From Criminal to Success: The G4 Tequila Story

Good morning. We took last week off. Welcome to Drink Up. Adam Smith, my co-host, is alive and he's raw and he's real this morning. And we have a special guest this morning.

Hey, Adam.

Sean Miller from Package.

This is from— Hey, good morning, guys.

Yeah, good morning, Sean. This is from Pasta to Mezcal. We're gonna get into it, but a little brand called G4, which I'm sure a lot of you out there have heard of that brand. So we're just super excited, Sean, to talk to you. I know you have other brands we're gonna get into, but hey, welcome to Drink Up.

Hey, thank you, man. I appreciate it. Usually I have a glass of tequila in my hand. It's 10:00 AM. I might wait. I'll wait just a little bit, but I'm excited.

It's okay here if you wanna have tequila.

Okay, on my watch, man.

Well, I might.

Let's see what happens.

Well, welcome. Welcome. Why don't you tell us a little bit about, you know, this morning we were talking, I'm like, what is PKGD? And what does it have to do with tequila and mezcal?

Well, nothing except, except now I'll tell you very, I'm very proud. There's been a whole bunch of occasions in the last year when we— since we actually put Packaged on the back labels of our brands.

Okay.

And people have said to me, and people that I respect have said to me, when I see— when I turn that around and I see a Packaged stamp on the back label, I know this is a good product. And I don't concern myself at all that I'm getting something that's high quality and value. And so, I'm super proud of that. So, Packaged has come to mean that. You mentioned pasta, and Packaged did come from a marketing agency. We were a digital marketing agency in Chicago. at Merchandise Mart, and we, it was our hub. And we worked in Chicago, is very food-centric, right? So we worked with many, many food brands, primarily grocery store brands. Our biggest clients were pasta, and we were doing a combination of basically the, the food network and digital marketing in, in combination that was working really well for us. And then we got, uh, we were doing so much digital marketing that we had created a couple of digital toolkits for social media marketing. We had a product called Smink and a product called Social Cloud Suite that helped with social marketing and brand advocacy. It was, we had created a consumer brand advocacy platform for our brands. And so when, as we were doing that, we got into the whole Shark Tanky thing, right?

Okay.

Got into that whole startup scene, Shark Tanky thing, all that stuff.

Were you on Shark Tank?

No, we were never, but we were in many, many, many a pitch meeting In Chicago, you know all those things where you stand in front of the group and you got two minutes to you know ask for a million dollars.

Were you ever in front of Invest Bev? I'm just curious.

Did you ever invest Bev? No, I don't. Well, we weren't focused on drinks at all.

We weren't.

We weren't in the spirits business at all. And what what did one of one of these investors that was in that audience that came to know us? He had invested in a tequila brand called Tequila G4, and it turns out that he had invested and many other people had invested. with an actual criminal when they did that. So there was an actual criminal that had the import agreement for G4 Tequila. He ran around the United States and got investors to give him money to build the brand, and he told them they were all gonna be rich like George Clooney very soon.

Wow. Interesting. So he took the money and ran.

Yeah, he did. And he also took 2 truckloads of tequila from Felipe and sold it in all kinds of bizarre ways all over the country. So when this particular This particular investor, then his name is Ross Pangieri. This particular investor ended up with the— I guess he was the most defrauded. And so he ended up with the import rights. He's an investor. He's actually a construction guy. And so he says, I don't intend to run this company. Right.

So he bought it from you at the timeline, probably.

Well, he just knew us because of the social media marketing things. And, and he, he knew that we were honest and he knew we were pretty good, you know, good marketers. And he asked us to help with that. And he actually had, you know, this business, there's marketing and sales. He actually asked some other guys to manage the sale selling part.

Yeah.

So we set about creating a website and learning about G4 and all these kinds of things. We, you know, my, my partner Jeff Ernst, we've been friends since we were 12 years old, by the way. We, we're— they call me right brain and they call him, uh, left brain. So if you ask— you said Adam might ask some technical questions. If there's any math involved, I'm going to plead mercy.

Yeah, I'm the right-brained guy, this too, and Adam's the left-brained. That probably describes us. Adam, would you agree?

Sure. Yeah, I agree to that.

Yeah. So if there's math involved, I'll default and defer to follow up later. But Jeff, I always say Jeff has just enough ego to say yes to a lot of things that we maybe shouldn't do, to be honest. But he said, sure, we can market tequila. Why not? Right?

Yeah.

And then very quickly, the sales team got fired, and justifiably so. I thought they were doing some really bizarre things. So they got fired very quickly. The investors came back to us and they said, well, can you also sell the product? And again, Jeff is, sure, we've sold lots of things. We can figure that out.

Wow.

So it's been about 9 years ago now, and we started by going to Google and asking, who's a liquor distributor in Chicago? And, you know, in trying to hit zero on the phone and trying to talk to a person and telling them that we had what we thought was the next great tequila, even though we had no idea if we had the next great tequila or not.

Did you land with Winebow from the get-go then? Was that your—

Well, no, we started with Cream Wine in Chicago, and those guys were terrific. And gratefully, now we're in a national contract agreement with Winebow, and we're in a very different place. But we started with 2 pallets of tequila, Delivered to Chicago, distributed by Cream Wine. And that was about 9 years ago now.

And so it's really important. Real quick, sorry to interrupt, Sean. I just—

yeah.

So we deal with a lot of the start brands like, yeah, ship a pallet and they're like, well, why aren't we doing 10 pallets? And you just said you did 2 pallets 9 years ago. So you're not new because you're just— so G4 is really coming on, really come on strong in the last couple of years, right?

For sure. We're, you know, I, when you say, you know, you mentioned Weinbo, I can't tell you the wash of gratitude that I felt when you mentioned Weinbo. And I think to be in a, in a, we're in a formal national contract with Weinbo, right? And we, we're in, we're on goal with Weinbo. We're in, we're in conversations with, with the president and the vice president and the plans and the goals and the schedules and, and all of this coordination now, right? There was a time, I bet though, it took you a long time to get there. No, my God. I mean, and I, and I think about this all the time when I, you You know, when I also talk to a new brand owner and they're like, why doesn't the distributor care about me? And I'm like, I don't mean to be rude to you, but you're not important. You don't matter, right? It's your job to sell the tequila for like a long time.

This is such an important— I mean, I want to stick on this for a while. Thank you for saying that because so many people are like, I mean, we had a— I'm not going to name a name, but one of our clients like, we're just going to put you on incentive. And he gave me like a 10-pallet incentive. To get paid. I'm like, at $19.99 for something, I'm like, ain't gonna happen.

It's fine.

Well, I told, I, you know, I'll do, I'll be, so I'm, we're quite transparent in what we do. And I used to refer to distributors as toll bridges. That was the acronym that I came up for them. And they're a toll bridge. And I'm like, damn things. Like I have to, you have a distributor to get to market. I can't get across the river without one. Right. But, but so I pay the damn toll and that's what I thought they were. And then it's, you know, there is a point though, and I'll tell, you know, I'll say this to brands, there is a point if you can drive enough consumer demand and you can drive enough pods and you can drive enough opportunity for the distributor that you start to impact their gross margin, right? And their CFO notices you as a vendor on their financials and you start to come up in those conversations about, hey, these guys are making us money. Now, all of a sudden, as if by magic, right? All of a sudden, you become really interesting to them.

So how did you get the heavens to open up? What was the tipping point?

Oh my. I mean, grateful, and I say gratefully, we were consumer marketers, right?

Yeah.

And we approached the market with no knowledge at all, to be honest, right? Which sometimes I think is an advantage. I always say that I'm very grateful that Ross and those first investors I, if they had known about, if they had known about the liquor business, they never would've hired us.

Right?

Because we didn't know shit. We didn't know anybody. We didn't know anything about compliance. We like, we didn't know anything at all. Right.

Right.

And, and on, so on one hand, that's a great hindrance. And on the other hand, it's kind of a benefit.

Mm-hmm.

Right. Because you don't, you just go, well, how do things work around here? Right. And how do, how do I work this game? And, and we had been, you know, very, very focused and for a long time on And so we said, and we had a great alignment with Felipe Camarena. So G4 is owned by the family that makes it. Everything that we sell as packaged is owned by the producer. We call them producer-owned brands.

Right.

But those producers in our case are not interested in sales and marketing. Some families are, right? Some families become great marketing teams. These producers and the ones that we work with choose not to do that for whatever reason, right?

Okay.

They just want to make something beautiful. So Felipe makes amazing tequila, cares not about this. Like, he's completely uninterested in being a guest on your podcast. He's completely uninterested in what we put on social media yesterday. He's completely uninterested in going to BCB. He's kind of like, just does not care. Right?

Right.

So we do all of that. We do all the marketing, all the communications, all the social media, all the websites, all the PR. We do all of it. And we have since day one. And we didn't— again, we didn't know any better. We didn't know that was somebody else's job or an agency we were supposed to, because we were an agency, right?

So you kept it all in-house. This is all in-house.

Yeah, absolutely. Still is. Always was.

Still is.

Love it.

And that's, that's the way that we do it, right? And again, we don't know any different, right? And the amazing thing, just remarkable, remarkable thing, we've grown more than 1,000% in the last 3 years. We've already doubled the brand this year. We doubled it as of the end of May this year. We are— G4 is the fastest-growing brand in the United States, and it is the highest-rated, according to Nielsen, independent brand.

Is that why everybody's coming out with a mezcal? Because of you? Because everybody is coming out of—

there's like mezcal.

It's like everybody has a mezcal. I mean, it's crazy.

Well, I think everybody came out with a mezcal because mezcal was thought to be next. Right. And tequila went crazy and everybody said, well, what's next? Well, it must be mezcal, right? And mezcal sales are somewhere about 1% of tequila sales at this point, right? So it's hot, but it's also got its own issues. Yeah. Wow. But we do have mezcal from Oaxaca. It's called Palomo. And I'm very proud in the Nielsen data that came out for the end of the last month, this was the fastest growing in terms of its distribution in the US was the Palomo Mezcal brand. So, by extension, we're doing the same things.

What's great is you're showing up in Nielsen. Some of these brands don't even show up in Nielsen. You can have the conversation, right?

Yeah, for sure.

What Nielsen is, let's start there, Sam. Some of these brands don't know. I mean, I talked to—

Yeah.

Alc brands or not, some of them don't know what Nielsen or IRI data is to begin with, let alone—

Yeah, it's a syndicated data company that tracks consumer purchases.

Sure.

That's not retail, right? So, you can just take away, take away, right? And then, they actually aggregate that data. You can look at things like velocity, ACV, et cetera.

Yes.

I was talking about, and they look at category growth. So, you're leading the category in mezcal. What percentage is your share of market of the mezcal category?

It's very small, right? It's a very small brand and we're growing really, really fast. So, I think G4, we just achieved half a percentage point, which is, you know, it doesn't sound like much, but like, wow. Right. And, and of course, the mezcal is, is, is, is something similar, I guess, to that. I don't know specifically. Is they, is they, they don't break, Nielsen doesn't break mezcal from tequila. They consider it all agave spirits in the same category.

Okay.

So it's so small that it's hard to even know. You know, yeah, I guess you could sort somehow to mezcal only and, and do, do some analysis. But Excel and I are not friends, so I don't know.

We got Adam now. I know Adam's thinking about this story and everything else. Adam, you got to have a couple questions from where we began here. Oh yeah, I know that Nielsen actually excited you, which I'm not surprised.

Well, first of all, I want to, I want to take a second. I know she's, she's got her camera off. She's being very, very, uh, you know, uh, polite in, in existing in the shadows. But, uh, I want to introduce Caress, who's a longtime friend of mine. We met years ago doing radio. Um, and so for those who are longtime listeners of Drink Up, um, Caress, uh, is, is gonna be working with Sam and I and helping with some, some, uh, production assistance. I'll put it that way. Nice. Because, uh, Sam and I—

So Sean might come back after this, uh, the craziness he experienced this morning with us. Sean, maybe you'll come back when we have a professional actually helping do this, right? Sure.

Yeah. So, so for those of you wondering who this Caress person is, uh, she's a dear friend and, and hopefully we'll be seeing her a lot more often. Um, Sean, to, to, I mean, I find what you're doing fascinating. I think, you know, you've made several callouts. The one I'm gonna pick on right now is, is if they had known that you, if they had known, I forget how you said it, but how little experience you had in the industry, they never would've asked you to do it. Right?

For sure.

I fucking love those people. Uh, I mean, you know, calling, calling somebody and like, hey, like, I'll give you an example. I get, and Sam and I have talked about this, I get probably no fewer than 3 or 4 times a month. Someone would be like, hey, can you help me with something? And I'm like, sure. And it'll be somebody, they're, they're a client of mine or a customer I work with or somebody I know in the industry. And again, I tell people all the time, I do beverage, I do ready-to-drink beverage, right? Meaning even spirits, I'm a novice in, right? Like I know a little bit, I know a little bit of packaging, I know a little bit of co-packing, but, but spirits are less ready to drink, right? And so I'll get phone calls and I'll go, hey, can you help me with something? I go, yeah, sure, what is it? And they'll be like, pickles.

What?

Why are you calling me about pickles? I don't know. I just wondered if you had any ideas. I mean, I do, but they could be completely fucking wrong, right? But I'm happy to help, right? And sometimes it works out. So the 2 questions I have, and one of them we talked about before, but I'll start with the other one. You mentioned you have a team of like 10, right?

Yeah. Yeah.

So how did the kind of supergroup assembly of the— like, where did they crawl out of the woodwork from? How did you compile that team?

Yeah. Well, typical, it's sort of typically Mexican, frankly. I had a, I had a re— so I mentioned, uh, Juan Pablo. So Juan Pablo Elorriaga, he's from León, Guanajuato, and he's a documentary filmmaker. And, and he was a starving artist as many starving artists would be. So the backstory is that Juan took a class, like a college class in how can, uh, artists turn, turn into a business? How can they make money? And they told him that he needed to find a niche and specialize in a niche. So he thought about what was he interested in, what could he do, where does he live, right? And he, and he thought, well, there must be a lot of, you know, American companies and big, big people that are investing in the tequila industry. And I only live like an hour from the tequila space. And I like tequila and my friends like tequila. Maybe, maybe I'll reach out to some brands. And he reached out on Instagram. to G4 Tequila. And because he, he, he'd heard about the brand and he knew it was high quality and he was interested in working with brands like that. Right.

Now I have to pause you. Was this still when it was criminally owned or was this after?

No, this is, this is with us. The criminally owned was the, that was 9 years ago now.

It's a safe bet, Adam.

Yeah. Yeah. Yeah. This was, this was only about 1 year ago. Okay.

This is recent.

You know, this is recent. This acceleration is recent.

Okay.

And so, Prior to that, I was literally doing all of this stuff myself. And I would hire freelancers and things sometimes to run cameras for me or that sort of thing. But prior to a year ago, I literally wrote every word on every social media post that was ever made, everything, every brand, every comment, every everything was all literally me. Anyway, so JP wrote out, wrote to G4 Tequila, and I get a lot of these requests, you know, in inbox for people that want to be service providers and whatever. But he didn't do that. He asked questions and he asked really thoughtful questions. And frankly, he asked questions that like bothered me because they were thoughtful. And I'm like, This guy has really asked me a thoughtful, earnest question, right? And in the scope of the WhatsApp messages and the texts and the emails and the DMs and then, and like, and damn it, this guy asked me like, he keeps like asking me these really careful, thoughtful questions. So I finally, I answered, you know, I sat and I thought and I answered. And to his credit, then he asked me a thoughtful reply question.

Yeah, that's funny. I get those too. I get the questions and they do draw me in, by the way. So that's interesting.

Yeah. He asked beautiful, beautiful questions with earnest detail. Right. And I'm like, well, this is a guy who's really thoughtful and he's really thinking and he's asking great questions. Now it turns out G4 was the only Ants brand that replied to him. And that was me.

Right.

Is that under the 200 that went out and you fell for the question? Yeah. I'm kidding.

Yeah. Yeah. I'm the guy that hit the reply. And when I had an occasion to have a video project, I hired JP to do the video project. And he did a brilliant job. He did a fantastic job. And I just, I loved how he did it. I'd never worked with—

And this is like how many years ago? Like 9 years ago?

This is like 1 year ago.

1 year ago.

Okay.

Just maybe a little bit more than 1 year ago.

Okay.

And I'm telling you, I was doing all this myself. Me and my iPhone. I mean, I'm telling you, me and my iPhone.

Chris, do you hear what he's saying, by the way?

And Adam, by the way, because Adam never shows up here. It's just me.

I can relate to that.

Well, it's one of the things that I say to, you know, I said this to a young brand owner the other day, a resierto reached out and he was asking me about the agency and all these things that we do. And I said, dude, no offense, but we're doing like, you know, over 200,000 cases. when I got an agency, right? When I built this agency, we sold 100,000 cases with me and my iPhone, right? Like, you don't need all that shit. You don't have to spend all that money.

Everybody listen to what he just said. He did 100,000 cases with just him and his iPhone. One person.

We did.

It's amazing.

I mean, I'm just saying we did, right? And we, you know, and I mean, you're shooting 4K video with this thing, right? And for $20, you can get professional microphones. And if you're— it's just not that, you know, you can do some shit with that, right?

I mean, these days you really can. I'm surprised that the collaboration between an alcohol beverage and an artist— I mean, that's not new, but when you find the right partner, it can open up so many different pathways.

And you did. And we— so just to fast forward to— you asked how we assembled the team. As soon as we did this project, I'm like, I gotta hire this guy. I gotta figure out how to do this. So I hired this guy to be doing things for us. And then when I say in a typical Mexican fashion, the next thing I know, his best friend is on the team, and then his sister's on the team, and then his other buddy, his buddy from school is on the team, and then his other buddy from school is on the team. And we're up to 10 now.

Wow.

And we have 2 people that were hired off the street. And the other 8 were all either in the family or went to school together, or we've known each other for a long, long time.

So you're telling me there's a chance my path into G4 and Package is actually to start sending him questions that sent you questions? And if he brings me in, I might have an opportunity?

Probably, yes. Probably. If you're related somehow. And we're— but to one's credit, they're all brilliant.

Yeah.

And he does a tremendous job of, of wrangling, uh, you know, wrangling this together. And, and we, we're producing something that, that is really, really impactful and special for all of those people that are working for us. And they're having a great time. Uh, if, if you know the, you know, the, the job of an artist or a creative is a, is a tough one. And, and it's mostly tough because you're always having to sell something to make a living. And, and so in this case, we've created an environment in which we have this whole collection of creatives that have nothing to do except be creative. They, they don't have to worry about, you know, where the next taco's coming from.

Yeah.

'Cause that's coming from, from the, from the US package team. And we're, and we've, we're feeding that, you know, an expense, you know, platform where they have, they have everything that they need. They don't have to worry about to how, how to make a sale. They can only work, worry about being creative. And the result of that, frankly, they're all working all the time that they're awake. They're all happy to be doing it, and they're getting to go to Oaxaca, and they're getting to go to Durango, and they just got to go to Turks and Caicos, and they just, you know, to shoot a music video. And they're, and they're, they're having, and they're drinking tequila on the job, right? And we're, and we're, we're, we're having a really good time.

Yeah.

And, and so they're just able to just explore their creativity, and, and the result of that has just been a wave of more skillful marketing, more effective marketing, more creative things, more creative content, and an explosion of brand awareness for us at extremely, you know, literally world-class quality. And again, like I say, we've already doubled the size of G4 this year. We doubled it twice last year. This is just— it just has momentum.

How are you meeting that demand? I mean, are you forecasting out 1,000% growth? Was this expected, unexpected?

No, that was really hard. You know, originally, so the distillery, Felipe's distillery is 15 years old. It was built for a certain amount of capacity. And don't ask me how many liters and all that. I'm sorry, I'm terrible at those things. But it was built, it was overbuilt at the beginning.

Right.

Right. And then, you know, and again, we didn't know anything, right? So it took a while for him to find us. It took a while for us to dig out of the hole of the criminal guy. It took us a while to get some momentum to the brand. And then about 5 years ago, it really started to roll. And 3 years ago, it just, with COVID time, it exploded. And I'm not so naive to say that we weren't what we call the additive-free movement in the authentic tequila space. Well, I'm not allowed to say those words, but lightning has not struck me yet here this minute.

Yeah, I was going to ask about, are you additive-free or non-diffused, but maybe you can't say that.

Well, we rode that wave, like G4, Fortaleza, Don Fulano, Orette, some of these brands. When we started, guys, when we first went to California, I remember we went to a trade tasting for distributor with G4, Fortaleza, Don Fulano, and Orette at one table because nobody gave a shit. And none of us had enough money to have our own space. And now, Fortaleza is in the secondary market. G4 is doing 200,000 cases. Orette is everywhere. Don Fulano's been bought out by Gallo and is freaking everywhere. But we rode hard that wave. We took every advantage of it. We rode it really, really hard. And we've ended up, we're the Coke or the Pepsi with G4 of that additive-free space within tequila.

Yeah. That's amazing.

So I want to—

You're hitting it. Go ahead. Just go ahead, Adam.

Go ahead. I was just going to say, I want to take a second and echo a point that you made, Sean, that I really enjoy. And it's something, again, I talk to A lot of the folks I work with are really small, early stage brand owners. And I call that out because they're one-man bands, right? They're one-man bands, you and your phone. And at that stage of a business, as you well know, it's obviously the default that you just wear every hat, right?

Mm-hmm.

Sure. But I think the point that you made of letting your, your marketers be marketers and letting your sales team be your sales team and not trying to conflate the two.

Right.

Because nothing will, and I've seen it and I know Sam's seen it and you've seen it. Like if you, if you do it long enough, you'll notice you try to get them, you try to force a marketer into marketing for the sake of a bottom line improvement that will ruin their day faster than anything else. Right. That is, I mean, that is gas or, you know, that's water in the gas tank to them. Right. Like it's miserable.

Yeah.

And so even if you're doing it on your own, right, that, that idea or that ethos of like sales is a function, marketing is a separate function. And yes, they are supportive of one another, but they're two very separate things. Right. I think it's a phenomenal call out. The question I want to make sure I don't miss, because I truly want an education, but I'm happy to wait till the end, is you mentioned it earlier, maybe before we got on, and you mentioned it a little bit, I think, since we've been on. What's Raicilla and how is it different from tequila and mezcal? Both like price point, taste, use case, customer. I mean, how is it different? Sure.

Sure.

Can I just real quick, just to, let me, let me back a parenthesis. Please, please, please. So in, in the growth curve, so we started with Jeff and I. Mm-hmm. In the growth curve, when we got some traction, we added 2 operators, 2 sales, sales professionals, operators with, with lots of industry experience. Sure. Uh, Mark, Mark Sorrell in Austin, Texas, and Chris Risdon, who was out of LA, who's now like everybody else moved to Idaho. But when he came on, he was from LA. And so we added operators, but we had to get to a level to be able to afford and support operators, right? And those guys are full partners of our company at this point. And they were part of the explosive growth in our ability to work as a sales organization with these distributors more effectively than just Jeff and I, right, as we started. But what is Riceia? So, Raicilla, for sake of simplicity, it's like mezcal, but it's from the tequila region. It exists within the DO of tequila. There is an old tradition, like from the 1700s, of making a mezcal in that area. It's the area basically around Puerto Vallarta and a little bit into the mountains inland from there. Small space, maybe not as big as Iowa, right? Like, it's just a little spot. And they have a cultural tradition of making mezcal there called Raicilla. And it's unique from mezcal, it's unique from tequila. It's relatively unknown to this point, but when people ask me what's next, I believe Raicilla is next.

Okay.

It's a beautiful product. We just had Raicilla, by the way, talk about a traditional spirits environment. We just sent some to the Beverage Tasting Institute guys in Chicago. They're a well-respected tasting panel.

Sure.

The El Ácabo Raicilla that we sell in La Plata, they scored it a 97.

Wow.

They were absolutely mind-boggled by it.

Sure.

They're like, this, this, that was the highest score of any agave spirit in their entire month of testing of agave spirits.

Sure.

So it's, it's really complex and interesting. It has some, a little bit of funky notes to it from the fermentation and the style there. But it's very traditionally produced like you would think of as a mezcal probably, and lovely. And I think it's gonna grow really quickly.

Well, you've gotten to that point where you can start to put innovation in, right? So you actually, you've grown your core brand, which has enabled you to do some other things, correct? Am I— For sure.

Well, and that's, you know, with the success of G4, and I didn't answer your question, Sam. You asked about production versus demand, right? And I didn't answer that There was a time in which production could not meet demand to such a level that we began to engage in mezcal and raicilla and other tequilas. And we marched forward for a number of years where we said, once we reached the point of problematic demand and we said, Felipe, this is what we could sell, sell? How much can you make? And well, I will invest, you know, if you can make this, I will invest in this way, in this way, in this way, and we'll step forward. And we'd say, okay. And Jeff would make plans and forecasts, and he's much better at that than me. And he'd say, Felipe, I think we can sell this much. And Felipe would say, okay, I will invest in this way, in this way, and we will increase demand. And to the point now, we still have almost no aged inventory at all because that's a whole other deal, right? And lags behind in time tremendously. Tremendously, right? But he invested in a colossal new cava and thousands of barrels, and we're just now literally in the last month getting reposado again. And we should have by the end of this year añejo again, and then sometime in the future extra añejo again. Now, can we meet that demand? I have no idea. But I don't know what the ceiling is. I don't know what the opportunity really is. And I'm I'm not good enough at math and forecasting to guess, but it's been a very calculated process of, you know, we think we can do this. Felipe says, okay, I'll invest. And we've invested millions and millions of dollars, and Felipe has invested millions and millions of dollars. And it's an amazing thing. One of the things I mark is to go to the posada, which is the Christmas party for the employees and the family in Mexico. And when we first went to Posada, there was like 15 people. And, and now the Posada doesn't fit anywhere in Arandas for this year. And they're gonna have to rent, uh, or they're gonna build a place in the distillery, I guess, to do Posada.

So you're gonna have like a home place at the distillery? Do you have one now? Are you building one?

I, I, I don't have a home place. I do have the office in Leon now. I have a, I, I, I, I am half Mexican now, by the way. I have a residency card and, and I have the, the company and the office.

Well, your pronunciations of everything is This, this spot on, right?

I get, I get along okay. I think, well, it's, you know, one of the great ironies in my life. I was completely interested, uninterested in school, managed to be, I, I guess I'm smart and creative enough that I managed to graduate. I was only interested in art, music, and, and sports, frankly. But I managed to graduate. And then my dad, of course, you know, he's a boomer and a corporate guy. He said, well, you must go to college, damn it. Right? This is necessary. I'm like, well, fine. Right? So I went to college and he said, you should study international business. Okay. Don't give a shit.

Playing around.

Right?

Right. Don't care. Couldn't care less. You know, I managed to get a degree. Took me 9 years. Well, I got a degree in international business with a minor in Spanish.

Wait a minute. It took you 9 years to get a degree? Were you just partying the whole time or what?

Well, no, I just wasn't interested. Like, I'd take, like, whatever was the minimum requirement, right? That's what I would do. And I was making art. I was doing music. I was doing— I was playing golf. Word, man.

I could have stayed in for 9 years, boy, because I didn't. Lord, when I graduated, I'm like, I gotta work.

What is this?

I was just trying to get beer money for 4 years.

Yeah. Well, eventually I got married and I was like, oh shit, now what am I going to do? So then I hurried up and finished and got a job. But anyway, that's one of the great ironies I think in my personal life is I have an international business degree with a Spanish minor. So the Spanish, it comes fairly easy to me and I spend a lot of— I'm there every month and I'm working on that. And of course my whole team speaks Spanish. They all speak English as well, but I mean, I'm intermingled. I'm buried in it, right?

This is an amazing story. I want to kind of transition a little bit. You know, we have about 25 more minutes or so. So you kind of answered it, but I'm going to ask again. So you got in this business simply by accident, really? Really? Someone just came and said, hey, I was with this criminal. Can you help me? A client got you in, right?

Yeah.

Yeah. What keeps you in the business? Obviously, you said it's been 9 years. I'm assuming the first 7 has been hard. Like, what kept you going? It's all been hard.

It's hard. Yesterday was hard. I started working yesterday at 6 in the morning. I finished at 9:30 at night. It was hard. And I worked and my respiration was high part of the day. I was working, like I was working. So it's all hard. But to some degree, it's just completely taken over my life. Like I said, I'm half Mexican now. This is my office. This has just completely taken over my life.

Okay.

So obviously I enjoy it.

But to be honest, I found a purpose that I was not looking for. And when I talk about the Posada party and seeing 70 employees in the distillery plus their families in there, that's cool, right?

Yeah.

And when I talk about these kids that are working for me in León, right? And they have a career path and they just got raises on the first of this month. And they have paths of education and career paths, and they got to go to Turks and Caicos, and they got to go to Oaxaca. And I mean, I'm not an ego guy at all, but I can tell you that what we're doing is changing people's lives in significant ways in multiple countries.

How's your purpose to change people's lives in significant ways?

I don't know, but there's purpose there, right?

Yeah.

And it's clear. And when we found this spot to work with these producer-owned brands, that's something else that I can tell you.

What keeps you going?

Because you got up at 6:30 in the morning, worked till 9:30 at night, and you said it's hard, right? But your purpose is you're changing people's lives. They have a path to success. They have a path to education. They have a path to food. I mean, that's a great purpose, Shawn. I mean, I love that because Just to share with my why just real quick is our why is to put people to work and do right by brands. And that has informed everything we do. Yeah. Yeah.

I'm not so eloquent. I haven't found such clarity, but to be honest, I just thought it was just another client, first of all. And then I hope, well, hopefully we'll sell some tequila. tequila, you know, and maybe, and then I hope, well, maybe we'll make some money. And then, and now we're at a whole different thing. Right. And, and when these, when we talk about, you know, when I talk about the producer-owned brands, one of the things that I say there, you, a producer can put product in bottles, and they can make some money, right. And they can employ some people and they can, they can help their family. And that's, that's a good business, right.

Yeah.

But that's not brand value. value, right? And in today's world, brand value is a whole other deal, right? And there's people coming around, you know, when I say we're the largest independent brand in the top 15 of Nielsen, right? There's not another independent brand. They're all Pernod Ricard, Bacardi, Diageo, Cuervo, et cetera.

All of them. I bet you they're all calling you, by the way.

Well, they're interested. I'm not sure. I think we're quite annoying to them, to be frank, right? But But they like to come by at like BCB and ask weird questions, like guys in suits and they come and ask questions, right? But it's just what I wanted to say is that brand value is not, in our case, it is not for some basketball player or some, it's for the producer.

Sure.

And in this case, it's turning out to be generational wealth value, And that's a thing I haven't resolved yet in my mind, but I know it's clear to me and that it's a lot of money and that it's going to change communities and families for a very, very long time. And it's all just a big freaking happy accident.

Well, I've been going down to Mexico for 40 years, and actually as a kid before that I went down. But I mean, I'm sure it's just what you're doing with those jobs and those people, in that community and helping them with what you're creating is fantastic.

It reminds me of, uh, it reminds me of— I don't know if you guys listen to comedy at all, but there's a, there's a line from Mitch Hedberg that he says, I'm sick of following my dreams. I'm just gonna ask where they're going and hook up with them later. As you're talking, so you're just like, yeah, man, I didn't plan for any of this, but I'm—

I saw a post this afternoon from you, Mr. Smith.

We do have, I do wanna, I do want, before we run outta time, Robert on LinkedIn had a question. He said, what's the current energy levels for non-alcoholic RTD brands to create an alcohol line? And do you get any proposals? He said, I handle a ginger beer brand and we had tried to get a partner for a Moscow Dark and Stormy RTD.

Well, in my, my world, I'm hanging around with spirits producers primarily, and they're they're interestingly, they quite often say, well, should we make an RTD? Right? That's the question. Like, are we missing out? Right? Everybody has FOMO, right? Am I missing out because I don't have an RTD?

Sure.

And to be honest, I've generally told them that I think that market is well saturated, well represented, and not in need of new brands. And what we learned, we did mess around with an RTD as a broker one time. And what we learned, again, we don't know anything about this business. What we learned very quickly was that low-proof spirits are a whole different division of the distributor. And even though the distributor had this— they were in the same building, they were a whole different division. And it was like, well, shit, well, now we got to start all over again, right? From a relationship distribution standpoint. So we're like, well, that's not for us.

Even though he knew Bob next door, Bob wasn't talking to Shirley, so he had to start over from square one.

Yeah, because they don't, they don't, right? Then maybe they meet up once a But they're not the same teams. They're not the same, you know, they're completely different organization within the building, right? So yeah, yeah, no, I think that's a really— I think for that reason alone, that's a really hard crossover. The high-proof, low-proof thing, and then the no-proof thing is yet another thing, right? And that's— those are really, really hard crossovers to me.

I applaud you for even from a— and again, I know you said you're not the operational guy, but even from, from just a, you know, an outsider looking in perspective, if you will, I applaud you for, for taking the thorough look at it because I talked to— and Sam's introduced me to a couple, but I talked to distilleries all the time who will say, you know, hey, you know, stateside distilleries who will say, hey, we want to go from making high-proof spirits to making low or no-proof RTDs. And, and sales and marketing aside, I'm like, do you guys understand the, the food safety and microbiology differences that come in when you don't have 40-plus—

Potentials.

ABV, killing it.

It's a whole other deal.

It's a whole nother animal, right? Um, so the, the question that stems from that— again, I, I really enjoyed this story, um, and, and hearing from you. The question that stems from that for me is, okay, so you've had these happy accidents. You're very, you know, I'll call it, um, uh, mile deep and inch wide. Like, you're very focused on what you're doing, which I think is great. You're not, you're not distracted by other things, which is Where do you want to be in 5 years? Where do you want to be in 2 years? Like, what is, what is, what is next? You know, what does the next happy accident look like?

Yeah. Well, I, I don't know. I don't know. Right. I don't, I don't have a crystal ball, but I, I can, I can say I do have a funny thing. Sam, I'm not sure, you know, what, I'm not sure what your calendar is, how long you've been around, but I've got a, I'm 54 this month and I have a, a clock running on my desk that my wife got for me, and she set it for my 55th birthday. And it's counting down, and everybody knows, right? Everybody that comes to meet with me, or they see this clock counting down to my 55th birthday, which is only now about a year away.

Oh, wow.

We're coming.

Just send us an invitation. We want to be there.

And everybody's like, what are you going to do then? And I said, well, I said, I don't But I'm not gonna do anything I don't wanna do. That's the only thing I'm clear on. I'm like, I'm not gonna do a damn thing I don't want to do. Right? And if, and I'm, I'm sure of that. And, and, you know, if that's a call I don't wanna answer or a meeting I don't wanna take or a place I don't wanna go, I'm not doing it anymore.

That's amazing.

But we're, we've built such a thing as a company that I, I, truthfully, it could continue for a very, very long time. Right? All of our producers are multi-generational businesses. I have 2 son-in-laws working for me now, and they're both doing great. One of 'em's on the accounting side, the other one's in the sales side. They're doing awesome. Our Mexican producers are thrilled that I have kids in the business because that means they think we've increased the longevity and the likelihood that their kids will work with my kids. And they think that's cool. And I think that's cool also.

That's cool.

So that may be that that continues for a long, long time. Or, Sam, if I'm really honest, we do have these giant global multinational people. They do come and they ask questions. And I let Jeff handle all that. I don't attend those calls. I don't take those meetings.

You don't go to the cap table or anything?

I don't. I have no interest in it. And I trust Jeff. Like I said, we've been friends since we were 12. I trust him on this. And I say, buddy, if somebody comes with some number that's just unfathomable to me and he knows what that would mean, then you come tell me about it. Okay? Right. But until that, I'm not— tell that I got stuff to do. And I'm having fun doing it. And I'm not, you know, I'm not worried about that.

That'd be tough though, once that clock hits 55, or once that number that you're looking for from the people that come, you know, courting you, right? How are you going to stop working from 6 to 9:30? It's not easy because it's in your DNA.

Well, it's in my DNA, but I can tell you that Amy was none too pleased with me last evening. So there is, you know, she would like to take a vacation and she would like to do Totally relate, man. I'm really— And I like her a lot. So I like her more than mezcal. And so there's got to be some balance there and respect there as well. So she understands, and you guys understand, you've been in business for a while. Sometimes you got something, right? And I feel like, okay, we got something here. And maybe we earned the place that we're at, maybe we didn't, I don't know. But I got something So right, I told her, hey honey, I'm right now, I'm in. Like, I gotta do this right now, right? And that's when the clock showed up, right? She's like, okay, you can work every minute you're awake till this clock goes off, but then we're gonna have some balance, right? You know, in our world. Yeah, maybe we're gonna break it. And I respect her for that. And, but I also respect, you know, when there's a time Okay, let's go. Let's do that right now.

Right.

Yeah.

I mean, you're, you're probably someone's— the Lord's talking through you to me because a friend of mine said you got to slow down. You gotta, you know, you can go after all this success, right, and work from 6 to 9:30, and I totally get it, but if you don't enjoy it, what does it mean?

Yeah, well, and that's part, you know, that's, that's a whole other discussion, right? You and I could drink some mezcal and we could talk about that, right? Because Right. You can work 12 hours in a grind or you can work 12 hours and just enjoy the hell out of it, right? And those are both choices that you have, right? And a lot of that, you know, it's funny, this is a whole other discussion, but I have a personal coach that I've worked with for quite a long time. I meet with him every week for a few minutes and he's a brilliant guy. And when we play this game called Notice and Choose, and my job is to notice Notice how I'm feeling about what I'm doing right now and then choose to what he calls it going up the ladder, choose to go up the ladder with how I'm feeling. So however much I'm enjoying talking to you guys, I can notice it and I can choose to make it an even better experience for me, right? I can choose that and I can do—

It's a great experience for me because I'm going to be noticing and choosing today as I go through my day.

It's a great game. I call it a game. Because I like games, you could call it whatever you want, but Kellan calls it notice and choose. And, it's a habit and it's a little bit of meditation that goes on for me at all times now after quite a long time. And, it doesn't really matter. It could be on an airplane or it doesn't matter. I notice how am I feeling about what I'm doing right now, recognize that it is a choice. I put myself on this airplane.

Right.

So, I didn't have to. I put myself on this airplane. And now, how will I experience this time? And I can choose in large detail, like whether that's an enjoyable time or not, right?

That's so brilliant. So let me transition you to the last few minutes, a couple of things. What do you want to relate to everybody here about your brand, about you, about Package? What's kind of 3 or 4 things that you want people to know about you, your brand, your This has been a great conversation this morning.

Thank you.

Some other questions, but this has been— I've really enjoyed it, Sean. We want to definitely have you on again. But what would you like to convey to everybody that's here this morning?

Well, I think, you know, I think, you know, for people that are listening that are interested in agave spirits, right, that's my context. So if they're interested in agave spirits, I would just— I would like them to know that, you know, we're earnestly working very, very, very, very hard at what we do, and so are our producers. And we have a 3-legged stool of packaged, and that the products are owned by the family that makes it. We just talked about that. It's world-class in its quality. We just talked about that. And that means you might like one cognac better than another, but we know that this cognac is a— what I'm saying is this cognac is a world-class representation of what is cognac, right?

Yeah.

So if I tell you this is a packaged product of Raisin, you know that we earnestly believe this is a world-class representation of that, of what is riceia, right? And lastly, this transparency thing, right? So, this came sort of born of the additive-free movement. We're not allowed to say those words, but that what we do is completely transparent. And, even if we did have additives, we would tell you, right? That's what we do.

So, truth in labeling, everything on your labels, what's in the label. Yeah.

And, all the way through, who owns the product, what's in the product, how is the product made, who is Package Group, what do we do, how do we it, right? That we're the ones that are speaking behind the brand. We don't hide that fact, right? Everything we do is based on those 3 things. So Adam said, you know, we're deep and focused and we're focused on those 3 things. It took us a minute to get here, but we're focused on those 3 things.

3 things again, name them again. Number one.

They're producer-owned, world-class, and transparent. So, all right.

So, Adam, why don't you take the big question?

The big question. So, I'm just checking LinkedIn, make sure we didn't miss anybody before I dive into our final question. One sec.

Let's see. I feel the pressure a little bit.

So, right? So, the big question is, in your experience, what has been the difference between success and failure?

I'm going to circle back to what we were just talking about, that it's hard to measure, but it's obvious to me that many people are having their lives positively impacted by what we're doing. And that's clear. And some of them are cortaderos in the field in Oaxaca, and some of them own distilleries, and some of them are graphic artists, and some of them are salespeople, and some of them are bartenders. And there's a lot of people that are involved in what we do, right? But everybody, I really believe that we've achieved enough momentum and we're doing it in the right way. I mean, I believe that we're doing it in the right way. Like, I'm sure people disagree with me. I'm sure people don't like me. I'm sure that, but I believe, I believe, like, I'll testify that I'm doing the best that I can, right? And being as honest as we can and as transparent as we can. And I believe that we're doing things in the right way. And I can see that people are— I can see the new trucks, right? I can see the new pickup trucks at the distillery, right? That the guys are driving. I can see the fruits of these things. And that's something that I did not expect. As I said, I wasn't seeking that. I didn't expect that. It's not a mission statement, but it's happening. And it's happening in the US and it's happening in my own family. One of my son-in-laws just got a raise because he worked really hard and he learned a bunch of shit and he's doing really good work. And so he got a raise and he was thrilled. So I'm seeing these things happen and I'm just very proud and very grateful. And I'll tell one other story just real quick, if I may.

Oh yeah.

We just launched this music video last night. I told you about that, right? This guy, Jeff Hodges in Turks and Caicos, and he made this song, Sipping on Some G4, and it's on YouTube now. It's on Spotify. and all these things, right? Jeff has never had success as an artist. He's been a guy that's helped other artists be successful. He's 61 years old. He writes this song. He reaches out to G4. I like this song, and I decide to make it the summer anthem of G4. And we— and Jeff, we, we talked last night as this thing launched, and with tears in his eyes, he's telling me what— how we made him feel and how respected he and how proud he is of this thing and this video. And he's so honored to have flown from Mexico to Turks and Caicos and spent a week and made a video. He's so honored by this and so impacted by this. And the guys in his band and the guys that are around and his family, his children are there. This is just the newest example of of how what we're doing, you know, is Jeff gonna make any money on this? I don't know. Is, am I, you know, am I gonna increase sales because of the song? I don't know. But, but we've made a really, really, really big impact on, on his life and the guy in his band and his family and, and the, and then the people that, that produced the content, right? The people, the kids that got to go there and do that and do that, do that work. And they worked hard. They were, they were, they were on set at 6:00 AM. They were on set at sunset. All week, right? And they worked hard, but they, but they did good work, and, and it, and it's fruitful, and I, and I, and I like it.

That's awesome. Well, I mean, your success, obviously, because you have purpose, is what you're saying. You have a purpose. You're helping people's lives. You gave your son-in-law a raise, but he worked hard to earn it.

He did.

The 61, you know, he's made other people successful, but you gave him a shot at G4 to do your song, and you brought tears to his eyes. And that speaks, you know, that speaks so much about your brand, about you and about why you do what you do. And we very much appreciate all of that.

Thank you.

With that, I'm going to maybe give you some closing comments, Shawn, and then Adam, and then we'll wrap up for the day.

Well, I don't know that I can top that one. That's what I see that's happening, and I'm very grateful. And I'm glad that you guys reached out and that you noticed what PACI's group is doing and wanted to talk to us about it. And I appreciate that. And the last thing want to say, because of my job with the company, I get to do— I'm kind of the Geico Gecko of the company, right? I get to do these interviews. But there's a lot of people in our company now, right? And there's a lot of people that work really hard and do really, really good work. And I just want to say, of course, Jeff and Mark and Chris, but there's a lot of people. And Juan Pablo, I've mentioned several, but there's a lot of people and they work really, really hard. And just because I get to be the Geico Gecko doesn't mean that it's all about me, right? It's really, it's about them. And my job is to do the best I can to represent them. And then of course, to facilitate what we're doing each day. So I'm super grateful to you guys and, but to all of those people and everybody that got up early in Mexico this morning and cut some agave for us, man, all those people, I really, really, really appreciate them.

Thank you so much, Shawn. Adam, you're muted.

Oh, I thought we stunned him. I thought we actually stunned him. He was speechless.

I always have more words. I'm actually in Chicago at a friend's house right now. I'm in Lake of the Hills. But nice. So I'm going to be— I've been feverishly Googling as we've been having this conversation of where I can find G4 and the El Cabo and all sorts of things.

Nice.

So I'm going to go find some tequila and Oh, you must try it.

I see it.

Yeah.

Uh, uh, and then I'm first at Benny's.

Yeah, Benny's. Go to Benny's.

Oh, for sure.

Oh yeah, Benny's and Garfield's. Yeah, I've been, I've been doing the where to find. Oh yeah, I'm, I'm, I'm there. Uh, and then, uh, I'm gonna check out, I got the music video dialed up too. So no, this has been a fun conversation. I mean, I think Sean, your, you know, your outlook on things, even if accidental from the start, right, has, is clearly obviously proven fruitful. And I, I think The, somebody posted the other day, I guess I'll, I'll leave it with this. Um, might've been the guy from Dude Wipes. Um, I forget who it was on LinkedIn, but, but the, he posted something that, that I'm gonna paraphrase it, but he said the hard truth of being in the, in the consumer packaged goods industry is for, for better or worse, any dumbass who stays in the, his words, any dumbass who stays in the pocket long enough will find a way to be successful. And I think, I'm not calling you a dumbass by any stretch of the imagination.

No.

What I, what I'm saying though is—

He's not coming back now, man. What the hell?

What I'm saying is you've stayed in the pocket, and by in the pocket, I took it to mean, and I think you would agree, like, who's cared about people and what you're doing long enough and who's let doing cool shit be your driving factor long enough that it proves successful, right?

Yeah. Yeah.

It's just really cool to hear stories like yours. So thank you for joining us today. Yeah.

I mean, I'm gonna—

thank you.

Every time I do these, I actually replay it and I walk around and listen because I always learn something new. So thanks for educating us today, Shawn, because there was some really good information. And for those founders or dreamers that wanna bring a brand, heard what Sean said. He's one of the hottest brands, or the hottest brand in the category right now. He worked from 6 to 9:30 last night and he said it's still hard. Don't forget about that. But he's in it and he has a purpose.

Definitely.

If you have a purpose and you know why you're doing it, or, you know, a vision where you're going, you're gonna be just fine. But it does take work in this business. As you know, when you arrived, you had to pay the toll, right? To get across the bridge.

Yeah. I love that. Yeah, absolutely.

He paid his tolls, many a tolls, and he didn't get anything for that. toll until there was a tipping point, and then he built, and now people are actually knocking on his door.

But it's pretty cool. It's magical when that opens. And Adam, I appreciate that comment. I'll never tell anybody I'm the smartest guy in the room. That's not me. But I'll outwork your ass. I will outwork your ass. And that's the thing.

I mean that in exactly the way you took it because it's Um, speaking from my own experience for years, and, and Sam knows this, I'll never forget, it's, I was probably 4 years into being with BevSource and I sat down for a dinner with some folks and I was talking to 'em about operational stuff and blending and micros and, and, you know, all of the stuff that Jeff and I would be able to commiserate on in terms of, you know, his experience.

Sure.

Spirits and mine in RTDs, right? And we're going through all this and I get animated about it cuz I, I love what I do really, right? As you do, as Sam does, like I enjoy enjoy what I do. And, uh, and they asked me, and it's the best example, it's happened a few times over the years, but they said, where did you do your, your technical learning? And I went, what do you mean? And they said, well, where'd you go to school? And I was like, Northern Iowa. And they were like, oh, do they have like a beverage or a microbiology program? I'm like, they might. And they looked at me and I'm like, what do you mean they might? And I said, my degree's in PR, guys. Like, I picked all this shit up on the fly, right?

Yeah.

But that's the people I enjoy working with. And I'm not saying that some of them didn't go to school for Some of them did, but I love asking people how they got into this industry because it's almost never by intent. It's almost always accidental. And then they're like, I just really like it and it's fun and it seems to come easy to me. I'm like, I'll work with you.

Cool.

Yeah. Yeah.

Yeah.

Anyway. Yeah.

Well, cool, cool, cool.

Awesome. This was a great conversation. I'll ask you, uh, all of us to stay on the line because we have to download our content. Oh yeah. So, but I'm going to say goodbye. We're going to say goodbye to everybody out there. Thanks everybody that joined us this morning. Marshall, Robert, Alicia, Jim, I don't know if I've missed anybody, but thank you for those that have asked some questions this morning. Robert, I'm sure he's just right up the road from you. Robert's up in Michigan somewhere in your neighborhood.

Nice.

He moves product over the border, a lot of RTDs and CPG beverages and stuff. So I'm sure he'll probably reach out to you. But thanks everybody for joining us on this Saturday.

Thank you, guys.

Bye-bye.