Welcome to our live show!

Good morning, everybody. Welcome up to Drink Up Podcast Live with Adam Smith and Sam Anderson. We're gonna do some dial-ins today. Hopefully some people may join, maybe they won't, but I put it out there with some of our friends. If not, Adam and I are just gonna have a chat about what's happening in industry and what it truly takes to bring a brand to market. And what the cost associated with doing that. And we were just talking before we went live about that. But before we go, you want to go through like our, um, our sponsors, Adam, and call them out?

Yeah, absolutely.

I'm trying to—

I'm multitasking, trying to see if we're on LinkedIn. But, uh, yeah, no, uh, shout out as always to, uh, sponsors, uh, Bev Assets, Sam and Alicia, to Ryan Halliman and On the Rocks Advisors, to Jay Williams and Freebird, uh, and last but not least, to myself and Alias Advising.

That's fantastic. And what does Alias Advising do?

Oh God, uh, I run my mouth a lot. No, um, just education is a big part of it, right? Like, uh, just talking to brand owners who've never done it before and helping them understand things. And some of those things we'll get into today. Um, and then, you know, once I actually get to sink my teeth in, it's, it's operational project management, right? It's, it's production planning, it's working with co-packers, it's helping you understand cost of goods analysis, um, testing needs, cash flow, uh, supply chain procurement sourcing shit. Just kind of the operational glue that holds the puzzle together is what Alias does.

Well, I asked that because You know, one of the things we want to talk about today was what is the true cost to bring a brand to market, right? And I think a lot of people arrive and have a discussion with you to try to figure that out, I'm assuming, correct?

LinkedIn is working. That's my computer repeating it back to me. Perfect. I was like, where the fuck is that sound coming from? Also, Chris, hang on. I'm gonna drop the link in the chat. He said, Sicko said he's gonna join us.

Yeah, put it in there. Put it in there. Okay, there you go.

I did. I just put a link to chat. Yeah, man. I mean, I think, you know, it's a good question, right? Like, but I think it's a little bit, not bad, but it's a little misleading, right? Like, call Cost to bring a brand to market and cost to stay in market are 2 different things and 2 different numbers, right? And so what we were talking about before we got on, and I'd love, you know, you and Chris obviously play a lot more in the alc space, especially the, the high-proof spirits and kind of the full-volume stuff than I do. Um, so for RTDs, I mean, whether it's alc or non-alc, like, I think there's very much a way to get to market, and whether that's on a retailer shelf or on-premise, off-premise, non-alc, whatever. I think there's a way to do that for 6 figures or maybe even a little south of, depending on how many SKUs you have, but you're not going to stay there very long if that's the entirety of the bucket of money.

Yeah, you mentioned that. You said, yeah, you can get the shop, but you're not going to stay on the shop. What did you mean by that this morning when you said that to me?

Yeah, so I mean, again, my take as the ops guy, and I tell this to people all the time, and for anybody that works with me that's listening, um, You know, my kind of shoot-from-the-hip number just to rip the Band-Aid with people is like minimum, you're probably going to drop $50,000 to $70,000 operationally just getting a product, you know, getting liquid in cans, getting it to a 3PL, getting it to a distributor, like physically getting shit done to get something on a shelf that people can drink, that's safe, that's had a legal review, blah, blah, blah. You're probably going to spend $50,000 to $70,000-ish. Again, variables abound, but just a ballpark number. My second comment after I tell people that is you're probably going to want that $50,000 to $70,000 to represent maybe a third of your overall cash because you're going to need the other two-thirds, the other $50,000 to $100,000. Oh shit, Chris, I'll email it to you, buddy. You're going to want the other $50,000 to $100,000 to go market it, sell it, pitch it, whatever, right? And usually people get that. They're like, okay, that makes sense. The problem is, and this is the third thing I say, and you know this and Sicko knows this, like, that's not— like, you're not gonna make that money back on product in one sale. It's gonna trickle in. The number of times that people's eyes fucking blow up when I tell them, like, retailers, distributors, like, all these people have terms— 30, 60, 90, 120 if they really don't like you, right? Like, they're not gonna pay you immediately, even if you give them product most of the time. And so that those funds are going to trickle in. So where's the next set of money coming from? And I think that's where it's like, okay, you got on shelf, but staying there requires a consistent stream of funds, right?

Interesting. Yeah. What So when you say staying there, what kind of funds do they need to spend on? I mean, I certainly have a thought on that, but curious what you think.

Yeah. I mean, you know, I'll start in your world. And again, this is stuff that, you know, better than I do. So, you know, tell me if I'm full of shit, but like, you know, again, alcohol brands all the time are like, or prospective alcohol brands, right? People that we had a group the other day come to us for like, well, I want to do a, I want to do a margarita. I want to do this. And I'm like, okay. And they're like, yeah, and I want to get into Total Wine, or I want to work with this distributor, or so on. And I'm like, yeah, maybe. And they go, what do you mean? Like, how do you plan to incentivize them? What are you talking about, man? The, the 30 to 40%, or whatever the number ends up being that the distributor takes, that's for, that's for them to cover their logistical service offering. That's, that's to cover, again, the get shit done side of it. The more creative ethereal sales part of it, you have to incentivize those salespeople. And you also have to understand that if you're making a tequila and that distributor has 6 other tequilas, every one of them already has incentive programs in place. So you are low man on the totem pole. So whatever you spend to incentivize that salesperson has to be more than at least the lowest guy closest to you, but ideally more than the top guy, because that's going to put you in front of more people.

Yeah, so this is— it's interesting what you're, you're saying here. So a supplier does their, um, their math, right? They work their pricing from the shelf backwards to the cost of goods.

There he is.

Hey, Chris, how you doing?

Did you get a haircut? You're looking sharp, dude.

2 things: got my haircut and dyed the beard for a Halloween costume for a party this weekend.

Fuck yeah, buddy, you're looking good.

You must be going as Captain Morgan, I'm assuming. So we—

no, we always go as Rip and Beth from, uh, Yellowstone.

There you go. All right, dude, it was a good one.

It's all right.

Hold on, guys, let me close the doors.

Yeah, but you have the dogs, which is good. Good to have dogs. I've been going through a lot of dog pain. I got a dog that has unfortunately—

I was gonna say, my, uh, we'll see if I can get my puppy in here. There she is. Hi, baby.

This is the dog show of the whole bit. We were just talking about what it takes to bring a brand to market, and Adam had shared his thoughts that you, for $100,000, you certainly can bring a brand to market, but it's not going to keep you on the shelf. And I said, well, why is that? And he said, well, there's a cost. You gotta incentivize salespeople. You know, you gotta, you know, do some buybacks, gotta do some tastings, a whole bit. So I was just, uh, sharing the cruel reality of what I know. And maybe it's not the case everywhere. First of all, distributors are awesome. They're, they're great partners, but they have a cost of doing business too. So that margin you're paying them, you know, the 25 to 30% or whatever it is, Chris. And Adam, that's the cost of getting it on the truck, out of the warehouse, onto the shelf. That's not the cost to actually activate your brand in the marketplace. And I'm curious from your standpoint, Chris, as she joined us, what you think about that. So this show's kind of about, or this conversation we wanted to kind of get, what does it truly take to bring a brand to market? Because what drives me nuts, by the way, is by the time they arrive to someone like me, They want me to work on full commission and they don't want to spend any money. They don't understand why they have to spend money for someone like me or the distributor.

So the reason why I like talking to you guys is we kind of have the, the triangulation of the process, right? You know, Adam is light years ahead of me on what I'm going to call back a house, right? Like creating, physically creating the product, sort of, right? There you go. And then, you know, Sam, with your decades of experience on the distributor side, now coming over to the hybrid side, right? Because you're kind of hybrid relationship with the distributor, take a brand to market. I tend to be a very glass half full guy, so this will be the only glass half empty comment I'll make today. I disagree with distributors are great. What they are, what they are is they are needed because we're the only country in the world with a 3-tier system, right?

Yes.

So what I share with my clients and potential clients is look in the mirror. That's who's going to be 99% responsible For your brand, right? The distributor is going to deliver it. And Sam, to your point, they're going to take 25 to 30% to do that, and you're going to have to incentivize their people to do just that. So if brands understand and own their brand, then it's a much easier conversation. And, um, You mentioned about a— you mentioned $100 grand. What I tell my people is it's going to take 2 to 3 years for you to stop losing money, right? It's going to take 2 to 3 years for you to see a flat EBITDA, if you're lucky. So my— the brands that I talk to and I work with, they need to have access to a million-dollar line of credit. Hey, It's a dog show. The dog show. Oh, you need to have access to a million-dollar line of credit.

You need access to a million-dollar line of credit, and the barking ensued. I don't know if that was an angry client or that was agreement.

I think I think she agreed. But um, the the good news is, if you know whether that's an investor. Right? Who can be a line of credit, whether it's a small business loan, whether it's friends and family, or whether you've made a lot of money in other businesses that you can bring in and have access to. And usually 2/3 of my conversations with brands usually end there because they either don't believe me or they're like, or they get scared. All right, and if they get scared, I kind of really don't want to work with them anyway. When he talks, huh?

I said you sound like Adam when you talk. So they either— 2/3 of your clients, that's a huge number— they either get— they don't believe you or they get angry, I think you said.

Scared.

Yeah, well, I've had— you know, we talked before, so including, including the initial calls I have next week I will have hit the 100 initial phone call level. And since I started this company, right, I've only ever signed and worked with 18.

All right.

So if you do that math, it's an 80% initial call does not lead to a second call. And it's either side feels that way. Right. But I'm a data guy. I'm a numbers guy. Opinions don't matter to me. So the data says it's gonna take at least 3 years for you to make any kind of money. So that's initial investment, that's funding at year 1, funding at year 2, right? So Sam, take your number of $100,000 to $200,000, triple that, now you're at $600,000, right?

Yeah.

So using your numbers, Sam, They should have at least access to $600,000 liquid, but they'd probably be smart to have access to $1 million.

Yeah.

And jump in here.

So good.

I say I got to jump in. I got to add a layer to this conversation. I've been—

it's—

Sam, you've heard me say it. I don't know if I mentioned it to you, Chris, but I've been posting stuff on Reddit. Right, just similar to LinkedIn, right? Really interesting community. If you guys aren't there from a business perspective, I fucking highly recommend it. Some wild introductions have come from there. Um, but I posted something the other day because, you know, you see a lot— like, there's a beverage industry thread, I'm sure there's an alc industry thread, there's a food and bev CPG, whatever, there's a bunch of subreddits. Um, but I posted something to several of them that said If you want to start a beverage brand, you need multiple partners. And the reason I posted it was, money piece aside, and I'll come back to that, whether it's referrals from co-packers or just comments that I get from people or things I see on Reddit or LinkedIn, the uninitiated— and I don't mean that as a derogatory term, it's just who they are— the uninitiated that are trying to get into this industry will send these laundry list, 20, 30, 40, 50 question deep emails. to co-packers, to me, to you, Sam, to whoever, and say like, well, can you do— and I'm like— and then I get introduced and I go, hey guys, like, timeout. All of these are perfectly valid questions. I applaud you for putting them on paper. The problem is about operationally even 8 different people answer these questions, right? And so I put all that up on, on Reddit, right? And somebody commented and said, you know, you don't need multiple partners, you just need a lot of money. And I was like, I literally replied and said, speaking from experience, because yes, you do need a lot of money, but I'm gonna call bullshit if you think just because you have a fat fucking check this is gonna go well, right? So my question to you guys is twofold. How many partners do you need? I just said somewhere in the neighborhood of 8 for operations. From a sales side of the coin, how many partners do you need?

Right.

A, and B, examples of maybe situations you've seen where somebody had maybe less money than they should have, but they were intentional and they were smart about it and it worked. And situations where maybe they had A shitload of money and thought, I'm gonna do it all myself, and then they lit it on fire and filed for bankruptcy, right? Because I know you guys have seen both.

I'll, I'll let Sam go.

So I'm not sure how to answer your question. So I think the first part of the question was, how many clients do you— or how many customers do you need to be viable?

How many partners So like, I'll give you an example. So on the ops side, right, you need a formulator, you need a co-packer, you may or may not need someone like me depending on your own experience. You need all of your raw material vendors, you need a 3PL, you need a freight broker, right? That's 6. And I'm not done, but I'll stop there. So on the sales side, right, you need a distributor, you might need someone like yourself, you need Uh, maybe somebody to handle the compliance per state for you when you've got filings and shit to do, right? So on you guys' side of the world, as opposed to ops, like how many different individuals or partner groups do you need to truly make stuff pump?

I mean, I think it depends on the supplier and what they want to do, but at the end of the day, um, you know, I always tell a small supplier they don't have much money to do it themselves. They can like pick a market, you know, go in your backyard and go build your brand. And then once you get enough volume and velocity that you built yourself—

Sure.

Um, dog, dog show, they agree. So, you know, once you get enough velocity in that like core set of accounts where you've kind of proven demand, then hire someone like me, like a fractional salesperson that can go on the marketplace and help support you because you can't scale otherwise.

Sure.

But I think there's enough money for them to scale, to answer your question. I do think they should hire experts like Chris, um, at the beginning because I think if you, um, don't understand the data as Chris talks about, and data can be in pricing, data can be in, um, um, opportunity that sits out there that you can't see that someone like Chris can see. That's the best kind of money you could spend or hire someone like Alicia Vargo because we do obviously commercial strategy and like brands come into the US, we can work with them and do that. So I think that money spent ahead of time will save you spending, you know, a few thousand dollars will save you hundreds of thousands of dollars on the back end. So that's my thought. But Chris.

Yeah.

And I'll, um, I think a lot of what you said, you know, so I agree with what you said, uh, you know, Adam, your point is what 99% of most people don't think about, right? So most people have an idea for a brand, but they're not winemakers, they're not distillers, right? They're not, they're not producers. And then even if they are, and if you're, you know, they don't have a bottling line. Right? They don't have barrels to age spirits. They don't have, you know, they don't know how to get dry goods. Right? But, you know, something that Sam kind of mentioned, I appreciate the compliment, Sam, but I was having conversations yesterday with leadership at Reyes in Florida. And one of the things that a lot of people don't think about is, you know, Sam mentioned price point positioning, right? The data, I don't care how great your brand is, if you come in 30% higher than the growing trend, then your brand's gonna sit there 'cause it's gonna take time to bring people up to your level.

Right.

Yeah.

But you have to— I think if, if new people come into our business during this time of uncertainty, right, they need to come in eating a big bag of humble pie, right? The reason why I've— so I mentioned earlier, I've only signed, what, 12, 13 clients? And almost all of them have re-upped, which is a great compliment to our team. But of the 80-plus percent that have not, it's because they tell me things and they tell me what they think. And when you come into our business, guys, what the 3 of us have, I want to say over 75 years of combined experience, right?

Very—

include me in that as I'm bringing up the rear.

Well, yeah, but, well, you know, you've been in this for a little bit, but, you know, Sam's got a few years on me and then I got a few years on you. But really, when you think about it, when you think about it, why would you reach out for an advisor, right? Why would you reach out for advice and then tell those people what you think? Shouldn't you be asking questions?

Right? I have to jump in there. I don't know if this happens to you guys, but it happens to like Ryan and I now constantly. And by I mean 2 to 5 times a month. No bullshit. The following will occur. Copacker A, Copacker B, whoever, someone will send a lead to us. We will talk to that person. We will tell them the things that we're discussing, and they will go, to Chris's point, awesome. Whether they say this or not, right, it's some version of, you've just scared the shit out of me, and now I'm gonna go do it myself, right? Fine, dude, God bless, right? I can sleep at night as long as I'm honest with people, so have at it. I wish you the best of luck, right? And then usually it takes anywhere from 2 to 4 weeks. So it's kind of a rolling occurrence now. Someone else, Formulator A, 3PL B, fucking vendor, you know, flavor house, ingredient vendor, because myself, Ryan, friends of our realm have become known for talking to these brands that, again, no knock to them, they're just new, don't know what the fuck they're doing. And so I'll get an email going, hey Adam, meet so-and-so. And I'm like, hey Bill, we talked a couple weeks ago, nice to see you again. And let's chat, right? There's a risk conversations keep coming up, right? You're asking people for too much shit and not understanding how to work within the industry. And the funny part is, and I feel bad about this genuinely, Ryan and I will send those people a follow-up email and not be dicks. We'll be like, hey, nice to see you again. We chatted before, you know, love to get on another phone call. 98% of them never respond, which I assume is because they're embarrassed of like, oh, I've been sent back to this person a second time. Now I look foolish. Right. Does that happen to you guys?

Oh yeah. Well, we have Alicia and I will talk to someone, you know, a year ago, then all of a sudden they're being referred back to us through another source. Um, it could even be, I think Chris has referred people to us that we've talked to before as an example. Um, I'm pretty sure. And it's like, oh yeah, we, we talked to him or sometimes we forget that we talked to him too. It's like, oh shit, we did have a conversation. We sent our services. So that does happen, uh, for sure. 'Cause it's a pretty small industry in terms of what we do and the services we offer. And it's a pretty short path or a pretty tight path into distribution. And you either have a relationship with a wholesaler or you don't. The relationships tap all because Chris has great relationships with wholesalers. He's able to get them to pick up the phone and get that brand in front of that wholesaler, and he's able to prepare that client of his to have that conversation with the wholesaler. And sometimes, Chris, as you said, two-thirds of them, if they would have listened to you, you'd probably get them inside the wholesaler. So that's their miss.

So here's my question, and I'll, I'll add to it for, for Chris's answer. When those folks come back around, how many of them actually engage with you? Right? How many of them go, oh, okay, like I was a little misinformed, now I'd like to work together? Because for me, that's still almost never.

Well, there's been a couple, but once once I break once I break up with you, I wish you well.

I love that. You know, we're at the point. Appreciate this. Maybe you won't, but I think you will. I know Adam. I've said this all the time. So when we talk to clients now, we've talked to five different clients. I've said this every week. Foundation, build, grow, scale, sustain. We talked a lot of foundation and a lot of build brands. They're the hardest brands to deal with in the industry. They, some of them think they have the answer. They seek out answers and they don't listen, or they do listen, but they're hard. It's the foundation of a home is the hardest part of building a home. Because you got to find the builders, you got to find the wood, the concrete, the rebar. All that takes time. As you said, Chris, it takes 2 to 3 years to do that. And impatience sues. So we tell clients now, if you're a foundation brand, do you have 36 months of runway? And we qualify that and we try to qualify that. We also tell them, don't come with us right now. Go work, and I say this: Go work with three or four brokers. Let them go open up doors, build your brand, and come to me in six months. And they look at me like, "What are you talking about?" I said, because they did all the work. They built the foundation. Foundation doesn't mean you're building yet. They're just building to get your brand known in the marketplace. So after they do all that work, I'll come in and take all the credit. I'm defending brokers out there because there's a lot of good brokers. Always hear they didn't do a good job for me. I don't agree with that statement. I agree they probably did a good job. It just takes time to build your brand and you got impatient. Not in all cases, but I'm just, I'm putting it out there that when you walk into a bar, restaurant, hotel, it takes, it used to be 3 to 4 times. It's now 6 to 10 for people to even consider you. It's so competitive. So, but those brokers have relationships or those salespeople to go do that. It just takes time to build your brand. So there needs to be patience.

Yeah. Well, the other way is, you know, you mentioned those 5 things, Sam, but, you know, strategy and strategy built on data and learning and right and learning from others. The thing I was— so I have a new client. I'm going to give them a plug. New client. It's a Clay Cachet champagne. Sam's very familiar. A Grand Cru Blanc de Blancs from Épernay. Michel Gonnay is the grower. Vineyard's about a kilometer and a half from Dom Pérignon. So I joke that it's the worst house on the best street, which is how every real estate investor tells you to buy. And you look at the Champagne category, and you guys— and I'm sure you guys know this— the Champagne category started to recover about 18 months ago. And now it's growing at about 4 to 8%, depending by market, depending by channel, right?

I mean, this market is tremendous. Yeah.

Now in the US, my former employer Moët Hennessy has 65 to 67% of the total revenue of the champagne category, right? Moët, Clicquot, Dom Pérignon, Krug. So look, so then you go back to strategy. And an example I always use is I'm an, I'm an F1 fan. So going into the last lap, Lewis Hamilton does not want to be leading the race. He wants to be in second place. He wants to let the front car do all the work, draft behind him. And then on the last turn, what does he do? He fakes left and goes right. Right.

The old slingshot.

Slingshot. Thank you. And so when I was talking with the owners of the brand, luckily they're all F1 fans too, so they understood that. But you're allowing, you know, the term follow the leader. It's the reason why you follow the leader, right? You follow and then you slingshot. So, you know, Sam, maybe I'm quoting myself. But we're talking about like price point, right? The research they did, to their credit, was $100 separates, let's say, the haves from the have-nots in the champagne category, right? So they strategically recommended the price at an SRP of $99.99, right? Now that shrunk their margin because really in order to have a traditional margin, they'd probably want to be at $119. But right, how many people are going to just keep walking when the first number is a 1 versus the first number is a 9? Right. And so once they shared that with me on our first call, I'm like, okay, They know a little bit about customers and consumers. And then I realized that the founder of the brand is a woman named Christina Haack, who's been on HGTV for 12 to 13 years. She has her own line of home goods. So she's very aware of price sensitivity on shelf. So I'm like, oh, okay. They get it from another industry, and so ever since I've been working with them, they've been great. And the thing that's been exciting is distributors, key retail partners, key high-end restaurant multi-unit operators—they look at the same data I look at, and it's been exciting that no. No one's told this, right? And then as they grow and as they scale, their COGS will come down, their margins will increase, and they'll be just fine, right?

I want to— so I love that story, Chris. I want to ask you something because I'm curious. So if I heard you right, you said, you know, typically to be at the margin they'd want to be at, ideally they'd be closer to like $119, $120 a bottle. But instead they're sitting at $99.99, right? Like just under that $100 threshold. So that's— I'm not going to pretend I can do the math right now, but, but call it, you know, cutting what?

20%.

Yeah, right. So I was going to say 15 to 20. I was close. 20%, right? So, so I'm curious if you know or have an idea of— they took a 20% reduction in margin What increase are they seeing compared to the rest of the market in added velocity?

Well, it's— it can't answer that yet. I could answer that in 6 months because the brand literally is just launching this month.

Okay, sure.

So the brand's launching in Florida this month. California this month. It's been in Wisconsin and Nevada, but, but with respect, those are tier 2 and tier 4 markets.

Okay.

Um, but what I can say is, you know, talking— let's use Florida, right? Um, brand got presented to Total Wine. There's 40— let's say there's 48 locations in Texas. They've got approved for 25. And those 25 are the highest indexing champagne stores. So that makes sense, right? The brand's talking to the other 2 key retailers in the state, Lukens, which is Tampa, Orlando, right? We got a meeting this week and then ABC, they got 100 and something stores. But when we're talking to ABC, 99% of other brands you guys talk to would say Oh, there's 132 ABC locations in Florida. I want to be in all 132. Oh, right. No, you don't, right? You ask the questions that you already know the answers to because all, all data is public, right? So, hey, Mr. ABC, I believe these are your 25 highest indexing champagne stores, right? Those 25 are probably doing 74% of your total campaign revenue, right? So let's focus on those 25.

I love it. I, I, yeah, again, you guys know I play a lot in the non-alc space, and I think for as much as, yes, all of this data tracks on the alc side of things, both, both, you know, higher volume, higher alc spirits and RTDs, right? I really, I try to encourage, right? Sometimes it lands, truly, sometimes it lands and sometimes it doesn't. But I try to encourage because I think people think that because they're a functional brand, right? Like a nonfunctional, it has some health benefit or perceived health benefit, right? They think, well, it's for everybody. No, it isn't. Well, I should sell it everywhere. You are legally allowed to sell it everywhere. You shouldn't set— you should, at least to start off, you should not try to sell it everywhere, right? Like, to your point, I'll use terms that I don't use on a regular basis, so apologies if I fuck them up, but like, you know, location A might sell a shitload of caffeine bomb drinks, Reign, C4, Monster, whatever. Your probiotic fiber poppy knockoff, whatever, is not going to work there. Right? Because that's not their customer. Their customer is the dude showing up at 4 in the morning before his construction shift and the guy showing up at 7 o'clock at night before his overnight shift buying a 4-pack of fucking 250 milligram energy drinks and getting the fuck out of Dodge. Like, he doesn't give a damn about his fiber levels, right? And I think it's so, you know, I think this conversation, I think, is a lot more common in the alk industry than it is in non-alk. For that reason, and I wish that more non-alch brands thought that way.

Now we have— we're working on the brand that I've been working with him for a year and a half, and it'll be 3 years by the time it comes to market. But it's a levantine out of Beirut, Lebanon. It's going in New York City, and it's from Beirut, Lebanon. He's Lebanese. So where do you think we're targeting?

Lebanese markets?

Lebanese restaurants that sell Amaro in New York City.

Yes.

And what do you think we're doing with him before he launches? We're having him fly into New York City, set appointments with those accounts, and have a conversation with him about the brand.

So I want to give a— in that same vein, I want to give a shout out real quick. Um, to, uh, I don't know if I'm allowed to share this, so I'm gonna be a little tight-lipped, but, uh, I know I can share the brand. So this is a group that I've been working with, right?

Nice.

It's a non-alch. I'll zoom it in.

I love the can.

Right? It's pretty. I wish I could take credit for it. I had nothing to fucking do with it. Um, but it's a, it's a, uh, not a— what am I trying to say? It's a commercial version, right? Obviously canned of a chicha morada, a Peruvian purple corn beverage. Right. Oh, um, and they won a Shelfie Award with Startup CPG recently. Their website's beautiful. They're going to be going into production for their commercial run here in hopefully a couple weeks or so. Um, shout out to Niche and, and Scotty and the guys at, at, uh, Niche Beverage.

By the way, beer wholesalers want brands like that. All wholesalers, they need brands. They need truck fillers, by the way.

Oh, we'll get there, Sam. But the, the reason I bring them up is They have done, and again, I've had, I've had fuck all to do with this. So this is all credit to the brand and their go-to-market partners. But they have been, you know, reaching out to Peruvian restaurants in the Northeast. They've been reaching out to travel organizations associated with Peru and with South and Central America and groups that would know this. And I'm like, fucking amazing. Keep driving, keep singing that song, right? Like, that is your niche.

They're more apt to adopt your brand, right? Part of the community, right? Matter of fact, he could probably get investors to some of these people. These are some great operators in New York City, by the way, that are Lebanese, that have some great drink menus. And to Chris's point, Distill This is— a lot of this is public knowledge, by the way. You can find this information and be able to pull together a pretty good target. And I think that's where, like, when Chris talks about data, something like, Chris, if you're not employing his services, I think would be a major miss because he's going to find those opportunities and niches. Or to your point, you know, Adam, with that killer package, I think it was— I don't know who we had on, I always forget his name. But anyway, he talked about, you know, go where you're already selling, you know, you don't go where you're not selling. And like, for instance, champagne. And I mean, no disrespect to champagnes, but if you want to be in mimosas, Maybe go to places that serve mimosas, right? Because you're probably going to do some volume with that champagne.

Yeah. And dude, it's— yeah. You know, Sam, building on what you shared about the Lebanese Amaro, right? And the Adam's Point that you were talking about. So I'll give a plug to another client that I know Sam's familiar with. It's a brand. It's called Paradis. It might be hard to see with the light. It's a Fashionola liqueur that's all the, all the fruit is sourced from Florida and it's distilled in Florida. Right. So the owner, great guy, self-funded small business loan. Right. Going back to the earlier part of the conversation, he lives in New Jersey. So what he did is he launched in New Jersey to try to build a proof of concept. Right. He lives there. He's carrying a bag, knocking on doors. He was watching this podcast 6 months ago and then sent me an email or sent me a message through LinkedIn, and now we're working together. And now the brand's in, uh, Connecticut, New York, because you have to have a tri-state strategy, right? Sam and I talk about it all the time. And then the next market he's going to launch in— wait for it— Florida. And so again, fucking awesome. You know, fish where the fish are, right? So he's— he and I have been spending some time there. We divided and conquered this week. He was in Tampa and Orlando, and he— the elevator pitch is data shows ultra-premium liqueurs are growing. Fact. Um, it's a great second or third ingredient in every drink. Fact. Uh, 2 of the fastest growing Ultra premium liqueurs at $29.99 or higher, which is where Paradis plays. Saint Germain and Chinola are both produced and sourced outside of the U.S. Fact. So he's able to catch the wind of the sales that Saint Germain and Chinola did, right? The lead cars.

Yeah.

He's got the homegrown advantage. He doesn't have to worry about the tariffs up, down, sideways, right? It's a beautiful package. It is gorgeous, right? And what he did, to his credit, is he goes, Chris, there are 134 tiki-themed bars and restaurants in the state of Florida. So guess what he's been doing? Starting at 1, work, and he's working his way down to 134, right?

Fantastic, right? That's very targeted. That's very good.

Yeah. And again, he's, he's, he's getting, he's getting told yes 3 out of every 5 times, right?

Wow.

And there's a chain— next time you're all in Florida, there's a chain of restaurants called American Social. And it's the— remember, it's the second ingredient, not the lead ingredient, the second ingredient in, I think, 3 cocktails on their list. And there he's averaging 2 to 3 six-packs a month per location. Right. And something Sam and I talk about all the time with brands that have delusions of grandeur, you know, how do you eat an elephant? One bite at a time. Yeah.

All right. Well, I love your— I gotta jump in. I love your call out. So I've been getting a lot of— and I won't, I won't name anybody because they're all super early on, I don't want to throw them under the bus— but, but we've been having a lot of conversations with groups doing, you know, wanting to work in some way with tequila, right? And don't get me wrong, personally I'm a fan. I like tequila on the rocks, a little lime. I like margarita, right? I I like Paloma. I got nothing wrong, nothing against tequila, but it's a shit to try and make it in the US if you're not familiar with all of the laws and the CRTs and the facility partnerships that need to happen and sourcing and all that shit. Like, it's a process. And something you said, Chris, a couple times now— I'm paraphrasing— but, you know, being in second place or being the second or third ingredient in a cocktail, like, you got me thinking based on that thread. I'm like Who are the big players in triple sec, right? Like, you make a margarita, tequila, right? It's a short list of ingredients. Cointreau, DeKuyper, Grand Marnier, right? Those are the only names I know.

Those are pretty big.

Well, the other ones that come up—

Pretty good call out.

Well, that's right. Like, but there's 3 brands are the entirety of my knowledge of an entire type of alcohol. Right? 2 others came up, you guys probably heard of them. Bols, or I mean B-O-L-S, or Cambier. Cambier. No fucking clue, never heard of them, right?

Bols is big, yeah.

Right, but that's my point, is like all these brands like, I want to be a tequila, I want to do this. I'm like, dude, be a triple sec. That people are making just as many margaritas with triple sec as they are with tequila, and it's a shitload easier, right? Like That just thought process, that ideology, it's fucking beautiful. That's one of the reasons I love talking to you.

Yeah, you know, Adam, you mentioned that one of the main reasons now, and we're all dealing with it, there's nothing wrong with being Pepsi, right? Why did— what, what was the main reason that RNDC is now in bankruptcy. They were Pepsi and they got tired of being number 2, so they put themselves in horrible positions to try to overtake Southern Glazers.

Sure.

All right, they tried—

A lot of wholesalers, everybody was running— trust me when I say this because I was one— is we'd all look at our competitors, right? And we'd bring in like BCG and And McKenzie, and we'd say, how do we get to that next, you know, the next rung, you know, to go get them? But you know, that shouldn't— that puts your business in jeopardy where you overextend yourself. That's not a good thing. So what we're talking about is being targeted. Like, that's a great example with the tiki places in Florida, and he's hitting over 100 of them, and his close rates 3 of 5. I think that's what you said. Those are amazing numbers. And then he's doing like, you know, a couple cases. I think I'm just rounding up here. You know, he, he, I mean, he's, he's gonna make his year and he's also gonna get the wholesaler. Is he with Reyes? Did you get him in Reyes?

Reyes in Florida. Yeah.

So they're gonna start paying attention. That's part of the battle too, is a distributor doesn't pay attention until they have to. And he's going to create that sense of urgency because they're going to start to see those 2 to 3 cases. They're going to start to look at their PAR levels like, oh, this is a brand for us. He's going to move up the totem pole in terms of importance.

Yeah. And the other thing that Brian— again, Brian brought humility to the table, right? So, you know, we're talking, you know, so from an on-premise standpoint, Sam, but we, the 3 of us know that 70-plus percent of your revenue is going to come from retail. It's just fact. So now look at how beautiful that bottle is. Put that on the shelf to the right of a Saint Germain, a Chinola, or a Sarti. Visually, what's going to stop someone 4 or 5 seconds from 5 feet away? That, right?

Yeah, she's in this— she shopper is going to look at that because they buy They buy stuff like that. No offense to all the companies out there.

And then the other— the— again, I'm gonna keep— Brian might even be watching because I sent him a text after I gave him some props. But now I talked to him about— I've got a bunch of other clients here, right? Literally his liqueur, right, would make a great cocktail with Art Tingstall's gin, would make a great cocktail with Porcelain. Would make a great mimosa with Serena. Would make a great French 75 with Artin Stalls and Clay Cachet. Yeah. And he said yes, yes, yes, yes. And he created the cocktails.

All right.

How many other clients, Sam? Would you know a standalone brand? And you were to say, hey, I have other clients who you might be able to partner with or be. be complimentary with, not as many would probably say sure. Now the other thing, Adam, is Arching Stalls and Paradis are both 6-packs, exact same FOV. So why not pair your funds for cocktail listings, display incentives?

Yeah, you know, it's something we should probably— and we we're gonna run out of time for it this morning, nor is this the right platform for it. But, you know, Ryan, if you're still listening, I know you were, uh, you were on earlier, but like, we should probably start at some point talking about like that one I showed you. I know she's got, um, like there's a Peruvian fusion restaurant here in Minnesota, uh, Sam, it's in Hopkins if you're ever out that way. It's fucking delicious. But they've got, you know, like, um, Peruvian-inspired cocktails that that Purple Drop product would well with. She's got cocktail ideas, she's put stuff up on her Instagram stuff, but we should probably start having a conversation sooner than later about some of the brands, you know, myself, Ryan, both of us, other ops partners that we work with, having this conversation. Because it's been said— and Chris, I don't know if it was your episode or somebody else's— of like non-alc startups having conversations with alc startups and going, hey, people are asking for unique cocktails. Why don't we just fucking create the bridge for them? Because if we do, you know, if we do all the hard work on their behalf and bring them, hey, here are 2 cool new brands, this one's got their shit together, this one's got their shit together, buy both, here's the recipe, fucking game over, right? I don't know why this thought didn't occur to me a year ago, but something we should probably start discussing at some point.

Well, unless we're like, you know, human-to-human interaction. Actually in the trade, talking to the beverage directors and the bartenders and mixologists and the somms out there. And if you come to them with a solution like what Chris described, with a client that's open-minded to actually take the initiative to actually put the drinks together, you can put that in the hands of a Raya sales team to have them go out there and sell that opportunity. Because part of the path to battle is just to get that. sales team at Reyes to pay attention. But if you give it— we make it easy for them, that you put it in their hands to go have the conversation, give them the 3 to 5 things that they can do to build the brand, they absolutely will do it. And if you have a Chris and the owner, the example that Jenny just shared, out in the marketplace working it, even better. Because as you look in the mirror, 99% of what you do is you. You're looking at them.

Mm-hmm.

Yeah, and then, you know, Adam, to your point, I think you hit it on the head. You know, you just hit a Shohei Ohtani 3-run home run because, you know, we've all— if, if people haven't heard of the term, they should Google it. Zebra striping is the most popular consumption ritual of the last few years, right? I'm gonna have a cocktail, then I have a non-alcoholic, then I'll have something non-alcoholic. So Sorry. And the buyer for Cheesecake Factory last year at a conference I was at hit it on the head, right? She goes, I wasn't embracing NA cocktails at all. Then I started to see our alc sales slow like everyone did. And she dug into the data, surprise, and she find out that people were buying a margarita for $18 and then buying an iced tea for for $4 than buying a margarita for $18, right? So what was the average ring was $18 plus $18 plus $4 divided by 3 versus creating a non-alch program to go margarita, 2 margaritas at $18, a non-alch cocktail at $14. But the gross margin on the non-alch cocktail was 2x of the alch.

Mm-hmm.

All right, it's not— again, it's not rocket science. You got to do the work.

Yeah, that's amazing, right? That a drink strategy, if you go and have a conversation with that operator, as you know, because of this economy, um, that's a— if you can take a $14 NA product and actually 2x it. I said, do you think you still in gross margin versus your $18 drink, you, you just like literally are putting numbers up on the board that are incredible, right? And then the consumer thinks they're getting great value anyway because they just saved $4 from a revenue, from a cash outlay from the consumer standpoint. Hey, I'm going to go back and forth. Maybe I'll have a margarita, but now I'm not drinking my iced tea because I'm gonna try that, you know, which is, uh, is a A great point that you can arm the sales folks to have those conversations in the marketplace and how the drink that they're representing can help do that.

Yeah. And again, you know, in the climate we're in, guys, you know, I think the term work smarter, not harder has never been more relatable. Right. And again, I was at Reyes. I was at Reyes in Florida yesterday. Having conversations with other suppliers and with their leadership, and not everyone liked this this statement I made, but they agreed with it or they reluctantly agreed with it. Right? The near future, so the next three to five years of Bev Val will not be driven nor written by the top ten suppliers. Sorry. Top 10 supplier companies in any category. The near future will be written by these people behind me and their colleagues and the brands that you guys are working with. And here's why, right? The top 10 wine and spirit suppliers, billion, multi-billion dollar global brands, they're not dumb, right? They're not dumb. They're smart. It's going to take them, but they're an aircraft carrier, right? If you need to get around a buoy, an aircraft— or if you need to pivot your strategy, an aircraft carrier is going to get around that buoy eventually. These brands and the brands that we work with are like Hobie Cats or like America's Cup boats. You need to get around a buoy. Right? Yeah. And get with the exception of Gallo, because Gallo's already— Gallo got their aircraft carrier to turn quick. And I tell everyone, look at Gallo for everything, right? Look at Gallo for everything.

Yeah, I mean, I love the Hobie Cat analogy or the You know, or even shoot jet skis out there cruising around on the water that they can pivot really quick. Also, I'd be remiss if I didn't share this is I think about brands behind you and I think of the term local brands and craft. And I also think about restaurants like James Beard Award-winning restaurants. Like in Minnesota, we have a lot of independent great restaurants. And if I'm a salesperson out there, and if you're a salesperson listening to this, this is what you should tell your on-premise, your bar, your restaurants, your independent package liquor stores. I represent independent brands from independent business people. You're an independent restaurant. Let's support each other. And I'm able to do things that big guys can't do. I understand that, you know, you know, Johnson Brothers can come here and give you great pricing and Breakthrough and all these guys, but I'm gonna be here. Give me an opportunity. Just put a drink menu together. And, uh, there's a brand that we don't really represent them. We work with them a little bit, but it's called Grey Duck. Uh, Jerry, it's here in Minnesota, familiar with Grey Duck Vodka. And they'll do about, you know, 30,000 cases or so in Minnesota. And that's exactly what they do. And they're available and they, they get on the drink menus. whole bit. And it's local restaurants supporting a local brand. And I don't want to lose sight of that, quite frankly. It's really important because if it's going to do what you said, Chris, what the future is— these Hobie Cats out there pivoting around the buoys is the future of the category— well, this is going to help those operators because they came up with that idea, the, the genuine, the, the, the modifier you talked about earlier, um, where he went in and he— or the drink price on the, um, And Ace, where you can go from selling a $4 iced tea to something of value. These brands behind you or your shoulder can help do that.

Yeah. And, you know, with me, it's really— we're in a really easy business that's really hard to succeed at, right?

Yeah. Yeah. But again, have—

you have to eat a bowl of humility. Before coming in this business.

Yeah, yeah, yeah. That's— that is— no, it's— it's—

I tell people all the time, it's not complex, but it is cumbersome, right? Like, it's not difficult to understand, but it is a lot of work, right?

Yes. If you're— but if you're willing to do the work, you can be very successful. I think the reason there's a high failure rate is impatience ensues and they give up too quick, uh, quite frankly. I mean, just when they're about to break loose They give up at like, you know, they start to question everything at 3 months. At 1 year, they're like, you know, I, you know, I didn't hit my goal. I mean, I hear it constantly. You know, some brands go quicker than other brands. I mean, what you're sharing, the success, Chris, with some of the products are amazing. You know, those are, those are great. You set them up for success. So hats off to you. So we're approaching on the hour. I don't know if there's anything. Chris or Adam, you have any closing comments, please share.

I mean, I think just you know, Chris, super glad you joined us, man. I thought I learned some shit today. I thought we had a good conversation.

He's our tri-host.

I'm like, I'm like a uglier young Joan Rivers back in the '70s, right, Sam? When she'd do the Tonight Show.

Yeah, you're great, man. You're all— you're all— you come up every week, Chris, you know that, man. Oh, but the thing is, same link, by the way, so you can come in anytime.

Well, the thing is, we're, we're in a unique time in our business, right? If people aren't embracing working together and, uh, getting out of the norms or the traditions that have been in our business since Prohibition, right? Work together, communicate, collaborate, share data. There's an idea, right?

Yeah.

You know, why do 8 different people need to buy the same data source 8 different times? You know, I talk to my clients, you know, you know, share your resources and buy the data that I will need to drill down to, and just— we'll, we'll split, we'll split the cost 3 ways, right? The same data.

Yeah.

And like, the thing about Texas— last thing I'll add, guys, is for brands that are looking to come to Texas or come to Texas where I live, did you Did you know that sales, BevAlc sales data is public information available through the Texas ABC website? Hmm. Nope. By license, by location. So if you wanted to spend time, if you had a high-end Cabernet like The Setting, which Sam's familiar with, and you wanted to target the steakhouse locations in the state of Texas, you can go to the website, you can drill down Cabernets at this price point. Here are the 100 locations that sell the most Cabernet.

Wow, that's great. Right there from the whole podcast that If you're listening to this right now, if you stay the whole time, you're gonna get some incredible information in terms of where you can actually see where to go target and sell your product. It's amazing. Adam, any thoughts? I know you're like searching the setting one.

No, I mean, again, I enjoy the shit out of this one. Uh, I'm really glad he's on the TABC website, dude. Literally, like, I'm, I'm Googling shit feverishly back here. No, I thought it was cool that Chris said somebody that listened to the show reached out. I thought that was fucking awesome. So no, that's that's it for me today.

No, it's good. I I love it. What do you got? About Chris going to Florida with his client and his client identifying the hundred plus tiki places. That for me, like of anything from this whole show is like just have a target. Go work your target. His close rate is three out of five. And he's selling 2 to 3 cases in those locations where he's getting. He was able to tell a very targeted story to be part of a drink menu, and he developed those drink recipes. So I think a proactive operator that can do things like that and listen to someone like Chris, it's going to pay you dividends. But you know, and it's paying him dividends because he's out working a market, quite frankly. Like the best salesperson on the team. No offense, Chris, but as your client, I tell clients that all the time. So that's my resonation.

I'm not a salesperson, right? He is, right? I'm the— I love, you know, if I could only show my face, let's say publicly on this podcast, yeah, I'd be happy. Yeah, I did that for 25 years. I love staying behind the curtain. Right, I want to direct and produce the play. I don't want to be on stage anymore.

That's good. It's good to meet you, Oz. You're behind the— behind the curtain. I'll ask you to just remain on the line because we have to make sure we do a download, and it's usually probably Adam that causes the issue. And Chris, I know you were on a cruise line a few— a couple weeks ago. You had to dial back in and sit there for a few hours to get it to It took 6 and a half hours, Sam.

Holy shit. Holy shit.

Hopefully, hopefully it won't happen this time, but I wish everybody a great, uh, weekend, and until next week.