[00:00:00] Justin Kendall: The Scots drank all the beer in Boston, just not the IPAs. Next on the Brewbound Podcast. Hello and welcome to the Brewbound Podcast. I'm Justin Kendall.
[00:00:20] Zoe Licata: And I'm Zoe Licata.
[00:00:22] Justin Kendall: And this week, we're going to be joined by Sam Hendler, the CEO and co-founder of Hendler Family Brewing. Jess is going to have an interview with Sam discussing the first day at the company's newest tap room, which is right near Foxborough Stadium, right, Zoe?
[00:00:40] Zoe Licata: Yeah, it's basically in the little shopping plaza area that surrounds the stadium. So if you're going to the stadium, you'll probably go in there.
[00:00:50] Justin Kendall: And from what we heard from Sam and Jess's got the Intel on this, that they sold out of a keg of house lager within the first 90 minutes of being open on opening day. So the Scots definitely took over. They invaded. How's the invasion going for you?
[00:01:08] Zoe Licata: It's sadly over. There's a couple of Scots that are still hanging around, canceled their flights and decided to stick around for a little bit, but mostly all left Sunday. So we had one final rally with them all this past weekend, and we're going to miss them dearly. But there is a potential chance that they come back. If things work out correctly, they could be back for the Germany game that is here. So who knows? Fingers crossed, because we like them all.
[00:01:38] Justin Kendall: I think everybody in the BevElk industry in Boston has their fingers crossed hoping that happens because I get Boston Google alerts and it's nothing but talking about how the Scots have drank all the beer in Boston.
[00:01:53] Zoe Licata: It's gone global. Harry Styles on stage the other day started doing the Scotland chant and there's no reason he would be doing that other than he's just on social media seeing that the Scots are drinking up all the beer here. Like, it's just everywhere. Every news outlet has picked it up. There have been some exaggerations a little bit, of course, but it is mostly true. They are drinking up everything and specifically drinking up all of the lager.
[00:02:18] Justin Kendall: Well, it's not quite Glasgow, but you're headed to London. You got to do some damage while you're there.
[00:02:24] Zoe Licata: I don't know how much I can hold up as one person compared to all of these Scots, but I'll try. All the Brits are coming over here to Boston, so we'll see how they hold up over here. But I'm looking forward to being out there, checking out those Wembley beer prices and some lovely, very old pubs.
[00:02:44] Justin Kendall: Speaking of Harry Styles. As far as England's invasion of Boston, what's the early word?
[00:02:53] Zoe Licata: We'll see. It's rainy here so far, so they're not out in full force if they are here, but it's definitely nowhere near what Scotland was doing. The word on the street is they need to get used to our city's ID policies. So if you're traveling over here, make sure you have your passport with you so you can get into the bars. But yeah, they have quite a lot to live up to. They're being a little shady about it. There's a video that went viral the other day of some Brits in a bar chanting about how Scotland's party's over and the Brits are here now. So we'll see what happens.
[00:03:24] Justin Kendall: Well, before we get to the featured interview, we've got some news. We also have to plug Brewbound Live. It's coming up December 9th and 10th. We've announced our keynote speakers for this year. Allagash founder, Rob Todd and VP of Human Resources and Organizational Development, Celine Fru will be kicking things off for us this year and we're stoked to have them. They're going to talk about building and maintaining the culture at Allagash, which is kind of the gold standard for the industry.
[00:03:52] Zoe Licata: Yeah, we say all the time that the keynote speech really sets the tone for the rest of the conference. And it's always a really great discussion that touches on things beyond just, you know, the numbers and the business, but also how people are operating with a human-centric business. So hearing from Allagash and what they're doing is going to be really awesome.
[00:04:12] Justin Kendall: Tickets are available now, more to come, but let's get into the news. And we're always trying to understand the consumer and so is the Brewers Association. And they've released the results of the 2026 Harris Poll. And what did we find out about craft drinkers in 2026? Or for that matter, people who don't drink craft.
[00:04:35] Zoe Licata: Yeah, the people who don't drink craft, it doesn't seem like that's changing anytime soon. If you're unfamiliar with this poll, it kind of divides up respondents as those that are considered craft beer drinkers, so they drink several times a month, and those who are not, which are anywhere on the other end of that spectrum of how much they're drinking it. And the folks that are not in that core craft drinker group, the ones that are drinking crafts went down slightly from last year, so it's around 46%. And so Kraft is continuing to battle trying to bring in new consumers to the segment. And it's a mix of the same things we talk about all the time. It's because of they don't like Kraft, or they haven't tried Kraft, and they're drinking something else. They're drinking other things within Vivec, or they're just not drinking alcohol at all, or they prefer a non-alcoholic version of things. They are paying attention to health and wellness trends, and they don't think that a craft beer fits within that sometimes. So Matt Gasiak, who's the staff economist from the BA, pointed out that within particularly the younger legal drinking-age consumers, a big reason why they're not is they just aren't around people who are. So it's become a thing now more culturally. their friends aren't drinking craft beer, they're not around craft beer, so they're just not inclined to try it or drink it. So we'll see how that evolves as that generation gets bigger. Again, this is, as we clarify all the time, that generation is still a very small portion of total drinkers. So not super great for Kraft in that sense, but there is more positive news when analyzing the responses from specifically Kraft drinkers and that they are drinking more Kraft than they were last year. 85% said they're drinking Kraft at least monthly. That's the largest percentage who said so since 2019, 2020. So that's pretty notable that it's first post-pandemic where it's around that percentage. and they appear to be what Gaciac has defined as more engaged. So they're going to tap rooms, they're buying from breweries after they go to tap rooms, they're looking for craft in more places, they're buying a wider variety of brands of craft. So they're trying a bunch of different styles and different companies with their purchase rather than just staying loyal to a couple of them. So there's some positive momentum happening with those consumers who are already in the segment, which is craft will take whatever it can get right now, which is great. But it's still having a hard time bringing in some new folks.
[00:06:59] Justin Kendall: How did the gender gap shake out for this poll?
[00:07:02] Zoe Licata: There's so many numbers still to dive into about every sector of this. But one thing that I pulled out was that particularly women, and it's even higher with women who are, you know, Gen Z or younger millennial, are really put off by the flavor, or what they define as the flavor of craft beer. It was around 50% of the youngest legal drinking age women said that was the driving reason why they don't drink craft, which was really interesting, compared to like 30-something percent of men the same age. We know craft has struggled to bring in women, but it's not necessarily because of the reputation of craft, it seems. It's just still education needed for consumers.
[00:07:46] Justin Kendall: You can dig deeper into this year's Harris poll at Brewbound.com. Become an insider today to get all the details from Zoe. And before we get to the featured interview, let's talk a little bit about RNDC because they had a couple of moves. Moon Distributing in Arkansas has picked up the business there, but Illinois has been one of the states that we've been trying to sort of figure out what's next because it was originally in that Reyes deal. It got pulled out of the Reyes deal and it's like, what's going on here? Well, it sounds like they're going to shut down operations because they do not have the financing available to continue, a spokesperson told our colleague Ferron Salniker.
[00:08:36] Zoe Licata: Yeah, it makes a lot more sense now why Ray's was not picking this up anymore. They are not in a financially good position to continue on. But I mean, that sucks for any impacted by that. But this answers a lot of questions we've had kind of hanging in the air for a minute now.
[00:08:52] Justin Kendall: Yeah, there were whispers that this was a rough business to take on and so understandable why they didn't get into this business. I figure that Reyes or any successor wholesaler could just cherry pick what they wanted anyway from RNDC at any point. But here it is, and it sounds like there are going to be layoffs. We have yet to see a warn notice on this one, and it sounds like suppliers were notified of the shutdown last week. And Mallory Vaughn Patton, the co-founder of St. Spritz, took to LinkedIn and said that Unfortunately, Illinois was not part of the transition and RNDC Illinois will be shutting down operations without a transition in place. So they're on the hunt for a new distributor partner, which if you're a supplier still with RNDC, You got to be looking for a lifeboat or any piece of the boat that's floating. Yeah. Some driftwood.
[00:09:54] Zoe Licata: Especially if, you know, like Chicago is a major market for you, which we know it is for a decent amount of folks. That's a big shift happening. How many pieces are left out there in the ether?
[00:10:06] Justin Kendall: Two, as far as I'm aware, New Mexico and Georgia. Everybody's got their eyes peeled there, and I guess we'll see what happens. But this is the second state that RNDC is just up and left, and California being the first and biggest domino to fall. So not much left of RNDC. I think by the end of the year, we'll probably be saying, maybe by the end of the next few months, we'll be saying goodbye to them altogether, which is astonishing when you look back that at one time they were the second largest spirits and wine distributor out there. Not too big to fail.
[00:10:47] Zoe Licata: We're recording this on Monday, June 22nd, so if this episode comes out and something else happens, which it very well could, that's why we're not talking about it. Because this moved so fast.
[00:10:59] Justin Kendall: You never know. And there's a lot of dominoes that are going to fall in the coming months with all the deals that are already in place. You can check all of that out at Brewbound.com. Before we get out of here, any other news that we should hit on before we let people get to this interview?
[00:11:19] Zoe Licata: Our Michelob Ultra spokesperson, Mr. Messi, is still killing it out there. So we'll see if that, not that Michelob Ultra needs any boost in sales, but it's definitely helping.
[00:11:31] Justin Kendall: Are you excited about the Comm Bar?
[00:11:33] Zoe Licata: Excited is a word.
[00:11:37] Justin Kendall: It is. The combine bar that AB was pushing. You can see that in our Insiders Weekend Beer Weekend Recap. That is quite the visual.
[00:11:51] Zoe Licata: People are getting creative.
[00:11:52] Justin Kendall: Oh. While I was grocery shopping, I hit up a Hy-Vee and I saw in the fruit section, there was a woman pouring Keystone Light Apple. So I swung by and it is very apple on the nose and very apple in the taste. It definitely delivered on the apple experience. And she's like, do you want to take a 15 pack with you? And I said, let me think about that.
[00:12:20] Zoe Licata: That's quite a commitment.
[00:12:21] Justin Kendall: It was $11.99 for a 15 pack and my mother-in-law and father-in-law were visiting and I was doing the math in my head because I was like, would they drink this? And they would probably each have like one and then I'd be 13 cans left to go. And it's not mathing for me.
[00:12:41] Zoe Licata: Yeah, I'm curious to see how all these Apple things play out this year because last year was just so crazy and it seemed like the demand when Apple first came out this year was also kind of a similar vibe of just people wanted on it but it doesn't feel like it's stayed as long as it did with Bapple last year.
[00:13:02] Justin Kendall: Well, and it sounds like the plan is to stretch this out as long as they can into the months when ABE has already transitioned Bush Light over to Lime. And I'm curious to see how that plays out as a strategy. And I don't know, we've seen a lot of folks try and play in that Apple space this year. And I don't know if we're heading for Apple fatigue. Are you Apple fatigued?
[00:13:27] Zoe Licata: Well, I can't say that I'm drinking any apple flavored things beyond cider these days, so I'm not quite there. But reading about them, yes, I'm fatigued with that.
[00:13:38] Justin Kendall: Even Garage Beer is testing in the home market. They're going to test their own apple version. And I don't know, it's late to the party, but I'm sure it'll do well in the Cincinnati area.
[00:13:52] Zoe Licata: It seems like a lot of these things are if it's getting the consumers that are already kind of loyal to the brand anyway, and they want the fun kind of apple flavored version of it. I don't know how much it's like, are people going to try an apple garage beer and then be like, oh, now I got to drink the other garage beers all the time. I don't know.
[00:14:13] Justin Kendall: I don't either. We're just doomed for copycats beyond this too. It's going to be a lot of Apple.
[00:14:20] Zoe Licata: That's the Bebelk industry.
[00:14:22] Justin Kendall: Yeah.
[00:14:23] Zoe Licata: That's how things go around here.
[00:14:25] Justin Kendall: It's funny too. These companies have not too far in the distant past, they were running commercials, making fun of Kraft and like it's fruit flavors and that sort of thing. And now it's like, look at all this money. Look at all this volume.
[00:14:43] Zoe Licata: Right. I think of like how there was brands like seltzer and beer brands that were trying to be like against the hard seltzer craze and being like, this is more like old school beer. This is what dudes drink. And now everyone's promoting like light beers and skinny cans. And it's like, okay, so you did agree with it before you were just trying to be a dick about it.
[00:15:11] Justin Kendall: Pretty much.
[00:15:12] Zoe Licata: And you could call me on that one.
[00:15:14] Justin Kendall: Yeah, I'm sure you will get clipped. Well, let's get to our featured interview with Sam Hendler.
[00:15:23] Sam Hendler: Our guest today is Sam Hendler, CEO of Massachusetts' own Hendler Family Brewing, parent company of Jack's Abbey Craft Lagers, Night Shift, and Wormtown, all of which have their own taprooms across the state and are all on display at the new Mass Appeal Draft House and Grill in Foxborough. That was mouthful. Sam, thanks for being here. How are you?
[00:15:43] Hendler Family: I'm doing great. Thanks for having me.
[00:15:45] Sam Hendler: I am thrilled that we can have this chat because you have been busy. So as if opening a new multi-branded tap room wasn't harrowing enough, you guys chose to do it just as the World Cup kicked off right next door. So how have things been going in Foxborough?
[00:16:01] Hendler Family: Yeah, talk about a wild start. We passed our final inspection on Wednesday, opened on Friday, and then had a World Cup match the next day. So it's been wild. It's been a blast. But yeah, definitely way beyond our expectations. I can tell you the Scottish are welcome back in Boston anytime.
[00:16:25] Sam Hendler: You're definitely not alone in feeling that way. So how many games have we now been through?
[00:16:30] Hendler Family: We've had two so far and a third today.
[00:16:34] Sam Hendler: Wow. So it was Scotland versus Haiti and then Norway versus Iraq. And today is Scotland versus Morocco. I got to say, I was kind of skeptical about all of this because I don't watch sports. My husband will watch any televised athletic event that exists. So I, it's always on. And I generally, this has not won me over. And so I was very much like, oh, all right. It's been really fun.
[00:17:04] Hendler Family: Yeah.
[00:17:05] Sam Hendler: We needed a vibe shift here in New England. And I think this certainly helped.
[00:17:09] Hendler Family: Yeah, there's no doubt about it. Even going into the World Cup, there was a lot of negativity around some of just like the business case story of the World Cup. There were articles, hotels saying they weren't seeing the traffic they expected. It's amazing how fast that negativity evaporated as this kicked off. And it has been awesome. You know, listen, did it hit every hotel metric they were looking for? I don't know. I don't claim to know but on the ground the atmosphere has been fantastic people have been showing up people are having a great time and they're drinking a lot of beer as it goes on there's been so much talk in beer about winning occasions that are beyond what the beer occasion has always been. And, you know, the industry still obviously needs work to do on that, because the World Cup unfortunately won't last for 365 days a year forever. But it's clear that beer is a winner for this occasion. And it's been absolutely fantastic.
[00:18:18] Sam Hendler: For sure. Well, so what have you noticed that your international guests are drinking?
[00:18:22] Hendler Family: Lager, really, really fascinating. In retrospect, maybe shouldn't be all that surprising. But when you're used to IPA being the top seller, even the Jax Abby craft lagers beer haul, which Obviously the Jax Abbey brand is all loggers, but the hoppy loggers we put on are often at the top of our sales product mix in the beer hall. When you look at Mass Appeal, which has been largely international fans, right? They're locals for sure, but the majority of the audience who's been down there on game day has been the international fan base. And Hauslager has been consistently the number one seller. And it's not particularly close. I mean, we're selling 6 or 7x the Hauslager that we are of the top selling IPA in that taproom right now.
[00:19:16] Sam Hendler: Wow. I mean, my next question I think is probably has a very obvious answer, but more so, what are our new friends not drinking?
[00:19:24] Hendler Family: There doesn't appear to be an honest answer to that question. I mean, listen, they're drinking everything like volume is just up. And certainly some of the styles you're seeing more play on are golden loggers. Lighter beers are all performing over indexing right now compared to what we would typically see. But at the end of the day, the mass of people is driving a volume essentially across the board. I would say the biggest actually reduction we've seen in that occasion is the higher alcohol brands. Like we're seeing double IPAs, just really, really low order counts compared to give me a 5% golden lager, like that is flying.
[00:20:17] Sam Hendler: What's the reaction been to Mass Whole Light?
[00:20:19] Hendler Family: That is our second bestseller in the tap room and it has been very, very well received.
[00:20:25] Sam Hendler: How much education have we had to do about the pun?
[00:20:29] Hendler Family: Quite a bit, but the Scottish enjoy that education.
[00:20:33] Sam Hendler: I would believe that. They seem to me a bunch that would enjoy it. So, so funny. Well, what else have you guys done to prepare down at, I keep wanting to say Gillette and it's not Gillette, it is Boston Stadium right now because FIFA is not getting that sweet, sweet razor money.
[00:20:49] Hendler Family: It is interesting and you know after one match we did pretty significantly revamp the lineup of what we're offering from some stuff just having multiple lines of house logger we did go out of stock of house logger relatively early in that first game day. But it's all hands on deck. I mean, we're pulling in staff from other locations. We've got the whole management team on site for all these game days. We also have a beer garden in Dewey Square right across from South Station that has had record traffic pregame as fans are getting on the trains going down there. So it's really fascinating. You can see the sales numbers start about four or five hours pregame. It's hitting Dewey Square. And then, you know, another hour or two later, Patriot Place just lights up. And that runs through about half hour, 45 minutes pregame. It starts kind of falling off a cliff.
[00:21:50] Sam Hendler: This must be an amazing time to have POS system data. Like what a fun thing to watch.
[00:21:56] Hendler Family: Yeah, definitely have hit the refresh button a few times over the last week.
[00:22:01] Sam Hendler: So you've got the Beer Garden, which is right next to South Station, which for our listeners who are not in mass as you and I both are, South Station is where the trains have been running from Boston to Foxborough for games. And you also have taprooms around Boston. So Night Shift has a taproom right next to TD Garden in Boston, and also in Everett, which is Stone's Throwaway.
[00:22:24] Hendler Family: Beer gardens and other high-profile locations in Boston. Yeah, I mean, traffic is just up, like, across the board. I was in the Night Shift Glove Joy tap room yesterday, and there were as many people wearing kilts there as not wearing kilts. And the atmosphere is special. This is at 3.30, 4 o'clock in the afternoon, and we have a mostly full tap room of Scottish beer drinkers. That's not your typical Thursday afternoon, right? Something special is happening and the vibes have just been fantastic.
[00:23:00] Sam Hendler: I tried to figure out if this was something that's unique to Boston and Scotland by asking, you know, people across other host cities and whatever, like, hey, what are you feeling? I think this is just lightning in a bottle. It doesn't really seem to me as though there's this much of a story coming out of any other host city.
[00:23:18] Hendler Family: Well, I think there's a couple things that are somewhat unique. I don't know if this is 100 percent unique, but that Scotland, both of their first two games were in Boston a week apart. It seems like a lot of people just stayed for the full week. So it seems like in a lot of other cities, you know, the fan base maybe comes in the day before and they're gone the day after. Like this has turned into a full week of a Scottish fan base just hanging out. What that's created is more than just this one night story of a crazy night. It lasted the whole week. You have, again, Thursday afternoon at four o'clock in the afternoon, a taproom full of Scottish fans watching the Switzerland game. It's created a lot more interaction. outside of just this one crazy night because like let's be honest when you're doing this kind of business pregame on site yeah there's positive interactions but it's also just a crush of people and you're just frantically trying to get beer into everybody's hands you don't get You know, a five minute conversation over the bar in that atmosphere. But yesterday afternoon, like that conversation was happening and the conversations are happening on the streets and the beer gardens in the bars in a way that's created this just really special dynamic. And I was talking with a friend. I would bet anything that there's like a two-year lift on tourism in Scotland from the Boston area versus typical baseline over the next couple of years. Just like the vibes have been fantastic.
[00:25:05] Sam Hendler: Yeah. I mean, like, do you just have like bagpipes constantly playing in your head?
[00:25:08] Hendler Family: Who knew? Yes. We have bagpipes all the time in our tap rooms now.
[00:25:14] Sam Hendler: Can a bagpipe fit in a carry-on? How did they all get here? Because it seems like they all brought them.
[00:25:19] Hendler Family: I don't have answers for you, Jess.
[00:25:21] Sam Hendler: It's amazing.
[00:25:22] Hendler Family: It's OK. These are the hard-hitting questions that I need somebody to be asking right now.
[00:25:26] Sam Hendler: Somebody's got to ask. Like, maybe I should just ask if I can go post up at TSA at Logan to ask. Anyway.
[00:25:32] Hendler Family: I'll say even like a hotel here in Framingham, we had my in-laws anniversary party at the Beer Hall this past weekend, and they had out-of-town guests in the local hotel. And they went into the bar Saturday afternoon. And there's a bunch of men in kilts at the bar in Framingham. And they order a house lager at the bar. And the response from the bartender is, I'm so sorry, the Scottish drink us out of the house lager last night. So it's just like, it's at every turn, you're getting these stories. And it's, it's been really, really fun.
[00:26:09] Sam Hendler: You know, it's been fun to watch people from elsewhere come and experience our city with fresh eyes. You know, like that's, I think what I've really enjoyed the most is seeing how, like how much delight they are finding in things like the duckling statues, you know, like the public garden. I mean, they're in my town. Like I've seen a bunch of people in kilts walking around Salem, which is fun. And you're right. I think we are going to see a huge lift in tourism from, from here to there over the next two years. Outside of your taprooms, you guys have a significant off-premise presence throughout Mass. How did you plan for this summer with wholesalers and how are you supporting brands in the trade right now?
[00:26:49] Hendler Family: Yeah, there's a huge focus going into the summer on making sure we win, you know, a disproportionate share of display space going into this period. We've done well in that. And really just making sure the beer is available and ready to go is half of it. You know, these trends are localized to Boston, too. I tell you, New York, you know, we sell Sloop down in New York and between the Knicks run and World Cup vibes down there. Like we saw multiple weeks worth of inventory depleted this week of juice farm into southern New York. This isn't just a Massachusetts Boston story like we are seeing this across our distribution footprint.
[00:27:34] Sam Hendler: Did you activate around World Cup and the Knicks as was possible? I know you can't. I mean, look, the IP in situations like this is really difficult.
[00:27:42] Hendler Family: Yeah, we don't have the IP. We've been doing around the edges where we can, yes, but most of it has been just focusing on the basics of owning display space, having inventory available, being ready to capitalize on the increased consumption.
[00:28:02] Sam Hendler: You guys had a really solid 2025. I see the BA has your volume up 17%, more than 100,000 barrels. Sam, congratulations. You guys should be really proud. Thank you. But how is 26 looking so far?
[00:28:15] Hendler Family: It's off to a really good start in Massachusetts. We had a great Patriots run to kick off the year strong. I would say late Q1 into Q2 as like gas prices ticked up. There was, you know, more challenging 60 to 90 day stretch there in April and May, which has now evaporated. And we're seeing wonderful numbers for June. So all in all, good start to the year. We have areas of challenges like this didn't suddenly transport us back to 2014. There are still challenges that we're working through, but between our own brand business, which, you know, depending on brand family ranges from down single digits to up single digits, to our contract business, which is up really significantly off of last year. Overall production, we're up close to 30% year to date. So pacing for about 135,000 barrels this year. On the hospitality front, we've had a lot internally. We reopened the Warm Town taproom in Worcester in March. So that had been closed since July of 25 for a major renovation. We just opened Mass Appeal, our first foray into doing a multi-brand taproom. And yeah, there's just a lot going on, but the overall results have been positive.
[00:29:47] Sam Hendler: Let's dig in on Mass Appeal for one second outside of World Cup stuff because I find this really interesting that it's multi-branded and its name isn'Sam Hendler Family Beer Hall. It's, I get it, I get the pun, I get the play. Are people understanding this when they arrive or what are people expecting?
[00:30:04] Hendler Family: We're gonna find that out when World Cup fever starts dying away. I mean, let's be really honest, like we're capturing a captive audience on World Cup days. And the locals are largely avoiding the region like the plague at the moment. So we're not seeing our long term day to day customer right now. It is a different customer. For us, the Hendler Family Brewing name is not a consumer brand name. It's not one that we have any desire to be a consumer-facing brand name. It's one we want to be a very well-regarded, reliable, industry-facing branding, but, you know, it's not one that we're looking for average Joe in Foxborough, Massachusetts to understand. So, you know, we think about that location. It is very event-driven. You're located in a mall adjacent to, I mean, like a hundred yards away from Gillette Stadium where the Patriots, the Revolution play, and you have, you know, a significant concert series all summer long. So while we've been resistant to the idea of a co-branded taproom, we felt like if ever there was a location where it did make sense, like this has never been a community-driven taproom. This has been largely an events-driven taproom. We've seen a lot of one-time visitors from a relatively large geography. You know, where Wormtown is in Worcester or Jax Abbey is in Framingham or Night Shift in the Boston area, like, Those are community-driven tap rooms that need to live and breathe the Brad Avery day for people to understand it. But in this unique location, we felt like there was an opportunity to approach it differently and expose this audience that's gonna be there to our entire family of brands.
[00:32:05] Sam Hendler: I think it's really smart. And it used to be a Wormtown branded space, correct?
[00:32:10] Hendler Family: Correct. Yep.
[00:32:11] Sam Hendler: Yeah. No, I think this is a really smart move and I'm really excited to see how it continues to play out.
[00:32:16] Hendler Family: Yeah it's a really interesting test case for us. You know we can see it as something that could go into other similar types of venues. There's nothing active right now but we've had conversations in the past with like Logan Airport. What does a taproom in Logan look like as an example? There's a feeling that this type of concept is something that we could put into a location like the airport or like the TD Garden, like put it into locations that have that captive audience. And we want to expose that captive audience to our entire family and friends.
[00:32:51] Sam Hendler: Makes all the sense. Now, we're also coming up on one year of your partnership with Sloop in New York. How's that been going?
[00:32:57] Hendler Family: It's going really well. We've made a ton of progress with Juice Bomb, which is really by far most important part of that brand. And we're really happy to see that progress. The team has integrated really, really well. We took on the whole sales team from Sloop and the beer is coming out great. We're really, really happy with where that stands right now.
[00:33:21] Sam Hendler: It sounds to me like your contract sales director needs a raise.
[00:33:25] Hendler Family: Well, he listens to your podcast. Thank you for that, Jess.
[00:33:29] Sam Hendler: Shout out to Rob, dear friend of the pod. Yeah, no, I mean, those numbers are are crazy. Like you guys should be so proud. I know you're working really hard. So I cannot wait to see how the rest of World Cup plays out for you guys, because these stories are I think they're giving everybody the the jolt of positivity that we all needed. So thank you.
[00:33:51] Hendler Family: Absolutely. Thanks so much for having me.
[00:33:53] Sam Hendler: Thanks. 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. Hello, and welcome back to the Brewbound Podcast. It's your co-host, Jessica Infante, and I am thrilled to be joined by Nicole Schustack, partner at Arendt-Fox Schiff, where she helps lead the firm's beverage alcohol regulatory practice. Now, while Nicole is an attorney, she is not your attorney, and anything we talk about herein should not be construed as legal advice. You should always contact your own attorney first, but if you need one, I know one. Nicole, welcome back. It's so good to have you.
[00:35:12] Speaker 1: How are you doing? It's wonderful to be here. There's lots to talk about, lots going on in the industry. So excited, very timely to talk to you today. You said it, girl.
[00:35:21] Sam Hendler: Well, so we've just watched a wild couple of months unfold in the middle tier, specifically with major M&A deals across the country, the likes of which I don't think we've really seen, basically since Prohibition, right? This has been like an avalanche of news. So what's something that suppliers need to know right now?
[00:35:40] Speaker 1: It's a bit of a can of worms because what's happened with R&DC, but with really the consolidation of the middle tier in general, it's caused a bit of a reckoning with the middle tier and how different brands are looking at the middle tier and their wholesalers. And it's something that is beneficial to look at proactively and constantly kind of be evaluating both your relationship, your contracts, Not to ensure that you are protected in an event of, you know, you receive a letter that your current wholesaler is selling, right? But kind of proactively, it's important that in the event you're ever going to raise money or exit, that you have to kind of be pretty proactive about thinking about who that wholesaler is, where you fall on their priority list. of who they distribute, because again, with R&DC exiting and being such a big player and Rea is predominantly picking up and them kind of really leaning into the wine and spirits space, you know, how that will impact things even on the beer side of things is a little bit TBD. And ensuring that you utilize the leverage when you have it to set up the best terms and conditions is probably where I'd start, right, is to ensure that you take a look holistically at your wholesale network. identify opportunities of where you can lean in and kind of memorialize your expectations on how the wholesaler works with your brands. So that's where I would start. It's a good time, it's as good a time as any, to kind of reevaluate everything holistically on a nationwide basis and just check in with your local sales folks, understand what you're asking of your wholesaler and ensuring that, you know, you're asking things on a competitive level. And ensuring when you can memorializing that and document that. And that doesn't have to be a formal distribution agreement, but documenting along the way is one of the things that we absolutely recommend to do, obviously carefully for brands. But it's always helpful to kind of have context and some documentation for down the line if you ever need it.
[00:37:45] Sam Hendler: So how can a time of change like this one be beneficial for brands? Because I'm sure you hear, my distributor is selling, oh no, but that shouldn't necessarily be your first thought, right?
[00:37:56] Speaker 1: Yeah, especially in beer land, given franchise laws. And there are a handful of states where, you know, because of small brewer kind of carve outs of franchise protections, you know, you have a little bit of more freedom to move. However, that's not universal and that's not in every state. When a wholesaler sells a brand or your brand, it is one of the few times where you actually have a choice in the matter. We always joke, and I know we've talked about this on previous podcasts, but the wholesale relationships are harder to get out of than a divorce. You're kind of married and stuck with it, and it's extraordinarily difficult sometimes to leave that relationship. From a financial perspective, even if you have kind of good cause to leave it, it often ends, you know, costing a lot of money and is pretty prohibitive if you don't have the funds to kind of support it. So choosing your wholesaler is crucial, right? Ensuring that you're with the best wholesaler, not just today and, you know, supporting your brands in the next year, but 20 years out, right? And it can be really daunting to think about that because as we've seen in the last few months, The wholesale landscape has already looked a lot different than if we were talking a year ago. But it's important to be pretty proactive about that and ensuring that you're kind of marrying up with a wholesaler that both can support your brands as it exists today, but in the future. And also gives you some flexibility in the event you ever wanna sell off your brands. Because that can also be prohibitive, again, because of franchise protections. If a potential acquirer has an existing portfolio and consolidate and streamline some distribution networks. You don't want to find yourself in a position basically where you have a misalignment because that could blow up an entire deal. So it's very important to be pretty proactive about this and choose kind of your wholesaler wisely and really do your diligence when it comes to a transaction and ensuring that you're with the best wholesaler. So it's an opportunity, but also when you're launching a new state.
[00:39:57] Sam Hendler: So speaking of sales and deals, your distributor selling is one thing, but what about when it's your own brewery for sale or if you're considering acquiring a partner or merging? We've seen so much of that right now. What's your first step when you're even considering it?
[00:40:09] Speaker 1: Yep, due diligence. So it's going to differ state by state. So just as, you know, there's small brewers exceptions in some states that allow maybe termination for a multiple, but that doesn't exist universally. It's the same if you acquire a brand or there's a change of ownership. It triggers different, in different states, the franchise implications are different. My number one recommendation would be do your homework where you're currently being distributed and see how the transaction is even structured and what impact that has on your network and what options it affords you. Depending on how the deal is structured and the acquisition, you may have the ability to consolidate networks in many states and streamline distribution. And in that way, as a multi-brand kind of portfolio, you may have additional leverage that you didn't before, but you also may be restricted by franchise protections. And depending on the structure of the deal, You know, you may not have the ability to move, so you may have misaligned networks and how that impacts your sales team and kind of your structuring of your company is very different. So be very proactive and think about this early on. Often we see brands worry about all of the other stuff, but this is one of those things that should really drive not just how your company is going to continue to operate, But the structure of the actual deal, how you're setting up this deal, can really drive some of what your optionality is. So you have to think about that proactively and early on.
[00:41:44] Sam Hendler: How about when you're taking on investment? What do you need to consider in those cases?
[00:41:48] Speaker 1: So investment is a big thing, and this goes a little bit to distributors, but mostly when you're taking on investors, one of the things that you have to be a little bit proactive about is how that is structured as well. So because the alcohol industry is so unique, and we have this licensing system, and we also have Tidehouse rules and disclosure requirements for owners and officers and directors and people involved in the organization, Oftentimes with investors, especially if they kind of come from outside of the alcohol world and they're just dipping their toe in some capacity, they're not always aware of the disclosure requirements that are incumbent on being, you know, an owner of a licensee or the restrictions that come with it as well. And, you know, the tide house and tier issues that you might run into, even with kind of, you know, a very nominal investment. within, who knows, a hotel or a restaurant group or something like that. You have to be very cognizant of it. And taking on money and kind of raising funds, especially in a highly regulated industry, you have to be proactive about it. And just as you have to kind of be mindful about your wholesale network and how that aligns with a potential investor, you also need to realize the structuring of your company And where you're taking in that investment and kind of where everything sits in your corporate organization is really important to kind of ensure that you're again proactive on to kind of minimize the disclosure requirements or the restrictions potentially for some of your investors. And be very upfront with them because a lot of times it's the brands educating the investors, especially if they come from outside of kind of the alcohol space. Because it's not intuitive and it's very unique to the alcohol industry.
[00:43:30] Sam Hendler: So when you are exploring possible deals, mergers, partnerships, anything like that, and you do need to undertake due diligence, I know people know what those two words mean, but literally, what should you be doing? To me, it seems like a time when you would want to engage a legal partner.
[00:43:47] Speaker 1: Yes. Yeah. It's a great time to engage a legal partner and kind of do a review. I love the concept of platforms and sharing of resources. And I think today in this space, with the increase in costs, it's a wonderful opportunity to pull together resources and streamline things to approach everything more efficiently. Because, you know, it has become very expensive to ensure that your company remains compliant. and basically have their, you know, they have their ducks in a row. When you're exploring this option, and just to your point, there's been a few examples of, you know, people maybe not taking due diligence as seriously as they should. Alcohol is a very highly regulated industry, right? It's unlike really anything and anything else. And it's regulated both on a federal level and a state level. Everything from the actual manufacturing of it to the importation of it to the labeling of it is pre-vetted and approved and all of that requires compliance and due diligence. And your exposure on not complying with ensuring that you're keeping on top of your licensing, on your brand registration, on your price posting, right? All of these regulatory requirements that are, again, very unique to alcohol. If you're not maintaining them or you're working along another brand, for example, on a platform or kind of within a portfolio, you want to understand who you're partnering with and what their diligence has been. Because if you come together from an auditing perspective or just quite frankly, an exposure perspective, it's really important to kind of keep up with that. And there's the agency thing you have to worry about, ensuring that your labels comply with not only federal regulations, but state regulations, and you're getting all the requisite brand registrations and COLAs that you need. But there's also, you know, what we're seeing is there's a gap in the risk tolerance of brands and in some of the claims that they're making. And how that's playing out, not just from a regulatory perspective, but from a class action perspective, and what your exposure is on kind of that side. So again, due diligence is super important. If you're thinking about even informally associating with another brewery, for example, right, and pulling some resources, it is very, very important that once you kind of commit to that relationship, however you structure it, you're tied in some way. And so their compliance or lack thereof could inadvertently have an impact on you, either through an auditing process or something else. And so diligence right now, especially with the changes we're seeing at a federal level and the TDB side of things, is really, really important. It's important that you kind of have your compliance buttoned up.
[00:46:39] Sam Hendler: Well, sounds like this is a great time to really engage a trusted legal partner. So with that, where can the people find you?
[00:46:47] Speaker 1: You can find us on our website, Erin Fox Schiff, under the food and beverage tab. And you can also find us on LinkedIn or via this podcast. So we'd be happy to answer any questions or help guidance on any of these topics, anytime.
[00:47:03] Sam Hendler: Well, thank you so much for joining me. It's always a delight to chat with you, my friend.
[00:47:07] Speaker 1: Absolutely.
