leaning into that all the time, more and more so. But what we've seen over the last really couple of years, people, I think especially since the pandemic, have wanted brands that they knew and trusted and have had before. And they know they're reliable. They know they're good. And so we went down from 35 SKUs last year to like 23 SKUs this year for distribution to just find focus, lean more into year-round brands which are just doing so well and have less rotators. You know, it's not like we don't have seasonals. It's just, you know, you go from like eight seasonals or eight rotators to like maybe four, you know.

[00:22:54] Justin Kendall: But you have to at this point. Distributors can't take all everything. They want less. Retailers want less. And they want focus. And that sounds like a more focused plan. You mentioned contract. I'm curious to hear what that's done for the business, like, because that seems like a game changer because it's extra volume coming in. Is that helping sort of stave off any other declines elsewhere? I know you're growing, but I mean, is that making up for anything for you? Like, how is that sort of giving you maybe a better floor than you would have otherwise?

[00:23:32] Kris Sjolander: Well, it's about diversifying your revenue, like having multiple revenue sources. Our own brands are up, which is, you know, not everybody is experiencing that right now. So our growth last year was 53% by volume, but that's not all from our own brands, of course. I think our own brands last year were up 9%, which is pretty good compared to a down or flat market. And then contract brewing was up, you know, over 100%. We kind of dabbled in it back in 2018 to kind of help out some local breweries and then In 2020, we really started leaning into it more just, again, because our restaurant slash brew pub and our beer hall were closed. So we pivoted. And if you didn't pivot during the pandemic, it spelled problems for, I think, several breweries, unfortunately, since then. Because if you didn't pivot during that and find new ways of doing things, again, you're going to be in trouble. But I think contract brewing for us is really a multi-pronged approach. It started out with just our brands and contract brewing, but then we found this interesting niche or niche, you know, depending on where you're from, which turned into more like partner brands for us. Contract brewing is still extremely relevant for us. Probably be over, you know, a third of our production, I'd say. But what's developed over the last year and a half are all these partner brands where we don't just contract brew for those breweries, we actually brew and sell their beer for them under a license.

[00:25:01] Justin Kendall: You're working with Hanson, right?

[00:25:03] Kris Sjolander: Yeah, Hanson for Mhops. I met those guys at JBF clear back in 2015, played drums with them for like three years in a row at the Beer and Music Fest, and who knew that that would grow into a long friendship. and now we're brewing their beer for them. And then we started brewing for Evel Knievel's family, Kelly, and then the biggest opportunity probably more recently, as you know, is Wrexham Lager Beer Company. That was officially bought by Ryan Reynolds and Rob McElhaney back in October. Once they start really marketing that, they've been a little bit busy with Wrexham AFC and, you know, obviously getting promoted for three seasons in a row. They have such an opportunity to tie, you know, to really integrate Wrexham Lager and Wrexham AFC, then really heavily market that in the United States. I hope we're ready for it. It'll be a challenge, but those are my favorite kind of challenges, you know, finding ways to grow and accommodate growth.

[00:26:00] Justin Kendall: And one of the things that is a hallmark of craft brewing has been collaboration. And you've talked about some of the hard times people have been through, whether it's a pandemic or whatever. But even before that, you know, there's always been sharing and collaboration within brewing. And I know Brees has jumped in and been a part of a lot of the collaborations and things. Can you tell us a little bit of why that's been important for the company?

[00:26:22] Potts and Briess: it gets back to that communication and connectedness. Whether it's our division managers on the sales team, or members of our technical team in tech services, or the Center for Malting Excellence, that ongoing interaction with customers is really important and central, I think, to who we are as a craft brewing industry. And so we love to be part of that, trying new ingredients like our new Crystal Red that adds color at just even one or two or three percent. or a new Lighthouse Munich mall that we've got this year that has the great Munich characteristics along with less color and just giving things a try and experimenting and innovating. It's exciting to be part of that. And like Matt mentioned a minute ago, one of the things that's also been exciting coming into craft brewing is some of that star power and some of the things that you're working on at Distil, along with things like the Kelsey Brothers and garage beer. And we could maybe use a little bit more of that in craft brewing to particularly engage the younger generations who might be attracted to that.

[00:27:22] Justin Kendall: Well, and craft brewing really needs an evolution, too, because it's it's not as much about the founder as it was in the past. I'm right here. I mean, I'm sorry, Matt, but you know. All right, I'm out. all industries go through some evolution in, you know, in the 80s, you know, it was King Grossman and then 90s, Sam Calagione and Jim Cook and, you know, all of this, but we've seen where maybe that's not the connection point that the younger drinkers need at this point. They've got to find something else to bring them in. And you have a lot of products that are engaging with consumers that may not have tried craft, whether it's a Rexum or, the hops or even the Illini beer that you did the partnership with the collective. And I was curious, you know, have you noticed that bringing more consumers in that maybe weren't a distill fan before, but have been brought into the brewery because of that?

[00:28:25] Kris Sjolander: Yeah, 100%. I mean, even the University of Illinois opportunity. I mean, The fact that we sell so much beer now at Memorial Stadium, whereas before you're just going in as, you know, well, you sell my distilled beer, very different experience. So, you know, looking for those opportunities where maybe we didn't have to in the industry, you know, before they were probably there. But we're also seeing, you know, I mean, a lot of colleges didn't even allow, you know, beer sales not that long ago. So now they're starting to embrace it. You know, we're brewing for three different universities now. You're introducing our Distil brand to people that, to your point, Justin, they may not have been that familiar with us for whatever reason, but you're getting exposure, whether it's like, if you're a football fan, when I say that, soccer. Could go either way. Now, we're getting exposed to people who like imports and they watch football, UK style, and you're getting exposed to a whole new customer base. And it gives even our own existing customers something really exciting, you know, that's different. You know, it's like, oh cool, you know, Distilled here in town is like now partnered with whoever and it's been fun.

[00:29:37] Justin Kendall: I want to wrap this up with a question for you on Breeze. Are there any of those new malts that you're excited about trying out?

[00:29:45] Kris Sjolander: everything they do we're interested in trying out. I gave up the brewmaster title I think in 2022 so I'm not as much on the R&D side except for the fact that you know kind of like where the direction is going for our brewery but Yeah, the more innovation they do, then the more options we have. And even for some of these collabs or partner brands that we're doing, and for the contract breweries or the contract customers that we have, a lot of them may not have been a brief customer, but when they try them, And we do a pilot with Breeze Malt instead of whatever they were using before. We're able to, you know, flavor match that, no problem at all. And it's been great to expand our business with Breeze, just even have and have them benefit from all the partnerships that we have. So, and the other thing I'll say, we're so loyal to Breeze. We've been a direct buyer since 2013. Obviously, we used it, you know, clear back to when our group hub opened in 2007 but once we became a direct buyer we just completely 100% leaned in to Greece and they've been a great partner and the fact that they have been the, you know, craft malt supplier like with all the specialty malts for so long, I mean, they were, you know, really supportive of the entire craft beer industry before anybody else, frankly. And that's the other reason that we're loyal to them as well. So, other than Ron.

[00:31:08] Potts and Briess: Thanks for that, Matt.

[00:31:10] Justin Kendall: Well, thanks for doing this, Ron and Matt. Appreciate the time. Our pleasure. Thank you. Thanks, Justin.

[00:31:18] Matt Potts: It is Brewbound Managing Editor, Jess Infante, and I am so excited to be joined by our next guest, Kris Sjolander, VP of Business Development for U.S. Beverage here at the Brewbound Podcast on location at Craft Brewers Conference. Chris. How you doing?

[00:31:32] Jess Infante: I am good. Thanks so much for having me. This is great.

[00:31:34] Matt Potts: This is great. It's so nice. You know, we just chatted a whole bunch about all of the the same places that we both really like visiting.

[00:31:41] Jess Infante: So it's great beer in all of those places.

[00:31:44] Matt Potts: Great beer in great places. Always love to have a fellow fan of the Jersey Shore. But Chris, US Beverage, I think, is somebody that absolutely needs to be on craft brewers radars, particularly today. And, you know, I've watched a bunch of deals that you guys have made in recent years and covered them, starting with, you know, acquiring you into a couple of years ago, and then forming the sales and marketing partnership with Captain Lawerence, which just hit its second birthday. These are two different situations, but they really kind of showcase what US Beverage can offer craft brewers. So for listeners who might not be familiar, how can you tell them a little bit more about it?

[00:32:18] Jess Infante: Sure, thank you. Yeah, it's, you know, we are a really well-rounded company, you know, touching a lot of different aspects of the industry. So in the case of Captain Lawerence, we have a great sales and marketing agreement with Scott Vaccaro, who's just an absolutely amazing brewer and owner. And, you know, we represent his brands not only in his home market of New York, but in other markets as well around the country. With Uinta, that's a little bit of a different situation. You know, we entered a joint venture to purchase the brewery and, you know, traditionally U.S. beverage now in our 28th year have been importers. You know, we import beer or represent craft breweries around the U.S., but that gave us the ability, especially after the pandemic, where you had beer sitting on the water from overseas for months and months. That gave us the ability to have production capabilities and that's a big deal. You know you look today with the tariffs and who knows where that goes. You know that we have a lot of calls from overseas brewers as well asking what the capacity is that are you into brewing company and So yeah, it's two different agreements, two different partnerships, but it gives people an opportunity to do things maybe that they weren't able to do on their own. And I think that's probably the overall message. US Beverage really gives brands a chance, whether it be from a sales and marketing perspective that you need help, whether it's production and capacity that you need. We kind of do everything, even consultancy.

[00:33:45] Matt Potts: Well, I mean, super helpful. What specifically does the sales and marketing partnership look like?

[00:33:49] Jess Infante: Sure. So depending on the brewery and what the capabilities are, you know, craft brewing, as you know, has changed over the years. It's gotten a little bit more local and hyperlocal in some cases. But there are brands that have the ability to get out and be regional brands that really have a strength in a particular region. So you might be currently a brewer in a home market that is doing tremendously well, and perhaps you're not interested in managing people six, seven, eight states away. So where United States Beverage comes in is we give you the opportunity to use our vast network. And whether it be regional or it could be national, We cover all 50 states. We have over 350 distributor relationships around the country. And so, you know, depending on your brand and what its ability is to travel, we can get you there. And so, you know, I'd say the strength of U.S. Beverage is in distributor management. You know, the bulk of our senior management team has spent a good amount of time on the distributor side, and that's not something that craft brewers tend to love to do. So we'll call it the dirty work, as it were, but... but managing the distributor is a big piece of our business.

[00:35:00] Matt Potts: Amazing. Now, Chris, what about relationships with national accounts? Is that something that you guys can offer Kraft Brewers?

[00:35:06] Jess Infante: Absolutely, yes. We have a chain team currently of three, and we're looking to expand that to four or five. It all depends on where our portfolio is at the time. We're not a cookie cutter that, hey, here's where our manpower stays at all times no matter what, and you need to fit into that. We're actually flexible, and if we were to partner with a brand, say, in Southern California tomorrow, we might increase the bodies that we have in Southern California to address that business. So, yeah, national accounts is critical across the industry, as you know, and our chain team handles both national regional and local chains. And then in addition to our dedicated chain team, our regional sales managers also will call on smaller groups of chains. And, you know, a lot of times those get overlooked, but, you know, a retailer with 10, 15 stores can really drive some volume for a good smaller brand. So having both the local level and the national level being covered is critical and it's something that we excel at.

[00:36:09] Matt Potts: Those local chains can be sneaky.

[00:36:11] Jess Infante: They are. They really are. Yeah.

[00:36:13] Matt Potts: Once you start learning how many different bars and restaurants are connected to each other, it's kind of like... Yeah, absolutely. Absolutely. Wild. Well, all of that makes so much sense. I know US Beverage has a vast portfolio, tons of imports. Yeah. Woodchuck Cider, if I'm not mistaken.

[00:36:27] Jess Infante: Yeah, we're super excited about that. That just started in January. So we're familiar with the cider business. We had a partner in 1911 for about eight years prior to that. And when that came to an end, you know, we were in the game for a cider partner and Woodchuck became an opportunity and I can't speak more highly of their team, which we brought the bulk of their team on and are working for US Beverage now. Just outstanding brand, legacy brand, been around for a long, long time. High quality and great people. So knock on wood, so far that relationship's been great. We're only four months in here, but we see a lot of runway ahead for us with Jugslider.

[00:37:07] Matt Potts: for sure. Now, with a portfolio this vast, what are the challenges and opportunities to managing it? I assume it's a lot of work.

[00:37:15] Jess Infante: Yes, it is. I would like to say that it's easy, but it's not. It is a lot of work. I think first and foremost, it's keeping our people trained and knowledgeable about the brands. You know, we take great pride in replicating the culture of the brands that we represent, I guess the best way to say it. So whether it's overseas, you know, a partner overseas, and I'm wearing a moose head hat here, you know, bringing our team to Canada, spending time at the brewery, understanding what the locals love about their brand, or it's a Captain Lawerence, you know, spending time at that brewery, understanding from Scott, you know, the business that he built, and then representing that business in the same way he would if he were out in an account. So I think that's where it starts and where our success begins is having a team that really understands the brands that they're representing and sells them with passion. But from then it goes to distributor management, right? And, you know, having been on the distributor side for many, many years, I understand how hard of a job they have. You know, their portfolios are gigantic and, you know, as bigger distributors buy out smaller distributors, it gets even bigger. And so it becomes harder and harder for a distributor to manage that book. And I think that's where U.S. Beverage comes in. So, you know, where there's a brand that Let's be honest, doesn't have Super Bowl commercials. They need people out and feet on the street and US Beverage provides that. So training and then distributor management, and then it's all about execution after that. So if the distributor in a particular market is struggling, we will reallocate or allocate resources to that market. It might be in the way of crew drives and bodies, but we will get into the market and work with that distributor to try and help them get their sales going with whatever particular brand it is. So yeah, I think it's a combination of those things, but not easy, but that's why we're here.

[00:39:05] Matt Potts: Got it. And in this network of what, 350-ish distributors you said? Yep. How are they mostly aligned?

[00:39:12] Jess Infante: Yeah, so that's another thing that, you know, we kind of pride ourselves on. They're not. We don't choose the AB network or the blue and silver network. We pick the best distributor for that brand in each market. And, you know, in some cases we inherit distributors, you know, having partners already. But, you know, we feel like we've managed and worked with almost every distributor around the U.S. at some point or Another Round, you know, so we don't tend to look in one particular direction. We want to do what's best for our partners. And in some cases, that might mean a completely new distributor that we don't work with. And that means more work for us having an additional call point. But if it's what's best for the brand, then that's what we're interested in doing.

[00:39:55] Matt Potts: Got it. Now, when you're considering adding a new brand to the fold, what are you looking for? What kinds of brands really would benefit most from what U.S. Beverage can do?

[00:40:04] Jess Infante: That's a good question. I think, to be honest, this business is still a relationship business, so it starts with us getting along well and having a similar vision to the management of that particular brand. And once we've established that we can have a good, strong working relationship together, then we'll start to look at the opportunities for the brand. And depending on what those are, we'll make a decision if it makes the most sense for US Beverage. We tend towards brands that hold a strong position in their markets and for one reason or another have fallen off. In recent times, we've had conversations with brewers here in the U.S. that have had to cut manpower for financial reasons, but they still have a really strong flagship brand that can do things. So those are the type of people that we look for. On the opposite side, you know, it could be somebody that is newer to the market, but exploding and they can't keep up with the growth. and they have opportunity to get outside their home market, that's another great opportunity to work with US Beverage because we can slowly and systematically expand your business for you, market to market, without just trying to do the shotgun effect. So yeah, each partnership is unique, but it starts with good relationships, and then from there we need to get to work and make sure that we can execute against it.

[00:41:24] Matt Potts: Awesome. Well, I think that's a perfect place to leave it. Chris, thank you so much for joining.

[00:41:28] Jess Infante: This has been fun. Thanks so much. Have a great rest of the show. Oh, thanks. You too.

[00:41:32] Justin Kendall: And that's our show for this week. Thanks to Jess and Zoe for holding it down here. And thanks to all of you for listening. We'll be back next week.