Brewbound Podcast: Topa Topa, Match Point and That’s Delicious Financials on What’s Working for Craft

[00:00:00] Justin Kendall: 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. How are omnibibulous shoppers storing their drinks? Find out next on The Brewbound Podcast. Hello and welcome to The Brewbound Podcast. I'm Justin Kendall.

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

[00:00:53] Justin Kendall: And this week, we're going to bring you three more conversations from the California Craft Beer Summit, where we did The Brewbound Podcast on location. You'll hear this week from Jack Dyer, founder and CEO of Ventura-based Topatopa Brewing, Simon Chen, co-founder of Albany-based Matchpoint Brewing, and Drew Kearns, the founder of That's Delicious Financials. So stay tuned for that. But first, we got to plug some things and we're going to be hitting the road for more on location conversations. We're going to be at the Craft Brewers Conference on the floor, booth 1989, our little tribute to Taylor Swift, intentional or not. And we're going to be there Monday through Wednesday. So you'll be able to find us there on the floor.

[00:01:41] Jessica Infante: In Vegas. You sound so excited, Zoe. This is Vegas's redemption for me, if that makes sense. Vegas needs to redeem itself from my last, my first and only Vegas experience. I don't know if your first Vegas experience is not great. I don't really think there's much. Well, it was also a work conference where we never really left Caesar's Palace. Yeah. See that stuff. My, my first Vegas was a work. I've only ever been to Vegas for work.

[00:02:15] Justin Kendall: Same.

[00:02:16] Jessica Infante: We saw Brittany and it was amazing. Right. And now that I've read her book, I feel terrible about partaking in that, but it was awesome. I was going to take Stephanie Rodas from Three Terp Beverages recommended David Blaine, right? Magician? Yes. She had said that that had changed her perception of Vegas, because she said it was an incredible experience. That sounds like a trick. I want to say it was David Blaine. It was a magician, and I want to say that's who it was. Then Zoe she actually recommended, I looked up, and he's not going to be there while we're there. So I can't take Steph's advice, unfortunately. Maybe it was Criss Angel. One thing happening in Vegas while we're there that will likely be magical and not involve any trickery is the National Black Brewers Association's meetup will be at Beer Zombies. We will be there on Tuesday, April 23rd. I will give you all a related adjacent fun fact about April 23rd. It is the anniversary of the signing of the German Rheinheitsgebot.

[00:03:22] Justin Kendall: What timing.

[00:03:24] Jessica Infante: Right? Well, it's also my wedding anniversary. Yeah, yeah. So 15, 16, and 2016. And now 2024, the MB2A tap takeover.

[00:03:37] Justin Kendall: 20 beers, all from Black-owned brewers, all for Just Infante.

[00:03:42] Jessica Infante: Much to celebrate. I don't know that I can drink 20 beers, but...

[00:03:46] Justin Kendall: Between 6 and 10 p.m., I have faith in you.

[00:03:49] Jessica Infante: I don't know. I don't know.

[00:03:51] Justin Kendall: No, I don't have faith in you.

[00:03:54] Jessica Infante: Just Infante of three years ago, totally.

[00:03:57] Justin Kendall: Yeah. Well, we'll be there and you can join us. So join us on the floor as well at CBC. Let's get into this week's news. And I don't know what's going on out there. We've got some positive signs, you know, whether it's shipments, circana data, the beer purchasers index. What is happening, Zoe?

[00:04:20] Jessica Infante: Yeah, I have been living in data world and for once it's not super depressing, but potentially misleading. So yeah, we got the latest Cercana data through the end of March. We also got the latest shipments data from the BI and both show that beer and particularly craft beer from the Cercana report are improving and doing better. With the caveat, March we had St. Patrick's Day, we know beer got a really big boost from the holiday this year, so those things could go back down in April before we get into the true real summer selling season. And Kraft is still technically in the red versus 2023, but it's improving. So per this Circona report, Kraft dollar sales were down 1.2% year over year for the last four weeks through the end of March. And volume also down, but improved over our previous report, which had dollar sales down 2.7% and volume down 4.4%. Making some progress there. The shipments report from the BI was, I think, even more positive or potentially some big milestones in there. There was an estimated 11.9 million barrels of beer shipped for February. That was up almost 8% versus February 2023. It also was the strongest monthly growth in almost three years, so since May 2021, which It's pretty big for shipments. I mean, that's around the time where we're still in those pandemic era things impacting shipments. And 2023, as we know, was a lot of negatives for shipments. It also was the strongest February for total industry volume. So that includes domestic shipments and imports since 2016. So that's a long time. I mean, that's, I couldn't drink in 2016 and it was well before anyone even knew what COVID-19 was. So I guess we can give a mini, like a one-handed little clap for beer, some positive Stuff going on?

[00:06:36] Justin Kendall: Some snaps?

[00:06:38] Jessica Infante: Andrew Heritage, who's the chief economist at the BI now, he said, you know, caveat here, January, February, typically lower volume months. So you're going to have to see if this sort of growth is going to continue in those more impactful high volume months. I mean, these BI reports have been a bloodbath for months. So to see something come through that didn't just look like straight carnage was heartening.

[00:07:04] Justin Kendall: And these always get revised, too. So it's one of those where you're like, oh, nice. Let's let's wait.

[00:07:13] Jessica Infante: Yes. Yeah, they do always get revised. And typically it seems to get revised on to a lower number is what I feel like we see most often. But it would take a pretty drastic change for this not still to be pretty positive news. And yeah, like last year, February was the only month of the entire year that had domestic tax pays up at all year over year. And it was a very, very small percentage. So to see not only is there positivity happening in 2024 in terms of percentage growth, but also that it's making significant leaps over even further back milestones is pretty big. Well, and there's a little kind of ripple here that I think is a little interesting is that I think if we back up two years, early 2022 was when a bunch of price hikes took effect. So what we might be seeing was that, you know, maybe volume was a little uninflated in 22 to get all of the beer to where it needed to be ahead of the price hike. And that's why some of 2023 looked depressed. And maybe now we're just kind of getting to an equilibrium, but I don't know. It's possible. I think that's a fair assessment.

[00:08:28] Justin Kendall: Well, I think we can shift gears and talk about somebody that believes in beer at this point. And that's Tilray. They did their Q3 earnings call this week. And Jess, you were on the call. We've covered a lot of Tilray lately, including like their innovation slate.

[00:08:46] Jessica Infante: Well, Tilray believes in beer big time.

[00:08:49] Justin Kendall: They got to believe in something until cannabis is legal in the U.S.

[00:08:53] Jessica Infante: Exactly. And it sounds like the Canadian cannabis tax situation is a nightmare. So the beer division was some good news for them. To back up for anybody who does not know, Tilray acquired eight brands from AB over last summer. They started acquiring craft beer brands in 2020 with the acquisition of Sweetwater based in Atlanta. And 2021, they tacked on Green Flash and Alpine. In 2022, they added Montauk. And last year, they added a bunch of brands from AB's Brewers Collective. A lot of stuff in the pack Northwest. 10 Barrel, Woodmer Brothers, Red Hook, Square Mile Cider, Blue Point on Long Island. But yeah, they added a bunch of brands. And those new brands from AB have driven up Tilray's beverage division revenue 165%, which is crazy. Yeah, Tilbury's had a big boost in revenue because of these brands, but that's obviously, I mean, you know, a year ago they didn't have any of these brands, but, you know, CEO Irwin Simon said that their existing brands, you know, I guess what they would call their quote unquote legacy portfolio of the brands they bought before last year, not from AB, were all pretty consistent. So it's more than a lot of other people can say in the industry, which is pretty good. One thing that they did call out that Justin Yu pointed out was that margin for the beer division now that they've got the AB brands is a little wonky. It's not as good as it was before because the deal with AB involved those breweries and those breweries are not necessarily all at capacity. So they expect this to change in the coming months. when volume increases to account for the summer selling season, and then those breweries will become a little bit more efficient. So that should help. They've got a wild innovation slate coming, which we've talked about on this podcast, that includes non-alcohol beer, canned water, FMBs, something kind of wild that is basically a take on alcoholic Gatorade in resealable plastic containers. We'll see how this goes for them, but the number one stat that kind of blew my mind from this earnings call was that Irwin said, you know, when we first acquired Sweetwater in 2020, that was about two and a half million cases of beer. And today they're at 12 and a half million cases. So they've added 10 million cases in four years, which I don't know. I mean, it's 10 million cases from a metric fuck ton of brands.

[00:11:21] Justin Kendall: Yeah. There's always something that Erwin says that sort of makes your ears perk up. And Then Zoe for me was he was talking about Shock Top. And he said, according to their qualitative research, Shock Top has the highest purchase intent among 12 of the largest beer brands.

[00:11:39] Jessica Infante: What does that mean?

[00:11:40] Justin Kendall: He said, this is why we're focused on increasing distribution and getting this brand back in the hands of consumers. So purchase intent would be they did what a consumer survey and the consumers came back and said, yeah, I'd buy that as far as shock top goes.

[00:11:57] Jessica Infante: But I mean, if they went to the top 12 brands, they probably included a lot of big nationally distributed brands that maybe aren't doing so hot.

[00:12:04] Justin Kendall: Exactly.

[00:12:05] Jessica Infante: Right. You mix in shock top with a. crazy mulleted sunglasses wearing orange and people are like, oh, I buy that guy. He sounds fun. Right. But also, it's not like Shock Top is a small regional brand that isn't accessible to a lot of these people. So they could buy it and they haven't been buying it.

[00:12:29] Justin Kendall: I know that it's it's a weird thing to call out. I feel like when the trends have been what they have been.

[00:12:35] Jessica Infante: Right. I mean, like purchase intent is all well and good, but like, you know what? Like I intend to become a billionaire. Is that going to happen? No.

[00:12:44] Justin Kendall: Right. I intend to buy a new desk, a new grill, you know, a few different things. But you know what I haven't done? I haven't purchased any of those things.

[00:12:54] Jessica Infante: Actions mean more than words.

[00:12:56] Justin Kendall: Yeah.

[00:12:56] Jessica Infante: In business and in life. Yeah, so ShockTap is, so they have actually tapped the Boston Consulting Group, a fancy schmancy consulting firm based obviously in Boston. Why am I explaining all of that? Their name is pretty self-explanatory. But it is the last employer of Jim Cook before he struck out on his own, which is a fun tidbit if you were not aware.

[00:13:21] Justin Kendall: And the current home of- Current home of who? Steve Fetchheimer.

[00:13:26] Jessica Infante: Yes.

[00:13:27] Justin Kendall: I don't think I knew this.

[00:13:28] Jessica Infante: You didn't know this? Maybe not. Did this happen while I was- Probably. Hmm. I learn something new from that time every day. So BCG is helping Tilray develop this strategy that I think everyone was saying dual. That's what it sounded like to me. That's what they're calling it. But basically the strategy is to take your regional brands that are doing well, keep them doing well in their home markets, but also figure out ways to make them able to steal share from their competitors. And then they want to have a big national brand, which is going to be Baby Shack Top. So Shocktop is bringing back its seasonal rotator, which includes the internet's beloved pretzel wheat. And they're also rolling out Shocktop Lit, which we talked about, that 9% ABV hard tea. So a lot going on. I was surprised that I didn't hear any analysts really question the innovation products. It didn't really come up. It sounds like they certainly had a lot more questions about cannabis. Maybe they need to reassign the analysts that are on Tilray calls to beer analysts.

[00:14:32] Justin Kendall: I mean, some of them are beer analysts that are just overly interested in cannabis.

[00:14:38] Jessica Infante: I want someone to get a little sassy and ask, why hard Gatorade? But why not hard Gatorade? How much, how, well, maybe you're not a derelict, but how many times did you mix vodka with Gatorade? Never. What?

[00:14:55] Justin Kendall: See, not a derelict. No.

[00:14:56] Jessica Infante: Exclusively a recovery drink.

[00:14:59] Justin Kendall: My God. Oh boy. The youth today.

[00:15:01] Jessica Infante: Zoe, like I want to throw a theme party that's themed like my misspent youth and we will serve all of these beverages. Now that I think about it, we never really did a lot of mixers in general. Like flavored liquor was like the replacement of that. I haven't even thought about that. Yeah. Wow. Look at this generational divide. Pink lemonade Svedka was a go-to. You don't mix that with anything. It just tasted like vodka and pink lemonade as is. Oh my God. Wow. See, I had to mix the crystal light and then add the vodka. And my parents did not have, my parents were not big booze drinkers, but they always had some absolute in case they had parties. So, huh. Well, now that I've incriminated myself, this makes a lot of sense.

[00:16:02] Justin Kendall: The Brewbound Insiders can read more about that. more about the story, less about Jess's misspent youth, but you can get into several stories, including Indeed workers getting their union recognized, the exporter of Kona, Kraft & Travel's lawsuit against Anheuser-Busch and the aforementioned Tilray Brands. The latest edition of A Round With featuring RoboBank's Burkhard Nessen and so much more. So become an insider today. But before we get on to our featured interview, let's play another round or Tabbing Out. And Zoe, I'm going to throw this one to you because you dug this up.

[00:16:49] Jessica Infante: We got an interesting email recently, it was a PR, for the Super Smart Drinks Fridge. This is a $1,300, quote, all-inclusive drinks fridge where you can store every bottle, RTD, can, and even the smallest of ginger shots, unquote. So my question to you, it's kind of a two-part question here. Are you buying another round or Tabbing Out on buying this $1,300 fridge to store all of the Bevelc PR that we receive physically, the products we receive? And second, are we going to see more of these, I guess, innovations or products from industries outside of actual Bev-Alk production that are in response to just the sheer amount of alcoholic products that are out there?

[00:17:42] Justin Kendall: As someone who is absolutely in the market for a beer slash beverage fridge, I want to be in on this, but at the $1,300 price tag, there are so many other things that I want to spend my money on that I haven't even pulled the trigger on a $200 fridge, let alone a $1,300 fridge.

[00:18:07] Jessica Infante: I don't think I could even have afforded to open a tap here.

[00:18:13] Justin Kendall: It would help my home life, but. Oh. Are you taking up too much space in the fridge? I take up way too much space in the fridge.

[00:18:21] Jessica Infante: Yeah, same. Hmm. I mean, this is just a fridge that like studied abroad, you know, like I don't get what you can't get out of a regular fridge and a trip to the container store. Right. So, yeah, it's the innovation here is that it's pull out reversible drawers. And they say you can, they're the perfect size to fit anything from a full size wine bottle to like more than a 12 pack of cans in each drawer.

[00:18:49] Justin Kendall: I think it looks cool, but I mean, I don't know that even the smallest of ginger shots, like is anyone stressing over their like ginger shot space in the fridge?

[00:19:00] Jessica Infante: I mean, maybe there's some like dedicated juice cleanse folks that are like, they're too small, they fall out of the regular fridge. Maybe they get lost trays. But yeah. Easier to see, I guess, like display wise, you can see what you have a little bit better. I don't know. I would not be paying $1,300. I'm also in the camp where I have not bought any sort of fridge for all these products we get sent, even though I really, really need to. And it takes up most of my designated food space in our fridge that is shared among four people. I was just going to ask you, how many people are in on your fridge? Because this makes things complicated. The joy of roommates. Luckily, I do share my bounty with everyone. So they're a little bit more understanding. But yeah. It takes up a lot of my space. But I am curious, we have seen so many different types of products. Are there going to be more things where consumers are looking for, and I don't know what those products would be. Powdered alcohol? Well, just like what other things do consumers need that we're not thinking about right now because they are having potentially so many different types of beverages in their home. And like we mentioned earlier, we also have to think about like there are products out there that are alcoholized versions of non-alcoholic products. So maybe you want to keep those in different spaces or have them labeled differently, like some sort of system in your home to separate them from kids things. So like, are there going to be these types of weird, niche products potentially coming out of the changes in consumers' habits in the Bevalk space? Yeah. I mean, my tiny human is a tiny, tiny human and doesn't walk yet, nor does she. She likes to look at the fridge. She likes to play with the salad dressing bottles, which are on the door at her level. But I don't know what you do once your kids get to be a little bit bigger. To give you an example, my extended family was all together at an Airbnb for a cousin's wedding, like multiple nuclear families, multiple generations. And I had acquired some hard seltzer and put it in the fridge. And one of the children saw this just like brightly colored can and assumed it was for children and tried some. So yeah, I don't know, maybe people do need to start segregating stuff because as I just shared with all of you, I was a wayward youth and I can't be alone. I don't know, maybe you're onto something Zoe, maybe people need some sort of... Segregated storage, yeah. Maybe, I mean, they even just think like, I don't know, when you were like a little kid and maybe there was like soda in the fridge, you weren't allowed to have it. And then you think that your parents like Jack and Coke can, RTD, is the soda and you go to try it when they're gone.

[00:21:53] Justin Kendall: Are you working for the NBWA now?

[00:21:56] Jessica Infante: No! Did you take the Hard Mountain Dew photo? I didn't. I'm not their insider, I swear. But I am curious, just, I don't understand the stress about it on the shelves, because I feel like that makes a lot of sense. You can't really buy things without knowing what they are. But when it's in your possession, then I could potentially see some things happening. Yeah, I mean, maybe like a separate fridge with like a luggage lock on it. Just not $1,300. No.

[00:22:27] Justin Kendall: Well, let's play one more round. And a few weeks ago, we talked about Mango on the podcast, and there have been a few offerings, speaking of, you know, Baby Shock Top having its Mango sibling, and 1985 Mango from Voodoo Ranger. But one of our listeners, Dan Shapiro, put together a whole chart of fruit forward offerings, and it looks like Mango is on the decline. So clearly Tabbing Out of my ass, but Zoe, you pointed out that Lemon is, you know, you're seeing more PR from Lemon offerings. And I think you may even said, is it the year of Lemon? So is it Lemon's time? Is it ever not Lemon's time though?

[00:23:19] Jessica Infante: Well, yeah, yeah, I think there should be. Yeah, we should point out lemon is kind of a default flavor, right? Like everyone, especially in The Brewbound beer space, I feel like some sort of lemon or lemon lime flavored thing is always included. But I am tabbing in on it being like particularly a trend happening right now. And I think more with the cocktail-inspired, lemon-flavored beverages. We saw Cutwater just came out with one. We know that Constellation Brands is coming out with The Drop, which is a lemon drop-inspired beverage. It's 9% ABV. Even Loverboy had their lemon cocktail inspired beverage that was based on some vacation that they had. And it was originally a limited release and they brought it around. This is maybe going a little too deep, but on their show on Bravo, it's like the only thing they talk about. So it's become their main thing now is this lemon drink. I feel like I'm just constantly getting it from everywhere that people want these lemon cocktail-inspired beverages. I feel like it also kind of makes sense because last year, was it? I think it was only last year, maybe the year before, everyone was really into Negronis, right?

[00:24:43] Justin Kendall: That wasn't just our office?

[00:24:45] Jessica Infante: No. No, it wasn't. That became very popular after certain Houses of Dragon interview went viral. Oh, my God, I forgot about that. But I feel like it's a kind of natural evolution from Negronis into exploring more spritzes to lemon spritz. And so, yeah, I think it's a real trend.

[00:25:09] Justin Kendall: So I've heard a few different things this year too, though. I mean, I've heard strawberry. That's one of the things Constellation Brands talked about. Strawberry is so hot right now. didn't know. And then I'm looking at Dan Shapiro's chart here on fruit beers, and this was all sourced from TTB Cola Registries. And peach is on the rise. And I have seen more peach. And I think that, I want to say Simply Spiked peach launched recently and a few other things.

[00:25:42] Jessica Infante: Yeah, but that kind of felt like a last year thing, right? Like I felt like we were all saying like last year was the year of the peach. I feel like we might be on the other end of that soon.

[00:25:53] Justin Kendall: You're out, Peach.

[00:25:54] Jessica Infante: Yeah, I'm over Peach.

[00:25:57] Justin Kendall: Well, with that, let's get to our featured interview.

[00:26:02] Brewbound Podcast: 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.

[00:26:23] Jessica Infante: I am so excited to talk to our next guest, Jack Dyer, founder and CEO of Topa Topa Brewing and That. Jack, how are you?

[00:26:30] California Craft: I'm great. Thanks so much for having me.

[00:26:31] Jessica Infante: Oh, thanks so much for being here. So you guys have been on quite a tear lately. You know, I looked up your BA data and in 2022, which is the most recent year we have data available for, we had a 49% increase in volume. Yeah. That's unheard of these days. What's working well for you?

[00:26:48] California Craft: Well, we're still kind of chasing our lead flagship IPA, Chief Peak IPA. Some of those growth numbers are a little interesting because that was a really challenging year to grow that much.

[00:26:58] Jessica Infante: Yeah.

[00:26:59] California Craft: We hit some things with kind of our expanded distribution footprint and then had some luck with some chain stores that kind of pushed our IPA in particular throughout Southern California. So we saw quite a bit of growth. That beer, Chief Peak IPA, still represents almost 70 percent of what we make. We're a little unique in this spread of craft breweries, of 1,100-some craft breweries here. We're kind of old school. We have a lead dog, a flagship beer. You have a flagship.

[00:27:27] Jessica Infante: We love to see it.

[00:27:29] California Craft: Yeah. So yeah, Chief Peak accounts for a lot of that, and Then Zoe're looking for some rise in our other four core brands that surround it and see if any of them can clearly stake themselves as the number two. Right now, it's kind of a mixed bag beyond Chief with us. What's really driving that for the Chief though? Well, first and foremost, it's a great beer. So we set out, when I started the company alongside with my co-founder, Casey Harris, who's our brewmaster, we saw a little bit of a hole in the market for like a hyper-local lead IPA in our region there on the southern central coast. So we're kind of poised right above LA, but we identified it. It's literally in our business plan that we wanted to have the best hyper-local IPA in the region. And so we set out to do that with Chief and quickly started knocking off kind of some of the IPAs that were from further and further away, some of the bigger brands. And we grew that draft footprint of Chief Peak a lot over our first couple of years. And then in 2019, we expanded and built a production facility that had the capabilities for us to go into cans. And as soon as we put Chief Peak in cans, it just really flew. I mean, it already flew on draft. It's got a really good velocity. So if you look at ACV, if you look at the velocity of that brand, it's one of the top selling brands in Southern California Craft just doesn't have as many placements as some of the other guys. So yeah, we're still riding that train and it's kind of a self-perpetuating thing with that beer because it sells so fast that it's always very fresh. So people like it more and they may not know why they like it, but I sit there and I'm like, yeah, they like it because it's less than 30 days old and there's not that many IPAs in the market that can do that on a consistent basis. And we really try and keep that beer fresh and manage it appropriately.

[00:29:23] Jessica Infante: And what a great story for retailers. Your retail partners must love you.

[00:29:26] California Craft: The sales per point is just... Yeah, it's hard to sell anything else sometimes when you go in because you can really confidently go in to any retailer, whether it's draft or a shelf placement, and confidently say that that beer will become one of their better selling beers. I mean, lo and behold, it's an IPA. People like IPAs. It's still the dominant category. For us to do that well in a category that is so competitive is something I'm pretty proud of. It's a darn good beer. I drink one every day pretty much. I haven't had one while I'm up here because we don't have our beer up here. I always say the joke, it's the beer I go to bed thinking about. It's the first beer I think of when I wake up in the morning. For a lot of reasons, it's my favorite beer that we make. Some of those reasons are the fact that it's helped us grow the company to Match Point now where we have, you know, 90 plus employees, five locations. So, yeah, I love Chief Peek. It's good. It's named after a mountain in the Topatopa Mountain Range, too. So that's kind of a fun, authoritative name. We hit the scene with it pretty hard when we first started. And those early draft placements were really important for us to grow our brand in the early days. Usually it doesn't come off. So most of those early accounts are still pouring it and it's still their best-selling beer Wow You mentioned the five tap rooms that you have now.

[00:30:43] Justin Kendall: How do you keep each of those locations distinct?

[00:30:47] California Craft: You know, they're all like they all kind of take on the town or neighborhood that they're that they're part of so We kind of allow some of that natural identity to happen. So we have, we have our original location where we started in downtown Ventura. It's about, it was an old printing press building, 5,000 square feet. We started there in 2015. That's where we did all of our production. That's still just a tap room. So it's, we ripped all the brewing equipment out of there during COVID. We didn't really want to have two production facilities. Then Zoe have Santa Barbara, which is in the funk zone. So that's kind of your fun, kind of day-drinking neighborhood in Santa Barbara. We do a lot of engagement with the community there, but we also engage with a lot of tourists there who are coming up from Los Angeles and that sort of stuff. So I think that's a really important one for us as a growing brand here in Southern California. Then Zoe have Ojai, which is right at the foot of the Topatopa Mountains. That's become a really nice, influential taproom for us. We have a great food partner there, so that keeps it a little bit unique from some of the other locations as well. And Ojai's become a really popular destination for Angelenos especially, so I think we touch a lot of people who we otherwise wouldn't. And Ojai's like, one of the sayings in that town is there's like, There's not enough to do and not enough time to do it. So it's like we're right in the center of town. So I always kind of say like, if you've gone to OI for a weekend and you didn't come in for a beer, you're probably doing it wrong. So that's a really nice, fun one for us. Then Zoe have our production facility in Ventura, which has a really nice, large, expansive outdoor beer garden experience, which is unique. And then our final taproom we opened during COVID is in Camarillo in Old Town. And that one has a couple of great food partners. We have an ice cream shop in there as well as a pizza parlor. So it's kind of a great place for families and stuff. So they all kind of are distinct and unique in their own ways. And I think that provides, I mean, I just, just like, I don't necessarily have data on it, but like just from traveling around to the tap rooms, I see our customers at all of them. So, you know, they're, they're not too far apart where like, if you feel like pizza, you can drive to Camarillo from Ventura. It's not the end of the world and still get a great, a great beer.

[00:32:53] Jessica Infante: The fact that you have beer, pizza, and ice cream under one roof, I think I would like to move in.

[00:32:58] California Craft: Yeah, it's not terrible. And it's been a good model for us to not own the food at any of our locations. We just manage the beer part and find great food partners that can focus just on that. And that's been a good thing, I think, because if the dishwasher calls in sick, I'm not getting a call. It's not a huge problem.

[00:33:16] SPEAKER_??: Yeah.

[00:33:17] Jessica Infante: Well, so, I mean, you're operating right in the heart of the biggest and probably most competitive craft beer market in the country. I mean, what trends do you think you're seeing right now that the rest of the country can learn from?

[00:33:31] California Craft: I mean, California is a little bit of a canary in the coal mine for everyone. And I just think we're seeing this overall slowdown because of, and my friend Rob Todd talked about it during his speech this morning at the keynote of just like, there are so many options for that drinking occasion now. And we really have to be mindful as business owners of like, Why should they choose us over everyone else? So we spend a lot of time trying to develop our why, because I'm a firm believer people buy why we make something, not what we make. There's tons of great beer out there. So we do a lot of engagement with our communities through our 1% for the Planet network, where 1% for the Planet is a thing that we do where we give 1% of sales back to environmental causes. So you can see that on our cans. We also use the independent seal. to make sure our consumers know that we're an independently owned brewery. So those are like the little things, but then I just think it's just going to take a little bit of... hitting the pause button a little bit of just like, we're not going to expect 49% growth or whatever, probably ever again. And whoever can weather this storm and kind of continue to kind of incrementally position your brand in the right places where people are going to purchase your beer, where you're not just putting beer out there for it to go to die. I think that's got to be the strategy of the day. You know, something that we think about a lot is what's next beyond our chief peak, considering it's such a big portion of what we make. So how do we start developing other products and items to test the market with for that inevitable day when we see chief fatigue someday? That's what I call it. I think it hasn't happened yet, but it's going to happen someday. So we have to be mindful of it early and often.

[00:35:14] Justin Kendall: So as you're looking at what's possibly next, what do you think is next?

[00:35:18] California Craft: You know, there seems to be this push continuously more towards these sessionable beers, lower ABV beers, the non-alcoholic movement, it's very real. I think a lot of people are still wanna, you know, Americans especially, they wanna hold a glass or a can in their hand, so some of those alternative beverages. So for us, I mean, we would love to see our Mexican lager take off and for that to be a beer that steps into the clear second place. So yeah, I think hopefully a trend in that direction is something that we would like. I just think there's probably, to me, it's more about just a little bit of a thinning of the herd in the marketplace of those who are making great quality products and good beers with good brands will hopefully stand the test of time, regardless of what they're making. I mean, I don't see IPAs going away, but... You know, is it going to continue the trend towards the milkshaky, kind of chewy, double dry hopped hazies? Or is there going to be a little bit of a return to that, you know, six and a half, 6% one that you can have a couple of?

[00:36:25] Justin Kendall: Yeah, I mean, you can only drink so many fruit forward 9% ABV IPAs.

[00:36:31] California Craft: All of our beers are designed for people to have two, maybe three of them. And that's something we're really cognizant of, even just on the flavor profiles of the beers that we create. We don't want to punch you in the face with too much going on, because we want you to go back for that second sip right away and hopefully order one or two of them. And that's a good thing for us. It's a good thing for our retailers. Because I think on those drinking occasions, you need to capitalize a little bit. You need to go a little deeper with the customers that you do capture.

[00:37:01] Justin Kendall: So speaking of the customer, what consumer trends are you seeing at the moment?

[00:37:06] California Craft: Yeah, in our tap rooms, our lower ABV beers are definitely performing well. So our tap rooms serve as a great resource for us to kind of just see what's working. We'll make a wide variety of beers outside of our core brands. And if they hit in the tap rooms, we're pretty confident that that's sort of like a proving ground that we can either catalog them for a later date, that they might go out into the market, or Just continuously make them in the taproom. So like one of our more popular beers in our taproom is our is our Kolsch and That's I mean, it's a great beer. What a metal at GABF this year But you know that's got a little bit of a cult following in our in our taproom so we we tested it a little bit in the LA market just on draft and and And it did really well. It got us into some accounts that, you know, we're looking for something new from us instead of just our standard core offerings. And yeah, so I hope that that kind of lighter occasion beer is something that grabs hold.

[00:38:07] Jessica Infante: You and me both. I just, I don't know, I'm too old for the close to double-digit percent ABV stuff.

[00:38:17] California Craft: Yeah, there's just, again, I like to have a couple of beers if I'm going to sit down and have a beer.

[00:38:21] Jessica Infante: Yeah, for sure. Well, Jack, I think that's a perfect place to leave it. Thank you so much for joining us.

[00:38:26] California Craft: Cool.

[00:38:26] Jessica Infante: It was a pleasure. Yeah. And we absolutely will have to keep up with you guys.

[00:38:31] California Craft: Yeah, come up and see us if you're ever in the Ventura area or Southern Central Coast. We got five options for you, so come hang out. For sure. Awesome. Yep. Cheers, guys. Thanks for doing this. Thank you.

[00:38:44] Jessica Infante: Our next guest is Simon Chen, founder Match Point Brewing, soon to be of Albany, California. Simon, I'm so glad that you're here with us right now. How are you doing?

[00:38:55] Beer Summit: Feeling pretty good. We just had a early morning panel with Calicraft and North Coast about contract brewing. We were just like the, you know, new startup brewery, what our take on it was. And so far so good. The conference is pretty laid back, in my opinion. Yeah.

[00:39:12] Jessica Infante: Have you been before?

[00:39:13] Beer Summit: This is my first time here. The last time I was at like a beer conference was in Denver in 2021 at the CBC. That was on a much bigger scale and yeah, pretty hectic. And this is nice. Yeah, it's a lot more chill here.

[00:39:30] Jessica Infante: Yeah, well, and that CBC was like the first gathering of the beer industry since COVID.

[00:39:35] Beer Summit: Yeah.

[00:39:37] Jessica Infante: Awesome. Well, I mean, tell us about this contract brewing chat.

[00:39:41] Beer Summit: I think that from what I heard originally, Thomas had been approached by Lori from CCBA. I think they had originally imagined the chat to kind of be between a host brewery and a guest contract brewer. And it kind of just evolved more just to become a panel of contract brewing companies. And Thomas invited us because he was aware that we were contract Brewing and That time and Then Zoe're relatively new. And while, you know, him at Cali Craft had been doing it for around 12-ish years or so with various breweries in the Bay Area, like 21st Amendment and Heretic. Yeah. I definitely learned a few things from them. Jennifer from North Coast mentioned how deposits can tie up a lot of your cash flow, especially when you're working on those 500 barrel batch sizes. We're nowhere near close to that, but thankfully. But it's good to know down the line that that could be something we need to expect and account for.

[00:40:43] Jessica Infante: Yeah.

[00:40:44] Justin Kendall: What's your experience been like? Because your beers are very, very unique in just composition.

[00:40:50] Beer Summit: So it's funny you say that. Like, I think they're normal beers to me. To me, it's just normal. But to everybody else, it seems like they're unique or super special. All we did is use things that we're, like, accustomed to eating or drinking as Asian-Americans. Exactly. Yeah.

[00:41:09] Jessica Infante: So for listeners who might not be familiar, can you tell us a little bit about some Match Point's beers?

[00:41:14] Beer Summit: Then Zoe that we've had the most success with is our Jasmine Rice Lager. It's a light 4.7% ABV. Yeah, low IBUs, 15 IBUs. The special component of that is brewing the jasmine rice, cooking it, actually, like a cereal mash instead of using any pre-flaked, pre-gelatinized rice. I came from a homebrewing background. At the time, I was aware of the growing trend of hard seltzers, ready-to-drink cocktails, but it just wasn't something that I was interested in getting myself into. I just found that for beers, I'm sure a lot of homebrewers say this and stuff, is just you get so many different ingredients to work with. You're not just making sugar water. And I guess Although we do try to emphasize the ingredients from our Asian culture, my co-founder and I, Johnny, we played doubles tennis together in high school. And when we came up with the brand Match Point Brewing, you know, we really wanted to welcome and connect with friends who played in maybe recreational sports leagues, tennis, basketball. volleyball, and that's why we like to do things like host and organize our own local community tournaments. Earlier this month, last Saturday actually, we did our first three-on-three half-court basketball tournament in El Cerrito. I think it was pretty successful for our first time trying it. We had about 10 teams come, some from as far as South Bay, Yeah, everyone had a good time. It wasn't like super competitive. Thankfully, no one had to like be carted to the ER or something. We got like a few bloody noses. Someone sprained their ankle.

[00:43:06] Jessica Infante: I mean, that's so smart, though, because so much, you know, of what I understand, I do not dabble in the recreational sports, but I feel like so much of that experience is not only just the getting together and playing, but having a beer together afterward. So you found the perfect way to have like a built-in drinker community already for the brand?

[00:43:27] Beer Summit: It's not an original idea. A lot of breweries, I'm sure, like they find that they have a built-in sports audience themselves, like from maybe running clubs or biking groups.

[00:43:39] Jessica Infante: Yeah, absolutely. Well, so you and Johnny were part of the Brewers Association's first cohort in their mentorship program. How did that accelerate your business?

[00:43:48] Beer Summit: Because we took part in that program, we had like direct lines with, I wanna give a shout out to Ramon Tamayo from New Belgium SF. Recently, unfortunately, they closed earlier this year, but I think he's still at Magnolia. And he was the only, I think, local mentor that we had. It was great to be able to stay in touch with him and share our progress and keep asking him for advice. He would taste our beers, you know, every new batch and give us his feedback. And then, yeah, it was really good to be able to share with him that, yeah, we're planning to open our own tap room in Albany this year. It also connected us to a network of other professionals in the industry, not just on the technical brewing side, but on the operations side. Yeah, it was a great resource to be able to tap into. I remember last year we were able to promote a little Kickstarter campaign that we were trying to raise some money for the taproom with the former members of the program.

[00:44:54] Justin Kendall: So as far as choosing a location in Albany, what was it that stood out about that location for you? Was it population density? What were the factors that went into that decision?

[00:45:08] Beer Summit: Well, first off, it is our hometown, where we went to middle school and high school, so we're pretty familiar with Albany. It's also like a comfortable distance logistically from Concord, and also I live in Richmond. And one of the main reasons that we decided for this particular location in Albany was that there's a family-run Asian-owned restaurant called the 310 Eatery. They've been in Albany for the last six years or so, and they've got, like, 1,000-plus, you know, four-and-a-half-star reviews on Yelp. So they are gonna be able to do all the food service for us, and we would be able to connect our spaces. to kind of create like a micro food hall. If our customers want food, they can easily cross the door and get it from the 310 eatery. If their customers want beer, they'll be able to get it from us. There'll be some, you know, communication issues to sort out, I think. But once we get going, I think it'll run pretty well.

[00:46:13] Jessica Infante: That's such a popular model right now. Like, it just makes so much sense. You don't have to worry about the food. They don't have to worry about the beer. And everybody is able to help each other out. I also want to flag the fact that you just named three different communities in the Bay Area that are all named for other state capitals. What's the timeline on the taproom?

[00:46:31] Beer Summit: Right now, we've got our fire inspection done. We've pretty much got our health permit done. We got the federal TTB approved. We're just waiting on the ABC right now. We need to keep working on the training for the employees, the bartenders at the taproom. I think I need to make the bathrooms look a little nicer. They weren't looking that great when we first got them. But yeah, pretty close. I would say maybe less than a month.

[00:47:03] Jessica Infante: Oh my gosh, congrats.

[00:47:04] Beer Summit: That was another reason we actually decided to go in on this particular location. It had been a craft beer bar previously. All right. Yeah. So it had like a bar already, a really nice bar. It had a walk-in cooler with a tap system, a little shed for empty kegs.

[00:47:27] Jessica Infante: Yeah. And then what about the distributed part of your business? You guys go on self-distro? Do you have a wholesaler partner?

[00:47:34] Beer Summit: Right now, for our size, self-distribution still makes the most sense. We want to focus on continuing to preserve our existing accounts in the Bay Area. We found some great success at a lot of more modern, contemporary Asian fusion type of restaurants that already carry craft beer on their menu. Yeah, we found it a little bit harder if they don't have any craft beer at all. Maybe their food menu prices are more on the lower $1 sign level. So it wouldn't be compatible offering our craft beer with them. What about package? We're fortunate enough that Epidemic Ales has their own canning line. So we have been able to package our Jasmine Rice Lager and Mandarin Wheat Ales and offer it at more independent grocery stores like Berkeley Bowl. Awesome.

[00:48:30] Jessica Infante: Are you and Johnny at the let's quit our day jobs point yet?

[00:48:33] Beer Summit: I transitioned from doing this full-time in the middle of last year. That's huge.

[00:48:39] Jessica Infante: Congratulations. That's such a big step for founders.

[00:48:42] Beer Summit: Yeah, I always feel that, you know, if we don't try to do this ourselves, I mean, somebody's going to do it.

[00:48:47] Justin Kendall: Someone will, but, you know, you can come at it from a more authentic place than, you know. 99% of the people in here?

[00:48:56] Beer Summit: I guess one thing on that is like, when we do try to go maybe outside of our normal cultural, like, familiarity, like, most recently, right, we tried, we're trying to make like a Vietnamese coffee lager. So for that, we, from like a previous fundraising event, we met a local Vietnamese coffee company called Little Green Cyclo in Brisbane. And so we were able to source beans from them and work with them to make that kind of a beer. That's so sweet. So, well, awesome. Look out for that. How soon? Hopefully, we'll be releasing it as like a Taproom exclusive. Sweet. All right. Well, hit up the Taproom. Thanks for doing this, Simon. Yeah. It was awesome having you. Thanks for having me. Yeah, absolutely.

[00:49:51] Jessica Infante: With us right now is Drew Kearns, founder of That's Delicious Financials. Drew, how are you?

[00:49:57] Topa Topa: Doing wonderful.

[00:49:58] Jessica Infante: Awesome. And how long have you been doing this?

[00:50:00] Topa Topa: I've been in the beer industry for five years now. Been doing my own business for two years.

[00:50:05] Jessica Infante: Wow.

[00:50:06] Topa Topa: Yeah.

[00:50:06] Jessica Infante: Wow. What made you want to make that leap?

[00:50:08] Topa Topa: So I was a controller at a brewery, and I learned I could help a lot more of them with the high-level skills. So I thought I was also quite useful as an advisor, being able to see multiple different models, seeing how a certain group of breweries do things well, On Another certain group might do things poorly, and really being able to coach breweries to optimize. What are some of the conversations that you're having right now with Brewers? Certainly. So a big focus for us right now is financial literacy across the entire team. So trying to get information to not only the executive and the director level, but really managers across the company. So the production managers, the taproom managers, getting them information on how their teams are performing so that they can make hard decisions off data. Because a lot of hard decisions, it gets emotional. But when you have some data to back it up, it helps people sleep at night a little better. What do you think the hardest decisions people are making right now? It's personnel decisions. Yeah.

[00:51:05] Jessica Infante: Absolutely.

[00:51:06] Topa Topa: And those are the emotional ones. Yeah.

[00:51:08] Jessica Infante: Yeah. And that's, I guess there is some data that you can apply to that, but... Yeah.

[00:51:13] Topa Topa: And you have to be careful with it as well. Yeah. Because people can be pretty influenced by it. But it's what needs to happen when it's at that juncture.

[00:51:22] Jessica Infante: Hey, one thing that I feel like has gotten brought up a lot lately is cash flow cycles.

[00:51:27] Topa Topa: Sure.

[00:51:27] Jessica Infante: And I am stupid when it comes to numbers of any kind, really. So, I mean, what is like the basic like cash flow cycle 101 things that people need to know?

[00:51:38] Topa Topa: Certainly. So the hardest thing with the brewery is the time span between purchase of raw materials and when you're actually going to sell that beer and collect that money. Depending on your model, if you're very taproom heavy, luckily collections are pretty easy because your POS system is going to pay you right away. but tracking it is the base level. And trying to just start small with a spreadsheet and trying to forecast my cash coming in, my cash coming out, and then audit yourself. It can be weekly, it can be twice a month is easy as well with your payroll cycle, but just start with that and go back and check what you're forecast was versus your actuals, and you're going to start to learn your cycles. You're going to start to learn how impactful discussing with vendors terms are. And if you can extend those out, find other ways to use credit cards and different methods, because that cash conversion cycle is long. And especially during the slower seasons, whatever that is for your region, most of us it's the winter, making sure that you can plan through that slow time and not be worried about payroll.

[00:52:39] Jessica Infante: So, I mean, you probably know better than anybody, the industry is hitting quite a bit of bumps in the road right now. Other than everything we've just talked about, what are some of the most basic like nuts and bolts business advice you can offer?

[00:52:52] Topa Topa: Sure. I'm trying to preach optimism right now. That's not usually the financial guys. That's some of the feedback I'm getting right now, too. But I'm doing a lot of industry research, and not specifically within the beer world, but really, how do industries develop? And so for us in the craft beer world, we've been around for a while, but we just had our boom cycle. And so looking at what happens post-boom cycles within an industry. And there is a plateau, usually, a lot of financial people will call it a shakeout. And on the other side of a shakeout, it's usually more business acumen keeps the industry afloat as a whole. So how do we professionals bring a certain skill set to our brewers, to the businesses, that they're going to be economically sustainable for the long term? I think it's a little bit of people coming from other industries that might be advanced in things like analytics and using different dashboards and getting data in front of people. It's also on the HR side, getting, you know, very skilled people officers who are doing surveys within the teams and understanding how do we reduce turnover and get the most use out of our staff. It's those type of steps that make a brewery a business.

[00:54:09] Jessica Infante: I feel like, you know, probably right around the time that you got into beer was when the messaging coming from the BA was like quality, like quality, quality, quality table steaks. That's what's going to save, not save the industry because the industry wasn't in the situation that's in right now, but I think financial literacy is probably the quality of today based on everything you just said like that's super important.

[00:54:32] Topa Topa: It is and it's not a sexy topic by any means so there's a learning curve and there's also a bit of pushback I would say from the staff who are used to the days when you didn't have to focus on these numbers or think about these decisions, but just invest in the time in it. And what I learned is people push back, they start to accept it, and then they get really interested in it. And so if you're spending the time to teach your manager level these data and analytics and how they're performing, people will grasp onto it because it's their business and they want to be optimized. And especially when a bonus is tied to it, it works out pretty well.

[00:55:12] Jessica Infante: We're in it every day. We, you know, get news about bankruptcies and closings and all of that. Do you think we've gotten over the hump or should we expect more of those things to come?

[00:55:23] Topa Topa: Unfortunately, I think it's more the latter. I see a lot of people struggling with leases currently, whether it be commercial leases coming up, and there's a lot of competition for housing, especially in the brewery sectors that popped up in industrial spaces. And you have these warehouses that can a lot more easily than office buildings be converted into housing. And so with the housing shortage, I think they look at these areas where breweries exist, where it's pretty easy to knock that down and build a 10-story apartment complex. There's opportunities there too, though, especially in certain cities where the zoning allows for first floor retail underneath those apartments. I mean, if that happens, you're having more foot traffic, and so it's a huge opportunity as well. But that is a whole different conversation with a developer rather than whoever owned your building last time when it was a warehouse.

[00:56:14] Justin Kendall: For sure. And once you have that equipment in there, it's not easy to move. No, it's not.

[00:56:20] Jessica Infante: So you said you like to focus on the positive. Give us a little optimism right now. What is one thing to be thankful for in the beer industry?

[00:56:29] Topa Topa: For me, it's your taproom. It's always the taproom. It's your moneymaker. It's your chance to show your brand, to feature products. What are you putting in your products? Why are you doing that? You get face-to-face with people. I'm a big believer in the hospitality model, and so I push people to that direction. And even the big breweries that we work with who are, you know, 90, 95% of their revenue is coming from wholesale business, they still focus on their taprooms, and those are their biggest fans. So doubling down on that, I like a lot of the breweries coming out with the multi-taproom model in a certain area. Those seem to be doing really well, and it's good for cash.

[00:57:05] Justin Kendall: Drew, this has been great.

[00:57:06] Topa Topa: You've struck the perfect tone between optimism and the stuff you need to know. We can do this. It's not the end. It's not the apocalypse, I promise.

[00:57:16] Jessica Infante: That's a perfect place to leave it. Drew, thank you so much. This was great.

[00:57:19] Topa Topa: This was wonderful. My treat. Thanks for doing it.

[00:57:21] Jessica Infante: Thank you.

[00:57:23] Justin Kendall: And that's our show for this week. Thanks to Jess and Zoe for all they do. Thanks to our audio team, especially Joe. And thanks to all of you for listening. We'll be back next week.