Dry January Beverages, Food Waste Awareness

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Alcohol products like beer and wine should carry warnings of their links to cancer, the US Surgeon General said, citing an increased risk of developing tumors in the breast and other parts of the body. Kind of the perfect day for us to talk and drink non alcoholic wines. It's not just dry January, but this new show via McMurphy coming out earlier today, exactly.

We've slowly been kind of reaching into this space more and more aggressively. It is a perfect day to do it. Tim have a perfect guest to do it.

Grehn Hemingway's co founder and CEO of Libby Wines. It makes non alcoholic sparkling rose and sparkling white. Grant joins us here in the Bloomberg Interactive Brokers studio. Welcome Grant, How are you?

Thank you guys?

Happy New Year, Happy new year.

Really cool origin story here because you founded this, you have a history in the wine industry. You founded this with the former executive chair founder's brewing company back when I did drink. I did love All Day Ipa because it had a small amount of alcohol in it. Very famous All Day Ipa. How did the be wines come together?

Well, John, my now co founder, and I actually were connected through some mutual friends, and yes, a beer guy and a winemaker getting together. John did cut his teeth in that sessionable category, but I think it was one of those early indicators for him and for me watching from Afar, that this moderation wave was was forthcoming, and uh, we really wanted to lean into my way.

Did you really see this moderation wave coming on? What were you seeing specific?

I mean, the crystal ball that we saw was which we couldn't have predicted was going to be this self regulating meaning there are a lot of people out there and there's these buzzword terms zebra striping or bookending.

Which is what that means.

So a session, it's like a drinking session or a socializing session in which you have a full fledged cocktail or a glass of wine and then can you mix over to a non alcoholic Okay. So it seems to me that this is the consumption pattern happening for those that still are consuming, not the abstainers which seemed to be growing also by the day.

What can I ask you while you I know you have talked about it because you used to drink some alcohol.

Yeah, and even you know, to be fair, I did have a sip of like a really nice stout that my wife opened the other night. I get really bad headaches when I drank. And when I what I found was that the less I drank when I did drink, the worse the headaches got. With less alcohol. Yeah, and I thought to myself, you know, it's not worth after drinking one beer to wake up and have my my day the next day completely ruined. So I don't know

And that's our exact experience to my wife and I we have two kids back in California, and really started to almost like this self awareness or observation that we were just not drinking wine as much, and it was a lifestyle thing. We had young kids and we were managing careers and alcohol was kind of getting in the way of that. And so it was kind of that moment that light bulb were kind of set out and surveyed the competitive set and nothing was really enticing from

Well, what are your friends in the wine industry say, Because they're getting hit hard right now.

You're getting hammered. It's concerning, I mean the downward and you just reported on the Surgeon General like there's an anti alcohol movement, which I don't know that I'm all for in our business. I would say I'm four, But generally speaking, this moderation is a cultural movement, and I think the wine is she's really waking up to it. And look no further than the results at the register.

Yeah, and you know it's funny to watch, you know, kind of old television where people are constantly smoking and had a cocktail. I even think of like my dad coming up from work and had kind of a serious you know, spirits and cocktail, you know, fairly regularly when we were younger, and then eventually all of that stuff started to go a way, even with his generation and easing of it.

Have you heard of California sober?

What is it now?

What is it? California so Yesforna apparently California sober as you abstained from alcohol, but you partake in.

TC or everything else.

Every is he flushing? No?

Well no, this is just the bronzing that I get from being a California.

All right, So Grant, let's let's talk about because you brought us a couple of sparkling.

You brought us a.

Sparkling white and a sparkling and I'm curious about I'm going to pour some and you can kind of walk us through it. But like, tell us, because Tim and I have actually tried some non alcoholic beverages.

And some better than others, we can say, so tell us.

About how what went into making this.

I think that was shared around. Yeah, The biggest white space for me was was trying to take a wine maker's perspective with the wine drinking expectation. Please, it's our expert, and so I really tried to deconstruct the whole wine making process. So where the grapes growing, when are we picking them, how are we fermenting them? Making sure that the non alcoholic was the end result. And so the whole process I have.

Oh do you have a glass? Do you already have or did you ready pastic glass? The sausage the sausage, and non alcoholic wine is being made, so go ahead, please.

So the whole process for me was trying to appeal to a wine drinker's expectations. And so the dealkyalization or alcohol removal process is very aggressive. It's not as exact as we'd like, and hopefully technology keeps improving. But you remove a lot of the aromatics, the texture, and certainly the alcohol, which is a massive component to the integration of the overall wine experience. So you're limiting, eliminating fourteen roughly fourteen percent of your product.

That's the thing that really interesting. We spoke to Duncan Fry earlier, not yet of Bloomberg Intelligence. He's a consumer products analyst, and he talked about this at the top of our program today that the technology to remove alcohol has gotten so much better in recent years. He mentioned caliber when he was a kid being a terrible alternative to like it was like the alcohol freak Guinness. He

It's a filter or there are various ways that you're doing alcohol removal, but it basically is a molecular weight.

It's pretty nice.

Thank you, This is good.

I appreciate it.

And we're a tough crat.

The process though. It's very extracted on weight and it's selective, but it's not perfect. And so the the the imperfections are the removal of aromatics and then remove all varietal character. And so that's why some of you know, some of the early entrants you might have seen, are adding a lot back to try and replace, but it's not adequate. And so with this, like it's very bright, it's very refreshing.

I gotta be honest when Grant walked in with it. I saw it and you opened it up. I was thinking to myself, Am I going to be drinking Martin Ellie's right now?

Yeah?

That's what? Right? Yeah?

And I'm not. I mean, this is.

Martin elli is the apple juice right that we get New Year's Eve?

This is not the sparkling apple juice. This is something different. It is closer to wine for sure.

So is it.

Essentially And forgive me because I was kind of running around pouring and stuff, but so is it wine just with the alcohol pulled out one hundred percent?

It's it's fully fermented grapes from California that we reduce or eliminate the alcohol from and then go through the uh you know, flavor composition or formula, and then carbonated up to basically a prosecco level. So it's it's really meant to replace that sparkle for.

A seco level.

Yep.

Yeah.

What does your consumer research told you about when people buy this and they drink it, if they drink more than they drink of the counterpart with alcohol in it.

I mean, my own consumer research is telling me I drink much more of it because there's not the guilt or the shame of knowing like oh, I have to be tempered or tall like temper my consumption on this because of what I have on the horizon. So there's I think what you mentioned athletic at the top of the call. They have done such a phenomenal job on matching quality that people don't have to compromise anymore on

I'm gonna start pouring the rose so you can neither bottoms up there, buddies, and we can try this. So I'm sorry, keep going oh here, okay, yeah, I'm gonna part me. So what's the different same process for.

The same exact process, just different grapes produced in a kind of in a rose style. You hear that clanking, that's the swing top we've got on the bottle so that you can so you.

Can put it, close it, pop it back in the fridge.

Would you like, I'm okay, you're good. Yeah, ok I've got a drive very funny, So.

You close it, pop it back in the fridge and it stays.

Yes. That was one of our learnings from Like I think in terms of trying to be innovative around the wine category is like, you're never going to see a champagne bottle with a swing top on it or a proscco bottle. They're etched intrig this is nice to try this, and so with the addition of the swing top, we wanted to really do preservation.

Can you do can you do softer touch a little bit?

Right?

Yeah?

Nice?

Yeah?

Are you planning to do any non carbonated versions?

Absolutely? Yeah, R and D. I'll admit sparkling was more in my repertoire and our wheelhouse adding easier to do. I would say it's easier to replicate or replace a sparkling. But the still wine category, I think is is very It's a huge opportunity for the category if we're to nail a Chardonnay or a savingon Blanc or a pen and a war a lot of drinkers out there, and you talked about who is this consumer? It is definitely the wine consumer that is self moderating.

What I'm also finding is bars, restaurants, parties, social events, professional events have increasingly non alcoholic options that are not soda.

Huge real estate being being garnered by the mocktails and commanding quite a price. But I think it's about, you know, more options for inclusive occasions, making sure that everyone is able to participate and not feeling sheepish or needing to go with the line in a Seltzer water as the chameleon.

All right, So you introduce this October?

Is that October? All right?

So I know this, but we're bloomberg. So give us any indications of the kind of demand you're anticipating or maybe already seeing.

So in eighteen years in wine and this would be the fifth startup for me, I've never seen something like this. And to your point, October, we didn't have a lot of data behind us. Yeah, but we have gotten so many fortunate retail programs in anticipation of dry January, big moment and timing could not be you know, we're blowing away goals and obviously the proof will be in the pudding with repeat business and velocity. But the early adoption.

Has been through the roof funding, self funded, raised money. Have you done it?

Raised a fair bit of money, went to the outside for the first time, but John and I actually self funded the initial Wine is very capital intensive business. You guys likely know this, but we feel like the category is not a fad. This thing is here to stay. It's going to keep growing. The retailers are now starting to get behind it, which is a massive win.

Well Happy drive January, yes, promised to come back see unless going. Grant Hemingway, co founder and chief executive officer of Libby.

Wines, Carol, we just talked about sparkling wine.

Check.

Let's talk about food because we actually waste a lot of it here in the US. The USDA estimates that between thirty and forty percent of the food supply is actually wasted.

That kills me.

It kills me.

How many times have we talked about there's so many people who are on what do.

They call it, oh, food and secure.

Food and secure So you've got that going on. And then at the same time, we have tremendous waste in this country.

So part of it is us, you know, buying stuff and not using it, but a big part of it also is just poor planning when it comes to grocery companies. When it comes to food spoilage and the supply chain. It's a very complicated thing, right. Yeah, it's not good for our wallets, it's not good for the cost of food, and it's not good for the environment.

Right. Ronnie Neff is Associate Professor in the Department of Environmental Health and Engineering at the Johns Hopkins Bloomberg School of Public Health, focusing on the connection between food waste and climate change. We should note, of course, the Johns Hopkins Bloomberg School of Public Health is supported by Michael R. Bloomber, founder Bloomberg LP and Bloomberg Philanthropies NDY joining us from Baltimore.

Yeah, thank you and thanks for the chance to be on the show. So, yeah, it's a staggering percentage of our food supply, and by one estimate at the national level, we're talking about throwing out the equivalent of four hundred and ninety five billion dollars. And if you put that you were talking about food and security. If you put that in terms of meals, it's one hundred and ninety five one hundred and over one hundred and ninety billion

Yeah, it's incredibly depressing.

Incredibly depressing. It's so much food and so and then if you think within our households, every household on average is throwing out about fifteen hundred dollars. And there's not many people that you could go to and say like, hey, you want to throw out fifteen hundred dollars and they'd be like, sure, no problem. It's a lot of money that that that we didn't need to have been throwing out.

Isn't just wish you could talk to my five year old like you know that when you're making food for kids, it's like you just asked for this, and now you're not going to eat this.

No, but it's like kids, it's you know, it's interesting. I was listening to the surveillance team, and I was thinking about how I grew up and we had two fridge you know, refrigerators, we had a freezer.

Well, how many kids did you have?

There was seven kids, It was a big family. But nonetheless there was always like you know, major shopping, you know, trips and so much food. And I get it. My daughter, who spent some time over in Europe, said, you know, we used to shop every day and we bought a little bit. We had a small fridge.

You know in our part.

It's just a different way if they and is it the way Americans think? Is that the problem? Like what is it? Is it that it's we just are an abundant economy, although not everybody feels that way, certainly in the US economy, but like, what is it?

Yeah, it's so many different things, and that's part of what makes it challenging to address it because there are so many different things going on. But I think that you've hit on a lot of really important points in terms of the cultural factors, and that we have this idea that we need to have abundance and if we're not providing abundance, we're not providing well enough for our family.

I'm wondering about the connection with climate change. I mean, there's a few issues here. One of them obviously has to do with the resources that go into actually bringing food to the table greenhouse gases along the way. Then there's also the element of raising that food, watering, whatever you're doing, whatever you're growing, feeding a cow, all the everything associated with the cow. But then there's also throwing

So the biggest impact starts with the production, as you were saying, in a particular meat production, but then throwing it out in the landfill is also tremendously impactful. And so if you think of climate change, we're putting basically the equivalent of forty two coal fire power plants worth of greenhouse gas emissions into the air every year from

Totally agree run it, you know, and I do wonder you know, sometimes you raise the cost of things and people are much more careful right about waste, And I don't know if ultimately that leads to change that you're less likely to overbuy because you don't want the waste because you can't really afford it because it gets so expensive. If you could change one thing in our system that would get to this thirty to forty percent of the food supply being wasted, what one thing might that be?

Because that's so hard because there's so many different things that we need to do and they all needed to work together. So I guess, gosh, if there was one thing, I think it would be having everybody, whether it's consumers or businesses or any anywhere, tune in to the amount of waste that's happening, because I think one of the biggest challenges is that we're really not aware of it, and we just throw out a little bit here and

Yeah, right, Awareness and having an understanding what's going on that's kind of off in the first step. Hey, Ronnie, thank you so much. An important issue and we're so glad we could spend some time with you on it. Ronnie Neff is Associate Professor in the Department of Environmental Health and Engineering at the Johns Hopkins Bloomberg School of Public Health.

I'm looking forward to explaining that to my five year olds. It's hard with to stop asking for another chicken nugget if you're not going to eat it.

It's tougher with kids. It is tougher with kids. But I think I don't know.

I don't know.

I'm guessing that we alwayte a lot of food. Yeah, we're trying. We're really interested it. It sounds like a dad, right, all right, guys, don't go anywhere. Getting ready to wrap up here on the Friday edition of Business Week, and this is Bloomberg