Brewbound Podcast: Loverboy Spills the Tea on New NA Beverage

[00:00:00] Justin Kendall: Heading to CBC? Kick things off the day before at Brewbound's meetup at Love City Brewing in Philly, Sunday, April 19th from 5 to 7 p.m. Connect with beer industry leaders, grab a drink, and catch up with the Brewbound team. It's free to attend and walking distance from the convention center. Head to Brewbound.com slash lovecity.rsvp. And don't forget to catch the Brewbound team at booth 956 during CBC. Next on the Rebound Podcast, all the tea on Loverboy. Hello and welcome to the Rebound Podcast. I'm your host, Justin Kendall.

[00:00:47] Zoe Licata: And I'm Zoe Licata.

[00:00:50] Justin Kendall: And this week, as I teased at the top of the show, we have some of the management team from Loverboy, the hard tea and hard spritzer brand, here to discuss where that brand is going. We have Todd Anderson, the SVP of commercial strategy, and Derek Hahm, SVP of sales. They'll be here. very shortly, because this is going to be a quick episode, as you can see, or hear. Jess isn't here today, so she's off, but she will be in the interview. I know, it's trippy.

[00:01:20] Zoe Licata: Yeah, yeah, Jess and I got to talk to Derek and Todd a little bit earlier, and they dished on everything that's happening with Loverboy. Both of them officially signed on with the company earlier this year. So they are giving that more like industry veteran perspective of why they wanted to join Loverboy and what's going on there. And we have some fun little news bits in there, some breaking news, I think you could technically say, in that interview. Not anything I've seen anywhere else. So stay tuned for what they've got to say about that. Yeah, don't jinx it Zoe It's gonna last like 48 hours

[00:02:03] Justin Kendall: Well, we also have to plug Brewbound Live, which is almost a month away at this point. It is going to be December 6th and 7th in Marina Del Rey, California. Tickets available now. We've pretty much set the lineup and the full agenda should be out by the time you're listening to this. So stay tuned for that. But lots of great speakers from all three tiers. And I don't know what else to say. It's going to be a great show.

[00:02:32] Zoe Licata: Yeah, all three tiers and across basically every area of beer and beyond as well. So we're going to have some conversations that dive into some of that beyond space. Some conversations focus on the craft space. It's a lot going on trying to really dive into all the major trends happening this year. There's going to be a lot of good conversations that hopefully you can all come and see in person. Talk to some of our panelists during networking events as well. Talk to your fellow industry members. It's a good event. Highly recommend. So come hang out with us in California in December when you don't really want to be anywhere else.

[00:03:13] Justin Kendall: Five stars on Yelp from Zoe. Yeah. Let's get into some of the news. And really this is going to circle back a little bit to Brewbound Live because we're going to talk about some hard tea. We're going to talk about those trends. We're going to talk about focus. And that's one of the things that was sort of, sort of coming out of the Boston Beer National Sales meeting that we got a peek at on Monday. And we've been posting about on Brewbound.com and in the new newsletter. And we kind of split this up. I took the dogfish head stuff, but we both listened to this. What were some of your big takeaways coming out of this meeting, Zoe?

[00:03:52] Zoe Licata: Boston Beer seems to be, and I know we've heard this before, but there seems to be an extra emphasis based on this meeting on making sure they have incremental innovation and really focused innovation, not just throwing everything against the wall. And also just bringing life back to some of their brands that may, that have been really declining this year. We've seen, and I think every earnings call we've covered, The majority of their brands have been a decline except for Twisted Tea and maybe Hard Mountain Dew every once in a while. There was a lot of, hey, let's bring our core brands back, like bringing back Sam Adams, giving that a facelift. bringing back attention to Angry Orchard, which has been kind of forgotten about for a while. That one stood out a lot to me. There was a lot of focus now that they have John London back to focus on that brand that he helped start to bring younger consumers to Angry Orchard, bring the attitude of Angry Orchard back. Yeah, it felt like, hey, we want to start actually focusing in, and I know we're going to say focus 800 times, but focusing in on the brands that we have, what makes each one so stellar what made them have a consumer base to begin with, and how can we continue to bring growth to them moving forward?

[00:05:15] Justin Kendall: I thought one of the funniest parts of the meeting was John London was talking about Angry Orchard, and he mentioned a partnership that they have coming up with batches. And he's like, I'm most you, you probably don't know what batches is, but ask, you know, your, you know, legal drinking age, younger legal drinking age, daughters or nieces or whatever, and they'll know about it. And I have working knowledge of this. But I think that speaks to one where they're going with the brand and who they're targeting. And to a little bit about the challenge that they face, because the consumers they're trying to reach and the people they're relying on to sell their product, there's probably a wide gulf between them.

[00:06:03] Zoe Licata: Yeah, well, there was a some refreshing self-awareness there where he was acknowledging, you know, we're Betches is a platform, a digital media platform, female founded. They have a podcast, they have social media accounts, have huge followings. But he's acknowledging that this room that looked to what we saw to be a majority older white men probably has no idea who they are. And so that's a common thing we've seen of the inside the industry not really matching with the consumer base we're trying to bring into it. So I was glad he called it out and he was saying like, hey, this is something that there's actually potential here. If you don't know about it, ask people who will. So I think there could be some promise there.

[00:06:49] Justin Kendall: Another thing that came out but wasn't a part of that meeting is there's going to be a new Samuel Adams light beer that is on the way. This was a little bit strange because we're talking about all these new products and we're getting images of these products shown to us, but we're told that we can't share those. So we're telling you that there's new packaging for Samuel Adams and there's this new beer coming out, and we've seen a label for it, but we are, I guess, sworn to withhold the secrecy of this until it makes it to the market. And, you know, it's going to be in the 4% range is what I gather. But even the ABV and all of that is up in the air.

[00:07:30] Zoe Licata: Yeah, we heard a little some rumors of this beforehand of this coming out. So it's an interesting play. I know we've, we've heard from Boston Beer whenever there was conversations of the impact of Bud Light on them or something that they haven't had any real significant impact because they don't play in that space. So this is potentially them saying, Hey, okay, now there is opportunity and we're going to go into it.

[00:07:54] Justin Kendall: And then There was, of course, talk about Truly and Truly has been challenged to be nice about it. But next year is supposed to be the year that, you know, they're cycling some of these big declines. Then, you know, maybe they'll start to eke out some growth potentially. What were your takeaways there? I think there's a reformulation to for a couple of the brands, if I remember, right?

[00:08:21] Zoe Licata: Yeah, so for the they're continuing to focus on their lighter flavored brands, they're changing that tagline again, to still focus on the lighter ones, but they are also reformulating their bolder flavors. and they got a lot of consumer feedback that the main takeaway why the boulder flavor struggled so much is people didn't like the aftertaste and a lot of that had to do with stevia the like sweetener content and so they're taking it out they're gonna they showed us a teaser of a new promotion for it that's emphasizing no more stevia which i think is a little smart as it plays into there was a bit of that hype or mass concern whether it was righteous or not over some of these sweeteners and contents so consumers are looking to get away from those things right now so those are getting reformulated and there'll be a couple new flavors in their variety packs and things but no big like big new brand introductions like they've done in the past with like a punch or a tea or margarita or that type of thing

[00:09:23] Justin Kendall: but there is a higher ABV truly on the way, which I know you're probably out there and you're thinking, well, there's already a high ABV truly, but they are getting rid of extra and they are bringing in truly unruly.

[00:09:41] Zoe Licata: Yes. Which I guess it's a more clever name. And that the, one of the wholesalers in the room straight up asked him was what, what is even happening with truly extra? They're like, nope, not doesn't exist anymore. So this is the replacement, trying to target that higher ABV needs that people want. They'll have, I'm sure there'll be a lot of focus on single service with this, which is what they did with Truly Extra as well. But yeah, that was like the biggest, I guess, brand extension that you could pull away from that conversation.

[00:10:17] Justin Kendall: And Twisted Tea, what's the news there?

[00:10:19] Zoe Licata: Twisted Tea, I mean, it continues to be the driver of any sort of growth. It is doing insane still. It's sustaining all of its growth in various channels. So they're gonna try to keep that momentum going. Twisted Tea is also getting a higher 8% ABV version, which we saw the news originally come out that they was going out in select markets this summer, but that's the Twisted Tea Extreme. 8% ABV. Other innovations for Twisted Tea are they have a Mango Nata, which is already out, and a Black Cherry that they want to focus on, but those are also in very small markets right now. So just testing it out, seeing. They emphasize that all those innovations are kind of secondary to the core Twisted Tea that's out there right now. So if you're, they encouraged wholesalers, if you know Twisted Tea is already getting a lot of shelf space, it's doing great, you're getting all the amount of stores getting it as you want then you can focus on those other brands but we still are really focused on the core tea twisted tea brand as is also got some new package sizes that include rocket pop which they included as a pack exclusive flavor last year got a lot of buzz so that is going to be available in a 1.3 gallon party pouch and a 24 can variety pack as well as the return of twisted tea party pack

[00:11:44] Justin Kendall: Hold that thought. We'll come back to that. But before we close out Boston Beer here, let's talk a little bit about Dogfish Head. They are getting a refreshed logo that is kind of a remix of their original logo or one of their first logos, I should say, from a couple decades ago. So they're going to bring that back. That's all because of consumer feedback that they've received. And then you know, they've got new beers and we can go over some of it. It's like cold IPA. Some of these are going to cycle in and out of like variety packs and seasonals. And, you know, I'm excited about this tasty traveler lager that's going to be Japanese style. So that sounds really cool. And of course, there are new IPAs. They said that they're going to make Covered in Nugs IPA, a art series release. And that was described as the best-selling beer the last couple of years in their brew pubs. So look out for that IPA coming, I think, in the fall. But the news that really sort of came out of here was they're going to do higher ABV canned cocktails coming this spring. And they're going to start with rum Mai Tai, pineapple and orange flavor. vodka meal, passion fruit and lime, and tequila margarita, strawberry and lime flavor. And those are going to be 12% ABV, they're going to come in four packs, and then they're going to mix into the variety eight packs.

[00:13:13] Zoe Licata: Yeah, a lot going on.

[00:13:16] Justin Kendall: So we talked about focus. And it does sound like canned cocktails remains a big focus for the Dogfish Head brand, which they've been in spirits a while. But it just You know they they've been such a craft evangelist that it's it's sort of a turn that we've seen to this being a growth driver for them.

[00:13:40] Zoe Licata: Yeah, we know that Sam Calagione has been very enthusiastic about these and is really excited for what these could do. And he tries to still connect it back to Dogfish Head's roots of being like a culinary taste or flavor focused brand. And he's trying to do this with the spirits based cocktails as well. So we'll see what the reception is.

[00:14:03] Derek Hahm: 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.

[00:14:23] Justin Kendall: So last week was Boston Beer's Q3 earnings. And we don't have to go over that because I feel like we just covered a ton of Boston Beer stuff. But let's talk a little bit about AB earnings. And it was a not so great quarter in the United States. As anyone can guess, the summer selling period was...

[00:14:43] Zoe Licata: It was rough.

[00:14:44] Justin Kendall: Rough. Very, very rough. So what does rough mean? So in the U.S., revenue declined 13.5% in Q3. its shipments declined 17.6% and its depletions declined 16.6% so that is in Q3 and we all know why Bud Light was the reason and They did try and give a little bit of hope that their market share has really stabilized since late April, and it stayed pretty much the same heading into the end of September. But yeah, this is not a great quarter for their US business. Overall, AB still 5% revenue growth globally. They are a global business, so that's going to carry them. They said in 80% of their markets, they are growing so you can guess where they are not. And one last thing before we get off the AB subject is they announced a big partnership last week which was they're going to be the sponsor of the Ultimate Fighting Championship again. Back when UFC started, when I was in junior high, I think, AB was one of the first beer sponsors, or was the first beer sponsor for them. So the last few years it had been Modelo, but now It makes a lot of sense that they're using this sponsorship for Bud Light in the U.S. and Budweiser Internet globally. That's something that Constellation couldn't do with those brands because they don't own them outside the U.S.

[00:16:28] Zoe Licata: Yeah, I mean, we've seen Anheuser-Busch has really been pretty heavy handed with its amount of marketing and promotions and partnerships and things to try to get Bud Light back in people's good graces and get its brands out there and get the attention of people. This is just another one that has a massive audience on a global scale, not just in the US. So it seems like they're continuing to do that. A lot of real focus on sporting events. I think trying to speak to some of that core Bud Light audience that may have departed from the brand.

[00:17:04] Justin Kendall: They are focused on football. They are focused on fighting, apparently, you know, UFC. They were a sponsor of WWE Money in the Bank not long ago. They are going to do some college football stuff. They already have. I mean, there are Iowa State Bud Light bottles out there that I've seen in market. They've done a whole bunch of other universities. It's just not the Cyclones. It's just what I see in my high D. And they're looking at music, you know, kind of a country bent in a lot of ways, but they are also doing like, they've done that Bud Light Backyard series with some acts that, you know, mid tier acts, I would probably say, and Yeah, I mean, then they're leaning into veterans and, you know, the Folds of Honor. I've seen a ton of those commercials. I think that they run them pretty much nonstop during NFL games at this point. What this is all sort of leading up to is, can they win back some of those lost drinkers? And Michelle Dukaris, who is the CEO of AB InBev, so the whole outfit, not just the U.S. market, that's Brendan Whitworth. He said that their recent survey found that 40% of lapsed Bud Light drinkers say that they would be willing to give the brand another chance. So we'll see how that stacks up next year. You know, once we start cycling these comps and I'd say what, April.

[00:18:40] Zoe Licata: yeah yeah april is when april 1st was the initial social media post that kicked off a lot of this so yeah i would say probably mid-april is when you start to see a lot of the significant comps but yeah we'll see i mean there was no timeline on when those 40 said they'd be back or would be willing to try the brand so we'll see if that's a soon thing or a more distant thing

[00:19:08] Justin Kendall: Hey, they already got Kid Rock back. He's already at least, he's had one Bud Light at least. At least. So at least been photographed with one. So if you can win back Kid Rock, you know, what's stopping the rest of you? I don't know. I don't either. All right. One more new story before we get out of here. And that's Treehouse is building a facility from the ground up in Saratoga Springs, New York. The Massachusetts Brewery has always been sort of known for, you know, lines outside its door here, and it's opened several locations in Massachusetts, but expanding outside of New England for the first time, and I guess, you know, this area is known for performing arts and horse racing.

[00:20:00] Zoe Licata: Saratoga Springs. Apparently there's a lot. I mean, it makes sense in this area. There's a lot of travelers from New York going to Massachusetts, traveling up to get some treehouse. So there's apparently an existing consumer base there. Treehouse does very, very, very, very limited distribution. So we don't have any numbers there on what that demand is. any numbers based on distribution to determine what the demand is but they seem pretty excited about it. It's their sixth location which is wild because all their existing locations have been open in just the past like three years or so. So it's a lot of big, massive taproom projects because they're focused on that experience. They have a pretty unique taproom experience, as I'm sure most, if not all people listening, know about, with their drink tickets and their events and all these other things happening there. Yeah, I'm surprised that they're doing another big project so soon after they just had this massive golf course project that just opened at the beginning of last year. I think it's when they first started to at least be partially open, but they're going for it.

[00:21:19] Justin Kendall: And I still need a golf course report from you, Zoe. Like, we need to hear it. Maybe you could spend your birthday there, which, by the way, happy birthday to Zoe this week. This is her birthday week.

[00:21:33] Zoe Licata: Yeah, it'll be my birthday when this podcast comes out, I believe. I don't know if I want to spend my birthday in Tewksbury, Massachusetts, but potentially around Thanksgiving, I can make a trip over there. Well, stay tuned for the review of the golf course.

[00:21:53] Justin Kendall: So let's play another round or tabbing out real quick. And you mentioned it. It's the Twisted Tea Rocket Pop 1.3 gallon bag. It's 5% ABV. Are you buying another round or tabbing out on this? Because you've actually tried this brand.

[00:22:09] Zoe Licata: I have tried the Rocket Pop. I tried it last summer. Was it last summer? Yes. Or this summer? I don't know. at some point uh when the i believe it was this summer when the uh variety pack came out and rock and pop was like the pack exclusive that they brought um back i it just is way too sweet for me i don't think i need 12 ounces let alone 1.3 gallons But I have seen a bit of a resurgence in hard tea pouches or bags or whatever else you'd like to call it. Beadbox has been putting some out. There's some other hard tea specific brands that are focused on this package size. So it may be potentially an early something to look out for if people are looking to bring back the hard tea pouch.

[00:23:04] Justin Kendall: But I'm okay.

[00:23:08] Zoe Licata: I think I'm okay.

[00:23:09] Justin Kendall: A gallon plus of this?

[00:23:11] Zoe Licata: Who knows. Check back in with me in summer 2024 and things might have changed, but I'm okay right now.

[00:23:18] Justin Kendall: Maybe 10 years ago, kickball me could have done this, but I'm broken and old. So I don't think that it's on the table for me at this point.

[00:23:30] Zoe Licata: Yeah. I think I would just need like more friends, people who would drink a gallon and a half of rocket pop with me.

[00:23:39] Justin Kendall: The twisted tea drinker is a little more intense than than I am, at least from their commercials, which they say are real twisted tea consumers in there. And they've

[00:23:50] Zoe Licata: They're enthusiastic and the unofficial mantra for next year for Twisted Tea is all gas, no brakes. So that's the kind of energy that Twisted Tea is bringing and its consumers are bringing.

[00:24:03] Justin Kendall: Well, here's a brand that is competing with Twisted Tea. Let's find out, you know, if they're all gas and no brakes. And that's our conversation with Loverboy.

[00:24:15] Zoe Licata: Joining us today to talk about all things Loverboy and hard tea, two things we talk about frequently on this podcast and in our reporting are Derek Hahm, the Senior Vice President of Sales at Loverboy. Welcome, Derek.

[00:24:31] Todd Anderson: Thank you.

[00:24:32] Zoe Licata: And Todd Anderson, Senior Vice President of Commercial Strategy at Loverboy. Welcome, Todd.

[00:24:37] Google Play: Thank you. Good to be here for the first time.

[00:24:40] Zoe Licata: Yes, thank you for joining us. We've had Derek on stage at Brewbound Live. We've also had Kyle Cook, founder from Loverboy, on stage as well. We've been having lots of hard tea conversations this year, and Loverboy's been able to carve out some space for it. So we wanted to talk to you guys all about what you've been up to. A lot of things going on. You have hard teas, you have spritzes, canned cocktails. lot in these very popular buzzworthy categories right now. What is the top selling product for Loverboy? What is the core thing for you guys right now?

[00:25:21] Google Play: It's tea. We coined it when both Derek and I joined the organization at the top of the year. Tea in 23 was our focus and that we would figure out our wine-based products, ready-to-drink products as we evolved. But our number one focus out of the gate in our first 100 days was understand the tea, define our core. and begin to shape how we innovated in the tea space and how we competed in the tea space. As everybody talks about, there's one big brand that basically makes up hard tea right now. And what is our objective? And our objective is that focus. again, TN23 and bringing consumers into the space to help grow an overall subsegment.

[00:26:15] Todd Anderson: So it's no secret, right? I mean, tea's the most widely globally consumed beverage, right? So it makes sense. And then we also have, you know, it's all about flavor, right? So we have eight different flavors in our tea lineup. So, you know, we kind of check all the boxes there and we can really kind of connect with the consumer. So it's no secret we lead with tea. Tea is our flagship. Now it's just kind of figuring out what is actually the flavor of choice, right? we do know that the consumer wants options and we provide those options in the tea.

[00:26:47] Hahm and Anderson: So Derek, I'm glad you mentioned flavor because I see you guys have eight flavors of tea. So can we kind of get into that? Like, is there a clear winner? Does anything pull away from the pack or do they all kind of take turns throughout the year? What does that look like?

[00:27:02] Todd Anderson: I'll let Todd kind of speak to it too, because with his background, I call him the flavor king. But for me, in my history with beer, you can only put so much in an IPA, right? But Todd was able to do as much as he could with the seltzers. But as we're trying to define our distribution foothold and our relationship with our wholesalers and retailers, we know it's flavor. It's really hard to pinpoint one that's actually going to win, right? We know what the consumers enjoy. We know that lemon and peach are top flavors within other brands. We know that's top in the category. But the beauty of ours is that we have kind of regional choices, right? Our black cherry vanilla does very well in the Northeast, right? The lemon does very well in the Southwest, right? So it's kind of like spread out. But as we continue to grow distribution and we're kind of revamping our SKU mix, is how do we provide the opportunity for the consumer to enjoy the flavors and kind of pick their own, right? So I think we'll continue to evolve and we'll stay connected. But the beauty of our brand is that our consumers are engaging and they let us know. They will tell us what their choice is.

[00:28:15] Google Play: Between 1.6 million followers and the 500,000 plus emails, we will find the top performing flavors. I think building on Derek's point, We don't have enough base distribution to fully define what that lead horse is, if you will. White tea peach certainly had the broadest distribution. Therefore, it's the number one flavor, but we, Derek touched on it. We know lemon and peach are trending and are very stable and not polarizing. And we're going to make those two our hero and then bring forward the variety pack with all eight flavors and consumers will decide.

[00:28:57] Zoe Licata: You brought up all those followers, and for anyone who doesn't know, Loverboy, co-founded by what we call a Bravo-Leopardy reality TV star. But you two were both announced as joining the company at the beginning of this year, and it felt like it brought, at least internally in the industry, a lot of legitimacy to the brand. You both had extensive experience in the industry. So why was this hearty brand with a pretty big, loud founder and image and social media following something that was doing things a little bit differently than traditional? Why was that something that you both wanted to get involved in?

[00:29:35] Todd Anderson: You know, I spent 28 years in beer, right? you know, 18 years at CBA, you know, a tremendous amount of fun and learned a lot. But I was always intrigued in my 18 years there, I was always intrigued in connecting to the to the female consumer, the Hispanic consumer and flavor, right? All things that we try to do. I mean, you know, we put every single known fruit into an IPA. We made a hazy IPA, we made a regular IPA, right? But Truly, you never really could connect, right, in the way that you always want to. So I wanted to have an opportunity to work on a brand that's different and that's in a category that's actually growing and has that opportunity to connect with more consumers. I'm not going to lie, I did not know the power of Bravo, whatever you just called it.

[00:30:23] Zoe Licata: Bravo Liberty.

[00:30:24] Todd Anderson: Bravo Liberty, right? So I did my research and I did know that they were on a show. I've never watched the show when I interviewed. And, you know, he kind of told me about it. I'm like, Oh, you know, celebrity brand, right? But the more I, you know, met with him, and the more I spoke to him is, I didn't feel like the brand was product place on a show, but I felt like it was built on the show. And then I felt like Kyle had this passion and he had this desire to build an organization that could mean more than just making money. it was his baby. And I had eight founders, you know, actually six, two were born in the boardroom. But, you know, I had six founders that were very passionate. And that's why Kraft Burgers always joined. You know, Paul Sherman, Kurt and Rob Whitmer, they had this passion for the brand and Kyle had that same passion. So for me, it was it was kind of a no brainer. I just I just was really excited about becoming a part of a company that had had a really good foundation. Right. It was in about 38 states. I had about 150 wholesalers. I had a strong team with Brian as the VP of sales and Jen as VP of national accounts. Nick and Kyle, I mean, had all the components that I was really interested in. And then I met Todd, and I'm not going to lie, when they first told me that they wanted to hire another senior VP, I was like, we only have seven salespeople. Why don't we just hire two more salespeople? And then Todd and I met in person and we hit it off. And I'm not going to lie, we hit it off at Irish Bar in New York City after a day full of meetings. And I'm not going to lie, we were drinking a big wave. And we just talked about the future of the organization and what we can do and how we can grow this company. and how we can make this the next big thing, right? And we both believed, and we kind of made a deal. We actually did our volume projections on a cocktail napkin, and then all the strategy on another cocktail napkin, and we decided that we were going to do this together. So that's my story, and I have no regrets. I've been here for 10 months, and the features continue to be bright, and I still believe in the brand, and I believe in the team.

[00:32:29] Hahm and Anderson: Todd, all that ring true for you? And where are the cocktail napkins now?

[00:32:32] Google Play: Yes, 100%. I think for me, having been unique in this industry, that I've only played in the fourth category. My entire career is in flavor. And so one of the big pieces is liquid. And then the second big piece is innovation. Kyle and Nick nailed it. The liquid is spot on. It is repeatable. It's just magical. And it differentiates itself from all the others that are out there in the space. Two is that innovation. You could just sense that he wants to do more and more and more. Yes, we have to put guardrails up. And we have to be very disciplined in how we go about this. But the appetite's there for us to go into very unique spaces given our malt base and our wine base. Then the third was, Kyle was a very humble individual. You could see the curiosity, you could see the wheels turning that he constantly wants to grow and to dovetail on Derek's piece. He wants this thing to succeed. He wants it to be bigger than just a company, that could potentially sell. He wants this thing to do something and make a mark in the industry. It's a good recipe.

[00:33:59] Hahm and Anderson: I was writing a story about Loverboy years ago. Zoe, I don't even think you were on the team yet. It was still pretty new and I am a recent comer to the Bravo cinematic universe. So I didn't really know. And I was texting my friends and I was, well, what's going on with this brand? Do you watch the show? And like my best friend from high school, Heather was like, Jessica, like you must watch some Summer House because Loverboy is basically like the seventh main character. And it is, you know, like it really, it's impressive because the roots of the show, I'm sure you guys both know, the cast was drinking a lot of twisted tea. And Kyle will tell you, you know, he had the idea that's like, wait a minute, why am I not making my own brand here and I can do it better? And that's where we all are today, which is really interesting.

[00:34:49] Todd Anderson: Yeah, and that's the one thing that I, you know, Todd and I both, you know, we talk about it was like, we didn't know the power of that. Right. So you talk about product placement. You're right. It's not really a product placement. It actually lives on the show. Right. And, and they live in and breathe it. And Kyle developed it on the show because he was drinking Twisted. But he also was very hungover. You know, there's some sugar in there, right? So he had that idea and he brought it to life. And it is real. I mean, if you really think about it, you know, Todd and I are like, OK, so he's 41. How much longer can he be sending it and, you know, doing shotguns of Loverboy and all that stuff? But, you know, if you really think about it, the brand itself is strong because of the liquid and the branding. Yes, the show, both Summer House and Winter House, are both vital, and it does help deliver and connect us to the consumer. But if the show went away tomorrow, the brand's still going to be solid, because you have the things that are what the consumers really want, and that's a better-for-you option than a widely consumed, fashionable tea that actually has an opportunity in a category that's going to double. You know, we're going to be a solid number two. And, you know, that's OK. And that's what we want. But the show is for real. And, you know, Heather's right. You know, Todd and I were at a meet and greet in Dallas, Texas, and we're at a Whole Foods. And this lady was standing in line ready to get her autograph from Kyle. She had a bee on her hat. And I was like, are you a Red Sox fan? She's like, yeah. I'm like, oh, that's cool. So did you move here? She's like, no, I live there. I go. You live in Boston?" She's like, yeah. I go, so you're here for vacation? She goes, no, I flew here to meet Kyle. I said, from Boston. I was like, are these people nuts? I'm like, what the hell is going on? And then she admitted to me that she's a flight attendant, but she actually had to schedule a flight to work to go to Dallas to meet Kyle. And then the next day she went home back to Boston. I'm like, you do know that we go to Boston, right? So you could see Kyle in Boston. She's like, no, but I missed that. I missed that opportunity. So I want to make sure that I got to see him. Anyways, long story short, I'm like, how is this even possible? right, until the next lady who was wearing a mullet wig, I don't know if I gave it to her, she was wearing a mullet wig, and I was like, hey, so what's going on? She goes, yeah, my husband's having surgery, so I had a little bit of time, so I'm out here meeting Kyle. Her husband was having a hernia surgery, and she came to the Whole Foods to meet Kyle.

[00:37:14] Google Play: It is crazy, and the stories rinse and repeat itself over and over again.

[00:37:20] Zoe Licata: I can speak on all Bostonians that we're passionate about things we're passionate about. So whether that's our sports or it's apparently also about Kyle Cook. So I'm glad people are still representing well for us.

[00:37:35] Hahm and Anderson: So, I mean, the way that I wrote this question in advance, we don't really need to kind of dance around anymore, but I had said like the elephant in the room on hard tea is Twisted Tea, but you guys, we all jumped in right away and nobody's really afraid to talk about it. Twisted Tea is, you know, this juggernaut brand, but it's old enough to rent a car. So Loverboy is obviously very different, very different brand proposition. But do you have any overlap in drinkers, obviously, besides Kyle himself, who went from Twisted Tea to creating Loverboy? It's like, how do you think your two brands interact in the market?

[00:38:08] Todd Anderson: You know, yeah, Twisted's been here for 20 years and they've started kind of the way we're starting, right? But, you know, they own the category and that's fine. We felt confident that we're different enough where we're bringing more consumers into the category, right? So we're bringing people that normally wouldn't be drinking a tea into the category, right? We're kind of a better for you option. I mean, obviously we're zero sugar, 90 calories, right? And we have more flavors, right? And we're premium because of those things, right? We don't feel like we're stealing Twisted drinkers. But what we think is that there's occasions where you can kind of do both, right? So, you know, I think there's times and places where you want to be able to sip on something that has a little bit less sugar. It's that, you know, occasion that we want to be able to fulfill. And then that's okay. We have too much experience to know that there's no way we're going to overtake Twisted. And that's not our goal. Our goal is to continue to provide that opportunity for our consumers to purchase Loverboy from a distribution standpoint. We need to grow that. And then also I mean for us is making sure that the retailer and wholesaler has the opportunity to fulfill a niche in this hottest category. to be able to bring more consumers in, right? So that niche, that mix of that portfolio, that side of the cooler, that's what we want to do is bring that value to our wholesaler and retailer to be able to capitalize on that. That's the story. And we think that, you know, being a solid number two will make us a very successful company.

[00:39:29] Google Play: What's very interesting, you talk about Twisted being 22, 23 years old now. Well, so is Mike's, so is Smirnoff. The other big FMV brand that took time was came a jack 10 years in into the mix. Now Seagram's escapes. Brands take time to build and find their niche and recruit their consumers into the space. What is very unique over this 20 year window has been the amount of competition that has come into But the reality is, is that this is the only CPG brand that we could find that doesn't have a clear defined number two. You have Mike's versus Smirnoff. You have Red Bull and you have Monster. You have Energizer, Batteries and Duracell. Think of this power of two. And if you think about power of two, you can do magical things in bringing category or raising high tide and helping the overall industry. And then building on the consumer side, we did an ANU study, and it was very interesting. We asked the question, you know, what brands have you heard? And we didn't tee anything up. And 90% of these people said they knew about Twisted Tea, and 80% of those had tried Twisted Tea. Of that, I think it was like 35% said it was a wee bit sugary for them, so a third. We're starting to dial down into the consumer and the consumer space. And it certainly is shedding light on all the things that we believed that there is a consumer out there that wants something different than what Twisted brings in the competition that continues to enter into that space or into this space.

[00:41:13] Zoe Licata: Twisted Tea, and more specifically, Jim Cook, has been pretty upfront about not being too nervous about competition. I think he specifically called out Loverboy this year in one of his fireside chats. But Diaz talked about, you know, we still have to fill some spaces, like white spaces that might be out there, and one of the ways they're doing that is high ABV versions of Twisted Tea. Are you guys exploring any of that space at all? Are you pretty confident in the sort of... better alternative to twisted tea space you're in right now?

[00:41:45] Google Play: I think we don't have enough equity built in a brand and that we have to work on our foundation, which our foundation is in this health and wellness a little better for you, lower ABV, broaden our overall occasions, and then look at the channel. The reality of it is you're bringing higher ABV to the convenience channel. and you're recruiting consumers into that space. I don't know what their cannibalization is going to be off of it. But yeah, if I'm Jim Cook, I'm not overly worried about Loverboy either. You know, they grew, they're going to cross over, I think, 40 million boxes. They think they could potentially double again. And we're sitting here saying, let's go out there and kick some serious, you know what, and grow to 5 million. Because once you make it to 5 million, you never know what happens to brands. You guys have been in this business long enough, and you've interviewed plenty of founders and brand marketers. And you get through that hurdle, who knows? The world changes quickly.

[00:42:48] Todd Anderson: Yeah, spoken like a true Bostonian, right? He definitely is the Tom Brady, right? So I wouldn't be worried about us either. But I think, you know, as Todd said, I mean, we're bringing more consumers in and we're not the same, right? So, you know, we're a different option. As millennials and Gen Zs are going to start taking over, I mean, like, you know, they have to have options, right? So everyone's going to look for the next thing and how do you continue, right? And most times, most suppliers go with more flavors, right? So you can kind of keep mixing it out. You know, as Todd says, we don't have the critical mass from a distribution standpoint to really define what that is. So I think we have eight solid flavors, but we will continue to innovate, right? We will continue to make sure that we're doing the right things so that our consumer stays engaged, but also has trial, right? So we're doing things in the sense of making sure that those opportunities are there if we're being aggressive. So, you know, I mean, we're investing now to make sure that we can stay connected and we're providing that value to the wholesaler and to the retailer. we want to continue to do those things. So, yeah, we might not be coming out with a higher ABV, but, you know, we just announced at our national host of the conference that we're coming out with an NA, right? So, we feel like that's a huge opportunity and we know that, you know, the consumer is not just, you know, that whole better for you, the consumer is not just not drinking, they're taking breaks and they're doing both. Right. So, you know, we think that we have opportunities to make sure that we will continue to connect with the consumer. But, you know, strange enough, everything that we do still gets tied into the show. Right. So not only do we have this message, but the message is connected on to the show, because like we talked about Loverboy, the brand is a cast member and it's living its finest life on the show. Right. And our consumers are along for the ride with us. So You know, I think those are great opportunities. And, you know, we're not going to stay still. We know that we will continue to make sure that we grow and innovate and stay connected. And that's that's our goal.

[00:44:46] Hahm and Anderson: So, Derek, I think you just broke some news. Tell us about this new NA offering.

[00:44:50] Todd Anderson: Yeah, so I'll let Todd. I mean, Todd's like the flavor king. You know, he gets all the glory. He gets all the sizzle. I just, you know, I just do all the dirty stuff.

[00:45:01] Google Play: Well, a few things on the front. One is When Derek and I first joined, we obviously TN 23 and we were hyper focused on that that piece of the business. But there was this storyline that both of us. We didn't anticipate, and that was this show in between Carl and Kyle and everything that was happening. That was all in our first 100 days, and it was playing out live for us. And so we have this cast member that, you know, and Carl, that's a fan favorite and a beloved person within the Loverboy universe. And, you know, he's sober. we started just thinking about what that would be. That was probably back in March. And as we really started to dig in, what we saw was FMB in general, so your mics, your came and your Smirnoff, all these, even Twisted Tea and Light, they were basically bringing a zero sugar into the space and that there wasn't a true NA. And so we'd started to dig into it. What we found was really intriguing that There were roughly 10 markets that drove probably 60 percent of the flavor space. The irony of it is is when we started digging into N.A. those 10 markets drove about the same markets drove about the same 60 percent N.A. volume. And so there seemed to be this intersection where consumers could live and breathe. And could we go into this space knowing that yes three aisles down there's a whole plethora of tea and flavor. The other piece that we thought a lot about was pricing. When I go into Whole Foods geez there's a 16 ounce 999 single something that's gonna make me healthier if I buy it. So we didn't feel like there was this hurdle that we had to get through on the pricing front. So we are bringing it forward as a two six packs. We know within the NA space, athletic certainly is a dominant player, but we also know from a pack size, it's over 60%, almost two thirds of the volume is done in that six packs. We feel very comfortable in leaning in. We thought a lot about what we talked about earlier about defining kind of our core and what our hero is. So we pulled forward lemon iced tea and white tea peach as our two focus. You've seen a teaser on Instagram on Carl's hand. If you're following, you can go back and look at it. So you can actually see the tea, you can see the can image. So we've delineated and we've put a kind of a white top, but clear to our brand and our new branding. is all throughout through that space. And we'll bring it forward with our beer buyers through the Beer Network and the Beer Isle. Here's another thing too. So the other piece of this that both Derek and I have learned the power of the show, we had not aligned our innovation and our thinking with this great show and the fact that we have a cast member named Loverboy on these shows. And so you will see non-elk film this summer and it'll be airing in March for Summer House Season 8 as we pull it forward to retail. So now we have this national media platform. In fact, Episode 1 of Season 3 of Winter House was just Tuesday and I think we had 30 plus images on there. So we have this great national platform and We had filmed last March our DTC paired kiwi, and we pulled that into our Spritz variety pack. So flash forward in spring of this next year, you will see So we are definitely aligning on how we bring packages forward to retail while we're allowing DTC to be very fun, playful, and an opportunity for us to test and learn flavors without absolutely proliferating or inundating our customers, both distributors and retailers.

[00:49:28] Zoe Licata: I think Loverboy was even in the title of the premiere episode. You guys were really prominent. Speaking of DTC, especially when you have a more social media popular brand like this, DTC is normally more popular than some other more traditional brands. What does DTC sales look like for you guys now that you have more actual brick and mortar locations to get your products and how important is it to the brand?

[00:49:59] Google Play: It's still going to be extremely important. We've taken a big step back in 23 to focus on retail, focus on our distributor partners, since we can't bring tea through DTC. So that's really that primary objective there. And all of our wine based, what is it, 44 states we can ship direct. That has become our opportunity to really be, again, playful in that space and test out and really communicate two ways with our consumer. We're a digital first company, and I think I want to hand it over to Derek, because our next real foray into helping our retail partners and helping our distributor partners is social commerce.

[00:50:46] Todd Anderson: Yeah, so obviously, you guys know, I was on the stage last year talking about e-commerce. And, you know, I was I was fully ready to just launch a full on attack into the e-commerce space this year. But, you know, we really have to be strategic because, you know, what we don't want to do is to do a full force of this and not have enough distribution. Right. So, you know, from a from a national scale, we're about five percent ACV. And, you know, we know that it has to be greater in order for a consumer to be able to get that right. So what I don't want to do is that have it so where you know they can buy everything online but then not be able to get it in the right places and market wide. So don't we spend a lot of time trying to make sure that you know we can build our distribution. You know, so that way that the consumer, it's easier for them to purchase the brand at retail. Right. And that's what we want, because that's the thread that I'm talking about with within the wholesaler, retailer and consumers. How do we connect all three together? Right. So that is obviously our goal. We're obviously very adamant about the three tier system and making sure that they can do that. But we also have the opportunity to connect with our consumer and DTC. We will spend 2024 actually launching some of the e-commerce and also some of the social commerce platforms. We will be updating our website so that it will be easier for our consumer to purchase and find a brand at retail. So we will work with our retailers. We spend all summer fixing our shelves so that our digital shelves, so that our packaging, because we have new packaging this year, right, for six packs. And we'll be coming out with the new variety packs. So we will make sure that the imaging The digital shelves are all updated and correct. And then we'll continue to grow distribution, which we're launching a fast start with our wholesalers for Q1 or trimester one, making sure that our distribution is there. So that way we can do heavy digital promotional activity in the summer months so that we can tie into the hot selling season for us. So, you know, all that stuff is happening. We talk about us being digital first, and now it's just time for us to make sure that we can kind of thread that needle and have that opportunity to grow.

[00:52:49] Google Play: You'll see us, I think, 24 to compress our pricing model, bring it closer to retail, DTC, and also begin to really showcase merchandise and build our brand in a little different lifestyle manner.

[00:53:06] Hahm and Anderson: I am so glad you said that because literally the next question in our document is, we have to assume that for a lifestyle brand like Loverboy, merch is extremely important. So what's your strategy when it comes to merch? And I noticed on the website that there's a free treat given in to all orders between now and Halloween. And since this is airing after Halloween, can you tell us what that is?

[00:53:28] Todd Anderson: Yeah, I'll let Todd talk about the specifics of that. I don't know if everyone knows, but Kyle and Amanda. So Amanda, she does all of our, a lot of our branding stuff. So, you know, she designs most of our merch. So she's obviously very connected into fashion and all things, you know, online. So she has, she has a line. She did a collaboration this summer with Corey Page in New York. She just got done designing all of our merch for BravoCon, which BravoCon is happening next next weekend in Las Vegas.

[00:53:59] Hahm and Anderson: Zoe, are you going?

[00:54:00] Zoe Licata: Vegas during MBWA took enough out of me, so I got to take a break from Vegas.

[00:54:05] Todd Anderson: Oh, come on. Speaking of BravoCon, there's going to be over 30,000 people there. The tickets sold out in minutes, right? So it is going to be absolute pandemonium. But Amanda Huang designed a whole series of merch for BravoCon. I don't know if people really understand, but she's the one who helps design. And then we just launched our university crewnecks, right? That stuff is all live and real. And how we execute that and how we stay connected is going to continue to deliver because our consumers are more engaged than most alcohol brands. And it's partly to do with Kyle, it's to do with Loverboy, but also this is going to be recorded, so it's fine. But do you know how many times we see people at a meeting and they say, hey, we like Kyle, but we love Amanda Huang I've told it to his face, so he knows, so it's not a secret, but it's not a shock.

[00:54:59] Hahm and Anderson: He should be okay with that.

[00:55:01] Todd Anderson: He's completely okay with it, I think, kind of. But it's amazing, the connection that she also has with him, and she does do all her design work for our merch, so it's very special. It's not just merch.

[00:55:15] Google Play: Yeah. I think the strategy, we pressed pause in the first half of 23 to really take a deep dive and understand how we could align and really ladder things up and down throughout our big themes. So summer should be fun is obviously one. We've had that same merch that's out there. So I think 2024, we'll probably start to refresh that and really make it stand out. But bringing it closer to home as a better example would be the Limoncello launch. Obviously they had the genesis of it or the inspiration was on their honeymoon and that we can do something like this. And so we tied in an entire merch pack that went in adjacency with the launch of the Lemoncello and both sold out equally. So there's this way to really lean in on these themes or these flavors and then augment with collabs. If you didn't see, we did a collab with Aminoline. We did a big launch party there. They're leading it, but we did the flavor innovation to lead on that piece of it. So you'll see some of that coming forward. I think the big thing for us is just finding ways to connect with not only our love consumers, but how do we connect with those consumers that like us and make them love us really fast. and we keep rinsing and repeating. Another key learn that we had with the BravoCon, we gave away two tickets, we put it out there, we ended up having like 25,000 DMs to register in two weeks, and we organically grabbed 5,000 new followers on Instagram. So how do we take these learnings and rinse and repeat and keep us fresh in the eyes of our loved consumers and recruit more consumers into the space. So that's really how we want to use DTC and Merch moving forward.

[00:57:22] Hahm and Anderson: Awesome. Now, I know a huge piece for you guys is also your distribution work. We covered the brand's exit from the former night shift distributing pretty closely, but how would you characterize the rest of the network? Are you in Molson Coors houses? Are you in Kraft houses? What are those relationships like? Because I know the middle tier, I mean this with all the love in the world, they're not out there watching Bravo. How are you communicating this to them?

[00:57:46] Google Play: We're going to purpose address it. We saw it firsthand at MBWA, and our favorite question, Derek and I is, they walk up with their phone and they're like, hey, can I get a picture with you for my wife? Or my girlfriend? Or my friend's friend? Or my daughter? There you go. Yes, that was for them. So yes, there's a whole lot of closet Bravo watchers out there. But to answer the actual question, Derek, we're roughly, what, 70% AB, about 25% Molson Coors, and about 5% all other. And it was done in a very, very organic manner. I mean, we've been having real conversations with where our brand fits within each of these distributors' ecosystems. You know, we may lose out and we may be being dropped and we're revisiting and we've got opportunities to still close out what, eight, nine states, Derek, I think?

[00:58:47] Todd Anderson: What are you looking at this morning? Yeah, so we have about nine states. A big focus for us is how do we revamp, how do we reinvigorate our relationship with our wholesalers, right? So, you know, I took over and we had a team of seven to cover 150 wholesalers in 38 states. I mean, that's just not possible.

[00:59:06] Hahm and Anderson: No, it's huge.

[00:59:07] Todd Anderson: So, you know, I mean, it's like I don't want to go back from markets. I want to actually continue to grow. But it's it's how do we how do we reengage with our wholesalers? Right. So, you know, we're up to about 180 wholesalers in 41 states now. I've got the team up to 18 now. Right. So every single wholesaler in America has a name tied to a contact tied to Loverboy. Right. So. I want to make sure that we're growing our team strategically in the right markets and then for growth. And how do we continue to grow? You know, our number one thing is to make sure that we understand that our partnership with our wholesalers is going to get us to our five million in 2025. Right. And we were very clear on that. So. We've invested, we had our first national wholesaler conference earlier this month, and then we followed that up. And first time ever, you know, we were at MBWA, and now we're in the ABP process, right? So, you know, what we really want to do is to make sure that we're collaborating with them, making it as easy as possible for them to sell our brand, and making sure that they understand the value of our brand, right? We may not be huge numbers, but it's an opportunity for them to fulfill part of their portfolio and in the cooler, right, where they don't normally play. Right. And some do and some don't. But it's an opportunity for them to generate extra revenue and GP because Todd and I both know, I mean, the way the wholesalers make money is when they stop the truck, they have to unload as much product every time they stop that truck. You know, fortunately for them, they don't have. They don't have to unload as much of our product to make that money. Right. So what we want to make sure that we have is that partnership. So the plan is we're going to continue to grow our team. You know, we're adding bodies and key counts. We're adding some street level folks. We're going to continue to add bodies in our focus markets. The plan is to double the team again next year, but in a way that's not ridiculous. Right. We can't. We can't just go out and get ahead of our skis. We want to make sure that we're growing the brand organically and sustainably so that there's future growth. And we want to make sure that we're doing it in the right way. And we know that we have to be better. We have to make it a little bit more seamless. And those are all things that we worked on all year to help build that foundation so that we can move forward.

[01:01:10] Google Play: A build on that is from a culture, a lot of brands focus so heavily on the early onset, rightfully so, on consumer. We've shifted and we'll spend a significant amount of our resources, not only financial and our time resources against the customer. So we've shifted our focus to the tune of probably 60 to two thirds of our attention against customer. And that customer is our distributor, our retailer, and even our internal employee to help us build that culture the right way so that the brand, to Derek's point, is this sustainable, long-living lover boy brand and that we can actually innovate from that master brand or this macro level.

[01:01:59] Zoe Licata: You know, Hearty is on fire right now. We're seeing the scan data. We're seeing how you guys are doing. Wholesalers have gotten burned in the past by certain segments booming and busting, hard seltzer in particular. But what is it about hard tea that makes you guys feel like this really can be a sustainable segment and can maintain some of that momentum?

[01:02:26] Google Play: One, twisted. Two, if you think through just consumer, tea is the number one consumed beverage globally. So why can't this space grow? I think that's probably the number one reason to believe. And then differentiate yourself within it. You see the amount of competitive brands that are in the non-ALK space that are finding their niche and helping elevate this and maintain it as number one consumed beverage.

[01:03:01] Todd Anderson: And, you know, we bring something that those other brands don't bring, right? We bring the show. We bring, you know, a better for you option. We bring an army of consumers, right, that continue to grow. But, you know, as we start expanding our distribution, I think we'll bring more people into the category. You know, we just talked about there's, you know, reasons to believe and why our wholesalers should believe, why our retailers should believe. You know, we're gonna help support them in a way where it's a seamless process, but I think ultimately it's gonna be about the fact that the consumer wants flavor, the consumer wants better for you, right? The consumer wants occasion-based products. We fit all those buckets, and I can pretty much certainly tell you that there's wholesalers where we are adding value into their portfolio. Right. So I think that's the opportunity. And for retailers, we're helping provide, you know, bring extra basket ring. We're helping provide innovation. We're helping provide a connection to the consumer. So I think it's a it's a strong story. And I think as we continue to grow, we have to do our job of making sure that we stay connected with our consumer and that we're helping grow distribution so that the consumer. My tagline all month has been give the people what they want. Right. Let's give them what they want. They want it. Right. So let's give it to them.

[01:04:21] Zoe Licata: Perfect. Well, thank you again, Derek and Todd, for chatting to us about everything you have going on. Best of luck on this next year, this next adventure. But we appreciate you joining us.

[01:04:33] Todd Anderson: Well, thank you, guys. Thank you.

[01:04:35] Zoe Licata: And that is our show this week. Thank you to Joe, our one-man audio team, who makes this sound great. Thank you to all of you for listening. Thank you to Jess for chatting with me on this interview. And we will see you all next week.