[00:00:11] Justin Kendall: Hello and welcome to the Brewbound Podcast. I'm Justin Kendall. I'm Jessica Infante.
[00:00:17] Zoe Licata: And I'm Zoe Licata.
[00:00:19] Justin Kendall: And we got a lot of ground to cover this week. And we've got a featured interview coming up with our colleague, Lukas Southard. He writes for Nosh and BevNET. And he's done a really great job covering the intoxicating hemp space and maybe some alternatives that are out there. And Jess and I had a conversation with him about what's going on and what could happen and what's likely to happen.
[00:00:42] Jessica Infante: Yeah, I would just like to go on record as being part of the Lucas Appreciation Fan Club because he has done a really great job just getting the lay of the land of that segment and really understanding the ins and outs of something that's been really complicated and has become very, God, I hate the word impactful because it's not really a word, but has really started to affect our areas of coverage in really big ways. So shout out to Lucas, who I feel like we've leaned on his reporting a lot. It's been really helpful.
[00:01:13] Justin Kendall: Well, and so many beer distributors have gotten in on this game and hard to blame them trying to fill those trucks and have a product that really moves.
[00:01:23] Zoe Licata: Yeah. Beer distributors are in on it. Suppliers like breweries have tried their hat at it. Retailers are figuring out where the hell it fits and how much they should invest in it based on what's going to happen in the future. Like it's just every corner of beverage alcohol that is taking up a lot of their mind space at the moment.
[00:01:43] Justin Kendall: How can it not when you've got governments that pull the rug out from under you, like in Ohio, everybody, they're trying to figure it out. Here in Iowa, where the ceiling is four milligrams.
[00:01:56] Zoe Licata: Yeah. I mean, on the ballot in Massachusetts, they're trying to make changes again, too. There's just constantly things changing across the country in totally different ways.
[00:02:06] Justin Kendall: Yeah. Lots going on in New York as well at the moment.
[00:02:09] Jessica Infante: It seems to be pretty popular among consumers.
[00:02:12] Zoe Licata: Yeah.
[00:02:13] Justin Kendall: Can you blame us?
[00:02:16] Zoe Licata: You know, there's an interesting, totally opposite perspective or feeling about it where there's a lot of, it seems like a lot of calls from the consumer side to have these products and continue to have them. And it doesn't seem like they're averse to regulations around them. They just like to consume the products. And then on the legislative side, it's, we have to get rid of this ASAP.
[00:02:39] Justin Kendall: Well, stay tuned for Lucas and stay tuned for more on Brewbound Live coming up December 9th and 10th. Get your tickets now. We've got a great program that's coming together. I'm excited to have all our speakers, but we've got Trevor Tyler from Eureka, which is a chain of West Coast craft-focused restaurants. We've got Rob Todd and Celine Fru from Allagash Brewing talking about culture. Tara Hankinson from Talaya Beer Company, going to talk about taproom economics and hospitality. Lester Jones and Jennifer Hawk on the on-premise. We got a stacked program. We got Annie McGinnis coming from the National Black Brewers Association. She's going to talk about all the changes going on at that organization and their work going forward. But I think the three of us should talk a little bit about the experience because Yeah, you could stay home. But being in that room, you're going to have conversations that you didn't expect to have, you're going to meet people that you didn't expect to meet. And you're going to walk away with an experience that I think is one of the best out there. And we've got a lot of testimonials from people who have been in the room who keep coming back to that room. And a lot of positive things.
[00:03:59] Jessica Infante: One of my favorite things is when we're about two months out after Brewbound Live, when you start hearing about job changes and big retail placements, and you can connect the dots and be like, oh, these people made this connection during Brewbound Live, and now the changes are coming to fruition. I know a bunch of people who have met their future co-workers. You know, they hang out over a beer or two during the Firestone Walker party and then all of a sudden you see so-and-so is now joining this company and it's like, oh, that's so cool. Like these people found each other and made a fit?
[00:04:37] Zoe Licata: We're not just making assumptions about that either. We've been told by folks that have said, you know, we connected at Brew Brown Live and that started initial conversations for whether it's a job change, whether it's some sort of big retail programming. We have so many amazing retailers that come to this event and they're both in the audience and they're doing one-to-one conversations to hear about your products or to pitch to them about whatever's going on with your company. And so those are actually productive conversations that are resulting in real life physical things that are happening. So it's super cool. We every year hear stories about it. There's an actual tangible result from the conference.
[00:05:18] Justin Kendall: So get your tickets now and we'll see you in December in Los Angeles. We also should plug the job board. Speaking of getting your next job or finding your next star employee, the Brewbound job board is out there. The CPG job board. Benet CPG job board, I should say. Maybe you're looking beyond beer. Maybe you're looking into the non-alcoholic space and we're going to talk a little bit about that. It's out there. So check it out now. Before we get into the news of the week, we've got a couple of things that you wanted to talk about, Zoe, and I think we should dive straight into them.
[00:05:54] Zoe Licata: Yeah, we haven't had like a, I don't know if you would call it pop culture check, but like a cultural zeitgeist check type thing going on on the pod in a while. There were two things that have occurred this summer that I think was worth touching on. One is the emergence and popularity of the sardy spritz. Have either of you seen any sardy spritz out in the wild yet this year?
[00:06:18] Jessica Infante: No. No, but in one of the local restaurant Facebook groups I'm in to like just, you know, learn what's going on where I live, somebody legit posted today, like, hey, where can I find a Sardi Spritz without going into Boston? And that's how you know when the things have gotten mainstream, when the suburban Facebook weirdos are calling for it.
[00:06:39] Zoe Licata: I mean we've had the various spritzes every summer. It's like the summer of the Aperol spritz and then it was the summer of I think last year was the lemon spritz. What is that one? What's the Hugo spritz? The Hugo Spritz, I think, yeah, that was a big one last year. Yeah. And then this year it seemed like the Sardi Spritz kind of came out of nowhere. And it's Sardi is like this pink fruity liquor that they add to the Spritz cocktail. I think it's a mix of Passion fruit and blood orange and there might be another fruit in there, but it's literally bright pink sounds good And it has taken off from whatever people traveling in Italy taking photos gone viral a couple of restaurants were able to get some over to the U.S. because this is only available in Italy and put it on their menus and it took off. And now, specifically here in Boston, we've heard from just talking to some folks that either work at bars and restaurants or folks that have owned some liquor stores, Sardi itself has prioritized getting it on menus in the city. made it so you can't really buy it in any liquor stores that were kind of doing small deals to import it so they can have it on more and more restaurant menus. And then we just found out a couple of weeks ago that they're now doing a full-blown scale launch in the U.S. to have this at a bunch more places. But this is like, I don't know what it is, but it's really taken off, especially with the Gen Zers and caused them to find a big U.S. market they didn't have before.
[00:08:15] Jessica Infante: Do you know who owns it?
[00:08:17] Justin Kendall: Campari?
[00:08:18] Jessica Infante: That's kind of interesting to me. It's like their way of future-proofing their ownership of the spritz segment, right?
[00:08:25] Zoe Licata: Yeah, really like just finding new ways to continue that momentum and not just have a one-off. You know, we had the Aperol spritz or whatever, and that was a quick trend. And they have really, I think Altalene is something we've talked about a lot, which is the in-person experience and the importance of that on-premise has been huge for this brand. It was something that kind of had a little bit of a retail presence, but not really. And then once they found that it could have momentum in the on-premise, it has leaned hard into that and has continued to be rewarded for it. Have you had one? I have. They're delicious. It's become one of our go-to things to have at Tia's downtown by the waterfront. I love that you still go to Tia's.
[00:09:09] Jessica Infante: I think I would get reverse carded if I tried to go to Tia's.
[00:09:13] Zoe Licata: And I don't want to say it's a fabulous spot. It's a notorious spot. It's a beautiful spot. But we went the other day and they were out. They had sold out of all their Sardis. There's been a run. Yeah. Run on Sarti. Yes, we could not get our Sardi Spritzes. I assume it Instagrams beautifully, right? Oh, it's gorgeous. You could put a little lime in there. You put a little orange on there and it's just classic Instagram worthy. Delightful. Yeah.
[00:09:40] Justin Kendall: What's the ABV on it?
[00:09:42] Zoe Licata: 14% for the Sardi Rosa, but you're not using very much of it in your cocktail. It's mostly a lot of bubbles. So that has been kind of the drink of the summer. I think I'd safe to say that around here at least that has been the cocktail of the summer. And the other thing I wanted to talk about, which I think is really funny based on all the conversations we've had now for a couple of years about health and wellness trends and whether Gen Z is drinking. with the start of the college season again and specifically the start of rush season you know a month ago or so or a couple weeks ago there was a video that went viral of a group of different fraternity sorority folks having a wellness starty which was having a Pilates or sculpt class in the morning and then having a run afterwards. The whole social event and celebration was exclusively exercise and wellness and basically everything alcohol is terrified of. They're not drinking and partying. They're going to have this. But what I think is even funnier out of this is a lot of elder Gen Z's and millennials have been responding by posting their own versions of what they were doing at that same age and it's all like 2013 to 2017 college parties doing ridiculous things like mixing jungle juice in the college bathroom or doing things that would be considered the opposite of health and wellness, I think. Actually playing beer pong and drinking the beer out of the cups, that type of stuff. There is a video of someone who was using a ceiling tile from their dorm as a ramp to get the water from the bathroom sink to their jug for their mixer. because they couldn't fit the jug underneath the tap. Just really bringing back to that, you know, 2010s college drinking culture. And it's being celebrated, which I think is fun.
[00:11:46] Jessica Infante: I saw a meme once that was like, I think a night in 2005 could heal me. And yeah, obviously that's a little earlier than what you're talking about.
[00:11:55] Zoe Licata: Yeah, heal you and also possibly hurt you at the same time, but emotionally heal you, yeah.
[00:12:01] Jessica Infante: I think how you and I started having this conversation was that I had sent you an Instagram post from the SU Wellness Society at my alma mater, Syracuse, where they had a wellness darty at Delta Kappa Epsilon, which is the former home of Carl from Summerhouse, who now has his own non-alcohol bar, right? Soft bar?
[00:12:25] Zoe Licata: Yeah, soft bar, it's all non-alcoholic. Their whole thing is like health and wellness, drinking without the alcohol, and they do run clubs and things. I saw a really funny clip from a stand-up comedian the other day, and he was saying, you know, generations always, you're doing the opposite of what your parents did, whether it's fashion or drinking or anything. And so later Gen Z and the millennials were wearing skinny jeans and had this crazy drinking culture. And now these other Gen Zs and going into the next generation are all about the loose pants and health and wellness and not drinking as much. And he said, I would rather be the millennials because at least you know how to do it. You know the culture of drinking. You know how to respond to drinking. You know how to do it in healthier ways and find your limits. These kids that are growing up now that aren't doing it, their kids are going to be the ones that, you know, they rebel against their parents and they're going to go back to the drinking culture of before. And they're not going to know how to handle it because they didn't have that experience when they were younger. which I think is a funny take that I hadn't heard yet.
[00:13:33] Justin Kendall: Anything else on the youth that we need to talk about? Because it looks like they're doing all right.
[00:13:38] Zoe Licata: I've enjoyed this culture corner. I know some people have the concern, oh, is this going to continue to trickle down to further generations? Because you see that it's going to be a cultural thing where you're not drinking as much. And I'm not equating alcohol to cigarettes. I'm going to clarify that right away. But I think millennials and Gen Z, it was really hard into our brain set. Smoking cigarettes is horrible. And those smoking levels went down significantly. And you're starting to see them come up a bit now with the younger Gen Z and teenagers and college kids and 20s and all that. And so I think that is an example of how even if you're surrounded by culturally, it's going down, that doesn't mean it's going to stay down. And each generation has continued to discover things and act in however way they want to. And so I don't think just because these younger generations aren't drinking now, you're going to see this for generations to come.
[00:14:34] Justin Kendall: Let's get into the news of the week, and this one was a bit of a surprise for me as far as the way that this story performed, because our top story of the last week was C4, the energy drink maker, doing a beer-flavored energy drink. It's non-alcoholic, 200 milligrams of caffeine. I didn't see this one coming as far as popularity goes. It's called All Hopped Up. How about you all? What's your read on this?
[00:15:04] Jessica Infante: I feel like I have learned to not be surprised by anything anymore. I was a hot water skeptic back in the day, and I think I've learned that that was- Probably rightfully so. Really? I don't know. They stuck around a lot longer than I would have thought. What we end up seeing here is, it's basically been how craft brewers have adjusted to feeling comfortable making products that respond to consumer needs, right? Hop water was a way for craft brewers to touch on the popularity of seltzer and the popularity of non-alc stuff without having to make a non-alc beer. And then when it became a little bit less taboo for craft brewers to make their own legit, honest to goodness non-alcs, then more of them started doing that. I think hop waters were kind of a bridge there, just like there were also you know, amid the seltzer craze, brewers were clearly trying to make things that were adjacent to seltzer, that answered some of those broader themes of sessionability, portability, and flavor variety that weren't quite full-fledged hard seltzers. Like, for instance, Allagash's Little Grove, Leinenkugel did some sort of interesting like spritzen thing. There's always like a bridge product. So maybe that's the role that hops to hot waters were playing. But here, I think what C4 has done is they've realized that they have a bunch of consumers who like the flavor of beer and also need an energy drink. And you can't really make a full-fledged energy beer, according to the government. So this is what they've done, I suppose. Would I drink it? No. Do I drink any energy drinks? No. Do I drink beer? Sometimes. I'm not the target here. I'm a 41-year-old mom. As you'll hear later, Lucas says, the THC drinks are all for me. This one's not me. But I guess I see what they were thinking. It was like they made a Venn diagram of popular trends in beverage and figured out where to connect them, right?
[00:17:10] Justin Kendall: I feel like they heard Zoe. Long-time listeners will remember that Zoe, if she's going to take over Four Loko, was going to bring back the old-school Four Loko. And I don't think you were going to do like a beer-flavored Four Loko, but... No.
[00:17:28] Zoe Licata: Was Four Loko ever beer-flavored? God, I hope not. This is, I guess, one step towards that by saying, hey, this can remind you of alcohol, even though we don't actually have alcohol in it. I'm very fascinated by this happening because we're also seeing, there was recently a THC drink that came out that is also beer flavored or beer inspired. What is the name of that brand? Herb Light, which is this light beer inspired and marketed like THC beverage. So I guess you could call this a thing now if there's multiple things happening within this space of people creating very beer-like products, but they're not beer. And I'm very curious about why that is happening. I mean, I think part of it is building off of what we've seen happen with light beer having such a resurgence and especially these craft light beers or independent light beers. So it's definitely having a moment. And I'm very fascinated to see how that translates to products that aren't actually beer. But I was looking this up because I was like, this can't be the first time that something similar has happened. And I forgot Harpoon had a hoppy THC seltzer that came out a couple of years ago. RecWeed was it called? And so that was kind of similar. It wasn't beer flavored, but it was combining more of that like hop water flavor, but with a THC beverage. It's not entirely the first time we've seen it. But I'm fascinated by who that consumer base is, how large that consumer base is. I could probably guess who a lot of those folks are.
[00:19:09] Jessica Infante: Yeah, I think a lot of what is driving us is that beer-flavored beer is cool again, courtesy of the outlawed garages of the world.
[00:19:17] Justin Kendall: Good job bringing more people in.
[00:19:20] Jessica Infante: But is it kind of? I think it's just kind of like a Band-Aid to keep the people who were leaving for things like whiskey from leaving.
[00:19:32] Speaker 1: Yeah. Hey, listeners. The September 15th rush brings lots of new beer jobs. This week at cpgjobs.com, including from Wolfhound Nitro and Almanac Beer, Russian River Brewing, Bay 13 Brewery and Kitchen, and FIFCO USA adds strong openings. Beer people, search cpgjobs.com now. Every listing runs on Brewbound, the beer industry's daily read. And if you're hiring, reach brewers, beer sales leaders, and distributor people tracking beer. Your role can reach passive candidates inside beer news they already read. Post your job on cpgjobs.com today. Use code brewbound26 and save money on your listing.
[00:20:09] Speaker 2: Your inbox should reflect the parts of CPG that matter to you. Choose from BevNET's seven free newsletters covering beverage, food, beer, spirits, careers, education, and more. Sign up and select your favorites at cpgmedia.com slash newsletter.
[00:20:26] Justin Kendall: Well, let's get into our next story, and that is Tilray Brands, and they have a collaboration going on with Spirit Halloween, which I'm all for, for the Shocktop brand. It's a candy corn weed ale. I'm not sure I'm for that, but hey, it's for somebody. And I spoke with chief growth officer, Prince Pinaket, and he acknowledged that. He said, this isn't going to be for everybody, and that's fine. And they see Shock Top as not so much a wheat beer as sort of an easygoing, experimental beer, something that they can tap into when they need to for things like their Auntie Anne's partnership with the Pretzel Beer. I thought all that was sort of interesting, and I love Spirit Halloween. We went back this weekend. But one of the things I wanted to talk about with this was something totally different. Tilray acquired BrewDog, and one of the things that stood out from my conversation with Prince was He mentioned that they don't really want to talk about the Scottish heritage of BrewDog going forward, that they want to frame it as an Ohio beer. It's Ohio made. It's from the Great Lakes. That surprised me a little bit, that there's this erasure of 20 years of history. And my question was, how do you take a brand that has this rebellious punk ethos that was very much about, you know, these stunts and stuff that they use to gain popularity and had a cadre of equity for punks fans. And you know, how do you keep that sort of ethos or make that relevant to them? And obviously, that is a lot harder when you've got equity for punks who lost their equity in this thing. But the reframing of it as this like Great Lakes, US beer brand was kind of stunning to me.
[00:22:26] Jessica Infante: Yeah, well, when I interviewed Irwin in March after the announcement, he did say then that they were really, said what Prynne said to you, that they were going to focus on that really immediate adjacent to Ohio geographic footprint. But then they spent the summer doing crazy things like doing a brew dog pop up in the Hamptons. Yeah. So I don't really know what that's about. And obviously I would hope that that's only the strategy for the U.S. They're not going to go to Scotland and be like, hey, we're at Ohio beer, because obviously That doesn't work, but I've always wondered what Ohioans thought of it. Do they feel a connection to it? Do they say, yes, this beer is made here? Or did they just think it's an imported brand with local production? I think that would be really interesting. I don't personally know too many people from Ohio to have that conversation. I just went to Asheville and it seemed like people in the city had warm fuzzies for New Belgium and Sierra Nevada who are not of there, but they are there, you know?
[00:23:29] Zoe Licata: It's not like Ohio is empty of existing craft brands that already lean into this. You have Rheingeist, you have Great Lakes, right? You have a good handful of folks that are already out there doing this. I'm curious if they see having similar messaging helps with that competition? Because in my head, I feel like it would make it more difficult. Like your positioning is now very similar to a lot of these folks instead of having the unique messaging of, hey, we're a Scottish brand that is producing beers here.
[00:24:05] Jessica Infante: I will tell you, having worked on a beer brand that is produced somewhere other than where it says it's from, that is tricky. Because you hear things from everyone. You hear people in your hometown say, you're not made here. And then people in the area where you do a lot of production are kind of like, yeah, you're here, but are you? You're not really like exclaiming that you're proudly brewed here in Pennsylvania and Ohio. So it's hard.
[00:24:31] Justin Kendall: Well, and to that point too, though, they're going out a decade in Ohio, which to me was like, It's already been a decade since... Yeah. BrewDog has this massive brewery now in Ohio, but... And a hotel. Or Tilray does, I guess.
[00:24:48] Jessica Infante: They've also closed a bunch of taprooms, so... Yeah. I don't know how that fits into the math. It doesn't have to, but it's certainly a thing that happened.
[00:24:57] Zoe Licata: Just the positioning of Birdog in general is just really fascinating to see what can or will eventually work for them because it's just has gone through so many iterations and has so much going on and has had plenty of outside conversations also had around it based on things with employees, based on things with its previous owner. So there's a lot of different dynamics going on for this brand. And so what can actually work to make it have whatever new reputation it wants to have? I mean, that's a massive task. I certainly don't have the answer for what that is.
[00:25:34] Justin Kendall: Luckily, Tilray has a portfolio full of brands, maybe not with the similar issues of Burdawg, but many of the same issues of figuring out who they are under new ownership.
[00:25:47] Jessica Infante: I do think what they're doing with Shock Top is interesting because Shock Top really was created as a competitor to Blue Moon. So it doesn't really have like a vast heritage to lean on. So they're basically just remaking it in the image of who they're partnering with. Would I drink a candy corn beer? Maybe.
[00:26:13] Zoe Licata: I don't know if I would. I think it makes a lot of sense that they're leaning into not necessarily the liquid, but shop tops reputation for just like the funness or the kind of outlandish nature of it. It is a bit absurd in some of its marketing before, and I think that is what attracted people to it. And so they're kind of returning to that messaging. I think that is a nice way to distinguish it.
[00:26:36] Justin Kendall: I look forward to seeing your shop top wedge head costume, Zoe.
[00:26:40] Zoe Licata: That will not be my costume. I am sure there will be plenty of older gentlemen in it, for sure, with beards.
[00:26:50] Justin Kendall: Let's talk a little bit about another story that our colleagues at Nosh, they took the lead on this one and BevNET as well, Marty over there. And it's that Kroger, I mean, I don't know how you feel about lunch meat, but they're dropping Boar's Head. But the big deal here for us is they're dropping Red Bull. And this matters a lot to beer distributors out there because there are some very large distributors in this industry who are carrying Red Bull products. And now You've got a major grocery chain dropping Red Bull over a pricing strategy dispute.
[00:27:26] Jessica Infante: Yeah, this was interesting. And I think it just kind of speaks to where we are right now with the state of the economy. People feel really crunched in their budgets and they're not opting for these pricier things when there are cheaper replacements. I don't know if the Boar's Head recall situation had a hand here, but I'm not a frequent buyer of cold cuts. So I couldn't really tell you what's on their minds in that regard. But yeah, I mean, the vibe session, unfortunately feels really real to a lot of people and they're cutting back. So Kroger is saying, Hey, we hear you. And if you're not going to buy it, we're not going to carry it.
[00:28:09] Justin Kendall: I mean, aluminum is not cheap.
[00:28:11] Zoe Licata: And it's in a category that has just seen a massive influx in smaller brands finding growth quickly and making a name for themselves. And so that's just increasing competition where before I think you think, oh no, no one's going to ever really take down a behemoth like Red Bull, but retailers are paying attention. It seems like potentially it can in some places.
[00:28:34] Justin Kendall: And you wonder how far this goes. If Kroger's willing to do this, are there other retailers who are likely to follow? Don't know, but something we'll be watching. And I asked at least one distributor about this and they said that things are a little tight lipped at the moment, but I'm very curious to hear what comes from the Red Bull side of this.
[00:28:55] Jessica Infante: Yeah, because you can come down in price, but that's never really a winning strategy. Yeah.
[00:29:01] Justin Kendall: All right. With that, let's get to our featured interview with Lukas Southard. Let's bring on one of our colleagues, Lukas Southard. He is a reporter with Brevard Sibling Publication, BedNet, and Nosh. He's on the CPG podcast, CPG Week. Did I get that wrong?
[00:29:19] Speaker 3: CPG Week.
[00:29:20] Justin Kendall: You got most of it. You got the first half. I got one of the two words. You can find him on CPG Week. That's available on Apple and Spotify, covering CPG. But you spend a lot of time, a lot of time covering THC infused beverages. You've done a great job covering that space. And a lot of your work ends up on Brewbound.com. Thank you. We appreciate it.
[00:29:45] Jessica Infante: I don't think we can thank you enough.
[00:29:48] Justin Kendall: Yeah.
[00:29:50] Speaker 3: Just racking up those bylines is what I'm doing, you know?
[00:29:53] Jessica Infante: You really like dove headfirst into this really complicated part of the industry that I don't know that well. So I'm really glad that you do what you do because it has made me smarter at all of it.
[00:30:05] Speaker 3: I guess I found a niche in terms of how complicated it is being the most interesting part, that it is so dynamic. There is so many different nuances to it, even before this weird time that we're in where regulation is kind of being awaited, but nobody really knows what's going to happen after December.
[00:30:28] Justin Kendall: Yeah, you can't really predict the future on this at this point. But as far as we know right now, there's a continuing resolution that passed. The deadline is set for December 11th. And I guess from there, what is your sense of where things stand? I can't tell if there's a sense of existential dread, a feeling that this can will get kicked down the road even further, or is there real hope that something will happen after the midterm elections that will either make this permanent or push it further down?
[00:31:06] Speaker 3: I think it's a lot of all of what you just said, basically, Justin. I think there's a lot of posturing going on from the industry. as a whole, the brands themselves, most of them, when asked outright, what do you think is going to happen? They say, I don't know, but I think eventually we will have regulation. But I also think that there is, when people are being realistic and when some of the sources I've talked to are being honest, most of them concede that the December 12th deadline will probably pass. without regulation being in place, and that brands and stakeholders in this industry are going to need to at least bide their time into 2027 until some sort of regulatory framework is put in place. Now, you know, in saying that, there is a lot of optimism that the hemp beverage category or hemp-derived THC beverages will not go away forever. That it has established itself as a really good alternative to beverage alcohol. That the consumers that are moderating their alcohol consumption are turning to things like low-dose THC drinks as their social beverage of choice. And most importantly, there's just a lot of money to be had there. I mean, you talk to distributors, you talk to retailers in that space, and they all are saying the same thing, that people are drinking less, but they are drinking more of this. And so filling the shelves with this category has really become a sticking point. So it's just a matter of finding what that balance is with lawmakers and regulators and what the industry actually wants.
[00:32:56] Justin Kendall: This kind of uncertainty is really no way to run a business. I don't know how these folks even get up in the morning and operate, but a lot of them are finding alternatives in the way to approach this. Some of them are creating products that meet the The threshold, is it .04? Is that what the threshold is that it would be on December 12th?
[00:33:22] Speaker 3: Yeah, which is basically non-existent. And you have, like nowadays, one of the category leaders has launched a, you know, an extra light beverage that is below that threshold. You're also seeing just a lot of brands pivot into THC-free alternatives and get out of the intoxicating hemp. not get out completely, but offer a functional beverage that, quote unquote, will do some of the same things. But making a beverage full of L-theanine and lion's mane mushrooms is not going to give you the same effect as low-dose THC. That's just not realistic.
[00:33:59] Jessica Infante: It seems to me as though there's a bunch of different trade groups that have entered the space. Can you give us the lay of the land on that part of all of this? You know, with beer, like, we understand that framework. But what about here? How are trade groups trying to help navigate members through what we're seeing? And how many are there?
[00:34:17] Speaker 3: Well, there's a lot. And so it gets complicated because there's some that are solely devoted to the hemp industry. You have like the Hemp Beverage Alliance, the HBA. You have CABA, the Coalition for Adult Beverage Alternatives that are pretty aligned in terms of they are for intoxicating hemp for the most part and really lobbying for that category. Then you have like a retailer lobbyist group called Bamco that started earlier this year and they have backers with like Spex and Total Wine & More and some of the big beverage alcohol retailers. But again, I haven't heard a lot from Bamco other than just like, Hey, we're here and we are supporting the hemp beverage category as a whole and they have been pretty outspoken in the few times I've talked to them about, we're not dealing with other types of edibles and other intoxicating hemp products that aren't in a kind of traditional beverage format. But then you have trade groups that have been around for years, sometimes decades in the hemp industry, and they are vying for industrial hemp. And then you have also the competing trade groups coming from the regulated cannabis sector who are pushing back against either. new regulations or an actual regulatory framework being put in place for intoxicating hemp or incorporating intoxicating hemp into a broader definition of cannabis and a regulation of cannabis as a whole, which includes marijuana. So it does get really complicated. I couldn't give you a whole number, Jess, honestly, but the main ones when it comes to the hemp beverage category would be the HBA and CABA, who have been really strongly supporting, and I guess that includes the hemp roundtable, the U.S. hemp roundtable. They've all been kind of strongly supporting what they call sensible regulation for intoxicating hemp beverages.
[00:36:17] Justin Kendall: Is part of the sticking point here some of the other intoxicating hemp products that are on shelves? Because when I hear conversations around this from people who want to regulate this, they talk about this in a way of products that would appeal to children. And I'm sure there are probably some intoxicating hemp beverage labels that might do that. But from some of the major players that we've seen, I don't get that sense at all. So do you have a sense of sort of what the sticking point is around some of this? Or is it just old school prohibition that they want to wipe the whole thing out?
[00:36:58] Speaker 3: Yeah, it's a great question because I think there's a variety of ways to answering that. When we've seen states push back, like when California, when Governor Gavin Newsom outlawed all intoxicating hemp products, a big thing that he was basing this on was what people are calling gas station weed. And a lot of that does come in the form of edibles, like candies that are supposed to look like a Skittles or supposed to look like Sour Patch Kids, but have an excessive amount of intoxicating hemp or hemp-derived THC in them and are, you know, unregulated basically in the same way that beverages are. There are some beverages out there that are, you know, excessively high, but for the major brands in the beverage space, what's interesting is that they've found a sticking point, especially in retail and most especially in beverage alcohol retailers at the like 10 milligram dosage for RTDs, single serves. And also they've found there's been a lot of demand coming for the multi-serve kind of spirit alternative. So a big bottle, a 750 usually milliliter that you can pour a little shot and you get five or 10 milligrams per shot. Like Willys. Yes, like Willys, exactly. And pretty much all the major brands have went into that space. Delta, Uncle Arnie's, all of them are in that space now too. And those products do really well in retailers from what I hear. And retailers are really seeing demand for, you know, value, basically the 10 milligram being more bang for your buck. But from what I hear when having conversations that revolve around what's happening in DC and negotiations that are happening on Capitol Hill, most people will tell me that 10 milligrams is too high, that it will likely be somewhere closer to the five milligram sealing. And that would also, for the most part, usually discount anything or void out any of the large format multi-surf bottles as well.
[00:39:03] Jessica Infante: Now, is there any thinking or conventional wisdom around which consumer demographic each of these things appeals to? Like, for instance, in alcohol, they're ready to serve like big bottle prepared cocktails. Traditionally, those usually find a consumer base among boomers and up. Is there anything like that in hemp that we can say, oh, well, you know, Gen X prefers gummies, but millennials are drinking the beverages or anything like that?
[00:39:31] Speaker 3: I don't think so. A lot of times when I'm talking to brands in this space, they say that their core demographic is soccer moms or the, you know, elusive soccer mom as they're considered now. And I think there is. There is some support behind that, that the core demographic is maybe not soccer moms specifically, but people over 40 who are reducing or moderating their alcohol or have given up alcohol, and this has been the good alternative for them. But in terms of format style, I don't know if it really is shaking out in the same way. Obviously a multi-serve bottle would be great to have at home if you want to, you know, make a, a THC cocktail, but also would do really well in on-premise. But I just don't think there's enough distribution or enough of a footprint in on-premise right now for, for hemp drinks, just because it's. such a dynamic space and there's, it's kind of the wild west depending on where you go. I know that the format in terms of the 10 milligrams is really just coming down from what I'm hearing. It's less about a demographic and it's more about just the value. You get more milligrams per dollar when you're getting the 10 milligram. And that's why there's plenty of fairly reputable or very reputable brands that are still offering things that are higher in dosage, that there still have 20 milligram single serves or 50 milligram single serves that they're selling where they can, usually in smaller independent retailers. But they're like, look, there's a demand for this. People are buying it. And we haven't been told we can't take it off the shelf in a lot of markets yet. So we're going to keep offering it. And, you know, they're like, when we're told we can't do it anymore, we won't do it anymore. But for the time being, we're going to try and make the money where we can.
[00:41:12] Justin Kendall: Is there a sense that some states may push back if there is a federal ban and say, we're not going to go along with this?
[00:41:21] Speaker 3: There is. And that has been a really interesting wrinkle that I've been trying to explore a little bit more in depth in my reporting is there is a contingent of, I don't want to say states, but there are a contingent of retailers and distributors that I have heard from in states that are currently selling intoxicating hemp products. They're saying, we're going to keep selling even if there's no regulation in place after December 12th, because we're going to claim states' rights in the same way that, or in a similar way to what happened with recreational hemp in Colorado and California and really all over these days. They're gonna say, okay, you're not regulating it, and we're gonna just keep selling it, and what are you gonna do? Come and knock down our doors? The Fed's gonna come and rip bottles off of shelves and pour out cans down the drain? What I'm hearing is that there's a little bit too much money to be made, and if the federal government is not gonna put regulation in place, then states are gonna take it into their own hands and test the powers that be to see if they can keep doing it.
[00:42:33] Jessica Infante: So with so much uncertainty, it seems really hard for any of the brands who are in this space to be able to even know what to do next. But this is a segment that has developed relatively quickly and is worth a lot of money. So what's up with the investment dollar situation?
[00:42:50] Speaker 3: There's still investors putting money behind brands, but it definitely has been slowing down in the last couple of months, I've noticed. One notable exception that I recently reported on was Uncle Arnie's just received a new $2 million investment, pretty much an add-on to a $7.5 million round that they raised last August. So August of 2025. And when I talked to Theotaris, the CEO there, The thing that he pointed out was they have a bifurcated business strategy. They are still selling hemp-derived drinks in the regulated channel. So they are still in dispensaries in states that have recreational marijuana laws. And so they're doing well in those states. And they have also launched into the hemp-derived THC set and are in separate states and separate markets where they sell those products. So their feeling is, look. If it gets shut down, that sucks, but we also still have a whole half of our business that's doing very well in dispensaries. And in fact, those dispensaries and that dispensary business for beverages might increase significantly. If people can't just go to their Total Wine & More and pick up, you know, a 12-pack of hemp-derived THC drinks, they're going to go down to the dispensary or they're going to cross state lines and get it where they can. And so that is a notable exception in terms of the investment scape. But, you know, like I know Breeze was trying to raise new money and I haven't heard anything from them. Willie's raised some money recently, so there is money to be had. There are investors that are still coming into this space, but it is starting to slow down. Now, depending on what happens moving into December, we might see a whole deluge of investors jump into this space really quickly. if things look like they're going to loosen, if regulation seems like it's on the cusp. And there's a lot of different bills in Congress that are trying to resolve this quagmire before December 12th. It's just a matter of if they can get through when we have midterms coming in two months.
[00:45:04] Jessica Infante: So I'm glad that you mentioned that Uncle Arnie's is able to, you know, they've got a bifurcated business. How feasible is that jump to the regulated channel for other brands in the hemp space? Is that possible?
[00:45:16] Speaker 3: It's possible, but when you're working within a state-by-state framework, so pretty much every recreational cannabis state requires you to source your raw materials and use everything within state. Your whole supply chain needs to be within state, more or less. And so it makes it a lot more complicated. It makes it a lot more difficult. And you know, the raw ingredient is actually cheaper from what I can tell in terms of working with marijuana because. It has a higher THC content. And so there is some cost advantage to working in the recreational channel, but it's also a lot more expensive to work in. There's, you know, state by state, it can be really, really expensive to work in the dispensary channel as opposed to working in a more traditional grocery or beverage alcohol retailers.
[00:46:12] Justin Kendall: What's your sense of consumer awareness of this impending ban? Do they know?
[00:46:17] Speaker 3: I don't think it's really front and center for a lot of these consumers. I know that brands have been really outspoken since last November, trying to make their consumers more aware. Literally every marketing email or posting on socials has a call to action about, Hey, the band is coming. You have this many days, weeks, and. months or hours and minutes until the ban goes into place. So there is a call to action to get consumers aware. I think it's slowly building. I mean, I see it just in the news stories that come out. And granted, I'm pretty deep in the weeds in this set. So I see a lot of these news stories. But I do think that As we get closer to December, there will be more and more awareness growing. Again, I just don't know if there's enough of an appetite from the actual lawmakers and congresspeople that would be making decisions on a regulation or on a regulatory framework to get this done before December 12th. Do lawmakers know much about this space? When you talk to stakeholders in this space, they have often cited that as being a really big point of contention and a really, one of the hardest parts of this is educating lawmakers about what they're trying to do, especially when it comes to the kind of micro-dosed or the really low dose drinks that are out there. So really anything below 10 milligrams per serving. What I hear is that a lot of lawmakers think of it in terms of these like, 50 milligram gummies or, you know, a 12 ounce drink that has 100 milligrams of THC that will just wreck most normal consumers. And trying to educate them, educate lawmakers and regulators about where this category has really found a footing and where the demand amongst consumers is coming from has been one of the hardest parts for a lot of the stakeholders.
[00:48:22] Justin Kendall: Can you put a dollar figure on this business at this point? Do we have a good sense of how much this is worth, where it stands?
[00:48:34] Speaker 3: I don't. I've heard widely different estimates about where this is because the problem is a lot of this business is still in D to C. So you're still getting a lot of these brands operating half their business, if not more, by sending product through the mail. And so it's just not really a good way to track it. I know that Spin started tracking it a little bit. I know that Cercana started tracking retail sales. But again, those aren't really great estimates when, like more than any other beverage category that I know of, Most of this stuff is coming through the mail. I do know that the hemp beverage Alliance said that the category grew 133% year over year between 2024 and 2025. And by my rough estimates, I would say that's probably increased even more in the 2025 to 2026, because a lot of the sources I've talked to a lot of the brands that I know, and I talk to regularly have told me. If anything, sales have been up significantly this year because those calls to action that we talked about earlier to their consumer base are working in terms of consumers are buying more product in anticipation that it might not be available to them after the winter.
[00:49:51] Jessica Infante: Yeah, I saw an ad on social last night that was encouraging people to buy a palette because prohibition is coming.
[00:49:59] Speaker 3: Where you're going to stick a pallet of beverages in your house is, I would be interested to see, but somebody's garage is going to be just, you know, piles of cans.
[00:50:09] Jessica Infante: There's got to be an expiration date, right? Does this stuff go out of code?
[00:50:13] Speaker 3: I would imagine so. I don't actually know. If you're buying a pallet, I would imagine you're drinking it fast enough that you don't really, you're not really worried about it going bad first.
[00:50:23] Jessica Infante: It's too bad we can't find like recordings of podcasts from 1920, but see how they handle that prohibition.
[00:50:31] Justin Kendall: Yeah. One last question for you before we let you out. You recently had a story about intoxicating hemp beverage replacements, Canna and Cava. Do you have a sense of whether these are actual replacements that consumers would pick up on, or is there just some magic in, this is a THC beverage, you know, is there that connection there, THC, that sort of puts something over the top where it's like, it's really hard to replace?
[00:51:02] Speaker 3: Yeah, so the idea behind that story was THC drinks are going to go away, possibly. What's going to replace it on shelf? And my expectation was that Kava would be the number one. But when I started to go out there and talk to brands in the Kava space and in other kind of intoxicating alternatives, shall we say, Most of them kind of had the opposite response, which was, we're not positioning as a replacement for THC drinks. And if anything, it's going to hurt our business because we have really rode the tailwind of what's happened with THC drinks to bring our product to consumers. So even though kava's been around for quite a while, especially in kava bars in South Florida and is a traditional drink from the Pacific Islands, it doesn't have as much understanding amongst consumers that THC does. People know what THC is. They know what weed is. They know that marijuana, cannabis, THC are all the same thing, more or less. But kava seems different and is hard to explain. And frankly, kava doesn't taste very good when you drink it in its pure form. It's kind of like muddy water. And so the RTDs that are on the market are, you know, using a cavolactone extract, which is not really true kava, but it's a, you know, it has this very similar effect to make it taste better. And there are some really great kava beverages out there. But when talking to the kava brands that I did for this story, most of them said, You know, we're just as worried as THC. Yes, we're going to maybe see a slight bump. Maybe there's some more distributors that are reaching out. But frankly, a lot of the retailers in the adult non-ALK space have filled their shelves with THC. And if they can't sell that anymore, they're going to close really quickly. And so we're going to lose retail opportunities, and it won't necessarily be replaced with the larger beverage alcohol chains that could also pick us up. That being said, there is a lot of interest growing for kava and kana. And kana, you know, derives from an African plant as well. And they're kind of different in that they don't necessarily give you the same high or the same effect, shall we say, as THC. But they do get you to feel something. And that has really been the sticking point for THC beverages being an alternative to alcohol. If people are going to give up their alcohol, they still want something that they can drink when they're socializing with friends or at the end of the day. And it has a relaxing effect. And it makes them feel similar to how alcohol did. And as I said, with like L-theanine or some of these other functional ingredients, you really have to take a lot of that to even trick yourself into believing that you're feeling something. Whereas THC, for me, I'm a bit of a wimp. If I drink a five milligram can fairly quickly, like, I feel it. I feel it sometimes a little too much. And same thing with kava. If you drink kava, you're gonna feel something. If you drink kana, it does have an effect on you. And I think that is what consumers are looking for. Whether it is a good replacement, I don't think so, a replacement for THC, but whether it will gain a little bit more recognition, either with the ban going into effect or regulation being put in place and THC becoming more ubiquitous, I think kava, kana are inextricably aligned with the THC drink category.
[00:55:00] Justin Kendall: Well, that's all we're trying to do here is feel a little something as a consumer or not. So thanks for doing this, Lucas. It was a pleasure. Happy to be here.
[00:55:10] Jessica Infante: And that's our show for this week. Thank you for listening. The Brewbound Podcast is a production of BevNET CPG. Our audio engineer for the Brewbound Podcast is Joe Cracci. Our technical director is Joshua Pratt and our video editor is Ryan Galang. Our social marketing manager is Amanda Smerlinski. Our designer is Amanda Huang. If you enjoyed this episode, please share it with your colleagues and friends and review us on your listening platform of choice. You can find our work at Brewbound.com. And we also welcome feedback and suggestions at podcast at Brewbound.com. On behalf of the entire Brewbound podcast team, thank you for listening. We'll be back next week.
