Brewbound Podcast: Road Reports, Private Equity Deals and More Leadership Changes

[00:00:00] Justin Kendall: Field reports, craft deals, and the leadership carousel continues to turn. We discuss a big news week next on The Brewbound Podcast. Hello and welcome to The Brewbound Podcast. I'm Justin Kendall. I'm Justin Fonte.

[00:00:25] Zoe Licata: And I'm Zoe Licata.

[00:00:26] Justin Kendall: And we are back. Well, not in person, but back together on the same zoom call after a week apart, you both were on the road. So let's kick this week's podcast off with some field reports. And we'll start with you, Zoe, because you're fresh back from Portland, Oregon, where CiderCon was held. How was this year's CiderCon? What were the big themes coming out of it?

[00:00:49] Zoe Licata: Very icy in terms of Portland being basically one giant ice block the whole time. But luckily, everyone kind of showed up. They had a record-breaking attendance this year. Not everybody could come because of the weather, but still were able to break those records. The official theme of the event was speaking to consumers in a time of endless choice. I'm paraphrasing that there, but it was something we've been talking about a lot across especially in beer and ciders talking about it too of just how do you get people to drink cider when there's a million things out there. The unofficial themes I saw a lot of Attempting to be a singular segment and working together for the segment, I think cider still has some interesting issues. It's hard to speak for one segment when it's split in two. You have the more traditional beer-looking parts of cider that are looking at scan data and they're in cans, and then you have the more farm-focused, bottled operating like a winery type cideries. So that was an interesting theme. We had a lot of conversations with people about just how do you balance that and is the segment balancing itself out there. And retail and how to get in retail was another big theme too. They had multiple conversations about Just with retailers, chain, independent, how do you even get in there? What's the best practices there? Because there's potentially some space, but it's a very contentious area. And there's a small market for beer in general. So where to Cider fit into that was a big topic.

[00:02:33] Justin Kendall: On the product front, did you get a sense of what's trendy?

[00:02:37] Zoe Licata: I mean, it's still a lot of high ABV. I think the highest one I tried was a 16%. That one, of course, is in bottles. You can't have that in a can. Also, a lot of low or non-alcoholic ciders this year. I tried a good handful of non-alcoholic cider for the first time, which Contrary to what you would normally think, it's not just like the cider that you would get at the farm after apple picking. It tastes completely different. Some of them taste like a non-alcoholic wine. Some of them taste like just entirely different beverage that we talked about. The Schilling has their non-alcohol coming out that has apple cider vinegar. It's completely alcohol-free. and it's cherry flavored, so a lot of innovation there happening right now. And then focusing on flavor still was big, just like it is in beer. Like everyone's looking, how can you really punch that flavor up for consumers?

[00:03:32] The Brewbound: I know this is one of your favorite events of the year, but what were the vibes like? What makes Cider Con one of your favorite things to go to?

[00:03:38] Zoe Licata: It's always a really fun time because of the array of businesses that get to go to CiderCon. I don't know what the difference is. You can probably figure it out. But between this and other beer events where you really are interacting with people on every spectrum of size and specialty, and they all still are super connected to the farms that their apples are coming from. There is this wholesome small town nature to all of them regardless of size, which I really enjoy. that makes me kind of connect back to my roots a bit. So it just, it feels a lot like what I assume early craft beer days felt like, where everyone is just still super happy and passionate and like connected to what they're making and where their products come from. And it's just generally a pretty positive experience, even though they're very small.

[00:04:36] Justin Kendall: Well, going from icy Portland, Oregon to somewhat sunny San Diego, you both were at the Beer Industry Summit last week. Any themes that really jumped out at you both from that?

[00:04:50] The Brewbound: It sounds kind of somewhat similar to CiderCon in that a lot of talk about focus, a lot of discussion of we can't just keep throwing innovation out there and hoping that something sticks. A lot of that was coming from your friend and mine, Whole Foods Market Global Principal Merchant for Beer, Mary Geiber, Dame Mary Geiber, excuse me. Mary was pretty fired up during a retailer panel that our friends at Beer Business Daily hosted. told everybody, if you don't have, she said workhorse, but I think what she means by that is as close to a flagship as you can get. Jay, if you don't have a workhorse that's doing numbers for you and you're coming to us with a million other innovation products, don't. One of her favorite lines was, if you don't have your port in a storm yet and you want us to get in your boat, absolutely not. So sounds like Mary is pretty fed up with getting pitched a million different innovation RTDs, God knows what, because Whole Foods also has some pretty strict quality rules that if you aren't meeting them, you shouldn't be bringing anything to her anyway. But basically, Mary was telling everybody to stop innovating in 50 million different directions, focus on something that works, figure it out, and focus on that.

[00:06:07] Zoe Licata: And no more hard tea.

[00:06:08] The Brewbound: And no more hard tea.

[00:06:10] Zoe Licata: No more hard tea, please, from Mary. Well, specifically, she then clarified no more like national launches of hard teas. If you were a small local brand that could come out with a hard tea that you can connect to consumers on, then she was more open to it, but no more big hard teas.

[00:06:27] Justin Kendall: It sounds like there was a lot of talk about hard tea, though.

[00:06:30] The Brewbound: Yeah. So who did we hear is launching a hard tea? The Happy Dad guys are bringing a tea to market.

[00:06:37] Zoe Licata: We heard not at the event, but this news came out while we were still there, that Tilray is going to extend Shock Top with their own hard tea.

[00:06:45] Justin Kendall: Jim Sabia joked that they weren't going to make a hard tea. Yeah.

[00:06:49] Zoe Licata: Yes. Consolation said, just to clarify, and so everyone knows we will not be doing that.

[00:06:55] The Brewbound: And then New Belgium, new CEO, Sean So fancy. Sean talked a little bit about Voodoo Ranger hard charge tea, which is their slightly higher ABV tea that is rolling out. So yeah, you know what, like back to Shaktap, I like it. I like tea for them. I think that's a good fit. I'm interested to see how that plays out. But do you guys get the vibes of hard tea right now? Do you feel like we're in hard seltzer in like 2018?

[00:07:24] Zoe Licata: Yeah, absolutely.

[00:07:26] The Brewbound: Yeah, there's like a hard tea gold rush going on. And hopefully everybody learned their lessons from hard seltzer of 2021. And this does not drag on as long. And we won't have too many warehouses overburdened with excess amounts of hard tea.

[00:07:44] Justin Kendall: Well, anything else from the road you want to share?

[00:07:47] The Brewbound: No, it was good to see people. We also heard from Brewbound Rising Star stateside vodka CEO Clement Pappas, who talked a little bit about some of their innovation products. Speaking of hard tea, but you know, their surfside vodka based tea, I had several. The various networking receptions was very pleased about that.

[00:08:08] Zoe Licata: They seemed very popular at those end of night parties and stuff. I saw several people being like, hey, what is that? Like, let me go try that. Like they seem to get a lot of buzz from that event.

[00:08:20] The Brewbound: Yeah. I also noticed that bars were selling out. He said they're about to have some new flavors of lemonade, focusing on berries, which sounds delicious. So yeah, we'll see. But basically, I feel like Zoe, you had like, you couldn't have had two more polar opposite events in the same week.

[00:08:39] Zoe Licata: Very different. The themes were generally very similar, like you said, but yeah, it went, I went from warm San Diego talking a lot about very big beer, then up to freezing cold Portland. We were talking about like, I went to a tiny little tasting of Norwegian ciders at one point, and it was talking to people who like are only in one state and sell their only directly to consumer.

[00:09:05] The Brewbound: What are Norwegian ciders like?

[00:09:08] Zoe Licata: Very much like a white wine, the ones that I tried at least were very similar to white wine, but had some sparkling-ness to them. Very dry, very, very dry, which to me was delicious. Those were some of the best things I had all week.

[00:09:22] The Brewbound: That sounds super tasty.

[00:09:24] Zoe Licata: They were showing the videos of them working at their orchards and it's the most beautiful. Norway and Sweden and all their waterscapes and mountains is the most gorgeous thing I've ever seen.

[00:09:36] The Brewbound: How close are you to booking a trip?

[00:09:38] Zoe Licata: I told Lawrence, we've always had plans if we had a honeymoon to go to Alaska, and I told him, I think we might have to change and go to potentially Norway or Sweden. I support this. Thank you.

[00:09:51] Justin Kendall: Well, the news keeps chugging along, and as we teased at the top of the show, deals. We actually have some deals to talk about, and they are a lot of private equity-backed companies making deals. First up, you broke this news on Friday, Jess, and that's Muddy Nose's parent company is acquiring Wachusett.

[00:10:13] The Brewbound: Yeah, the Smut Shoe Set is upon us. So Smutty Nose, this is a super New England, you know, mid-90s era craft on craft deal. Smutty Nose Brewing, parent company, Finest Kind Brewing. This is not their first rodeo in the M&A space. They made a deal to acquire Five Burrows Brewing from Brooklyn in November. And at the time, we spoke to their CEO, Steve Kearsad, who said they had a very large appetite for M&A, given that they had excess capacity to fill. When my phone started blowing up late Thursday night, I was like, ah, that sounds like something that could be true. So we, you know, we do what we do. And we found out that yes, indeed, Smutty Nosed was about to acquire Wachusett. They are based in Westminster, Massachusetts. We're a top 50 craft brewer for a time. But their, you know, their output has steadily declined in recent years, just under 20,000 barrels of late. Steve did say that their 2023 volume was on the increase on the backs of things like their blueberry, which, you know, I mean, Justin, you lived here for a time, so you know too, but I was going to say, as Zoe can certainly attest, Wachusett Blueberry is an institution in these parts.

[00:11:22] Zoe Licata: Yeah, it's like the main craft beer other than Allagash White that I see most people around me like my age ordering. The blueberries in the pint are definitely helping with that cause, but yeah.

[00:11:35] The Brewbound: That's super interesting. I mean, like cherries in a pint of cherry wheat is how I got into craft beer. So this makes sense. I actually, my last night in the hospital, when I had Cora, I had a nurse who's a family member worked at Wachusett. And she was telling me some stories from, you know, the inner workings of what was going on there. And it didn't sound too pleasant, but I also kind of regret telling her, you know, who I am and what I do, because now there's a lady out there who has seen me in some very intimate moments. that knows all about me, but she's, you know, bound to the Hippocratic Oath, I think. But yeah, I mean, it's ultimately going to be a good story. They're able to retain 90% of Wachusett's employees. Sounds like for a little bit, both breweries, Smutty Nose and Wachusett, will just be cranking out production beer. at the same time, but the ultimate plan is to move all production of beer of the Wachusett brand for distribution, to move that to Smuttynose, just over the border in New Hampshire, and they will continue doing R&D brewing at Wachusett, keeping Wachusett's two taprooms open, you know, the one onsite at their brewery, and then they've got one in Worcester. So yeah, we'll see what happens. It's one of those things that makes a lot of sense, especially when you consider the fact that Justin, you broke this story a couple of years ago. A group led Beer Industry investor Brett Williams had invested in Wachusett and they were largely using it as contract production for Montauk. And obviously with Tilray owning Montauk, that's no longer needed. So this is something when you come to see it all laid out, it makes a lot of sense.

[00:13:04] Justin Kendall: And that wasn't the only private equity firm making moves last week. Orkea Capital, which owned just under half of McKellar, the Denmark craft brewery that used to have some outposts here in the US, has decided to sell a 20% stake to Carlsberg, one of the biggest brewers in the world. And that deal, I guess, will lead to a ramp up in distribution of McKellar beers in Denmark. Founder, I hope I get this right, Mikael Bourgeois, is staying on as CEO and he retains a controlling stake in the business. And it sounds like Orkia is the second largest stakeholder in the business still, leaving Carlsberg in third. But you know, this is probably one of those things where eventually there's some buyout that Carlsberg does over time. That's just my speculation, but that's how these things generally seem to go.

[00:14:05] The Brewbound: Yeah, this one to me had flavors similar to, you know, stone selling to Sapporo or the investment in Brewdog that Heineken has made based on things the founders say about large beer companies when they're, you know, young and on the up. And, you know, after a few years in the business, everybody's gotta sometimes reconsider the strongly held morals they once had.

[00:14:28] Justin Kendall: Yeah, like when your tap rooms have a Wi-Fi password that's Carlsberg Free Zone or something like that. I think that was even on the window of a bar in Copenhagen. So I know that Mikkel's brother Jeppe from Evil Twin was having a field day on Instagram over this and sort of posting some of the things that, you know, have been said in the past. The drama. Lots of drama. One that wasn't very dramatic, but some maybe misinformation got out there at first, but New Belgium is making a minority investment in open brewing, and that's a Southern California brand. Fill us in, Jess.

[00:15:09] The Brewbound: Yeah, Open Beer is a craft lager. There's quite a few of these out there in the world lately, these single Brandt Gehrs producers, a very lifestyle brand feeling. Open is backed by a bunch of skateboarders who founded it. Skateboarders and multidisciplinary creatives, I believe was what the press release said, which to me sounded Very fancy. And they've got a minority investment from New Belgium. New Belgium is helping them, you know, contract brew, but also offering some, some leadership consulting and creative consulting, and just basically helping them get into the beer business, which is interesting. Those multidisciplinary creatives and skateboarding legends are John Nguyen, Tino Razo, and Eko and Atiba Jefferson. And I am not up on the world of skateboarding, so I probably have butchered those names. apologies to the skateboarders and their King Tony Hawk. But the managing director of Open Beer is Keir Dillon, who is also an alternative sports legend. He's a former pro snowboarder and had a turn on ESPN as an analyst. He's an entrepreneur as well. He's been leading Open since 2022, so they've had this in the works for quite a while. They've got six packs of 12 ounce cans that are available in Southern California, officially launched December 1st, continuing to roll out. One of the cool things about open is that every, I think twice a year, they're going to switch out art for cans. Every pack has three different can designs in it. It is all the same beer by different artists. You can see these The Brewbound.com, super different from each other. And it will be interesting to see the new art, you know, six months from now.

[00:16:51] Justin Kendall: And our last bit of news as far as deal-making or at least the repercussions of deal-making came out of a monster investor call. It wasn't an earnings call, but was more so just like a shareholder fill-in, you know, business update meeting. And coming out of that were two things. One, a big focus on the Beast Unleashed and Nasty Beast, they're F&B brands. So, you know, Another Round tea brand for us to talk about. But, you know, the thing that sort of raised eyebrows for us was there's an impairment charge coming for canarchy in Monsters Q4 earnings, and no word as far as how much that is. And then they're gonna be doing some rationalizing of brands, or they have been, No specifics were given there, so do with that what you may. It sounds like they're focused on Cigar City, HiLi, and the Dales family of brands now, so that's kind of where their head's at.

[00:17:58] The Brewbound: Yeah, I mean, that makes a lot of sense when you look at the year-end Cercana data, which is just, you know, off-premise scan data. It's not a complete picture of what goes on out there in the retail world. But through December 31st, Monster Brewing, which is basically the name that goes over the Beast Unleashed and Nasty Beast, if it's popping in scan yet, I know it's on its way out in the world. But Monster Brewing did $100 million, you know, at multi-outlet and convenience stores. for the year, and Canarchy, which is listed separately, is right underneath Monster on the chart at $89.8 million. So when the deal was announced, what was that, two years ago?

[00:18:37] Justin Kendall: It's two years, and it was a $330 million cash deal.

[00:18:42] The Brewbound: Wow. Yeah. I mean, you know, Monster had Another Round of those investor calls, like you just listened to. And they basically said, like, we're really interested in just seeing what happens. But to me, you kind of got the vibe that they weren't, weren't in it for the Kanarchy brands. They were in it for the facilities, the wholesaler network, the path to market to potentially make other things. And that is what we've seen.

[00:19:07] Justin Kendall: Another theme that continues from 2023 into 2024 is a lot of movement at the top of craft breweries across the country. The latest and biggest, and Friday was such a big news day for us, Maria Stipp is leaving Sapporo Stone. She guided the Stone brand prior to the sale, through the sale, and now I think it's, what, a year and a half later, here we are, and she's stepping out, and stepping in, at least in the interim, will be Zachary Keeling, who is, I think he was last CFO, and he has been sort of on the upward trajectory there.

[00:19:47] The Brewbound: Yeah, Zach was their chief financial and strategy officer. He's been at Stone for a long time. You know, he had a brief hiatus to come out this way to get his MBA at Harvard Business School. And I know this from digging around his LinkedIn. It's not like he's one of those people who, you know, on our interview said, like, oh, I got a degree somewhere outside of Boston.

[00:20:06] Justin Kendall: He was name dropping.

[00:20:08] The Brewbound: No, he was not name dropping at all. He did not mention this. Yeah. But yeah, like, I mean, Justin, did you get the sense that like, I tried to be like, so the search and my vibe and takeaway is that this is basically just going to be Zach's job.

[00:20:21] Justin Kendall: Seems like a formality. You know, we've been through this before with Reingeist, where there's an interim tag. And, you know, the thing with the interim tag is like, How do you walk that back? Like, hey, thanks for covering for us for, you know, three, six months, whatever. By the way, you're CFO again.

[00:20:41] The Brewbound: Yeah, go back to your old life. And that happens, you know, we've seen that happen. I can't think of where, but I know it's happened. But you know what, like maybe like the interim CEO was like, hey, I don't want this job.

[00:20:51] Justin Kendall: I think it happened at New Belgium.

[00:20:53] The Brewbound: I think you're right. I mean, look, I just hope everybody gets what they want to happen and is happy about it. That is what I hope for everybody. But, you know, Maria, I remember when she got the job, like it was Labor Day weekend in 2020, and Dominic Engels had announced he was resigning just a few weeks before. And that business has really transformed since then. Look at their portfolio, like one of their biggest bets is on Buena Vida. Buena Vista, Salt & Wine Lager. Yes. And Buena Vita is the hard seltzer. Thank you guys. Yeah. Like, you know, Justin, we looked at these numbers on Friday and really what we're seeing here is a portfolio that is very much greater than the sum of its parts. None of their brands were popping in the Circona Top 30, but they are overall. So things are working. It's really interesting to see, you know, that's like a really interesting use case for a big national craft player. It's not really what you see right now.

[00:21:51] Zoe Licata: I think we can give Maria her flowers and say she was one of our frontrunners for Person of the Year this year because of how she helped shepherd those in for the transition. It's pretty impressive what she's been able to do with that brand since she joined.

[00:22:08] The Brewbound: Yeah, she did the same at Heineken.

[00:22:10] Justin Kendall: and that's the perfect segue is she's done this before and at the next brand we're gonna talk about, which is Lagunitas, and helped shepherd that brand before moving over to Stone. And if you were wondering what's going on with Lagunitas, it is a full Heineken takeover at this point because Peter Green was named head of sales. He's coming over from Heineken Europe, and he is the third, I believe, C-suite employee to come over. He joins CEO Dennis Peek and Hannah Dray, who is CMO. So you can see the trends have been going the wrong way for Luganitas for quite a while. And they are now basically, you know, taking over the C-suite and trying to infuse some of that Heineken leadership over there.

[00:23:01] The Brewbound: Yeah, I mean, we'll see if that plays out because these are two very different brands. Previously, I feel like we had seen following, you know, Heineken's completion of the acquisition of Lagunitas was they kind of left Lagunitas alone to do their own thing. But I guess maybe they're changing their mind there.

[00:23:19] Justin Kendall: Definitely changing their mind there. Let's wrap up the news section of the show and talk a little bit about Anker because we're very close, it sounds like, to finding out who the winning bidder is. But what really interests us, I think, is that a very familiar name has emerged.

[00:23:41] The Brewbound: Yeah. So Fritz Maytag himself, who acquired Anker Brewing in 1965, I would say nearly single-handedly ushered in the modern era of craft beer, but I think we all kind of know that's not really accurate, but I don't think anybody would ever fight you on that. Generally, Fritz Maytag is regarded as being the father of craft beer. Fight me in my email if you want. But he is part of this investor group that is making a play to acquire Anchor as a going concern. It is led by local San Franciscan, Mike Walsh. Other people on that team are Tony Folio. I don't know how you guys say that, that you covered this story, not in my time The Brewbound. But Tony was one of the owners that Fritz sold to in 2010. Also in this posse is Pete's wicked ale, former CFO, Jim Collins. That is a throw back to the old days of craft beer and also private equity investor named Robert Sale. But that's this team that Mike Walsh has put together. Mike's been giving interviews that, you know, I was able to catch up on. He told the local NBC affiliate that his plan is to go back to the old labels. That was the fastest and first thing he said, which is shocking. You remember that rebrand in 2021? People had big feelings about the new anchor redesign. And Mike apparently feels strongly enough that he wants to assemble millions of dollars to buy the brewery to kill the rebrand. I'm just kidding.

[00:25:05] Zoe Licata: People are still talking about like in the comment section of almost any time like news came out about the sale, there was at least one or two people calling out all this is all because of that package change.

[00:25:17] The Brewbound: It is not, but fine. Mike also wants to cut the portfolio to four or five beers. He wants to keep all production local. I don't know that that was the case before, but he wants to make the Anchor Brewery more of a destination than it's been, upping the food offerings, bringing in musicians and artists. It sounds interesting. He said that he believed that Sapporo overpaid when they bought it in 2017 for $85 million. Up against Mike and his crew, including Fritz himself, is a group of Anchor employees, the Anchor SF Cooperative. And they have been crowdfunding. They've got a WeFunder going for equity in the business. Should they win the auction, they've also got a separate GoFundMe to cover their expenses in this process. But they have not been as friendly with the media of late. So I couldn't really find any conversations that those guys have had with anybody recently. But yeah, I mean, Both of you covered this over the summer extensively, so I don't really know why I'm the one that's talking about it right now. It should be you guys. But writing this story today was a very helpful exercise in educating me on what I missed out on. But basically, this auction could be everything all together, could be in parts. Seems complicated.

[00:26:32] Zoe Licata: Yeah, a lot of the conversations that were happening right after the sale was announced was what is going to happen with the properties because those seem to have some of the highest value because they're in San Francisco. And is it going to be something where people are just buying this up for the real estate? And so I think it's still we'll have to see if like, what are they going to be prioritizing from these bids? Is it they just want that higher price tag from those potential developers or something? We'll see. But that was like one of the main, main storylines in that beginning.

[00:27:07] The Brewbound: Has all the trappings of a Hallmark Christmas movie.

[00:27:11] Justin Kendall: To one of the people who said that they were interested in buying it, they said that they wanted to turn it into a reality series of bringing back the brand, which to me is nightmare feel.

[00:27:24] The Brewbound: Yeah. I mean, aren't we past that in the world of reality TV? You'd think. I mean, give me like a tight docu-series on a streamer. I'd take four episodes on this. Yeah. But we can have an answer here. They say by the end of January, which is next week, which is crazy, crazy. So hey, if you're doing dry January and you're at the end of your rope, hang on. So close, so close, so close.

[00:27:52] Justin Kendall: All right, let's play Another Round of Tabbing Out, and we found out earlier this week that Molson Coors is bringing back the Coors Light Chilled Train, which I don't think it was called back in the early 2000s, but they're gonna bring it back for the Super Bowl. Not a lot of other details other than some sweepstakes to get some consumers into the commercial when it's moving at 900 miles per hour, but they're gonna do a slow-mo version for online. Are you buying Another Round of the Coors Light train being a nostalgia hit or are you kind of Tabbing Out on this one?

[00:28:32] The Brewbound: I'm going to tab out, you know, and like I could be wrong, but I think they're assuming we have much stronger warm fuzzies for this train than we do.

[00:28:41] Zoe Licata: Yeah, I'm going to tab out as well. I have absolutely no connection to this chill train. It's like a very foggy memory. That's about it. So I don't, this is not doing anything for me.

[00:28:53] The Brewbound: I mean, it's an interesting idea. It sounds like they've, they've really kind of thought through the 360 nature of this as they should. It's a gigantic investment. So if you're not firing this shit on every available prong, you're wasting your money. So well done to them. But am I personally excited about a train? No.

[00:29:12] Justin Kendall: Are you expecting a karate fight in the middle of the train? Or am I just thinking of bullet train the movie?

[00:29:19] Zoe Licata: You're combining bullet train and the ad from last year.

[00:29:22] The Brewbound: Yeah. Like just watch the end of this. There's going to be a big reveal that the train conductor was actually Blue Moon.

[00:29:30] Zoe Licata: Yeah. Speaking of, I want to dive, see if we can dive into numbers again for what that commercial did. Because as I've told Jess while we were in San Diego, recently discovered that a friend thought that that commercial was Blue Moon being ballsy and showing competitor brands and then highlighting themselves at the end. Did not realize they were all owned by the same company. Justin has not heard this yet. So yeah, that was just brought up unprompted the other day.

[00:30:06] The Brewbound: There's so many things that I love about this situation. Because I feel like, first of all, the people who say that, like, advertising doesn't work on the young. Here is a young fellow who has been thinking about this ad for over a year and recalled it almost a year later. Yeah. Zoe, one of my thoughts upon seeing it was like, oh, they just outed themselves as being the parent company of all these brands because the consumers don't know. They don't care. They have no idea. They're not thinking about who owns what, except, you know, from like 2014 to 2017 when they cared about that a lot.

[00:30:40] Justin Kendall: But. Cared about it too much. Way too much.

[00:30:45] SPEAKER_??: Yep.

[00:30:46] Justin Kendall: So let's wrap up with one last, Another Round or Tabbing Out. And this is sort of like an unofficial theme of this episode, because I feel like we've talked about it a lot. IWSR, which is the marketing research firm out there is warning RTDs that they could be at risk of a craft beer like future. So. We know that the number of RTDs have exploded in recent years. IWSR says they've tripled since 2018 or between 2018 and 2022. Volumes have been double digits from 2018 to 2021. And Martine Ludwig, Consulting Director for North America at IWSR said, As the number of brands and new variants on the market increases, growth rates are trailing off. And he continued later, the glut of brands that emerged during the peak of craft beer movement in the US essentially led to a de-branding of the category. Instead of buying based on brand, consumers instead started to focus on expressions and flavors of beer due to the overwhelming nature of breweries and brands. So basically he's saying RTDs could be heading in the same direction. But I want to get a perspective from you both, whether you're buying Another Round that RTDs are even comparable to craft beer, or are you Tabbing Out on this notion?

[00:32:26] The Brewbound: My issue here is not the notion that RTDs are wilding out and need to be culled a bit. My issue is with comparing it to craft beer because I think what he actually is comparing it to is wine. This is something that we used to talk about a lot in my old life was how do we prevent the winification of beer where consumers are shopping by you know, varietal or style. I'm going to get that. I'm not a wine person. So I might be saying it wrong, but like, that's how people shop for wine. Is it not? They look for the kind of wine they look at, like where the wine came from. They look at price point. They kind of look at everything, but the brand of the wine, except for whatever the fuck is happening. Josh wine right now. I don't know. I am not online enough, but yeah, like I think our friend Martin just saw that he was He's gonna grab some eyeballs by calling out craft beer, and he did, and kudos to him, great job. But I think it's not quite the right comparison. Because a lot of the vast majority of brands of craft beer, of craft beer SKUs, of whatever, of whatever you wanna say, a lot of these are only available at brewery tap rooms, and that's a different beast.

[00:33:40] Zoe Licata: Yeah. What does BART call out all the time with style trends in beer? It's not people actually super interested in that style as much as it's certain brands that are really popular right now. I don't think that's really an accurate comparison. I'm Tabbing Out because it seems weird to compare RTDs, which seems like mainly very large corporations putting out this product. and are all operating pretty separately. I don't think there's a large RTD collective movement together other than potentially Discus working with all that tax stuff versus Kraft, which was people creating the Kraft community, and it's starting with much, much smaller brands. It seems like a weird comparison. There's not a lot of crossover other than just the pure number of products out there. We've talked about it before. I think it's like, you can compare it to hard seltzers, sure. But I don't think you can compare it to craft.

[00:34:45] Justin Kendall: They roll hard seltzers into their numbers, I believe, too. So then it gets a little bit tricky. I think you're dead on, Jess, because we've heard about winification of craft beer for a while, way back, you know, to when I started and how that was a major concern of where things could be heading. not to keep bringing up, you know, the Voodoo Ranger brand, but that is one of the strongest craft beer brands out there right now. And I don't think that that's getting confused with other IPA brands at all. And I mean, look at a lot of the top craft brands. I don't feel like there's any confusion among them. There may be confusion as far as consumers being overwhelmed when they get to the shelf, but I don't see that as comparable. And IWSR called out two brands, which are Jack and Coke and Absolute and Sprite as examples, maybe bucking that risk trend, which those are basically calls.

[00:35:50] The Brewbound: Yeah, I mean, that's like those are absolutely different use cases entirely. Like the spirit in each is an internationally known brand, as is the mixer. Different story altogether. I mean, the craft beer is certainly a cautionary tale for many reasons, but I wouldn't say it's this one.

[00:36:07] Justin Kendall: Yeah. Yeah, I'd agree. All right, well, that's our show for this week. Thanks to Jess and Zoe for everything they do. Thanks to our three man audio team. And thanks to all of you for listening. We'll be back next week.