Lester Jones on Beer’s ‘Moneyball’ Play; Carbliss Founders on Their Under-the-Radar Heater

[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. Next on The Brewbound Podcast, Lester Jones tells us why hitting the bars is important. Hello and welcome to The Brewbound Podcast. I'm Justin Kendall. I'm Jessica Infante.

[00:00:49] Zoe Licata: And I'm Zoe Licata.

[00:00:51] Justin Kendall: And this week, we're going to bring you two interviews that we recorded at the NBWA's annual convention in Las Vegas. We're going to bring you an interview with the previously advertised Lester Jones, the chief economist and VP of analytics for the NBWA. And he told Jess and Zoe why socializing is more important than ever.

[00:01:12] Zoe Licata: He did. It was nice. I like the idea of it. I don't get to do it a lot, but I'm glad that other people do.

[00:01:19] Justin Kendall: I know the feeling. It's like, I want to go to a tavern, but I have responsibilities. I'd like to go out to eat too, but we need a good babysitter.

[00:01:29] Zoe Licata: We do that, but it's a real roll of the dice. You guys will be back there one day. One day. I took her to IHOP on Sunday after gymnastics and swim. And by her, I mean my two-year-old daughter. First of all, she thinks the word IHOP is hilarious. It's like the funniest word she's ever heard. It is a funny name. Our usual diner was way too full. And I said, we're not waiting. You're not going to last. I should have just listened to my original gut of just go home because it was a wild time. I got headbutted in the mouth. Wow. Yeah. She calmed down. People were looking. I'm like, look, we're at an IHOP. This is a baby. I feel like you expect babies to be a little wild at IHOP anyway.

[00:02:14] Justin Kendall: I mean, you expect babies to be wild in general, but like... Wasn't there a meme at one point of IHOP workers being required to brawl? Like they had to be proficient in brawling? Oh, it's Waffle House. Sorry, IHOP.

[00:02:29] Zoe Licata: But yeah, no beer sales at the IHOP.

[00:02:33] Justin Kendall: For good reason.

[00:02:38] Zoe Licata: It was a great chat with Lester.

[00:02:40] Justin Kendall: Yeah, it was. And Zoe has an interview with Adam and Amanda Kroener, the founders of vodka cocktail brand Carbless.

[00:02:48] Zoe Licata: Yeah, we got to talk to the lovely married couple and co-founders of a brand that has been really taking off the past few years. And we were chatting both in the interview you listened to and before the interview about just how much their brand has changed since they were first at NBWA. They had a little booth set up like five years ago that they were kind of going around trying to find people to come over to. And this year their setup was insane. It was a massive like floor-to-ceiling setup and it was probably one of the most popular booths, if not the most popular, other than maybe the Guinness area the entire week. So they have had quite impressive growth and both consumers and distributors are really, really interested in it right now. Yeah. Yeah. Yeah. That was bumping. Yeah. Yeah. We had a really good chat about just their, the expansion they've done this year and what they're looking to do or continue to do moving forward. It's a spirits based brand, but they've worked with a lot of beer wholesalers. So we also chatted a little bit about that. So yeah, really fun chat.

[00:03:58] Justin Kendall: Well, they are a brew bound live rising star. And if you want to be considered for one, You can, uh, make your nomination. Now, this is the last week that we're accepting nominations for the brew bound awards for 2025. So check that out at brew bound.com. Also, we're still selling tickets to brew bound live, and we have some new speaker announcements to make Zoe. We've locked down a tap room panel and you've got all the details.

[00:04:27] Zoe Licata: Yes. I'm very excited that we got this together. We have had numerous conversations over the past year about the strength of taprooms and how a lot of folks are kind of really focusing in on certain areas or pulling back on some taproom locations, others are expanding into what's happening with that space. So the three folks that we have talking about their various taproom strategies in their different regional areas, we have Andrew Berman from Otherhalf, who we recently talked to a couple months ago about how they have learned a lot kind of in the past year about how different regions have been responding differently to revisiting the on-premise, going to tap rooms, what has had more strength over others. We also have Adam Charnek from Highwire, who you may have heard on the podcast earlier this year. They're based out of Asheville, which they kind of had to do a big reopening of their Asheville location after Hurricane Helene. They've also pulled back on some of their locations. So they have tons of tap rooms, but now they're trying to narrow it down more to the strongest ones. And the third one running at the list is Tiago Canero, who is from Novo Brazil Brewing in San Diego. I got to talk to him a couple of years ago for a hard kombucha conversation. But in that conversation, we talked a lot about the creation of communities with their tap rooms and trying to connect with consumers based on creating that very experiential, very ambient sort of space where that is a community gathering space, whether it's their Novo Brazil brewing actual beer tap rooms or some of their hard kombucha spaces. So yeah, hitting all areas. We got East Coast, West Coast. We got a lot going on, so it's going to be a fun chat covering a lot of different strategies to really strengthen your tap rooms.

[00:06:19] Justin Kendall: Very excited for that. And we've got a whole lot more coming to Brewbound Live, so keep an eye out at Brewbound.com and also brewboundlive.com. Let's get into the news. And Jess, I want to get into a story that you covered on Monday, and that was Brooklyn Brewery is outsourcing its sales team or sales efforts to US Beverage.

[00:06:42] Zoe Licata: Yeah, Brooklyn has tapped U.S. Beverage to lead their sales both at the, I think all levels, the National Beer, the regional level. And they're far from the first craft brewery to strike up a similar deal with U.S. Beverage. They've been on a bit of a tear. It started back in 2023 with Captain Lawrence. They signed a sales and marketing partnership with them, their regional craft brewery out of New York. They also have added Vermont hard cider, thinking like Woodchuck. Evil Genius, which is based in Philly, Rogue out of Oregon. I think we can probably comfortably say that Brooklyn is the largest brand with the biggest footprint they've taken on for a relationship like this. Brooklyn right now distributes to 30 states. And in the press release about this new arrangement, Brooklyn President Robin Ottoway said that through US Beverage, they have the ability to scale up to all 50. I checked in with the spokesperson who told me they're going to assess and take a wait and see approach, which I would advise, not that I really know what I'm talking about here, but I don't think there is really much heart across all three tiers for any craft brand that's not nationally going National Beer days, right?

[00:07:46] Justin Kendall: I think it's very few and far between. That window is not wide open.

[00:07:51] Zoe Licata: No. And I think just the most surprising thing here to me was that we have Brooklyn, the ninth largest craft brewery in the country. opting to outsource its sales. That to me seems... I assume they probably ran the numbers and realized that this was the way to go, but now you're in a book that's much, much larger than just you. In addition to those relationships that they have with craft breweries, US Beverage is also an importer and they've got a lot of import brands, a couple other RTD brands. No, they're, they're real busy, but I assume they presented a situation that Brooklyn couldn't say no to. Brooklyn's been on a bit of a growth bender, you know, 2024, they grew volume 3%, but that was the first year in a while that they weren't putting up, you know, double digit numbers. 2021, they were up 18%, 22, they were up 28%, 23, up 19. So they seem to be doing well.

[00:08:49] Justin Kendall: I'm very curious how much that stays at home.

[00:08:52] Zoe Licata: They distribute to 30 states, like we said, but also 26 countries. That feels to me like a good question for Matt Gasiak at the BA, so I will be asking him. But there's not too many craft breweries that the BA reports their data that are doing that. I think Brooklyn's definitely a unique case in that regard, that they have this international cache that a lot of other craft brands don't. They've also found a lot of success with their non-ALC portfolio. So they've got different avenues for growth. I mean, we just talked about their overall volume being up, which is good, but I also took a peek at NIQ data provided to us by Three Tier Beverages. And in the 52-week period ending October 4th, off-premise dollar sales of Brooklyn's portfolio have declined 19.7%, volume down even more, 21.4%. However, scan data does always need several very large caveats, and I am absolutely not going to skip them here. NIQ's data set does not include the on-premise at all, and Brooklyn's strongest markets are really heavy on independent retailers, which don't always get picked up in NIQ.

[00:10:00] Justin Kendall: They've been trying to solve this sales puzzle for a while. They once had that national sales platform with 21st Amendment and Funkworks, and that didn't work out. that led to layoffs. Presumably this is going to be the similar situation here.

[00:10:17] Zoe Licata: Yeah. I mean, that platform that you're talking about was back in 2017 when nobody was really doing similar things. So they clearly like they, they had the foresight to explore the idea of sharing services, but it just didn't work out. But those are three super different brands, you know? Yeah. I would find it probably hard to find synergies even in terms of like market overlap. So again, nobody would confirm to me how many salespeople are affected. I did ask US Beverage about their sales team, and it's fairly robust. They've got 52 sales and marketing reps across the country, but they've also got a pretty big team supporting that. Five marketing people, four division directors, 12 regional directors, and four chain key account managers, and several sales activation specialists, which is a lot of people. but they've got a lot of brands. Yeah, it's like this weird balance where we're also at a time where I feel like we're hearing a lot more from wholesalers that they want more communication, they want more collaboration, wholesalers and retailers. And some of those folks that are dealing with more brands have some of those better relationships, may be able to do more things, collaborate more, but also they're dealing with a bunch of brands. So how much can they prioritize you over some others? It's something you have to balance out and see which, if it's going to work for you or not. Right. I know it can be really difficult at the supplier level to get the mind share and buy-in that you need from your distributor reps. To me, this just feels like an extra layer in between that. Yeah. So getting buy-in with this team of people that you have tapped to sell your brand who don't work for your brand. Does that mean we have four tiers now? Yeah, kind of.

[00:12:07] Justin Kendall: And then you wonder if U.S. Beverage is done here, if they're looking to become sort of that outsource sales force for essentially the industry, right?

[00:12:21] Zoe Licata: Yeah. I mean, I think they would love that. You know, we talked to Chris Sholander from their team during our CBC podcast interviews, and he said they are happy to recruit and He pointed out that they deal with both ends of the spectrum. If you have so much, you're moving so much volume that you can't keep up, they're a great way to tap into their sales team to be able to keep everything flowing into the market and make sure that you can maintain your momentum. And on the other side of the spectrum, if you are in a downturn, you can absolutely tap into them once again to get that sales support that you maybe don't have. But at what point is too many brands too many? And the other thing to me that's interesting here, we talked about their importing, but they also own Uintah. So they've got a bunch of different business models going on. These partnerships outright owning Uintah and importing a bunch of stuff like beer and Moretti and Tiger beer. And I want to say Erdinger too, a vast brand portfolio.

[00:13:23] Justin Kendall: We've spent a lot of time talking about this and I think that there's a good reason for that. And to me, this is going to be one of those maybe under the radar stories of the year that is really just. A flashing red light of where the industry is heading, because this is a top 10 craft brewery that's doing this right.

[00:13:42] Zoe Licata: And this model, it gets replicated too, right? You know, like we saw Hendler Family Brewing, you know, the parent company of Jack Sabby, they signed a similar sales and marketing agreement with Sloop out of New York, another really popular regional brand, to do exactly this. They're not buying Sloop, but they are contract producing and now they're also going to help sell and market it.

[00:14:00] National Beer: 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.

[00:14:20] Justin Kendall: Well, let's talk a little bit about Beatbox and they are branching out from Party Punch and getting into Chilitas. And what is a Chilita? It is not a gelada, despite the name, and it does not have tomato or beer. It's an FMB and it's going to come in at around 8% ABV. I believe there are four flavors all in single serve 19.2 ounce cans, and it'll be hitting eight states to start.

[00:14:50] Zoe Licata: Yeah, Justin, you had this story and it made a lot of sense to me in terms of, you know, the Beatbox crew looked at popular flavors among second generation Latino consumers. And that's a huge demographic block and they have preferences and Beatbox realized there was an unmet need. So enter Chilitas.

[00:15:12] Justin Kendall: They have, for a very long time, been looking at this tahini, chamoy, sweet, salty, spicy flavor and trying to figure out the right product for the right liquid for this. And they think that they've finally got it. So several years in the making, they've been putting this together over the last eight months or so, and they're going to be ready to go with this in February. That's fast. Yeah.

[00:15:38] Zoe Licata: Yeah, I really need them to bring it to Massachusetts because I really want to try it. I am a fan of gelatos, so I'm curious to see how the no tomato, no beer flavor tastes and how it compares. And speaking to so many things that we've been talking about, it's kind of higher ABV, it's flavor forward, it's fruit and spice flavors, which are like two of the most popular flavors right now. doing it in single serves, like it's hitting a lot of boxes or checking off a lot of boxes. And so it makes a lot of sense. I think the marketing of it is going to be crucial, which is beatbox. They know what they're doing when it comes to marketing a lot of the time, but really getting the message across of what this product is. But it seems cool. I agree. It seems cool. Sounds tasty.

[00:16:26] Justin Kendall: And they worked with what they're calling the drip committee, I believe it was, which is around 25 Latino influencers. So they would meet monthly with them and they would help sort of guide them through what liquids work, what branding worked. Then they'd have an ongoing discussion over text. I was told they very much have a voice in this and they will have a bigger voice in this going forward once the product hits. should be fun to see because there was a very short-lived hard seltzer that they launched, and I think that we've all sort of blacked it out in the post-pandemic.

[00:17:07] Zoe Licata: I mean, that's ideal, though, to have, you know, the general public and also the trade journalists memory hole your failed product.

[00:17:15] Justin Kendall: For sure. Well, let's very briefly talk about the Surfside skimmers lawsuit, which I think a reel from our podcast might end up in Discovery, over.

[00:17:27] Zoe Licata: Oh no. Yeah.

[00:17:30] Justin Kendall: You ready to be subpoenaed?

[00:17:34] Zoe Licata: Yes. Yes, I think so. I will not give up my sources, but my source on this story was the court documents, so that's not a problem. As we all, anybody with eyes, noticed in April when Anheuser-Busch launched Skimmers, their vodka-based tea. I didn't actually write this into the story and I kind of forgot about it, but I realized it going through their packaging and all their artwork. They do call out the fact that they use cut water vodka in this tea, which I thought was interesting. But it looked real close to the design on Surfside cans using a white background for the base. color blocking bars at the bottom that I at first typed had an ombre effect, but that is not what they said in the lawsuit. So I took that out and then a ring around the top of the can. It looks super duper similar. And we also talked a little bit about how Suncruiser has also similar elements, but they did not catch any strays in this lawsuit, not mentioned once. I think we mentioned at the time that the skimmers kind of looked like someone like plugged in Suncruiser and like Stateside and everything and put them into like chat GPT or an AI creator and was like, hey, make our own version of a vodka iced tea. Yeah. The spirits based tea segment is super dominated by four main players, none of whom are skimmers. I mean, we'll see what the judge thinks. We'll see how this lawsuit plays out. Surfside really did not mince any words saying that Skimmers was very obviously trying to ride their coattails after they built this massive nationwide brand from the ground up in a very small amount of years. Yeah, which can't blame them, I guess. It's been one of the big bright spots within Bud Light right now. I almost forgot about Skimmers because we didn't hear much about it after the release. It's like Bud Light's thoughts are all over again, right? Like Surfshide and Suncruiser are mostly in a lot of the same wholesalers, which are mostly the Molson Coors network and the AB network, depending. didn't really have an answer to that. So AB barfed up this product to be able to compete.

[00:19:58] Justin Kendall: Well, one of their largest wholesalers just bought an AB wholesaler, so there's that.

[00:20:03] Zoe Licata: Yes, one of Suricide's largest wholesalers just bought an AB house. Yeah. Justin, do you want to tell the people about that? Oh, Fedway? Right.

[00:20:13] Justin Kendall: Fedway bought Richie & Page, which... Our New Jersey quotient has been met for this podcast.

[00:20:20] Zoe Licata: You know, and it wasn't by me.

[00:20:25] Justin Kendall: Well, there was a tie, so we had to bring it in. And before we get to our featured interview, let's talk a little bit about the latest celebrities to get into non-alcoholic beer. And this is according to page six. And that's George Clooney and Randy Gerber and Mike Melvin, the folks that brought you Casamigos. And now they want to do a non-alcoholic beer.

[00:20:51] Zoe Licata: Well, I mean, look, is anybody who is not an A-list male actor allowed to make a non-alcoholic beer?

[00:20:57] Justin Kendall: I wonder if there will be motorcycle riding in Mexico to advertise this as well.

[00:21:05] Zoe Licata: There very well could be. Yeah. It is funny that it is. Is non-alcoholic beer now the new tequila for celebrity endorsements? Yeah. Well, I mean, look, this is what moderation hath wrought.

[00:21:18] Justin Kendall: But isn't anybody getting rich in non-alcoholic beer?

[00:21:21] Zoe Licata: I think it's too soon to tell, but I don't necessarily think so at the very moment. Well, you know, like celebrities and spirits has long been a thing. Celebrities and beer really never. Right. And now here we are, I suppose.

[00:21:39] Justin Kendall: Yeah. We had like Sammy Hagar and I guess Hulk Hogan and the Kelseys now.

[00:21:45] Zoe Licata: Yeah. I mean, this has been a thing in like the past, like two years.

[00:21:49] Justin Kendall: Yeah.

[00:21:50] Zoe Licata: Is it because craft beer had its own like celebrities? I don't know. I don't know. It is very odd that it's happening at this moment of beer. I don't know what, Like if it's people in beer being like, this is how we're going to reinvigorate the category is by getting bigger faces. Or if it's just the people outside of beer not fully understanding where the category is and still thinking it's a massive opportunity. I think people saw Athletic and saw that non-alcohol beer is a growth story, but failed to realize how small it is. And then I think they also see, you know, non-alcoholic beer affords, you know, routes to market that other beer cannot have, you know, like the DTC component. So celebrities can probably do a lot more lifting on that end in terms of directing people to the brand's websites and all that jazz. I assume some wholesalers maybe don't give a fig that you're George Clooney. That don't impress them much.

[00:22:54] Justin Kendall: Will George Clooney be on stage at NBWA next year?

[00:22:58] Zoe Licata: Maybe. Maybe. Maybe he'll zoom in just like Jason Kelsey.

[00:23:03] Justin Kendall: All right. Well, let's get to our featured interviews this week. This is Justin Kendall with the Brewbound Podcast, and I'm here with Jessica Infante. How are you doing, Jess?

[00:23:15] Zoe Licata: I am doing all right, Justin. How are you?

[00:23:18] Justin Kendall: I'm doing well. And we have an esteemed guest. I feel like we're doing this every year now.

[00:23:23] Wholesalers Association: Yeah, we should. It's good. It's always good to catch up. As long as you're not keeping score, what I said last year. No, it's like, hey, you said last year, now here we are this year.

[00:23:33] Justin Kendall: I hate to bring it up, but Joe, roll that tape. You guys aren't recording this, are you?

[00:23:42] Zoe Licata: Oh my God, Lester ran away.

[00:23:44] Justin Kendall: And if you couldn't tell, it is Lester Jones, the VP of Analytics and Chief Economist for the National Beer Wholesalers Association. Thanks for doing this again. My pleasure. Thank you for having me. So you've gotten really good at going fast at this conference.

[00:24:01] Wholesalers Association: Well, you know, that came from the Beer Institute days. So back in the Beer Institute, we were always trying to manage that annual meeting and it always got down to, oh, you're going to have like 15 minutes. Oh, you got 20 minutes. Oh, you got 30 minutes. They always use the economic industry insights as the kind of as the squeeze there to keep things going. And, you know, we had some pretty good high profile high caliber guests on stage. So you can talk, you can guys can talk and listen to me anytime. So 10 minutes was good. And we kind of delivered the message, which I thought was most important here instead of dissecting individual slides and components of the industry.

[00:24:39] Zoe Licata: It was very generous of you to cede your time to Jason Kelsey.

[00:24:43] Wholesalers Association: Yeah, of course. He'll thank me at dinner tomorrow night when I'm hanging out with him.

[00:24:49] Zoe Licata: You getting invited to the wedding?

[00:24:51] Justin Kendall: No. You're the reason they booked him, right? You're the connection.

[00:24:55] Zoe Licata: Maybe you could be the ring bearer.

[00:24:58] Wholesalers Association: Yeah. I look pretty in pink.

[00:25:04] Zoe Licata: I believe that. Yeah. I don't know if you've done this intentionally, but to me it seems as though one of your core messaging tenets over the years that we have known each other is finally front and center throughout this conference this week, which is we are social creatures and we like to be together.

[00:25:22] Wholesalers Association: I know it's taking so long to get here, but I think it's important. I mean, beer in and of itself is a volumetric product. You invest in capital, you invest in equipment, you invest in these things and you want to make more and more and more of it, right? And so where do you put more and more of it? You put that into the... off premise, stack it high in grocery stores and big box retailers wherever you can. But the reality is, it's kind of like I said there in the middle there, it's the money ball. You know, the sociability accounts, the places where people go to be together, that's money ball. That's where you want to get What was it? Hattie Berg on first. You know, we don't play Pena. Pena's the hero. He's the home run guy. But you need to get on first base, because the more first base hits you get, the more runs you get. And that's fundamentals of Moneyball. And so while we spend a lot of time as an industry looking for the home runs in the off-premise, which are, I want Walmart, I want Kroger, I want H-E-B, I want 7-Eleven, I want Crick Trips, I want Buc-ee's, you know, that's where the all that beer goes and you get so much of it, you kind of lose sight of that one at a time, which is the beautiful thing about the on-premise, the sociable nature of the on-premise, and how those brands get introduced to people. And it's great to see people talking about that more.

[00:26:43] Zoe Licata: So if I hear you right, a Walmart placement is a home run.

[00:26:48] Wholesalers Association: Absolutely.

[00:26:48] Zoe Licata: But a nice like on-base single is a draft placement at your local pub.

[00:26:52] Wholesalers Association: Yeah. We can go looking for home runs all day long, but at some point you got to have the base hitters. You got to have the guys that when they step up to the plate, you're gonna move the game forward.

[00:27:03] Justin Kendall: You can't have a grand slam unless you get three runners on.

[00:27:06] Wholesalers Association: This is true too, you know. You've heard me complain about this before. I mean, Kraft, you know, isn't a funk, but Kraft kind of started, they had Moneyball early on, right? They had the on-premise, they had, you know, their 40, 50% on-premise, you know, but then they adopted the can, they adopted the big pallets, and they started looking for that volume that they need. You need the volume to pay for the capital equipment and the investment. And we lost sight. That's a balance there, that equilibrium that I like to say. Searching for equilibrium. What is the right balance between on and off premise? How much should I be investing in getting singles, getting people on base versus hitting that grand slam with a Walmart account?

[00:27:48] Zoe Licata: I asked you this a few months ago and your answer was not yet. But now that we are several months removed from that time, has Kraft hit the bottom?

[00:27:59] Wholesalers Association: Yes, I would like to say. It feels like it's hit the bottom. I mean, you know, we do the beer purchasers index every month. For me, it's a sentiment index, thumbs up, thumbs down. I've had a lot of thumbs down. Now I'm getting thumbs in the middle. That makes me feel better. You know, that people are either not ordering less, they're ordering about the same, but still low. I'm still not getting a bunch of thumbs up. We need to pay attention to it. But also if we also have fewer, we have people exiting the industry. I'm getting a lot of crap for sticking to my guns on 2.5 gallons of ethanol, but I'm going to stick to those guns. And you know, that pie, that ethanol pie was split too many ways. I mean, there's too many people eating smaller and smaller slices of pie. And when we got through COVID and we got through all that stimulus and all that propping up of all these businesses that kind of shouldn't have been there in the first place. So there is some weeding. So as the players pull away and there's fewer players remaining, those guys will be stronger. That's a little bit of creative destruction. But for the most part, I'm hoping that some of these brewers recognize that and they're like, yeah, I mean, the strong will survive and they will be healthier as we go through this culling of the herd. Is that too draconian?

[00:29:20] Zoe Licata: It's a little dark, but it's okay.

[00:29:21] Wholesalers Association: It is pretty dark. I can get dark sometimes. I apologize.

[00:29:24] Zoe Licata: Dude, I thought of you one day over the summer, and I almost texted you, and then I was like, it's Friday, leave him alone. We went to the boardwalk to take, like, my daughter on some rides, and the boardwalk has a bar now. You know, you said beer was popping up all these places where beer didn't really belong. I don't know how I feel about beer belonging on the boardwalk. I lean toward yes, but you could just buy a pint, walk around, see the kiddie rides.

[00:29:48] Wholesalers Association: Yeah, I mean, you heard me rant and rave about this forever, you know, beer was everywhere at a point in time, you know, it went really too far and we had way too many accounts, we had way too many places that were trying to capitalize on that beer and it spread things too thinly. You know, and now that things are coming back into balance, you know, some of those players will, will be more profitable and more successful. And hopefully that allows us to grow the industry and grow volume and occasions as well. And, you know, we don't have to, we can talk about occasions, but yeah, growing the occasions are just super important.

[00:30:23] Justin Kendall: What's missing in that equation of growing those occasions? I mean, are we missing the marketing that needs to be there? Is there something that is missing in forging that connection with the consumer right now?

[00:30:36] Wholesalers Association: I think it goes back to making beer the best choice. I was talking with Brian Sedano. I don't know if you know him. He used to be with Beverage Market Corporations. He's out on his own now doing consulting, but he's a beverage consultant. So he's beer, wine, spirits, water, energy. He knows everything about liquid refreshment. And when you think about the day, you think there's only 13, 14 drinking occasions in the day. You know, coffee in the morning, a little juice, some milk. You move into the mid-morning, maybe get an energy drink or a soda or something like that. You get the lunch, you get the, you know, if you look at the drinking day parts, the opportunity for day parts, you know, how do you squeeze beer in there when there's so much other liquid to choose from? And that's what that Scarborough data that I showed was so important. I mean, there are more people who've had a beer in the past 30 days today than there were 10 years ago, period. I mean, that's just a function of the population. And the people, the 40% of the people say, yeah, I had a beer in the past 40 days. The problem is they've had a whole bunch of other things in the past 30 days, too. So, you know, beer's the beverage, needs to make itself more prominent when it comes to people choosing it as a refreshment opportunity. And that's why I go back to sociability and being together and hanging out and making beer. I love the low strength stuff. I live down in Austin, you guys know that. I hang out at Live Oak. They have plenty of low, they've had it for a long time. Low ABV sessionable table beers. They've had these products for a while. And that's what you tend to drink as a liquid refreshment. Granted, we got a little too high. And there's a balance. I love seeing some of these higher ABV products come out. But then at the same time, we see the lower ABV. And you guys take a note that there's this bifurcation in our industry of high over here, low over here. And where does all the middle stuff, where does all the 4.5, 5% end up when there's a whole bunch of 2.5, 3, and a whole bunch of 7, 8, 9, and 10? But we've got a market. Market will find a nice equilibrium, I think. Just give it time.

[00:32:50] Zoe Licata: Another thing that I know you are big on is sometimes it's too hot to drink beer.

[00:32:55] Wholesalers Association: Oh yeah.

[00:32:55] Zoe Licata: So how much of that did we see this year?

[00:32:58] Wholesalers Association: A lot. I mean, we had, you know, you know me, I go to, I go to Austin City Limits Festival every year and it just keeps getting hotter, you know, and liquid death is prominent. It's out there. And the liquid, the big cans of liquid death are, I think, $5. And the big cans of mineral light and bud light and Coors Light are $20. So, you know, it's hot and expensive beer is expensive and cheap water, you know, expensive water, which should be free, is for some magical reason still crushed it. So heat is definitely for me a big factor. I think, you know, people need liquid refreshment when it's hot and you're outside. I think it's a driver.

[00:33:37] Justin Kendall: When you're there, are you taking note too of the number of people who are drinking beat boxes or some of those other beverages?

[00:33:44] Wholesalers Association: Yeah, yeah, yeah. Beat box at a booth. You know, there are a lot of crushed beatboxes on the ground. And yeah, I just did a panel with Heather from Beatbox. And we were, you know, I was talking about people want to be out. They want to be sociable. They want to have fun. And she's like, that's what we are. And that's one of the reasons we're successful. They got a nice little package that's fun and people like it, you know. And I know we got the shoots in there with Party Bomb. Party Bomb. You know, I was in there hanging out with those guys yesterday, tasted some of that. It's clever, it's fun, and I think as long as we promote sociability, we promote fun, we can win. But I think everyone's kind of got to do it, and we've got to do it collectively. That's why we do beer first. That's why NBWA got sick and tired of waiting for the suppliers to get their shit together to kind of figure out a way to move the industry forward. NBWA said, okay, let's figure out what beer distributors can do in their interactions with beer retailers for them to think about putting beer first. We don't need to move 100 million consumers. Let's try moving 50,000 retailers. Because those retailers will interact with consumers, let them do their work. So if we come to the retailer table where we have a much manageable audience to work with, our chances of success improve.

[00:35:09] Justin Kendall: One of the things that we didn't hear a lot about on stage was THC infused beverages. How much of that do you think is cutting into beers occasions?

[00:35:21] Wholesalers Association: I personally don't know. I mean, certainly cutting into shelf space and retailers certainly are engaged in, you know, have a certain amount of FOMO. They don't want to be left out. So there is a certain amount of exuberance in here. We've seen this, we've seen it in seltzers, we've seen it in ciders, we've seen it in hard sodas, now we see it in RTDs and now RTDs, and now we see it in hemp beverages. You know, retailers don't want to be, retailers are retailers, they're on the front line with consumers, they don't want to be the one that doesn't have the product. They want to have the right, the fear. FOMO is live and real in the retail community. So they're asking for them and they're putting them on. The ones that will do it, you know, I just think we just saw Target decided to do it. They're all, we're missing sales. People are coming in and asking for it and we don't have it. We better put it on. So that's a, that's a fear of losing a sale. And for a retailer, that's significant. But you know, at some point we have to cycle. You know, there's no, for me, when I look at the industry, there's no clear brand leader in this segment. There's a whole bunch of individual kind of suppliers. It seems very much there's no clear, you know, double digit share leader in this industry. It seems very much that there's new people coming in constantly. I think it's just a matter of time before we see, oh wait, before we saw a big brewer, we just saw Quirk Seltzer enter. I mean, I think they're, you know, they classify as, you know, top 20, I guess, boulevard. Higher than that. Higher than that if you throw in Firestone to the... Exactly. So, you know, when do we see, you know, I don't think we'll see White Claw, the Marc Anthony brands go into it, but, you know, who's the next? Is it, is it A, B? Tilray's doing it, right?

[00:37:13] Justin Kendall: Oh yeah, of course Tilray's doing it. Like 13 states, I think, right now.

[00:37:17] Wholesalers Association: Yeah, they're going to do it where it's legal. So, you know, once again, we've seen this, the rational exuberance and novelty of a new product, of a new segment. far exceed the demand that goes up and it goes down. I'm already getting a sense out of some of the data that Minnesota's probably already peaked a little bit.

[00:37:33] Zoe Licata: You think so? I think so. Interesting.

[00:37:36] Wholesalers Association: And so, you know, there's some other states that now that it's out, but then again, it's super risky, guys. I mean, look at Ohio. Yeah. I mean, look at Texas. It was 1130 at night. You know, it was half an hour before it became law that he stroked the pen, right? And, you know, it could have ended that very quickly and outlawed it completely, made it even worse. So, but, you know, Ohio is now up there and we just don't know what's going to happen behind closed doors with the loophole. So risky, risky, risky. But, you know, once again, Beer's down. I need to make some money. These people want it. I can put it on my truck, sell it to them. And then, you know, if it's not here tomorrow, oh well. I mean, a couple of beer distributors have lived this life with the non-Alcs, you know. Well, what was Ghost? What was Alani? You know, these things have been, these non-franchise, non-Alc brands have been, they built them and lost them as, you know, in the snap of a finger. So there's not going to be, it's not going to be a shock to anyone if they wake up tomorrow and they don't have it. But in the meantime, you know, make AY the sunshines.

[00:38:44] Zoe Licata: Yeah, that puts like a really interesting lens on the situation, you know, because they've been thinking about it. I'm like, I don't know that I would have the temerity to invest millions of dollars in something that could just be taken away by, you know, a governor's executive order. But I also don't have millions of dollars. So that doesn't really matter. Yeah. But you're right. They've been here before. They know how this goes. So you might as well take it while you can get it.

[00:39:04] Wholesalers Association: pretty much half of them are doing it and half of them are saying I'm not going to touch it, I'm not going to waste my time with it because it could be gone tomorrow. So building a brand is one thing, logistically moving packages around and putting it in places where they belong is another thing. But like I said, there's no, you know, the T category has Twisted T, the Seltzer category has White Claw, Premium Lights has Mic Ultra, Imports has Modellos. These are all big brands that lead in industry. There ain't one in the Delta 9 space that is an industry leader. It's a very homogenous, group of brands, and I don't think even consumers when they walk in the door are like, oh, I need Trail Magic, or I need this, or I need that. I think they're like, oh, let me get this, or let me get that. There's literally hundreds of them, if not thousands of them, that they can choose from. I don't want to be too insulting to them, but right now you're selling milk. You're selling a homogenized product that, you know, for now, there is no, I got to have a Modelo. I got to have a McAltra. There's no clear brand leader in this space yet. And yeah, maybe we'll see one emerge. Maybe we won't. But for now, it's pretty fragmented. It's pretty homogenized. And it's about the novelty of the can. THC's been with us forever, guys. There's nothing novel about THC. It's in a can, Lester.

[00:40:29] Justin Kendall: It's in a can.

[00:40:30] Wholesalers Association: It doesn't matter. The can is the novelty. I know. And the novelty was craft in the can, too. I know. And look what craft in the can got you guys. Get back, pouring pints. You put that in a slim can, you get a hard seltzer. You know, get back to pouring in on-premise and making people happy and feel good and have fun. And maybe we could see a resurgence in craft. I like how you brought this full circle back to the on-premise. I know, well done. That's my thing. You landed that plane.

[00:40:56] Justin Kendall: Thank you, I appreciate it. Well, thanks for doing this, Lester. You're welcome.

[00:41:02] Zoe Licata: We are here on the trade show floor at NBWA. I am Zoe Licata, and I'm sitting with two folks that their brand should be pretty familiar with any Brewbound listeners because it was one of our 2024 rising stars. I am here with Adam and Amanda Kroener of Carbless. Welcome guys.

[00:41:19] Lester Jones: Thanks for having us.

[00:41:21] Zoe Licata: Yeah. Thanks for being here. I was just chatting with Amanda Huang we first sat down. Carbless started 2019. It's been quite an accelerated growth journey up into this point. What has this experience been like at NBWA compared to that early time?

[00:41:38] Brewbound Podcast: Big change from the size of our booth, how many people we have here, and the amount of people that are coming to see us instead of us trying to pull them into our booth. Yeah.

[00:41:48] Lester Jones: 2021, it was like, hey, come here, please. And I mean, now 20, you know, it's only this is our fourth, fifth one. But now the five hours on both days, our booth will be stacked. We can barely get away. And we're just very blessed to be in that position.

[00:42:03] Zoe Licata: Well, thank you for taking some time away to chat with us for a little bit. Last year, you all had huge growth, doubled your business. What's it looking like this year? How are things going so far?

[00:42:14] Lester Jones: We're not quite doubling, but I think, you know, when we look at some of the other entrants and people on how they go to market, we roll out a lot more methodically and slower. I think we're tracking to be up about 50% from last year with only adding four or five states. Our current places continue to grow. The new states are growing like weeds. So all things said and done, it's been great so far.

[00:42:36] Brewbound Podcast: We just launched 819. It was Florida. That's where we just were for three weeks. I was reading the press release.

[00:42:43] Zoe Licata: People were really, really jazzed in Florida for it. They've been asking for it for a while, right? Begging.

[00:42:48] Lester Jones: Yeah. I feel like I've borderline gotten death threats along with pictures of people taking their Chevy Silverado packed full of carbless all the way down to Florida. So now they don't have to do that anymore.

[00:42:58] Zoe Licata: Nice. So based out of Wisconsin, have 19 states now, some of those other new additions, Tennessee, right? Indiana, Kentucky. What's it looking like in the future? You want to add more? Are you kind of getting around where you'd like to be?

[00:43:13] Brewbound Podcast: We're definitely going to keep adding. Yeah. Yeah.

[00:43:15] Lester Jones: We just have a different philosophy than others on how we go to market, the way we're building the brand. We want to exist in 10, 15, 20 years. And the way we view the route to market on that is just a little bit different. So we intend to be National Beer're just going about it in a different way than others.

[00:43:31] Brewbound Podcast: Yes. We've continued to grow our team bigger and stronger so we can start to spread a little bit faster, but not too much. Yeah.

[00:43:40] Zoe Licata: So Carpless, you're an RTD brand. It's really leading into a lot of trends that are happening, whether it's those health and wellness are better for you brands, having more spirits-based products. Also, just browsing your website, I love the addition of the cans moving and you show the actual liquid on the site, showing the color. Like it's really speaking to a lot of what consumers are asking for. What has been the response when you're going into some of these new markets of how they're discovering this product?

[00:44:09] Brewbound Podcast: I mean, it's tough. You know, we're in a category called seltzer and whatever people describe that to be, they're all in a tall white skinny can. So when you're putting something up on a billboard, how do you truly get them to understand what that tastes like? So that's what we're trying to focus on. And if you see that pouring color, it's how can we differentiate ourselves because it tastes like no other. Yeah.

[00:44:34] Lester Jones: Everything we do is focused on trying to get somebody to drink it because when you see this and you've never tried it, you assume it's like 25 others until you actually drink it. So every piece of our business is focusing on how do we get the consumer to actually try it because that's when we can spend money is after they've tried it.

[00:44:51] Zoe Licata: What have you found is working for that? Is it doing tasting events in like retailers? Are you doing any on-premise stuff? How are you getting folks to actually try the product?

[00:44:59] Lester Jones: Both of those, we do well in events. Once we hit a certain threshold, we'll do marketing sponsorships because you're able to activate and kind of have that marketing wing. But yeah, we've got a ton of 1099 contract people that work for us. And I'd say it's well over 600, so basically a whole sampling agency. But again, we've got some places that we've sampled every month for the last three, four years. But it's just that important to us to get people to try the liquid because we're Very staunch on once that happens, there's a really good chance we're going to convert.

[00:45:32] Zoe Licata: Yeah. We're at a wholesaler convention, so we kind of have to talk about what's going on in distribution. And you guys are working with beer wholesalers to get your product out. Why did you want to go through that network and what has that been like when you have a spirits based product?

[00:45:48] Lester Jones: We do have some spirits wholesalers. Ultimately, really what it comes down to is figuring out who's going to be the best to activate in that market. And what we found is that actually transitions throughout the timeframe, right? So we've got some states that are all Molson Coors. We've got some states that are all spirits. We've got some that are all AB. And what we're finding is based on, I'll use the beer distributors, the Mothership, right, what they're doing, that can play a large role. Also, a lot of the Molson Coors distributors have Mark Anthony brands and Boston Beer, which are really good add-on suppliers. And so what they're doing... can also play into their excitement for a brand like Carpless. And so when they need us is really when it's the most prime time to go into the market. And that has ebbed and flowed over the last three, four years drastically, where one distributor said who might have been really good two years ago, now they might not be the best for certain reasons.

[00:46:41] Brewbound Podcast: And beer distributors own that cooler, and that's where we want to be.

[00:46:45] Zoe Licata: The very important cooler space.

[00:46:47] Brewbound Podcast: Yes.

[00:46:48] Zoe Licata: We know how vital that space is. Exactly. A lot of the conversations that we've been having with folks is about finding occasions or speaking to more occasions when it comes to whatever product that you're trying to sell. What have you found? What occasions is Carbless speaking to? What are consumers reaching for Carbless for?

[00:47:06] Brewbound Podcast: Carbless is very versatile in that it's men and women and it's all events, all ages. There really is no one particular. It fits anywhere.

[00:47:18] Zoe Licata: So going into the rest of this weekend and just the rest of this year, what are you guys looking forward to? Any particular targets or just things that are really hyping you up right now?

[00:47:27] Lester Jones: Well, the selfish part is we have a ton of amazing partners in the likes of Wisconsin, Minnesota, North Dakota, South Dakota, Iowa, but we've spent the last five years launching North Dakota in negative 40 degrees in December. And so we're finally getting to the states that our entire team is super excited to go to. We actually just started homeschooling our kids so that we could travel together, take them with. We spent three weeks in Florida. Our kids were with us. So the expansion is now hitting these places that are just It's not that the team wasn't excited, but the weather is super helpful when it's absolutely beautiful. And most of the landscape that we have remaining is gonna be nice, beautiful weather. And what we're seeing is, even with Florida, where we actually skipped our whole market-to-market thing we've done, there was so many people who knew about Carbless walking into a chain and them saying, I've been hearing about this for three years, about time you're here. It's just continued validation of our slow methodical approach.

[00:48:25] Zoe Licata: I had a friend's mom was visiting in town and she was from Ohio. And she was like, this is everywhere. Have you heard about this? Like people are really into it. So it's definitely spreading everywhere. People are wondering what it is. It's very cool to see.

[00:48:39] Lester Jones: I talked to quite a few people in this space that are entrepreneurs. And there's a gentleman who's got a low ABV product in Phoenix, Arizona, where we do not sell. And I get a text message to two almost weekly from him, doing samplings and going, I heard like four people ask for Carbless at Total Wine in Phoenix. I think the fun part is when we come out to places like Vegas, if you're not in the industry, you've never heard of us. But at the same time, when you're looking at the Cercan or Nielsen data, we're a top three, four, five brand in dollars. So it is a fun, cool thing to be this like biggest thing that some people have never heard of.

[00:49:11] Zoe Licata: It's been so impressive to see. I mean, we go through the weekly Cercana data. We're writing through all the growth brands, and it's all kind of big, major beer companies that are owning these brands. And then we write just Carbless, because you guys are just this solo, independent kind of brand sticking out among these much larger groups. Is that intimidating at all? Is that exciting? What is that like?

[00:49:33] Lester Jones: I think it was at some point. I mean, shout out to Clem and the Surfside team. They're also on that list. They're privately owned. I'd say the most interesting thing is when we started this, we didn't know what the hell we were doing. And we often say we probably wouldn't have done it had we known what we were doing. But I think the cooler part is like, there's some states where we're now outselling Tito's, we're doubling High Noon's volume. And really, I think those little pieces are the more exciting piece, because I just wanted to get it on the shelf and get it to as many consumers, but then really seeing the data and all the team's hard work and dedication and what that ends up looking like on paper is just absolutely incredible.

[00:50:09] Brewbound Podcast: It's all been very gradual. So there's moments along the way, but it's all just been so comfortable and the right timing. And I can say there's one magical moment that felt different. It just has all felt really good. Yeah.

[00:50:26] Zoe Licata: Well, congratulations on all the growth that you had and good luck with the rest of this convention. I know you guys are gonna be really busy, so I appreciate you chatting. Thank you.

[00:50:34] Lester Jones: Thanks for having us.

[00:50:36] Zoe Licata: And that's our show for this week. Thank you for listening. The Brewbound Podcast is a production of BevNET CPG. Our audio engineer for the Brewbound Podcast is Joe Cracci. Our technical director is Joshua Pratt and our video editor is Ryan Galang. Our social marketing manager is Amanda Smerlinski. Our designer is Amanda Huang. If you enjoyed this episode, please share it with your colleagues and friends and review us on your listening platform of choice. You can find our work at Brewbound.com. And we also welcome feedback and suggestions at podcast at Brewbound.com. On behalf of the entire Brewbound Podcast team, thank you for listening. We'll be back next week.