[00:00:00] Justin Kendall: Next on the Brewbound podcast, we talk with Garage Beer about how they're finding their voice among craft light lager brands. Hello and welcome to the Brewbound Podcast. I'm Justin Kendall.
[00:00:22] Jessen Fante: I'm Jessen Fante. And I'm Zoe Licata.
[00:00:25] Justin Kendall: And I gotta know before we get started, if you both held true to your sitting out, Drinksgiving, blackout Wednesdays.
[00:00:34] Jessen Fante: Yeah, very much so. What did I do on that day?
[00:00:37] Justin Kendall: You sat at home with a 92 ounce can, right? And just sipped it all night. I don't think I had a single drink.
[00:00:42] Zoe Licata: Yeah, I don't think I did anything on that Wednesday. Drove to my parents' house. Avoided what appeared to be a brawl at Kowloon restaurant in Saugus.
[00:00:53] Jessen Fante: You were the first person I thought of when I saw that news. There was a brawl? There was a ball.
[00:00:57] Zoe Licata: Oh, yeah. Yeah. They're fed. Just check it out. I'm sure it's on Twitter or X or whatever. But yeah, there was we we talked about Kowloon last week. It was a little more intense this year than previous years. So glad glad I missed out on that one.
[00:01:14] Justin Kendall: Well, I know the pro wrestlers love Kowloon. So is that one of the reasons that there was a brawl or is this just regular Massachusetts brawl?
[00:01:24] Zoe Licata: I think this was just classic North Shore energy in a cramped space with lots of alcohol.
[00:01:31] Jessen Fante: Wait, like legit nationwide professional wrestlers love our Kowloon?
[00:01:36] Justin Kendall: Yes. It is a major stop.
[00:01:39] Jessen Fante: Wow.
[00:01:39] Justin Kendall: Yeah. If you look on the walls, I think that there are autographs. They've done comedy shows there. I've been to a taping of the major wrestling figure podcast there. Wow.
[00:01:49] Zoe Licata: Yeah. Kowloon like weirdly is on the map somehow. This is so embarrassing.
[00:01:53] Jessen Fante: I really need to get there. I think there were Kowloon socks too. They have like a collaboration with like a sneaker brand. I was going to venture the sneaker brand, but I don't want to be wrong. And we have so many sneaker brands that are here that I don't want to say like Nike and have it be a local guy. But yeah, the Kowloon, a big deal. Yeah. No, my Thanksgiving Eve. I couldn't tell you. Picked up Cora from daycare early, got her her RSV shot because she is young enough for that. And then we came home. I don't even know what we had for dinner. So I'm so cool. The coolest.
[00:02:30] Zoe Licata: I think I've noticed more the Saturday following Thanksgiving was people doing a lot more things this year. That's certainly when we had some beverages from my friend group. Sounds about right.
[00:02:43] Justin Kendall: Yeah.
[00:02:44] Jessen Fante: Is small brewery Sunday still a thing?
[00:02:46] Justin Kendall: I think it... Is it small brewery Sunday or Saturday?
[00:02:51] Jessen Fante: Well, it was small business Saturday. So there's Thanksgiving Eve, then Thanksgiving, then Black Friday, then small business Saturday. And then the BA was trying to make small brewery Sunday a thing.
[00:03:02] Justin Kendall: Yeah. I thought they were trying to get people to buy beer before the holiday.
[00:03:07] Jessen Fante: So that's Independence Day. That's like July 3rd is like National Independent Beer Day. I know all of the beer holidays throughout the year from an old project of mine in my old life. I used to have to make this like year-long promotional planner and one page was dedicated to beer holidays like IPA Day, which is the first Thursday in August, or Stout Day, which I want to say is the first Thursday in November.
[00:03:34] Justin Kendall: I'm tabbing out on this podcast.
[00:03:36] Jessen Fante: That's fine.
[00:03:37] Justin Kendall: Before we can get to another round of tabbing out, I'm tabbing out.
[00:03:41] Jessen Fante: That's fine. I'm sure there's a day for that. It's a tabbing out day.
[00:03:46] Justin Kendall: Tabbing out Monday, which is November 27th, apparently. Well, before we get into a lot of the news and stuff, we teased it at the top of the show. We're going to have an interview with Garage Beer's new owner, Andy Sauer, and VP of Marketing, Corey Smale. They're going to be here to talk about how they're crafting a voice for this light lager brand. what it's been like taking it on, expanding it to new markets. So all that's to come later. And also we got to plug Brewbound Live because we're going to be in Marina Del Rey, California in one week for Brewbound Live. The agenda is out. It's December 6th and 7th. You can see all of it at Brewbound.com. Tickets available now. Join us.
[00:04:30] Zoe Licata: Yeah, one week from now, we'll be in full Brewbound Live mode. We'll be already moving through, I think, at least half of our schedule and there's a lot of great conversations in there talking about flagships and the E-premise and tips for working with distributors and retailers and like every Every buzzword or hot topic issue from this year that you can think of, it's going to be covered in some sort of conversation on stage.
[00:05:00] Jessen Fante: You know, it's not going to be for your holidays.
[00:05:04] Zoe Licata: Unfortunately, not. No.
[00:05:05] Jessen Fante: But if you can't make it to Marina Del Rey, which is sad but understandable, you can catch everything streaming live at brewpound.com and on all of our various social media profiles.
[00:05:17] Justin Kendall: Well, I was going to say what was going to be covered is beer industry lawsuits and that there seemed to be a lot of them as Monday's newsletter. So many. Yeah. Yeah. So let's take it from the top. And the one that really captured some attention was Treehouse. One of the investors, a minority owner in the business, 2% is suing the majority owner.
[00:05:43] Jessen Fante: Eric Granger is the investor that you mentioned. He has owned his 2% since the company was founded in 2011. claims that his co-owners who are, you know, really like the majority owners, it's Nate Lanier and Damien Coudreau, who each own 49% of the company and are still very much involved in running the day-to-day operations. Eric claims that they are being irresponsible with money, claims several breaches of fiduciary duty. He also claims that they have set up these real estate holding companies that own the land where Treehouse's many locations are, and then Treehouse pays rent to these companies they founded. That's actually a pretty normal thing to do, but he claims that they never told him about it. takes issue with that because he says that they're enriching themselves and not the company at large. Zoe, you jumped on this story with me. What else stuck out to you?
[00:06:45] Zoe Licata: Yeah. It seemed the main complaints that he has is just this lack of transparency about a handful of things and about the financials of the company. And so with those real estate companies. He also says that he doesn't even know the value of his share because they haven't been upfront about financials of the company other than whatever is mandated by the state. He pointed out that they have had significant pay raises or bonuses as well, while shareholders haven't really received anything for their share. shareholders being just him now otherwise, but there were some previous minority shareholders in the past few years that have since bowed out.
[00:07:28] Jessen Fante: Yeah. He says that there have been no dividends paid since at least 2015, which is going a ways back. And if you know anything about Treehouse since 2015, they've been quite busy. Look, we don't know because they're not a publicly traded company, but they seem to me to be immensely profitable. They mostly sell all of their beer over their own bars. They have, let's see, they've got their main campus in Charlton, Massachusetts in the middle of the state. They've got a location in Deerfield in Western Mass. They've got freaking country club in Tewksbury, which is a little bit closer to Boston. They've got another location on Cape Cod. They've got a farm in Connecticut that recently started pouring. And just a couple of weeks ago, they announced that they're going to be opening a location in Saratoga Springs, New York. Most of these are usually packed on the weekends with people buying beer by the case to take home, people hanging out and having pints. Yeah, you've got to think Eric's shares are probably worth a lot. A lot of, I think, what he has filed this lawsuit over all came to light in his quest to attempt to get his shares valued as he started looking for more information. Another thing that came up that we did a little bit of digging on is that Eric claims, as a part owner of a business that sells alcohol, to get a license to serve and sell the alcohol in the state of Mass, the owners have to file what's called a CORI information request form, which is basically a background check. He had done his some years ago for some of the new locations as they opened, and then in the process of trying to get new ones that were updated, the company They ended up saying that he couldn't be reached and they hadn't heard from him, so they just copied an old form of his, changing the city and state where the location would be. He found out about this and he reported them to the Alcoholic Beverage Control Commission for duplicating this form he had filled out. He, in his lawsuit, said it was tantamount to forgery. The ABCC did an investigation. They realized what had happened. We haven't been able to hear from him. Both his lawyer and Treehouse's lawyer each told the ABCC investigators that something is afoot here with the ownership at Treehouse made it all sound very. Kind of sketchy, but in the end, Treehouse was given a written warning and granted their licenses, so everything ended up working out. Another thing I noticed about his lawsuit is that he went through and named all of the kinds of luxury cars that he claims Nate and Damien have bought, which I feel like whenever you want your lawsuit to get attention, you do something like that.
[00:10:09] Zoe Licata: Yeah. Range Rover, Audi, Audi, however you say that one, but yeah. It's some fancy cars. I think it was also interesting to see this come out after we saw their economic impact reports come out. So we don't know anything about their revenue or profits for their personal impact, but we know what impact it's having on the economy based on those reports. And just their four Massachusetts locations have generated $143 million in annual impact to our commonwealth. And their flagship location has generated 60 million alone. So that's a lot of money from one brand.
[00:10:54] Jessen Fante: Basically, he's trying to figure out how much money he's got via this 2% ownership stake. And he says they don't want to tell him, but they're also making all these economic impact reports pretty public. So we'll see how this plays out.
[00:11:09] Justin Kendall: We don't really know the majority owner. perspective because they haven't responded to us. We'll have to wait to see what type of response they give in this suit. So definitely something that we'll be tracking. Well, let's talk a little bit about another lawsuit, and that's a shareholder lawsuit against Boston Beer. This is from the truly heyday and then downturn. So what do we know about this lawsuit? What's the latest on it?
[00:11:42] Jessen Fante: Basically that aid is over. Investors filed a lawsuit against Basim Bir in September of 2021. I distinctly remember this happening. We were in Denver for the CBC that happened in the fall and it came right at the end of the summer where it became apparent to everybody that the ceiling was falling on hard seltzer. I mean, you guys know, the past two Boston Beer Earnings calls prior to this lawsuit, company leadership was saying how they were still seeing such strong growth, Truly is doing so well, we're going to make inroads in the on-premise, and all that stuff just really became apparently not true as the course of the summer went on. So a few shareholders got together, filed a lawsuit saying that they were misled by company leaders. A judge close to a year ago dismissed the shareholder's case and said no. And just last week, another, the The Second Circuit ruled in favor of that judge's ruling, basically saying, yeah, this case kind of has no merit. And the terminology that they used was saying that Boston Beer CEO Dave Berwick and Jim Cook and then CFO Frank Smalla, who has since left the company, said that they were just expressing corporate optimism and that is not an actionable thing that the Securities and Exchange Commission can act on. They're just being optimistic and they're not really making you know, hard and fast financial statements.
[00:13:12] Justin Kendall: It was quite a swing, if you remember this, from the expectations that everybody had, the pre-build that everyone was doing in, I think it was the fourth quarter leading into Q1, where they were stocking up wholesalers. And then, you know, what was it? Six, nine months later? We're talking about obsolescence charges, they're destroying old seltzer, just wild times.
[00:13:38] Jessen Fante: Yeah, that stuff got mentioned in the original lawsuit too. They were saying that not only were they wrong about how much truly they were going to sell, but in, you know, their eyes got bigger than, I would say their eyes were bigger than their stomachs, but really their eyes got a little bit bigger than the market realities of the time. And they booked all this extra time, you know, on lines at Citi, they installed a lot of extra equipment at Citi breweries to make all of this happen. And it was that July earnings call. I remember because we covered the call and then I got on a train to go to a Red Sox game. I don't know why I remember this, but I do. And I probably had it truly at the game. But yeah, it was like we covered the call the way that we do normally. And then that's when like the non-beer media, like the regular media started hopping on this and we're like, hard seltzer is over.
[00:14:25] Justin Kendall: And like- The bubble has burst.
[00:14:29] Jessen Fante: Yeah.
[00:14:31] Justin Kendall: It's fizzling out.
[00:14:33] Jessen Fante: Yeah. Seltzer's gone flat. Oh my God. We could do this all day. Yeah. And then, you know, Trulia wasn't the only one that had these issues, but ultimately a judge said nothing they said was, you know, really could be upheld in a court of law.
[00:14:49] Justin Kendall: All right. Well, let's move on to one more headline and then we'll play another round or tabbing out. This one belching beaver laid off a handful of workers for workers on the sales staff. They're attributing this to a packaging change.
[00:15:06] Zoe Licata: Yeah, we got a new sip last late last week about some there being possible layoffs. We didn't really know what how many or what was happening, but knew it affected the sales team. And we got in touch with CEO Tom Vogel, who It's transparent that there is four people who got laid off in a couple different markets, LA, Texas included, a couple other California markets. And he said this is mainly due to them having to restructure how they approach the on-premise or trying to refocus. the off-premise because they switched all of their packaging from 16-ounce cans to 12-ounce cans this year. As part of that change, they lost some shelf space, were completely off of some shelves for a little bit while the transition was happening. especially at some retailers that weren't even selling 12 ounce packages, were only selling 16 ounces. It's led to them having to reconfigure things and try to bring that business back. is something that I would be curious to see if other companies have had to do similar things because we have seen a lot of package changes this past year or two with people moving away, I think, from 16 ounce or into either larger 12-ounce packages or variety packs, or moving into bigger sizes like those 19.2-ounce single-serve cans. It's too early to tell if this new strategy or their changes are going to have any impact on their sales, but their numbers right now are pretty rough in the off-premise. I mean, in the last 52 weeks, their dollar sales are down 38% and volumes down 40%. And that's in NIQ track channels through the first week of September. And in their home markets, it's pretty much just as rough, if not worse. So it's really hitting them across the board. And I don't think you can credit all of that to just a packaging change at all, but it's definitely had a significant impact.
[00:17:23] Justin Kendall: you can see where they're taking a hit, how bad of a hit they're taking in those numbers that you shared.
[00:17:30] Zoe Licata: Yeah. I mean, in the Pacific region, which is their home market, just the last 13 weeks, dollar sales are down 40.8% and volume is down 45.7%.
[00:17:39] Justin Kendall: And you can also understand to a degree why they made the move, but just to lose the shelf space alone, though, that's a killer.
[00:17:49] Zoe Licata: Yeah, it's a big risk, especially right now when we've been hearing that craft space in general is so hard to get or even maintain right now that kind of voluntarily saying, yeah, we're going to change it up or possibly take some space away is very risky.
[00:18:07] Jessen Fante: Being entirely in 16-ounce cans is also just a really interesting strategy.
[00:18:12] Zoe Licata: Yeah, who is it? Highwire that does this? Highwire is entirely like made their full transition to 16 ounce last year. But I feel like you don't see that many people doing it. And we've seen in the last Kraft review that we got from Bump Williams Consulting, they went into some packaging trends and it's kind of all about either 12 ounce cans or about 19.2. And the 16 ounce cans and then bottles are really in decline in terms of dollar sales.
[00:18:45] Justin Kendall: Which is a wild change from like mid 2010s craft explosion where all the hype breweries are in 16 ounce cans and everybody, you know, that's, that's what you, you went to the brewery and you left with, right?
[00:19:02] Zoe Licata: Right. Well, it's kind of like signified that it was a craft brand. If you saw it in that package format, it's like how you could really, it was like part of the identity of craft. So yeah, it's quite a switch. We've seen it's kind of been a mix. It's been due in part to people wanting to have either better value with those larger sizes or they're getting something that's potentially a smaller package size and they're drinking less of that. Or they want the bigger pack sizes themselves with smaller cans, like getting those, I don't know, what, 15 packs that we were seeing for a bit.
[00:19:40] Justin Kendall: I mean, that's absolutely what I think of when I think of Massachusetts craft.
[00:19:46] Jessen Fante: Yeah. Super New England thing. God, 15 packs. You remember that? What a time.
[00:19:53] Justin Kendall: All right, let's play another round or tabbing out. And a lot of those stories sort of fold nicely into this one, because did you all know that it is doomsday for craft beer? There are headlines out there paced for many craft breweries. The apocalypse is now you've got business Business publications that are reporting, you know, craft is 10% or Illinois has lost 10% of its craft breweries in the last 10 or last two years. Jesus can't even talk. Then you've got the basically the Bob P's of Canada saying that they're hearing that they could lose anywhere from 10 to 20% of their craft breweries. That was in the CBC, so there's a lot of like not great headlines out there right now for craft. I know it's easy to ask, are you buying another round or tabbing out on doomsday? But I genuinely wanna know, you know, why do you think right now there are all these headlines, right, that are sort of just spelling doom or gloom when, you know, we've seen these trends happening for the last several years. The closings continue to tick up. Out openings were still outpacing them though. Why is it now? Because I mean, this slowdown isn't new.
[00:21:23] Jessen Fante: Well, I mean, I think we all know that. it can be enticing to write a headline like that, like something that's provocative and gets the people going. If you don't know the industry as well as we do, I see why that happens. But we, the three of us, and I'm sure everybody listening knows it's much more nuanced than like all the craft brewers are going to close. We know there's a lot more at play here. Something that popped out at me in the Canada story that we covered a little bit of was that somebody quoted and it was saying, when the price of groceries goes up, you take a deep breath and you hold your nose and you pay for it, but when the price of beer goes up, you can very easily not buy beer. But the other thing that's happening that's been mentioned, and Justin, I know you listen to a lot of financial and economic podcasts, but something that came across one of the daily news podcasts that I listen to is that The story about the economy is bad, but the economy is in fact not all that bad. It's just the media is portraying it in a way that's bad, so consumers believe that times are bad. I don't know, but I'm sure Bart and Lester and all of our other industry economists would gladly tell you that beer is resilient and a lot of times people do see it as an affordable luxury. So yeah, things are tough. The world is scary and sad and there's not much you can do about a lot of it. But you can get yourself a little treat in the form of a 19.2-ounce can, maybe a 12-pack, heck, maybe even a four-pack. It's tough. I'm sorry, I'm rambling, but you couple all of that stuff with the realities that happen through the rest of the three-tier system, and it is hard as heck to be a craft brewer in distribution right now. And I'd assume it's also hard to be running basically a taproom brewery at a time when people aren't going out. But there's different challenges to both of those business operations.
[00:23:37] Zoe Licata: I think there's just a lot of change and transition happening with the industry right now, and whenever that happens, people start to panic, or you can very easily create a flashy headline out of it. We've heard Bart say it multiple times. Craft is just in a place that basically every other industry is in now. It's had its huge boom, and now it needs to start acting like other industries. and not everyone's going to survive and it's not going to be big forever. businesses are starting to change up or consolidate in order to respond or to make their way through. And so when those things happen, like a lot of craft sales or pulling out of distribution or trimming down your portfolio, like those all seem like scary negative things, but they might not necessarily be negative or doomsday worthy. It's just a transition. It's a change.
[00:24:37] Jessen Fante: It's like how when you have a lot of dead ends on your hair and you need to get a haircut to make your hair grow better.
[00:24:43] Zoe Licata: Yeah. You got to cut off the excess and try to start fresh and new.
[00:24:50] Jessen Fante: Yeah. I mean, the other thing is that, you know, Lester loves to say this, but like demographics are destiny and what is happening with the people is interesting. So, you know, the people who were like the core consumers of craft in its heyday, you know, basically Justin and me, like Gen X and millennials, are getting older and probably drinking less. I am a perfect example. I don't drink nearly as much as I used to for a variety of reasons, and one is just this particular season of my life, but I'm sure I'm not alone. You've got to figure out a way to, if somebody that used to have 10 drinks a week is having two drinks a week, figure out a way to make sure that you're at least one of those two.
[00:25:33] Justin Kendall: That's one of the challenges for craft at this point is drinkers like you and me are at a stage in life where what's popular right now isn't exactly what we can drink. You and I aren't going to be pounding 9.5%, 10%, double and triple IPAs anytime soon.
[00:25:54] Jessen Fante: Heck no. I had the hardest time Saturday. I went to Total Wine. and was looking for a beer to drink while I decorated my sad little Christmas tree that wouldn't knock me on my butt. And it was basically impossible. So eventually I just threw my hands up and said, F it, I'm going to get this Troggs Mad Elf Grand Cru, which is 11%, but split one bottle with my husband. So
[00:26:18] Justin Kendall: I hit a couple of craft breweries on, I think it was Friday. So I met up with my friend who owns Cinder Block Brewery. He was in town. So we stopped at Single Speed Brewing. We had a couple there and then we were doing samplers though. And then we went over to Peace Tree Brewing, which is for sale and had a couple more beers there. And then I called it because I'm old and I got to go home, but he, he was going to one other place. But when I was looking at the menu, I was definitely looking at ABV and As much as I used to love getting big hazies, that wasn't what I was getting. I was getting pilsners, like an amber ale, just kind of mixing it up.
[00:27:06] Jessen Fante: ABV is the number one thing I look at when I'm trying to figure out what beer to drink. Me of 10 years ago would be like, that girl is so lame.
[00:27:17] Justin Kendall: He and I were also talking about this too, and he said that one of the things that he's found that has really connected with his drinker base is putting on or having a family friendly place. I mean, that really just speaks to where that craft drinker of the mid 2010s is. They probably have a family now. They're probably looking for something for their kids to do, and if they can get out of the house, which. is not easy. You know, you go somewhere and your kids decorating pumpkins or they're taking pictures in a, you know, makeshift pumpkin patch or with Santa Claus or whatever it is, you know, all those things help.
[00:28:02] Jessen Fante: For sure, the place that Cora has been more than the inside of our home or like my mom's home where we spent a few weeks is the brewery in town. That is Cora's third place.
[00:28:14] Justin Kendall: Not surprised. Do you go with her?
[00:28:17] Jessen Fante: Sometimes. Sometimes. But sometimes she just rolls her stroller down there by herself.
[00:28:24] Zoe Licata: She has a long-standing tab.
[00:28:27] Jessen Fante: I have to stop by and pay it every so often.
[00:28:30] Zoe Licata: My friends aren't necessarily going to craft breweries as much, I think, right now. And that's just because it's not... You can say it. You can say it.
[00:28:40] Jessen Fante: It's not cool.
[00:28:41] Zoe Licata: No, it's not that it's not cool. I think it's just not like... Um... The experiences that we're going for instead are either a rare premium experience where you're having some fancy cocktails with really nice food and prioritizing those kind of fun restaurant experiences, or if you want some beer, you're doing it from the comfort of your home and you know that you can get it at a better value. At least here in Boston, it's freaking expensive to go out anywhere at all. I think craft breweries are probably feeling that more than anything because what are you providing? You're just providing a beverage and not necessarily as much of a food and beverage experience. And yeah, they're taking a hit for it. But I mean, I have heard recently from friends that they are also looking at ABV the most, and they're getting kind of sick of the high ABV stuff. And so it's going to be interesting to see if that continues, what that looks like, if we're going to see it in any sort of data. Because they're still going pretty strong, no pun intended, in terms of data. So I'm curious where. I want to know more about that consumer and like how sustainable that consumer is, because I don't know very many people who are going that route anymore.
[00:30:07] Justin Kendall: You're just going to have safety shot chasers.
[00:30:10] Zoe Licata: Yeah.
[00:30:11] Justin Kendall: All right. Well, let's get to our featured interview with Andy Sauer and Corey Smale from Garage Beer. In February, Kentucky's Braxton Brewing spun off its lager brand Garage Beer into a separate company as part of a partnership with brand investment marketer Andy Sauer. Joining us to discuss where Garage Beer is going now is Andy Sauer. Thanks for being here, Andrew. Thanks for having me. Also joining us is Corey Smale, VP of Marketing. Thanks for being here, Corey.
[00:30:44] Andy Sauer: Happy to be here. Thank you for having me.
[00:30:47] Justin Kendall: So Andrew, you're now listed as the owner of Garage Beer. Can you share with us how the deal with Braxton is structured? Did you just buy the brand outright now, or how is that structured? Because it was initially listed as a partnership.
[00:31:03] Corey Smale: Yeah, so partnership in that Braxton still brews it. They're still our partner in the distribution of the brand, but we own the brand outright.
[00:31:14] Justin Kendall: So how did that deal come together? What made you interested in this brand?
[00:31:19] Corey Smale: Yeah, I mean, I think the interest goes back quite a bit further than my interest in the brand. It was very much a category interest. I love the craft movement for its independence, its focus on quality, but I was always a light beer drinker myself. was one of those spaces that just always kind of nod at me that there wasn't this independent kind of focus on quality, just true light beer brand. And so, I mean, that was an interest of mine since I worked at Jim Beam back in 2012 or 2014. And it just was kind of the right time when I met Braxton to explore that further.
[00:32:02] Zoe Licata: We've been talking a lot in these past couple of years about, I think, lager in general, but also a lot of craft lager brands, and we've seen some mixed success among those. There's House Beer, we've seen Muntucky Cold Snacks has had a lot of success lately. What opportunities do you see for a brand like Garage Beer?
[00:32:25] Corey Smale: All of that still comes back to quality and consumer trust in quality. If you look across the grocery landscape what I think is has been a prevailing trend probably since 2008 is consumers want to trust in the quality of the brands they're choosing. There's more heart for an affinity for for independent brands. And within Lightbeer, there still hasn't been a huge, you know, dominant surge of presence in that space. And so, you know, we always say we take Lightbeer very seriously and very much nothing else. And so, I think our opportunity is to continue to just focus on making the best quality Lightbeer in the world and connecting with consumers kind of in an authentic way around that. and everything else, you know, can kind of fall into place over time. But that's really the opportunity we see. I think we're still very much in the early innings of what independent light beer can be over time.
[00:33:23] Jessen Fante: So Andy, you mentioned a little bit about loving light lager, and I love lagers, like really of all kinds. And every year, nerds like me are always like, Is it the year of the lager? Is it the year of the lager? So I think this is maybe a two-parter question because you're talking about keeping this like taking the beer seriously, but not being too serious about it and you know more having fun. How much are you guys leaning into like the style here? Like what's the brand messaging? Is it more drinkability or is it more like this is a lager and blah blah blah all of that?
[00:33:56] Corey Smale: Our hope is we're saying that without having to say a lot of those stylistic questions. And that's a bit of a multifaceted answer. I won't bore you with all the details, but it comes back to our North Star is beer-flavored beer. And I think what lager as a category had been forever was just that drinkable beer, that sessionable product that you could buy and have around for everybody at all times. To me, craft As consumers are aging the consumer base that built craft was aging i think the return to light was was somewhat inevitable and so yeah i think. We're kind of there for that year of the loggers people are coming back and i think there's a lot of proof points in that. I think as consumers are coming back to light beer, you're seeing so much growth as we've talked about, as the whole industry has talked about from Modelo, but I don't think that's really the end point answer, but I think that's kind of an early sign that that's coming. We lean into that style only in so far as we just want to make the best version of that, but how we talk about that isn't necessarily in a, maybe a traditional craft beer kind of way, but more of a old school beer the way your dad knew beer kind of a way.
[00:35:22] Justin Kendall: Corey, I'm curious to get your thoughts too, as far as marketing for this brand and what you see as the opportunity, since you've already been at a light lager brand and Pabst, and now you're at another light lager brand. So what do you see as the opportunity? And who are the consumers that you see the opportunity to reach?
[00:35:44] Andy Sauer: I think Garage Beer in a lot of ways is rehabilitated PBR kids of their early aughts or their mid-aughts that have grown up and are like, I don't know, maybe I'm going to race to the bottom, you know what I mean? There's an upward extension of life and mobility. It's tricky. Andy's right where we're like, yo, we take the beer seriously enough. I think that's like maybe the difference right there is the liquid is like something we are like quite proud of, you know, but then the same time like not complicating that or like trying to put it in like the life of like a craft brand like that's not really it either. So I think from an ethos standpoint, there's a lot of similarities, a lot of crossover of like, I look for a little bit more out of the beer, but I'm definitely not buying a four pack for $16.99 or something like that. That's not it. Not that there's anything wrong with that.
[00:37:04] Zoe Licata: Can we talk a little bit about regionality, where this brand is resonating? You guys have added some distribution points to Chicago, Philly, Nashville, Michigan. What kind of markets are you looking for and targeting?
[00:37:18] Corey Smale: Yeah, I think we're very Midwest rooted. We're from here. I think the the sensibility is there in sort of the ethos of the brand. Midwest is kind of that light beer land. You know, you mentioned a few other brands. I think mixed success kind of comes from trying to be a bit coastal with a light beer brand. Maybe isn't quite as resonant as it is in the Midwest. You know, I think This is maybe one of those areas where Midwest has led a bit of that trend. Craft fell off quite a bit faster here and sooner, and Lightbeard grew a lot faster here. While we are expanding, I think our view is we want to make sure our markets mirror the sensibilities and the deep-rootedness of who we're connecting with. In Ohio, a garage is a very common place where people hang out. Minnesota is a very common place where people hang out in their garages. That is a cultural touchstone. We love seeing the Garage Beer that people build. And if people are building those Garage Beer, we want to be close by. I think that's the connection. That's the ethos that kind of binds where we want to go.
[00:38:33] Justin Kendall: That's definitely true where I live, because I walk the dog around the neighborhood, and there is an absurd number of garage doors that are open, TVs in the garage, people just hanging out, chilling, drinking beer, whatever. I live in Iowa, so that's definitely an extension of that. What do you think? as far as resonating with those drinkers and those markets, you know, what, what is it about the brand that is just appealing to that sort of second wave of, or next wave of lager drinkers?
[00:39:07] Corey Smale: It comes back to something we maybe touched on a bit ago is, you know, if someone is a believer in the quality of all products that they buy, odds are if someone was a La Croix drinker and then bought a spindrift, like there will be a, a fellow consumer in garage. They were a craft drinker. They're walking the aisle to try to figure out what their light beer is now that they can't handle double IPAs anymore. I think there's an affinity we build where someone sees us and like, okay, this is a light beer that kind of gets the quality expectations I have. That's the fun of being a small brand like us. We take that liquid very seriously and that's a believable connection point between us and consumers. And so I think that's a big part of it is the independent nature of our business just sort of lends to people. They can reach out. They can talk to us at any time. They can connect with the brand in a way that they can't with some of the largest brands in the world. And so I think there's just sort of an inherent nature to that. And our hope is that every day and every message we send is we're here to support those people who have their garage doors open, that are social connectors. A big part of why we did this, I think, is through COVID, that's where I built my community. It was in the garage with the people in my neighborhood, because that was a place you felt safe. When I did this, it was like, all right, let's build a brand that stands for building strong communities. Maybe it is one beer at a time, but that's the inherent underlying goal.
[00:40:50] Justin Kendall: Corey, you've been at a brand, you've built a strong voice for that brand. How much license do you have to sort of build the voice for this brand and what do you see as that voice?
[00:41:02] Andy Sauer: Well, you know, brand voice is the reason my time at Pabst Blue Ribbon came to an end, but it was also the same reason that I do have this job, which is tight. And he was basically just like, whatever you were doing, please keep doing more of that. If you can go further, please do. And so I think that that kind of speaks to the leniency or the freedom that we have to do that. You know, at the same time, understanding our audience, You don't have to go as far, you know what I mean? I think our audience subtly goes a lot further with what we're trying to build here. just causing smaller amounts of chaos. But I think that's important, though. I mean, like, you look at like the digital space, like, I mean, we for 18 months at PBR, and we're starting to now, I mean, on 4th of July this year, we did a post to PageSphere, and that was one of our ambassadors. And like, that got numbers over every in-dev Brad Avery big beer brand in the world, like we crushed them, you know, like, and I think it's very important to have a great strategy, very self-aware strategy, especially We don't have any TV commercials for the Super Bowl. We do have the internet. We have social media where self-awareness works far greater than anywhere else.
[00:42:28] Speaker: So having the ability to know when to lean in, to be able to lean in quick, having that freedom, I mean, it's everything, you know?
[00:42:35] Andy Sauer: So I think that we're seeing success with that, not only from our own internal voice, but also like from the ambassadors and the people that we've sort of aligned the brand with. They're very much on the same speed with that communication.
[00:42:48] Zoe Licata: The digital space in terms of like brand marketing right now has become so It seems like a lot more brands are willing to have that freedom now with what they're putting out there in content. How are you still staying authentic in the things that you're doing on there? And I know it can sometimes rub people the wrong way when they think, oh, you're hopping on some sort of trend or you're like trying to be funny. And like, how is it you still staying true to that brand and still creating that consumer community without just kind of being cringey?
[00:43:21] Andy Sauer: Yeah, no, that's a good question. You know what I mean? Like, I have a friend who runs the Nutter Butter account, and he's insane. You know what I mean? Like, this kid's crazy. And they're like, yeah, keep going. I don't know. I think that, like, there's a time and a place. I feel like we reached really far, and it's kind of coming back in the middle. And I think that, like, extreme, for the sake of extreme, feels kind of more gross now than before. You know what I mean? And I feel like it also just feels, like, oversaturated. I feel like we need to be subtle than that right now in more ways than not.
[00:44:04] Speaker 1: You know what I mean?
[00:44:05] Andy Sauer: I think self-awareness has always been key, but I think subtlety right now more than everything when it comes to funny is like, it's imperative, you know? I spent a year in between PBR and this at Partyland writing stuff. And you know, we worked on a bunch of really cool brands, but like really just kind of understanding the science of funny and how that changes in today's landscape. It's a job, you know what I mean? I say it like a lot of ways, like, I want it to look like we're not trying at all. But the reality is we're trying.
[00:44:54] Jessen Fante: Corey, how difficult is it to be a funny and authentic voice? Because I have friends who work in social and digital marketing, and they get told all the time by other stakeholders, like, well, we want to be like Wendy's. And it's like, it's not that easy. How difficult would you say it is?
[00:45:12] Andy Sauer: Dude, it's an uphill battle. I mean, the funniest people are the ones that are going to be in the replies. The funniest people are not brand managers or social media managers. I mean, they're funny. It's a space where you need to be, the only funny that we want to be is the funniest at making fun of ourselves. Because we're a brand and people don't fuck with brands. It's the reality. People fuck with people that fuck with brands on their behalf, especially when you talk about a millennial Gen Z skewing audience. They've been pressing skip ad for a long, long time. They're not interested. So I think it's very critical to not try and like push the funny too hard. I don't think that that, and if you're going to like make it about yourself. So like, if you look like a lot of the memes, like all the stuff we do, it's like jorts or like Nike Air Monarchs. Like we know our audience. We just make fun of them because we are our audience. So I think that that's key. And it's tricky because there's a lot of stuff that we want to do that we're still kind of figuring out how we tow the line of like, something that's interesting, but then to not position it as a brand trying to like. delicate balance for sure, maybe now more than ever.
[00:46:42] Corey Smale: Yeah, I mean, I think the category gives us a pretty wide canvas. Beer finds itself into a lot of situations, and I think it's more about giving, almost reflecting the consumer truths back to people and letting them respond, rather than trying to manufacture it. just understanding their life inside and out. And in so many ways, this is a brand sort of created out of our own interest, which is not always the smartest business strategy, but it was a product we wanted. I think in that reality, we're like, we also have kind of found a consumer community that responds really strongly to that ethos as well. So it's kind of a let them tell you what they want to hear and sort of reflect that back.
[00:47:35] Justin Kendall: So with that ethos and with that voice in mind, how do you pick, I guess, an influencer or somebody to be sort of a brand ambassador for this brand? You know, what works?
[00:47:49] Corey Smale: I think that's again, deep knowledge of, of who they are and how they live and finding people who, again, reflect that back out. And so, you know, our consumer plays golf and they are more likely than not a Muni club, you know, Muni golfer, not a country club golfer. And when we were. kind of thinking about how do we reach that person? We had a conversation with Paige and she was like, I want to be a champion of the Muni golfer. And from that point forward, it was kind of a, all right, we get who we're talking to together. And that became a pretty quick, authentic partnership because we were both speaking to the same person and golf can kind of fit into beer and beer can fit into golf. And that, you know, kind of organically flows. Same with Richard Rawlings, like he's a car guy, guys like tinkering on cars and drinking beers. There's an organic connection point there. And so where we find those, I think it's just kind of letting them flow and making the most of those connections.
[00:49:03] Jessen Fante: Awesome. So to bring it back to beer for a little bit, I know you guys chatted a bit about distro strategy, but can we drill down into channel for a minute? Because there's a lot of different stuff going on right now out there at retail. So where are you guys looking to play? Is this a convenience move? Are you hitting a big box, grocery, all of the above? What does this look like?
[00:49:26] Corey Smale: Yeah, when we enter a new market, I think our focus is really on bringing chain accounts that are meaningful to those markets. Distributors are now getting pinged by more brands than ever. And so we view it as incumbent on us to bring the chain accounts to our distribution partners and making sure that we've got a meaningful reach in those markets before we really think about adding a new state to where we're going. And so chain is really our focus more so than independent. And so big box grocery is really the focus. And If we think about, you know, a year after COVID 2021, there was a survey done of where people are learning about alcohol brands, and it was actually grocery had overtaken on-premise for the first time ever. And so I think that sort of informs and leads our strategy in how we enter markets as well.
[00:50:29] Jessen Fante: Awesome, that makes a ton of sense. So as a newer-ish branch of the world, how are you showing up at retail? Are we doing like a big POS game, displays? What are you hoping and wishing for?
[00:50:40] Corey Smale: Yeah, absolutely. I mean, I think having strong POS is important. You know, if someone comes into the store, first moment of truth, seeing the brand in the light that we hope it resembles is the most important thing. You know, that they see it and it instantly clicks as, oh, that's a light beer brand versus anything else. You know, making sure we're executing sampling or Shopper marketing, I think are important plays. And then surrounding that market, whether it's digital or more traditional marketing means in those markets, it's kind of how we try to support those launches.
[00:51:15] Jessen Fante: Awesome. Well, that makes a lot of sense. What about on-premise? It's a wild world right now. So what are you guys doing on that front?
[00:51:24] Corey Smale: It is. And on-premise is a smaller percentage of our business, but it's still so important for how people learn about brands. And so we always try to start with, let's find the brands that most closely resemble and likely where our consumer is likely to be, kind of fish where the fish are. So we go to Illinois, there's a great account called Fred's Garage in the North Shore suburbs, and that's where people go for wings.
[00:51:53] Jessen Fante: I mean, that's perfect for Garage Beer, right? Sorry not to interrupt you, but I just got excited.
[00:52:00] Corey Smale: Sort of glove in hand, right? But the vibe of it's good too. Naughty Pine and like everything about it kind of fits what we want to be. And so that may be the best example, but it's that's emblematic of our on premise strategy.
[00:52:15] Jessen Fante: Love that.
[00:52:16] Zoe Licata: So how are you guys approaching innovation? I know you guys have your OG and then you have to have a lime as well, right? So what is that kind of like the core you're moving forward with? Are you looking to expand that at all?
[00:52:29] Corey Smale: We're done. Corey laughs because Lime wasn't even really in the plan. But when we acquired the brand, Lime had just been launched and it got more distribution because it did so well. And so it kind of came along. And honestly, it's been such an amazing part of the portfolio that it was a blessing in disguise kind of situation. Our plan was to stay focused on just making the one amazing light beer product. you know, if you're launching a business like this in this space, I mean, the Delta between where we are and where the biggest brand is, is so wide to think that you need to bolt on and do anything else is kind of crazy. But, you know, so we're, we're staying very focused just on a couple of things.
[00:53:16] Jessen Fante: That is so smart.
[00:53:19] Zoe Licata: Yeah, we've been having a lot of conversations about focus this year. It's been like the vocab word of 2023. Corey, from a marketing perspective, when you have kind of this one core beer, how are you keeping the brand fresh in people's minds and making sure they're still paying attention?
[00:53:37] Andy Sauer: I think just doing things like everything about that's not the beer, you know what I mean? Like some of us show more marketing, like we launched a campaign earlier this year in our first TV spot and it's called We're Beer For You.
[00:53:48] Speaker: And that doesn't tell you what kind of beer it is, you know what I mean? It just says like, I think really like speaking to the ethos. When building a brand, I think A, making very clear when it's a beverage, what it is is important. And then I think equally as important is being like, what is it about? Like, you know what I mean? Like light beer in itself, I don't think it's enough for us
[00:54:16] Andy Sauer: Beer For You is a campaign line that we use that kind of just talks about all the stuff that's not beer. You know what I mean? The commercial spot is a guy who part of what we're doing right now. So I think just because we have, you know, we're making waves, we have every day we're introduced to 100 to 1000 new people like getting across what we are and what we are about is very key.
[00:55:03] Zoe Licata: Thank you guys again for joining us and chatting to us about all that you're up to. Final question, what should we expect to be coming from you? Any fun partnerships coming up or anything for anyone to be keeping their eyes peeled for?
[00:55:16] Corey Smale: I mean, I think as we enter new markets, that's really the biggest thing.
[00:55:20] Zoe Licata: Any particular new markets we should be looking out for that you guys are planning?
[00:55:26] Corey Smale: I would say if you're in Michigan, we're just kind of hitting that market, which is really fun. Great time of year to get some light beer in Michigan. Wisconsin, another just amazing beer state. So excited about that. And then, you know, Chicago, Pennsylvania, Tennessee, like those are fun ones for us to be starting to hit the ground running in. So if anyone's in those states, check us out.
[00:55:55] Jessen Fante: Awesome. Well, thank you so much for joining us. Zoe said, can't wait to see what you guys do in 2024.
[00:56:00] Corey Smale: Thank you. I appreciate the time. Thanks so much for having us.
[00:56:05] Jessen Fante: And that is our show for this week. Thank you so much to our guests, Corey and Andrew. We had a great time talking with them about Garage Beer. Thank you as always to Joe, who is our one man audio team wizard, who makes this pleasant to listen to. Thank you to Justin and Zoe for everything you guys do and for this lovely little team we have going here. And thank you to everybody for listening. Hope you enjoyed the show. If you did, you know what to do. Like, rate, review the podcast. If there's anything that you want to tell us we could do better, if you want to lavish praise upon us, which I prefer, you can shoot a note to podcast at Brewbound.com and we will see you next week for a very special Brewbound Live Week edition of the podcast.
