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You're listening to Bloomberg Business Week with Carol Masser and Tim Stenovek on Bloomberg Radio. I promise some alcohol, Carol, So some good news in the world of spirits today for those investors who are at least long Davide Campari Milano.
It's been a week.
It's been a week. Yeah, this is the barent company of Campari Apparol Grandmagnier. While Turkey and More reported better than expected profit and revenue for the first half of the year, shares rose eight percent. Not out of the woods yet though, and it's because of tariffs. The EU indicated that wine and spirits will face a fifteen percent US tariff starting August seventh. That's on an interim basis. We'll talk to continue about an exemption for the sector.
Can Pari flag today that the impact from tariffs could range between four point six million dollars to more than fifty million dollars. That's that's a range.
I was thinking about Grand Monnier in Margarita. I think it can make it like a it's just special.
Sorry, yeah, you're so. You didn't listen to any of that all you were thinking about?
Was that one?
I know?
Okay?
Which fine?
I know, tariffs and Trader front and center. We're going to talk about that.
I want to bring in Ali Anderson. She's CEO of Craft Co. It's a company that has a portfolio that includes more than two dozen spirits and liqueurs think Bourbon, Gin, Ready to Drink, cocktails and more. The company also does co packing for other brands. Ali's back with us from Alexandria, Virginia. Ali, how are you.
I'm doing great today. How are you Caroll and Tim?
We're doing pretty well. I know Carol wants a drink after this week. Hey, I want to start with with tariffs, because you're known as a company that doesn't import, and you do your own distilling here in the US. As a result of the tariffs that have been placed on imports of liquor from around the world, have you seen an increase in your domestic sales.
Well, I would like to say that I have, but the reality is that when the tariffs, the threat of tariffs, especially the back and forth on that, what it did was it caused us to distributors to use up that budget to purchase those imports out of fear that they wouldn't be able to get those going forward or get those at a different at a higher price. So that didn't leave a whole lot of budget for craft suppliers like me to be able to get our products out there.
So I think it's shaking out right now. I think we have lots of signs of hope on the horizon, but it definitely constrained things for a long time and does continue to you know, affect our suppliers as well.
Allie, Ellie, Jill, drill down a little bit. What does that mean in terms of the restrictions that you guys have had or your suppliers what specifically.
Well, things like packaging bottles which we do get overseas, glass bottles. We actually saw this coming and switched up our suppliers a little bit, and so imported barrels are another one. We actually would like to export more of our barrels. That's not going to be as easy to do, as you know, but even equipment abroad for us, there's some changes to our can line that we'd like to make and some of that means we've got to look for different suppliers. So you know, we're flexible we're nimble,
We're able to do that. I recognize that not all suppliers are able to do that, but you know, we're seeing it and we're feeling it, but we're also adapting to it as well.
So you know, it's funny because I always I don't say I always forget, but you know, when I say something is actually made in the US, the things that you're bringing up are a lot of international products. Whether that's barrels, whether it's parts of the machinery that you need, whether it's parts of the cans. What is what portion is actually made in the US?
Well, for us, it's it's it's everything is made in the US. It's Bourbon we do. We do mainly bourbon.
And all your ingredients, all your ingredients from the US too.
The ours are definitely ours are, but that doesn't have to be the case, right You could import rye from Europe if you wanted. We don't happen to do that, but yeah, you absolutely could. Now for us, we're you know, we get our labels, we keep as much local as we can from our boxes to our labels, our quarks, But big things like glass that can be a little tougher.
I'm also curious about consumer spending. You guys are a great window into that, and we've gotten a couple reads, certainly on spending this week. We even got some consumer sentiment from the Umish University of Michigan. Today. We did see sentiment actually go to a five month high. A lot of that had to do with the rally that we saw recently in stocks. We saw inflation expectations easing. What's your read on the consumer right now?
I think the consumer is fatigued. The consumer, you know, they want value, they want bang for the buck. They expect us to be very transparent with not just how things are made, but you know, they want to know if you're selling a four pack, they want to know what goes into that. They're very savvy and they're tired. I think of you know, we hear a lot about
shrinkflation as well. I think they're fatigued by that. So that's one thing that we definitely try to keep in mind when we're developing new products.
We had this discussion on our editorial call today about whether or not we should consider alcohol a staple or a consumer discretionary item, and I guess it depends on it kind of depends on the way you think about a drink after work.
I don't know.
I think it's person dependent. How do you view it as somebody who creates this product? Do you view it as something that especially in the part of the market that you play in. Do you view it as something that people will buy regardless of how the economy is or is it a treat.
I think it depends on the situation. It depends on so many factors, you know, socio political, economic factors. For one. It depends on how you're raised, where you come from, what your experience is, and how you view something like alcohol. Like we're seeing all kinds of trends with the low and no proof right people trying to make different lifestyle choices.
So I think it's definitely situational with with your relationship to spirits, to drinking, to alcohol, to how you celebrate, to how you mourn, to how you transition through life.
Are you doing any no or low right now? We are?
We are. We've got Thatcher's Organic Liqueurs, which we're super proud to be organic. That's kind of a hard certification to get. So we've got organic liquors that are low proof and personally I like, you know, just a seltzer like a Lacroix and and a bit of Thatcher's elderflower is a great way to just have a little bit of spirit but not have to, you know, drink a hundred proof whiskey either. Now there's a place for that, don't get me wrong, but yeah, we do dabble in that.
We recently reduce the proof on our cannon cocktails because that's what the consumer wanted, right, They're looking to be more sessionable, to enjoy for a little bit longer, and so we listen to that and delivered.
Well, that's what I wanted to ask you. Your portfolio, as Tim mentioned in the lead to you more than two dozen spirits and liqueurs, bourbon gin Rae ready to drink a lot. And you are thinking about the lower no alcohol market. Where where's the growth? Where are you spending time in terms of and you want to spend time, not only time, but money and effort. When it comes to product development.
The growth is really in innovation, whatever that, whatever your category is. What customers want is to be dazzled. They want something new. Like I said, they're fatigued. Sure, they're fatigued by price, but they also want something new to try. So I think if you're you know, if you're primarily into cannon cocktails, I think you should be innovating around flavors. What's the culinary scene doing. Are you paying attention to that?
What are you picking up from that? If you're into high end whiskeys, which we very much are, we're looking at what kind of different finishes can we do, what kind of different blends can we do with higher aged whiskies, because the consumers definitely want different, they want to continue to be kind of entertained at the shelf by what we're doing.
I mentioned that you do copacking. Can you explain that side of the business and what you're hearing from clients?
If you watch Shark Tank you would know what co packers do.
But I know I know what it is.
Sorry, go ahead, Well they always do they like, do you have a co packer yet? Or I've got a co packer? Sr?
Carol, No, I know she's mine O rough right, yeah, go packing. Go packing is Honestly, it's a new part of our business. But when we looked at what our strengths were, it was in product development. We've developed products for the Lions products for the Orlando Magic. We're pretty great at being nimble and developing new things for When people come to us and say, you know, I'd like
to do this, we say, great, tell us more. We think we can help you out with that, and so co packing is our response to utilizing our capacity we had a little bit of access capacity and being able to say, what do you want to create, we can help you navigate that. You know, alcohol is one of
the most highly regulated industries in the United States. It's not easy to navigate that, and so we're able to kind of shirpa new brands, New the World brand through the process using our experience in our resources as well.
You mentioned regulatory how what might the come from the administration potentially that might help or hurt you guys beyond maybe what we've talked about TARFF cent trade.
Yeah, you know, I'm definitely not a policy expert here. What I'm just looking to do is really urge President Trump and the negotiators just very quickly resolve the terraffs. You know, there's one point seven million workers that depend on a very vibrant US spirits industry. That's farmers, that's hospitality workers, that's drivers. That's us right, I'm reopening my tap room here in September, and I want to be
able to do that successfully. I want people to come through those doors and be able to drink American spirits.
Well, you mentioned workers on a day where we got some weakness in non farm payroll creation. What are you seeing when it comes to the US labor market. Are you guys hiring, are you holding on to workers? Are you trimming back your workforce? What can you tell us?
I'm hiring right now? Like I said, I'm opening our tap room which has been closed now for several months by our own decision. We really just wanted to reimagine it to be something that was more in line with what craft Goo is and who we are. But we're definitely looking to hire hourly staff. We just hired a tap room manager, We're hiring line cooks, bartenders, so we're
definitely in a growth mode. But yeah, is it a little difficult to find to find that right fit in the labor force yet it is just a little bit.
What kind of pricing power just thirty seconds do you have with your product line?
Well, we're very diverse, so we've got very high end Whiskey's one hundred and fifty dollars plus all the way down to canned cocktails which are twelve ninety nine for a four pack. So you know, there's something for everybody in our line, and I think that speaks to where everybody is right now economically. You can find something for a deal for sure.
Gonna leave it there, good stuff. Always appreciate getting some time with you, Ali. Take care and have a good weekend. Ali Anderson, she's CEO of Craftco. As you mentioned, they have quite a portfolio spirits and the course, Yeah, fun stuff. A great insight into an industry as well as a smaller business. She joined us from Alexandria, Virginia,