Episode Transcript
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Speaker 1 (00:06):
Welcome to the MHW
Mark podcast, where we take deep
dives into various aspects ofthe alcohol industry.
My name is Jimmy Moreland.
Mhw is a US and EU beveragealcohol importer, distributor
and service provider.
Co-hosting with me todaywelcoming back returning
champion MHW's Bridget McCabeHowdy.
Speaker 2 (00:23):
Thanks, jimmy, good
to be here.
Speaker 1 (00:25):
It's great to be here
with you.
We've got a really fun chattoday with our guest.
We get into one of my favoriteareas.
We get down in the weeds withdata.
Speaker 2 (00:35):
Yes.
Speaker 1 (00:35):
Are you a data person
?
Speaker 2 (00:37):
I am a data person,
so I think sometimes the idea is
that marketing people are allrooted in creative and design,
and while I do love thoseaspects, I cannot do my job
properly without data and realstatistics.
So it is something we love hereand specifically the data that
we're digging into today isaround ready-to-serves, or RTDs
(01:00):
ready-to-drinks however you'dlike to refer to them, rtds
ready to drinks, however you'dlike to refer to them and
broadly speaking, rtds havedriven some of the largest
growth in not just MHW as animporter and distributor, but
also distributors around the US.
So we've seen RTDs consistentlygrow in both the off-premise as
well as the on-premise, andthat is actually an interesting
(01:21):
data point that we talk about aswell.
But then also some qualitativeanalysis in terms of our guest,
jessie Ott.
She has a very strong supplychain background.
She's actually a podcaster ofThirsty Thursdays and has had
some members of the MHW team onher podcast and she consults for
a variety of different brands.
(01:42):
So she gets to see on the frontlines of what the retailers are
saying, what consumers arepurchasing, and it gives us a
really good insight into howRTDs can evolve and what's next
in the space.
Speaker 1 (01:55):
Well, this episode
does get a little bit into the
weeds, which is where we like tobe, but if there ever was an
episode, to check the links inthe show notes so that you can
follow along.
We dropped some really goodlinks to where you can follow
along with what our guest isactually talking about, so that
you can see some nice charts andgraphs and all that good stuff.
So check the show notes.
Speaker 2 (02:16):
Absolutely, and I'm a
big fan of doing this speed
setting as well.
I enjoy listening to my podcaston a two speed.
Speaker 1 (02:23):
You're a 2x person.
I can't go more than 1.5.
Really, bridget's busy, she'sgot no time for you.
1x and 1.5x people.
Well, that's you know.
Listeners, beware, listen atwhatever speed you like and if
you're not driving or somethinglike that, by all means hit the
show notes and pull up somedocuments so that you can follow
along.
But let's get into our lovelydiscussion.
(02:44):
Our guest today is the founderand CEO of Crossroads Solutions.
Welcome to the show, jessie Ott.
Speaker 3 (02:52):
Yeah, thank you.
Thank you for having me.
I'm super excited, by the way,you all are my first podcast to
be on the other side of the mic,so I'm so excited.
Speaker 1 (03:01):
That's right.
We've got a true podcastprofessional here.
Jessie runs the ThirstyThursdays podcast.
Why don't you start?
Just tell us a little bit wecan cross promote.
Tell us a little bit about that.
Speaker 3 (03:12):
Yeah, sure.
So I was in a tech company andI was in charge of marketing and
sales and it was a startup andI was thinking of ways to not
have to do all this direct salesall the time.
And so I was thinking of waysto not have to do all this
direct sales all the time.
And so I was thinking, oh, Icould do a podcast and I can run
commercials on it and that wayI can get people to learn about
this company indirectly.
And it's something that I'vekind of always had a knack for
(03:35):
or wanted to do, and it was alittle bit before podcasts were
cool Like this is.
I'm in my third year and I knowpeople have been doing it for 10
or 15, but really the last fewyears it's gotten really, really
popular and I called one of mymentors and said would you be my
first guest?
And it just went from there andI got amazing guests that first
year.
It took over, it had a life ofits own and here we are.
(03:58):
It's just.
It's been one of the greatestexperiences that I've ever had
and I hope I, you know, make animpact and a contribution to the
industry through these storiesof these journeys, of these
careers, of these people,because everybody has their own
story, everybody has their ownjourney.
Everybody gets to where theyare from a different place and a
different reason and it's justso fun to learn what those are.
(04:19):
You know, and we get to tasteon the podcast from time to time
and I'm just meet suchincredible people doing amazing
things.
Speaker 1 (04:27):
Well, let's learn a
little bit more about you.
Can you tell us a little bitabout your personal background
and then go into a little bitabout Crossroads Solutions and
what y'all do and everything?
Speaker 3 (04:36):
Yeah, so my
background is in the beverage
space.
I crossed over a little bit infood but people, I do a
quarterly review for beveragenow and I tried to do the same
thing for food and they were.
They were just like kind oftiptoeing around it and I'm like
I don't think I have the rootsto actually do a full on like
food podcast, on just trends andwhatever, and so I'm kind of
(04:57):
just back in just focusing on,you know, the beverage trend,
which is what I've beenentrenched with for over 20
years.
I worked at Remy back in theday.
I was a field marketer so Imanaged 18 markets for them in
the South and Southeast, livedin Miami area.
Then I moved to St MichelleWine Estates where I built sales
territories.
(05:18):
So that's where a lot of theanalytics came into play, which
is really cool because we wouldbuild sales territories based on
the different types of volumeand prestige accounts but also
based on drive times, becauseyou can't be everywhere and it
was the 80-20 rule and whatnot.
And that was really fun andinteresting.
And then I switched over intothe brokerage side of the
(05:39):
business, working in themilitary side, which I called on
the four exchanges the Army,air Force, marines, navy and
Coast Guard, and so I just lovethose relationships.
And when that I worked there atthat brokerage for I think,
around almost 10 years and weparted ways and then that's when
I kind of got into the techside of things and that's when I
(06:02):
created Crossroads Solutionsthe tech side of things.
And that's when I createdCrossroads Solutions because I
saw what it was like to managebusiness, multiple businesses,
as a broker and it's all thesame effort.
It doesn't matter the size ofthe company, it's still the same
emails, it's still the samepaperwork, it's still all the
same things.
And so I was like, wow, I'mgoing to build this system to
help people manage multiplebusinesses.
(06:22):
And once I started showing myplatform and this kind of
crosses over into crossroads,once I started showing people
the platform, they're like, ohmy gosh, any CPG company could
use this out here in this world.
Cause I've been kind of in themilitary, you know, not really
sucked in and and and but, butat the same time very busy
within that segment and so Ididn't know all the things that
(06:45):
were happening out and we callit outside the gate, by the way,
one of the terms and so, yeah,so that's when I was like, well,
why would I stop there and notjust offer it to CPG in general?
Because the platform isbasically built to support sales
, basically built to supportsales.
(07:07):
So, whether you're VIP orwhether you're in 20 states and
you're going and grabbing allthat data and you're looking at
them one by one, we will do thatfor you and then we will add
all your promotions within eachof those states or each of those
markets and we track yourinventory, make sure if it's
getting low at certainthresholds or KPIs that we want
to manage.
We can do all that within thesystem, and so we just go out
(07:27):
and we take all the differentsources.
Whether you want financeoperations within your company,
we put all of that into what Icall is our CRS data hub, and
then, within our data hub, wecreate custom dashboards so each
customer can review thebusiness the way they need to,
and we can also separate it bylevel.
So if you just have an investordashboard, you want, for you
(07:49):
know, just a basic overview.
You want a sales, you knowfinance, we can build all that
out.
It's really fun, and I'm such anerd for saying that.
No, I love that.
It's really fun.
I love that.
Speaker 1 (08:01):
I have to take the
opportunity to really quick jump
into a little bit of an A-feesrabbit hole.
Okay, I'm a veteran and so Ihave done many a shopping trip
to my local PX or BX, dependingon where I was stationed.
Okay, I actually I grew up inNorth Dallas, texas, where
A-fees is headquartered, and Iactually went to high school
(08:24):
where AFES is headquartered, andI actually went to high school.
One of my good friends in highschool, his dad was the
three-star lieutenant general incommand of AFES.
Speaker 3 (08:31):
Really, that is
awesome, that's really cool.
Speaker 1 (08:34):
So I don't know how
long ago this stuff was for you,
but at some point GeneralThurgood was a neighbor of mine
and it was strange to join themilitary and go like, oh, that's
what he does for a living,Because his portrait was on the
wall of my local base exchangein Misawa, Japan.
It was a trip, to say the least.
Speaker 3 (08:53):
That is so cool,
that's really cool.
Yeah, so I'm in North Dallasright now, whereabouts.
Speaker 1 (08:59):
So I went to Plano
Senior High School and I moved
around all over North Dallas.
So I've been to Rowlett schools, garland, richardson, allen,
just you name it.
I've probably caused troublethere.
That's funny.
We'll do some North Texas chatoff air, but suffice to say that
(09:20):
there's a fun and interestingconnection there, but let's get
back to work, shall we?
Okay, bridget, can you bring usback to earth?
Speaker 2 (09:28):
No, no, I love it, I
love being a part of this and
have a lot of support for themilitary.
So thank you both.
So today what we're doing iswe're kicking off some trend
discussion aroundready-to-drinks sometimes called
ready-to-serve it really justvaries.
Sometimes called ready to servereally just varies.
And RTDs can really utilize anybase, whether that's spirit,
(09:49):
malt, beer, wine, wine product.
I mean, we've really seen itall.
And so the reason that wethought Jessie would be such a
great fit to speak to some ofthe trends is because she has a
variety of guests on her show,she's working with a variety of
RTD brands as well as has greatrelationships with the retailers
.
So she kind of sees each tierof the three-tier system and how
(10:13):
it's responding to RTDs all theway to the consumer.
So really pleased to have youon today, jessie.
And, if it's okay, I'm justgoing to jump in with our first
question here, which is to kindof pick your brain on what are
the current trends in RTDs rightnow and sort of, where do you
see it going in the future?
Speaker 3 (10:31):
Yeah, and you know I
failed to mention another
business that I'm building rightnow.
It's called SpecialtyBrandsnetand we're export.
So I also have some insightinto kind of what different
parts of the world areinterested in RTDs as well.
So it's interesting to see thecurrent.
I have a couple of slides thatbasically will tell you the
(10:52):
exact story of what's happening,because the data is there right
to really tell that story.
But you're looking atpremiumization in the sense that
consumers are trading up forbetter ingredients.
They want lower sugar.
You know the spirit-basedversus the malt-based.
You know the spirit-based theyjust taste better.
It's kind of like a no-brainer,right.
I mean, we've all tasted them.
(11:12):
There's some that are betterthan others, but I personally I
think the spirit-based ones theyjust taste better and they
don't have like that aftertasteto them.
You know we're seeing morehealth conscious choices low ABV
, the functional, the adaptogens, nootropics, non-alcoholics
those are all helping drive thisconsumer.
I wouldn't call it a change,I'd call it adaptability.
(11:34):
You know, and I think really wegive credit to Athletic Brewing
that really put that wholenon-alcoholic trend on a grand
scale, not a large scale, agrand scale.
They're over in the UK killingit over there.
So you know, they, I think,gave a lot of the, even the beer
guys, you know, the opportunityto go hey, I can go and I can
(11:57):
make non-alcoholic beer andthey've done it and it's good
and, and so I think that camealong with different events, and
I know that there is a questionabout post-COVID, about how
that all of that has really beenimportant and how it evolved.
It has evolved.
The category flavors I think youmentioned something about the
base doesn't really matter andone of our quarterly reviews,
(12:20):
erica Ducey, has some researchon how the.
You know Gen Zers and Wise,they don't care so much about
whether it's a vodka or winebase or what it might be.
You know, and that's beenevidenced in some of these other
brands that are growing, likeBeatbox and Buzzballs, and you
know these orange wine flavored,deliciously flavored cocktails
(12:41):
that are, you know, single serve.
Single serve is also reallyimportant.
The cans have surged.
You know single serve, singleserve is also really important.
The cans have surged, you know,in the last five years the 355
milliliter cans, I think a lotof it is.
It's on premise to some degree,but it's also these sports
venues and these concerts,beaches, this grab and go sense
of in a hurry or you can get itat even at convenience stores
(13:01):
have helped us because it'sexpanded so much you can get it
even at convenience stores.
Have helped this because it'sexpanded so much they can be in
wine and beer stores a lot oftimes, depending upon the
alcohol percentage.
So I think there's just a lotof laws and a lot of momentum
behind why these are working sowell.
Speaker 2 (13:19):
That's such a great
point that you bring up about
the legislative shift that'shappening and obviously, mhw
being a distributor andcompliance provider, that's
something that, state to state,we have to follow very closely.
So, you know, post COVID we sawsuch a huge shift in the
convenience stores being able tocarry, like, different bases,
(13:40):
depending on the ABV or what thespirit was, depending on the
ABV or what the spirit was, youknow, to go cocktails, being
really strong for RTDs and noteven shifting, like on premise,
starting to carry them, whichwas a little bit interesting,
where we never thought we'd seea bartender sort of, and so it
was a little bit of a shift inthe model.
What are some other things thatyou've noticed within the RTD
(14:03):
landscape changing since thepandemic?
And I'll keep it pretty broadbecause I know that there's been
a lot, so feel free to commenton anything.
Speaker 3 (14:11):
Well, can I finish up
just a couple of more trends
that I'm seeing that I think arereally important and kind of
big to the bigger picture.
Absolutely, what I found veryinteresting is that these big
CPG conglomerates are nowreleasing some kind of a
cocktail.
So you've got Sunny D with avodka based, you've got Ocean
(14:33):
Spray, who just did somethingwith Absolute, You've got Vita
Coco doing Captain Morgan.
Even Welch's Juice is doing avodka based a, a grape-based
vodka transfusion thing.
Minute Maid, wine-basedcocktails, Kraft Heinz with
Crystal Light cocktails A lot ofthese brands that we knew as
kids are now making cocktails.
I saw it in Total Wine over herein Dallas not too long ago and
(14:56):
you know they've got theirsection, their RTD section.
It says Minute Maid right thereand it's just so wild and so
bizarre.
But I think that's going tohave a huge impact and I think
it's also going to beinteresting to see how
successful they are, becausewhat kind of distribution do
they have?
It's different right on thespirit side than it is in
(15:17):
grocery and whatnot, and so I'mjust very fascinated with what's
going to happen with theseversus like a carbless who's
just an independent family goingafter it and killing it.
And I've got some data to shareif you're interested on that.
And then you've got Beatbox,who now has Shaq, as he's an
investor now and he's aspokesman.
So I think that's a hugetransformation for them and they
(15:39):
are killing it as well.
They're in a great spot.
So I think these are reallyimportant things that we need to
be watching.
Speaker 2 (15:45):
That's such a great
point, the CPG involvement and
obviously your strength andbackground in that space.
Have you seen and I think therewas obviously a lot of buzz
around Tito's going to Reyes inCalifornia and the beer
distributor?
I mean the same thought kind ofapplies here for CPG.
Like they just know how tomerchandise and do it right on a
(16:06):
national scale.
Their logistics, likeeverything is just going to be
top par because they've beendoing it for so long.
How do you think that sets themapart to do these cross
collaborations, maybe even moreso than just like the marketing
side of it?
You know you're so strong inthe supply chain side.
I'm curious to see, like, doesit give them a leg up a little
(16:26):
bit from the other independents?
Speaker 3 (16:29):
I think it's
different.
I think they are motivated andthey have a giant sales team to
support it, right, because theyhave a very small territory
versus a liquor or spirits, youknow, supplier or even rep in
the streets, and I mean that'sjust my assumption, because I
(16:50):
feel like they have, you know,all the convenience that they
have to get to, and that's whycompanies like Carbless are
going to these distributors andthey're going to them by
neighborhood at a time andconquering that neighborhood,
and then they're going to thenext neighborhood and then
they're getting on-premise,which Carbless is, 50%
on-premise, which just blows mymind.
That blows my mind too With thespirits, though it's a
(17:14):
different sales approach andit's a different.
It's a hand sell, right.
It's not so much a transactionlike beer, and so I'm curious I
mean, we're all curious, rightand we talked about this on our
Q1 quarterly review about whatwere those meetings like and
what.
What were the points that Reyesmade to move the needle, to make
that happen?
Because clearly it's happeningand it's not just one company,
(17:37):
right, and so I think that thatis certainly a trend that is
going to be continuing.
For, you know, I thinkeverybody's watching, right,
everybody's watching, and youknow to your point,
merchandising it also came up onour podcast.
The beer companies just do itright.
They know how to do it, youknow, and it's a strong point
for them.
Speaker 1 (17:56):
I'm curious about how
the Bev alcohol brands might
approach collaborating with CPGsto take advantage of some of
these benefits that you talkabout.
Obviously, direct collaborationvia, you know, working together
to do an RTD that sounds like alot of investment and sort of a
long time horizon to makesomething like that work.
But even just likeco-merchandising, like you say,
(18:18):
you know, if I've got a vodkabrand I might reach out to like
the local juice producer orwhatever, and say, hey, can we
find some way to get on some,you know, shared shelf space or
something like that.
Is that a thing that brands aredoing or what would you
recommend like a way to sort ofdevelop some of these strategies
?
Speaker 3 (18:34):
Yeah, I think you are
amend like a way to sort of
develop some of these strategies.
Yeah, I think you are.
You've got the Jack and Cokeand the Beam and Coke
collaborations that I thinkprobably are doing very, very
well.
They're both really big names.
You know, like I mentioned,vita, coco and Absolute.
I don't know, I don't have theinside gut feeling that this is
going to be a bigger trend thanwhat it is, just because there's
so many other things fillingthat space so fast.
(18:56):
Because I think, once we seehow some of the ones that are
already in the market are doingand how it works, like I just
Crystal Light and drinkingalcohol is a really hard one for
me, minute Maid and drinkingalcohol is just really hard.
So I think it really depends onwhat the brands are, how they
resonate to consumer and whattheir brand stories are.
(19:19):
And I hate to keep coming backto carbless, but, like the name,
carbless is not something youhave to explain what it is Right
, you know what it is.
It's.
It's low carb beverage in a can.
It just makes it obvious, and soI think that there's no real
training or education that hasto come with that, whereas some
(19:40):
of these other ones, likeWelch's grape juice.
I'm not sure that.
I'm not sure that that's goingto go well for me.
You know what I mean.
That's a lot harder to explain,and so I think even these big
CPG companies have a lot ofmoney and they have a lot of
power, but what do they have?
How are they going to get froma kid's drink to an adult
(20:03):
beverage and drill thateducation in between there?
I think that's going to be areally difficult road for them,
right.
Speaker 2 (20:11):
And like, how far
does the nostalgia play go?
Right, like seeing the Sunny D.
I think that's a novel thing atfirst, a Sunny D cocktail in
store, but are you reallygetting the pull through?
Are you really getting thoserepeat purchases, or is it just
someone that's like, oh, this isfun to have?
Speaker 3 (20:28):
Yeah, I drank this in
the 80s.
Speaker 2 (20:31):
And it's also like, I
think, in terms of the
collaborations between, like,for example, I think Beam and
Coke is such a great example,like that collaboration happened
so long ago.
I kind of feel like we'reprobably at the end of the
timeline for external partnerscross collaborating like that.
I think if a brand who is asoda, like a major soda or juice
(20:52):
purveyor, they're probablygoing to take that R&D in-house
and create their own Likethey're going to want all equity
of that, so they're going tojust make it like their mixer
plus a spirit that you'reco-packing with or something.
I doubt they unless there'sreally like a top name out there
that you know is going tocollab with them.
Speaker 3 (21:09):
So I could be wrong,
or they need to put protein in
it.
Yeah, just put protein in itand make it keto.
Speaker 2 (21:15):
They need to put
protein in it, just put protein
in it and make it keto, have alittle alcohol and you're all
set.
Yeah, that's actually a greatpoint.
I will say and this is very offtopic but if they created a
Jones blue soda RTD, I might buyone if it was like a simple
herb just for old time sakes.
Speaker 3 (21:32):
Yeah, that's awesome,
that's great.
Yeah, I just it's hard to say,I just think there's, you know,
the kid factor.
I know there's parents that arenot very comfortable with it,
right.
And where are they going tomerchandise it?
They're not going to be ingrocery, at least in most States
, I think, because they're goingto have to be in a liquor store
, right?
Although some of them are winebased.
(21:53):
So it'll, it'll just beinteresting.
I'm just fascinated with that.
I don't know if you've seen thebeatbox.
Beatbox posted a the Schenkennewsletter, the impact
newsletter, and it's just forRTDs.
And you've got high noon,beatbox, surfside, all the the
ones you expect, right?
So when you take that and youlook at the circercana data and
(22:14):
you look at it this year, last52 weeks, the only thing that's
different in terms of growththere's, out of the top 35
brands, only two of them arespirits, the rest of them are
RTDs.
Nine of them are RTDs.
So it's almost the identicalpicture that you're looking at.
You've got Crown and you've gotDon Julio, and then you know,
(22:38):
when you look at it this year, Iwas really shocked.
So, year to date, high Noonjumps down to number six and
Buzzballs jumps up and they'reup 14, over 14 million, almost
three times the second highestgrowth company, don Julio.
And what you can't see herefrom the chart that I created is
(22:59):
that the distribution, the maxthat you can get most of these
brands that are growing likethey are, are 20%.
A couple of them are, you know,the Don Julio buzz balls
they're 70%.
Julio Buzzballs they're 70%.
(23:20):
So you look at Surfside they'reat 28%.
High Noon's at 92%.
They're there.
They're going to have to justbe creative with flavors at this
point right, and keep thatvelocity up.
But there is so much room forgrowth for these companies that
are just knocking it out of thepark right now.
I don't see it stopping anytimesoon.
Speaker 2 (23:34):
Right, and we're
definitely seeing the same on
MHW's end as well.
Some of our highest growthclients in terms of volume and
sales have definitely been theRTD category, and so that's
exciting from not only aconsumer perspective but a
distributional perspective, anaccess perspective.
I think and I just want to makea note we're going to have this
(23:56):
data in the show notes for youso that you can access any of
these data points that Jesse isrecalling right now after the
podcast.
So, just moving into, we talkeda little bit about the brands
that have high growth and thatare winning right now.
Not that I'm going to make youpick a favorite, because it's
like picking a favorite child,but which is the brand that you
(24:18):
think is one to watch for thefuture?
Speaker 3 (24:21):
I am completely
obsessed with Carbless because
they're doing it for beingoutsiders, are doing it so right
.
You know they're building itone, one beer house at a time
and they're creating, they'redemoing liquid to lips, liquid
to lips, liquid to lips.
They're not doing any, they'renot trying to be everywhere all
at once.
They're focused and it'sshowing and you know you can
(24:43):
only get them in a couple ofmarkets, but they're they're
exploding and their velocity isis unbelievable in the stores
that they're actually selling in, you know they.
They also have a lot of flavors, so they do have a lot of
offerings there.
It's vodka based and I thinkthey has a couple of tequila
based ones.
And you know the the name Ithink is is so important to the
(25:04):
times that we're living in,because keto is a big deal.
People don't want carbs, peopleare trying to be healthy.
You know that's the whole thing, where you kind of have this
perfect storm of greatness andthey know they just seem to pick
it up really fast and get itdone.
Speaker 2 (25:20):
What are some
interesting data points that
you've seen around RTDs.
You shared a lot, but is thereone in particular that you were
like, wow, I really did notexpect that.
Speaker 3 (25:30):
Yeah, I will.
I will say that I there's somuch growth for on-premise on
this, and I don't know the exactnumbers, but it seems like it's
less than 10% when you thinkabout it.
It's mostly driven byoff-premise, but on-premise,
obviously, is where they'regoing to be tasting it for the
most part, unless they happen towalk into a demo, and so I feel
(25:53):
like I feel like there's justso much more growth in that area
.
And, to your point, bridget,like it's cans aren't going to
be in your cocktail bars,they're going to be in your bars
and restaurants and maybe a fewofferings and some, you know,
your local restaurants and stufflike that.
But these cocktail forward andthese cocktail driven
restaurants and concepts, that Idon't see it happening Right.
Speaker 2 (26:16):
And it's interesting
because we're almost seeing like
the reverse happen, where nowsome of the top mixologists are
creating RTDs Like let me bringa lot of them to you.
And it's like it's kind of likea uno reversal there, which is
fun because they're bringingwhat a lot of consumers like
maybe they don't get a chance togo to Manhattan or Sweden or
wherever they're based they cantaste the magic at home in a
(26:39):
canned format.
So I think that's reallyexciting.
When I went to a bar conventBerlin last, there was quite a
few of those that were presentand I was eager to get them over
to the US.
Speaker 3 (26:50):
Yeah, you know one
thing and I don't mean to
sidebar here, but I think onesome data that is really
important for us to keep in mind, because we're not an industry
that is a have to have.
It's just you want to have theexperience.
So when you look at consumerdebt and where it's at right now
it's at an all time high.
It's not, it's not good.
(27:11):
We're borderline recession.
You know, you've got the tariffback in.
You know whiplash and manythere are quite a few, you know
investment companies that arelike, yeah, this whiplash is
could easily put us intorecession because people don't
know what to do.
They don't know if we shouldwhat to buy.
(27:31):
I mean, for me as an exportcompany, we're getting worldwide
brands.
We're getting worldwide brands.
We're getting the pricing intheir own countries, so we can
just avoid the mess.
Then the headaches and the mathof it all.
But when you think about thatin terms of RTDs and how, you
know, inflation is high andconsumer debt is over $10,000
per home.
More people are getting homeequity loans on their homes more
(27:55):
than 17 years.
So these are trends that aren'tgreat for any economy, you know
.
But then where do we fit in allthat?
And I think you know thatsingle serve with RTDs helps
ease that squeeze.
You know they're affordable,they're a little bit healthier.
You know they can't afford tobuy maybe a 40 or $50 bottle of
(28:18):
bourbon or tequila.
So okay, well, I'll just.
I'll just get some cocktails ina can for five or, you know, 10
, 12 bucks and it'll get methrough whatever Like.
So I think I think all thosepieces kind of come into play on
that too.
Speaker 2 (28:33):
Yeah, that's such a
great point.
The macroeconomic alwaysaffects RTDs and, you know, even
during the pandemic, people hada lot of disposable income
because they weren't going outor couldn't go out and socialize
anymore, so that they werespending in terms of like
off-premise right and we wereseeing that actual happy uptick
(28:53):
in e-commerce and things likethat.
And so now we're seeing almosta little bit of a trend reversal
there, where the consumer, eventhough they're still trending
towards premiumization, theirshopping occasions or cart
occasions are less we're seeing,you know, less than that, and I
agree that that's a.
It's really important to havethe single serve as a part of
your strategy if you're an RTD,because providing that
(29:16):
experience or that sort of likegrab and go is how you're going
to build your consumer basereally at the end of the day,
during what can be a tougheconomic time right now.
So you really covered on allpoints of it in terms of
creativity, merchandising,consumer experience and macro
economics.
So I'm so happy to have you on,jessie.
Speaker 3 (29:36):
Oh, I'm so happy to
be here.
This is so fun.
Speaker 2 (29:38):
Yeah, absolutely, and
so I think you know if we can
round it out.
I would love to get your ideaaround what is the future of
RTDs?
And then, knowing that so manyMHW listeners are brands
themselves and they might be newearly in their journey, yeah,
from your perspective, whatwould be some advice for them
and how could they move forwardin this environment?
Speaker 3 (30:00):
Yeah, I think, as I
learn more also, and you see
different laws come through andit's, it's.
It is kind of confusing,especially when you you know we
didn't talk too much about THCand CBD, but that is certainly a
huge trend that's happening andsome people are getting out
because it gets really confusing.
And then there's certainingredients you can and can't
use for sprouts and whateverretailers, and so I think if you
(30:23):
are a new brand, I think thereare certain things that you
really need to focus on, and oneof the first things I'd
probably do is get anappointment with a lawyer that
actually knows what's going on,because if you're going to do
CBD or THC, you got tounderstand the laws and the
headaches that come along withthat.
And I think if also, like,contracts are really important.
(30:44):
I know, you know, I was justlistening to the to Adam with
Carbless and he doesn't docontracts and, to his point, it
probably was to his benefit.
But just be very careful aboutthose contracts because you can
get really hurt if you don'tknow them.
You don't know what you'redoing and then locking your
ingredients with this globalturmoil.
If you can get long-termcontracts and get a fixed price,
(31:06):
that can help ease the cost andthe volatility of your fixed
costs, of your fixed costs andwhat we've seen, obviously, with
Carbolis and others.
There is this trend to going tothose Midwest markets, those C&D
even markets that have growth,where people are leaving the
cities, coming to these citiesand raising their families and
(31:28):
building it one market at a time.
And you have to be different,you have to be good and you have
to have a story.
Everything is about a story andso if you can nail all those
things, I think, if you candifferentiate yourself, then I
think you've got a brand thatcan stand out.
It's just there's so much noiseright now it's going to be hard
(31:50):
For the more established brands.
I think there is going to be alot more focus on the functional
.
We talked about cross-categorycollaborations, maybe even some
seasonal flavors.
There's some really fun yuzuflavors that are really popular
lychee flavors.
(32:11):
I think if they can get alittle bit, you know, creative
with what their offerings areand stick with the vodka based,
if you can, I mean, or like whatbuzz balls, what they do is
really smart because they havethe wine based flavored and they
have the spirit based flavored.
That way you can be everywhereand it's working for them, which
was which is huge, you know,and I think the other thing is
(32:35):
that even distributors.
One of the takeaways from WSWAthat I heard from Sam Anderson
was we're focused on velocity.
It's not that we don't want totake on new brands.
We need brands that are goingto focus on velocity.
We need tastings, you know.
Focus on that one market at atime.
Build it out a little at a time.
That way you're gainingmomentum.
(32:55):
Build it out a little at a time.
That way you're gainingmomentum, you're gaining a
little cash.
You can get more production andjust kind of, instead of just,
you know, widespread everywhere.
You know it's not somethingthat works.
Or, you know, especially withthe storytelling and the direct
to consumer relationship thatbrands have to have with these
days, you got to be reallystrategic about how you go about
(33:18):
that and know who your consumeris.
And then I think to what wetalked about earlier is these
strategic partnerships.
You know, maybe you know I'lltell you what if Jim Beam had
protein in it, I'd be winning,you know.
I mean, for a woman of you know, almost 50 years old, we've got
to start paying attention tothe protein and it's a big deal,
(33:40):
right, like protein.
Protein, I mean it's like ugh.
But yeah, you put a littleliquor in there.
Speaker 1 (33:48):
The Jim Beam muscle
milk collaboration we all need.
Speaker 2 (33:51):
Yes, I mean energy
drinks with protein that are
cross-collabing with likeeverything from candy to.
I mean energy drinks withprotein that are cross collabing
with like everything from candyto.
I mean.
You're just seeing it all, soit's, it's interesting.
I wonder what sort ofpreventing that from more of a
I'm wondering if it's compliancerelated reason there's not as
many clubs too is with industry.
Speaker 3 (34:19):
You know they're down
.
There's maybe less cash toinvest in some r&d that could,
you know, be a factor, but Ithink I think it's interesting.
Rtds are not going away ever,right.
I think these spirit-based onesare going to continue to grow.
High news going to continue togrow.
I think you're going to see thethC and CBDs grow as well just
a smaller base.
Obviously.
(34:39):
Non-alcoholics are going togrow.
It's not going away ever either.
It's a smaller base, but Ithink people are trading.
They're drinking one or theother.
They're just not wanting to go.
My example is when I drive thefamily over to my in-laws.
We like to hang out in theirpool.
(35:05):
Well, I'll just drink theathletic brewing, because you
still have that experience ofthis beautiful can.
It tastes like beer, tastesgood, and who cares if there's
alcohol in it, it doesn't matter.
Speaker 2 (35:10):
Right, right.
But then you feel like, oh, youget to relax and, yeah, I
definitely agree with you.
Speaker 1 (35:15):
It's interesting the
different, I guess, cultural
things that can drive thesekinds of shifts to things like
low and no alcohol.
I was stationed in Japan duringa time where Japan had just
dramatically changed theirnational drunk driving laws.
They had changed it from alimit like a blood alcohol
(35:35):
content limit, pretty similar tothe US, to where now the blood
alcohol limit in Japan to bequalified as like serious
trouble DUI is basically onedrink and you're over the limit.
Japan really clamped down, theytook it really seriously and so
, almost overnight, they sort ofscrambled and developed this
huge industry of low and noalcohol options.
(35:58):
And this was in 2009, 2010,thereabouts that I was seeing
this over there, and now,sometime later, we're seeing,
you know, this huge shift forcompletely different reasons,
ones that are more generationaland sort of these other factors
that are informing this shiftthat we're seeing on this side
(36:19):
of the Pacific, and I just Ifind that really interesting how
different exogenic factors cancause these kinds of major,
major market shifts.
Speaker 3 (36:27):
Yeah, major, major, I
mean now in Japan you can get
sake and highballs on thevending machine.
Speaker 1 (36:33):
Oh yeah, that's
always been a thing.
Speaker 3 (36:35):
That's so great.
Speaker 1 (36:40):
Our final fun
question that we like to ask
everybody, Jessie, is what isyour favorite adult beverage?
Speaker 3 (36:47):
Old-fashioned.
Speaker 1 (36:48):
How do you take your
old-fashioned Cherry?
Speaker 3 (36:51):
Oh yeah, the good
cherries Okay.
Speaker 1 (36:53):
Yeah, you like the
expensive.
Speaker 3 (36:54):
Yeah, yeah, yeah.
Speaker 1 (36:55):
I don't know if we'll
say the brand, the expensive
cherry, yeah, the $24 for a jar,like, yeah, they're worth it,
they're so good.
And you like orange zest, or doyou go a little fancy for the
lemon?
Some people go for the lemon, Ilike the orange.
Speaker 3 (37:11):
I love the orange
with the bourbon.
Okay, I just do I really.
I love it, and when I make themat home, I'll use I'll even use
a little orange bitters, andthen I'll usually muddle a
little bit of orange with it.
Speaker 1 (37:22):
Nice.
Speaker 3 (37:24):
Makes me feel a
little healthy.
Speaker 1 (37:25):
How heavy on the
bitters do you go I?
Like heavy, heavy bitters.
Yeah, and I like rye instead ofbourbon.
Speaker 3 (37:30):
I get that.
Yeah, I like Rye too, but I amsuch a stickler for my go-to is
Jim Beam.
They call it seven-year now, itused to be Jim Beam Black, but
I just love that flavor.
I love it with the orangebitters.
Yeah, I'm heavy on the bitters.
I probably use four or fivedrops when I make mine, and then
(37:53):
sometimes I'll just add just alittle bit of the cherry juice
in there too, just to sweeten itup, just a little bit soften it
up and just kind of thoseflavors meld really well.
People say that only old peopledrink those, but I don't think
so.
Oh, no.
I think they've got arenaissance.
You know, you can make themwith tequila now and rum, and
(38:16):
you know people are doing thesilly little smoke globe over it
.
Speaker 1 (38:20):
The whole thing yeah.
Speaker 3 (38:21):
Yes.
Speaker 1 (38:23):
Well, all right, so a
an old fashioned, a very dark
colored old fashioned for Jesseis the answer there, which is a
good answer.
Jesse Ott, we want to thank youso much.
The company and the websiteCrossroads Solutions is the
company.
Jesse Ott, we want to thank youso much.
The company and the websiteCrossroads Solutions is the
company.
We will have the website andother links in our show notes so
that you can follow up, findout more.
(38:44):
Check all that out, jesse.
Thanks so much for stopping by.
Speaker 3 (38:47):
Oh, thank you for
having me.
I'm so stoked to be here.
You guys have been wonderful.
This has been so fun.
Speaker 1 (38:52):
It's been a great
time.
You can also check out.
If you want to hear more fromJesse, you can check out the
Thirsty Thursdays podcast.
Speaker 3 (39:05):
Did I see?
It's every Thursday at 3 pmEastern.
I premiere every Thursday, butI have shorts that for that
particular episode run fromMonday to Sunday, sometimes
beyond, and I'm on all thesocial channels.
I post them everywhere, but,yeah, youtube is my primary
place where I post things.
Now I've got 125,000 views,almost 2000 subscribers, so
we're growing right now and it'sreally fun.
Speaker 1 (39:24):
A real pro.
Well, we here at the MHW Markpodcast are just hoping to ride
your coattails.
Speaker 3 (39:29):
Let's go.
Speaker 1 (39:32):
Well, this has been
great fun.
Thanks so much for swinging byand thank you listeners for
joining us on the MHW Markpodcast, and thanks again to
Bridget McCabe for joining me inhosting.
Speaker 2 (39:42):
Thank you so much for
having me again.
Speaker 1 (39:43):
This podcast is
produced by me, Jimmy Moreland,
with booking and planningsupport by Cassidy Poe and
Bridget McCabe.
It's presented by MHW.
Find out more at mhwltdcom orconnect with MHW on LinkedIn.
Lend us a hand by subscribing,rating and reviewing this
podcast wherever you listen.
We'll be back in your feed intwo weeks.
We'll see you then, Cheers.