Brewbound Podcast: Sazerac’s Big Move Gets the New Year Started

[00:00:00] Jessica Infante: Heading to CBC? Kick things off the day before The 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 The Brewbound.com slash lovecity.rsvp. And don't forget to catch The Brewbound team at booth 956 during CBC. It's a New Year on The Brewbound podcast. Hello, and welcome to The Brewbound podcast. My name is Justin Kendall, and I'm the editor The Brewbound. And I'm joined by Jessica Infante, the managing editor The Brewbound. Welcome back, Jess. Hi, happy 2023. It's nice to be back. Yeah, it's nice to see you again and talk to you again. This is maybe the longest period that we really didn't go through like daily contact. For sure. I missed you guys. Yeah, I'm sorry. I missed you pals. Also here on our proof of life podcast is Zoe Licata, Brewbound Reporter extraordinaire. How you doing Zoe?

[00:01:18] Jacqui Brugliera: I am alive. I can confirm.

[00:01:21] Jessica Infante: Yeah, see, this is our welfare check. So we'll just jump into the news this week. And this is going to be a rather short episode. And the big news that came out right as we were heading into the New Year's holiday weekend, was Sazerac is redoing its distribution network or a large portion of it, moving out of RNDC and into what looks like a lot of beer wholesalers in some major markets, California, Florida, Texas, a whole bunch of others that I'm not going to bore y'all with and name, but it's a lot. Yeah. And I mean, it's interesting because Sazerac is a huge spirits producer. So not always a company that comes top of mind when we think about the beer industry, but they're doing a lot in the beer category. Justin, what did you find out? Yeah, just looking through the IRI data and in convenience alone, they are the 15th largest beer category vendor and their Fireball Cinnamon in C-Stores is number 41 overall with 70.3 million in dollar sales. It's up more than 162% on the year in multi-outlet and convenience. They're the 22nd largest beer category vendor. They have a 0.21 share of beer category dollars. So a pretty significant player within the beer category, and you wouldn't really realize that, but Fireball Cinnamon is their big deal in the malt based category. Yeah, they had a pretty sizable booth at the NAC's trade show in Las Vegas in October that I visited. And really what I recall the most was the impressive display of nip slash airplane bottles, depending on where you are in the country is what you call them. And that's really what they, you know, were promoting to all of the, you know, the C-store buyers at that show, which makes sense, especially now that we see what their C-store numbers are. Yeah, and these transitions are expected to take hold by February 1st. They'll be with Johnson Brothers and a number of markets, Reyes in California, Hawaii, and certain counties in Texas, Southern Glazer in Alaska, Martin Yeti in Maine, Vermont, and New Hampshire. In Texas, it's a litany of distributors such as Andrews, Reyes, Houston Distributing Company, Faust, Favorite Brands, KegOne, L&F, Reed, GG Distributing, Fisher 59, and then they're also going to be set up for brokerage operations in a number of control states. So That was the big bombshell right before the holiday. And we took it a bit easy and said, it's Friday right before New Year's. We'll get to this when we get back on Tuesday. I know I said this to you both this morning in our morning huddle, but I'm really proud of us. We are pretty incorrigible workaholics. And we did, I think, a really good job unplugging and restoring in the week between the holidays. So congrats. We definitely needed it for the way this year is going to shape up to be. Oh my God. Oh, for sure. Definitely necessary. And we obviously still published some news. We ran newsletters every day, but we, uh, we were good. I'm proud of us. Zoe, you, you did some work over the last week and you were covering Drizzly's predictions for 2023 and their look back at 2022. What did you dig out of there?

[00:05:01] Jacqui Brugliera: Yeah, so not too many surprises in their predictions for this year. But the main thing is that RTDs will continue to grow in 2023. But the thing that stood out to me is that they see it being a year round product. So this is not going to have as much of the seasonality as it may have had, or that like hard seltzers really had. RTDs, people are looking for them during all seasons now.

[00:05:26] Jessica Infante: And their definition of RTD is a little bit broader than just canned cocktails.

[00:05:31] Jacqui Brugliera: Yeah, so their RTTs is everything from like those bottled cocktails, like on the rocks, those type products, to the canned cocktails that we think of spirits-based and malt-based. They sometimes include hard seltzer in that, so they have a wide array of what is within the RTT category for them. I guess I would say it's a pretty safe prediction when you have that broad of a category to say that there's still going to be growth there. But it's, I mean, as we've seen, RTDs have just been hitting it out of the park across the board. I am curious about what within that category is going to specifically be less seasonal. Like what within those is going to beat that seasonality that some of the other products have struggled with? Is it going to be those more like traditional like bottled cocktails versus like a cup water or something like that? But they didn't get into too many specifics about what within the category will justify that seasonality. I got hit with consumer forgetfulness or not really understanding category type thing the other day where I was in Connecticut and had to pick up some beverages and Lawrence asked me for high noons and I was like, oh yeah, I'll just go to the grocery store. Forgetting, oh yeah, high noons have vodka in them. I can't get them at the grocery store. So one of those things with high noons, I still am thinking of them kind of as a hard seltzer rather than these other canned cocktails.

[00:07:03] Jessica Infante: Well, that's what they'd like all of us to think of them as. But one of the things that stood out for me in that Drizzly report was they're dusting off their Year of the Logger t-shirts. So I guess it'Dry January. We can break those out again.

[00:07:17] Jacqui Brugliera: Yeah, even I've only been The Brewbound for what, like two years now? And I feel like I've heard multiple times that this is going to be like the year of the lager for different years. But Drizzly has really said that this is the one that is going to be the comeback year. They've said that retailers are expecting to put more space in the cooler for lagers and that specifically the consumers at Drizzly who are going to be buying beer or mostly beer in 2023 are within that going to be buying mostly lagers. But the second one under that is hard seltzers, which was a bit surprising, but I guess those kind of go a little hand in hand with those lighter products.

[00:07:56] Jessica Infante: We'll see if it finally happens. I mean, it's interesting to me that a lot of data or, you know, analysis that we see coming out of people in the know is that some of the older consumers that dabbled in hard seltzer are now coming back to light lagers. I think that's a little bit of what Drizzly is seeing too. Because Beer Twitter would love for craft lagers to become a thing again, but when we have conversations like this, like we're not talking about bespoke Czech pilsners. we're talking about some of the biggest beer brands in the country.

[00:08:31] Jacqui Brugliera: Yeah. And those, some of those biggest beer brands were the ones that were the top like lagers on Juicely's list. Like when lagers had their big Labor Day weekend this past year, like it was all those big light lager brands. It wasn't really any craft brands. So that's definitely the direction that they're seeing.

[00:08:48] Jessica Infante: Yeah. In other news, it'Dry January. So I guess we got to talk about. Dry January and Athletic Brewing company is making a seven figure investment in the month to promote their, what is it? Try dry. That's the slogan for this Dry January. And as Bill and others with athletic have told us, you know, this is about trying to reach consumers where they are. I mean, you know, this is the month of resolutions and you know, Dry January, so of course they're going to invest that much in the month that is sort of dedicated to this.

[00:09:25] Jacqui Brugliera: Yeah, I thought it was interesting when we listened to a call the week before the holiday with the Adult Non-Alcoholic Beverage Association. And they were talking about that they expect participation in Dry January to be higher this year as it's been getting higher and higher each year. But they've also are seeing more people participating in, I think they called it Dry January. So it's like an adjusted version of Dry January to better fit people's needs or kind of dip your toes and try and Dry January for the first time. And so maybe that's only drinking on social occasions or limiting the amount of drinks you're having for the month and not going full dry. But that was an interesting tidbit that they talked about of just like, it seems like, yes, participation is higher, but people are also adapting how you approach the month to still participate in a way that suits consumer lifestyles.

[00:10:22] Jessica Infante: Yeah, I butchered the campaign name. It's give dry a try. Big difference there. But yeah, this seems to be what Bill at Athletic and others within the non-alcoholic beer space have said before is, you know, they're not trying to get people to give up alcohol. They're trying to get people to just try this, moderate, maybe work this into another occasion or moderate, you know, it's a pace setter or, you know, it's Tuesday night, Wednesday night, and you don't want to have a beer, but you want that flavor. You know, you can crack a non-alcoholic beer and not,

[00:10:58] Jacqui Brugliera: not have the maybe guilt associated or you know the after effects of drinking alcohol for sure yeah and there's so many options now that it just seems like one it's just easier to try this type of thing but also like the month provides a nice excuse to just see what's out there and see what you could possibly fit into your consumption habits for the rest of the year if you want non-alcoholic cocktails Those are out there, which also I believe on that report, like, those are 1 of the most anticipated things this coming year is within the non category is not alcoholic cocktails or what people are looking for. So there's so many different options now. Anybody can really participate in any way they see fit.

[00:11:45] Jessica Infante: Yeah. And Bill from Athletic told me, he said, our goal isn't to have great customers Dry January. Our goal is to have them try our beer in January and stay with us the full year. Most of the people who try us in January stick with us for the full year. And I doubt all of those people are cutting out alcohol altogether. One thing that Bill's always been really adamant about is that what Athletic really is seeking to do is create new drinking occasions for the beer category, which they've done. You know, plenty of people maybe don't drink Monday, Tuesday, Wednesday, but by having a product like an Athletic beer, they can. I know a lot of people have a lot of thoughts about the idea of Dry January, particularly with the precariousness that many craft breweries are feeling right now, but you can't force drinks into people's hands who weren't gonna have them anyway. So having an option that keeps the beer category at the top of mind for them is good. Yeah. And if you're also mixing it up, you know, when you're at the tap room and you're looking for something to help create that base, There's Eastern Standard provisions. Yes. You posted the story that our colleague Lukas Southard did for BevNET about them getting a $13.5 million investment from Mondelēz. And you really did a great job of adding to that story and explaining why it matters for brewery taprooms. Oh, thank you. That's so nice to hear. Yeah. Our colleague Lucas had written it up for the Nosh and BevNET sites who are our sibling publications because, you know, Nosh covers foods and this is right in their wheelhouse. But I knew that this is important for, you know, our reader base. And Zoe and Justin had gone to the Mass Brewers Guild Conference back in November and founder Garrett Harker was the keynote speaker. And we didn't actually really cover his address because you know, a few other things came out in the news that day. But Garrett, if you don't know him, is a Boston-based, you know, restaurant owner. He's been in Boston for forever and has some really beloved restaurant brands, including Eastern Standard, which is slash was a restaurant in Kenmore Square near Fenway Park. And they unfortunately, you know, were a victim of the pandemic. However, Garrett's getting ready to reopen Eastern Standard. But in 2019, he wanted a way to transition the Eastern Standard brand outside of the traditional restaurant experience. And in his address to the MBG Con, he mentioned that he spoke to Chris Loring, the founder of Notch Brewing up here in my neck of the woods about like, hey, would you be interested in a pretzel that you could serve? And Chris said yes. Previously, Notch had been getting pretzels from one of the bakeries in our town, but I think perhaps they needed more bakeries and more pretzels in the bakery could provide. And that's really kind of how things got rolling for Eastern Standard Provisions. Now they're making delicious soft pretzels, Belgian waffles. They've got some toppings and condiments, a few other products, but they really started going to market through the Taproom channel. At the end of their first year in business, they had their pretzels in more than 350 beer-centric on-premise venues, and they're growing. So if you want a way to serve pretzels and waffles in your taproom without having to do too much heavy lifting on your own, perhaps hit them up. They've got this big investment from one of the biggest food companies in the world. But yeah, sometimes it's nice when there's a little crossover piece that our coworkers put together that we, you know, think there's interesting tidbits there for our readers. So that's what happened. I think their pretzels are delicious. Very glad to hear, too, that Eastern Standard is making a comeback because that was one of my favorite places in Boston. I'm going to say something that's very embarrassing for me. Oh, no. I've never been. I know. I know. You can rectify that now. I can rectify that. If you find yourself back this way, we can all do that. Yeah. Which is exciting. Definitely. And one more story to put a bow on this podcast is a story that we broke last year, which was Roothouse Brewery Group has acquired Melvin Brewing and the deal is done. Yeah, that deal closed right before Christmas. We've been following that one for a long time. In June, Melvin made it known that they were gonna be seeking a partner or buyer. And Justin, you very astutely picked up on what was happening when we were all at the Great American Beer Festival in October. These two breweries had booths next to each other, right? Mm-hmm, almost on top of each other. Yeah, and then the news came out, what, the next month, and here we are. Yeah, very exciting that they got that to the end. Very happy that it's done. It was a long way to get there. And there are a lot of twists and turns in the Melbourne story up until that point. So hopefully under new stewardship, I guess, new stewardship again, after Frank Magazine helped lead that brewery, you know, after a lot of negative things happened and got it to this point where it could be sold and it can live on under a new brand family. Yeah, you know, more twists than an Eastern Standard provisions pretzel. There you go. And with that, we'll say that's our show for this week, because we might as well leave on a higher note. Thanks to Jess and Zoe for hanging out. Thanks to our one man audio team, Joe, for putting this together. And thanks to all of you for listening. We're going to be back next week.