You're listening to Bloomberg Business Week with Carol Messer and Tim Stenebek on Bloomberg Radio.
We're wandering. It's Friday. Can you tell it? It's five twenty three to gym?
I need to drink.
I need a drink. Well, speaking of that, I don't know if you saw this news earlier this week, did you, Tim?
I did, Yeah, axios recording that Uber was shutting down Drizzly. You remember Drizzly. It's the alcohol delivery service it shelled out more than a billion dollars for back in twenty twenty one. You can still order alcohol using the Uber app, but Drizzly will stop taking orders in March.
Ah done, that's it all right, Well, don despair. There are other ways to get alcohol deliveredy if you're over twenty one. Of course, one of those ways is using Reserve Bars Mini bar Delivery, which has been delivering booze for more than a decade.
We've got Derek Correa on with us. He's CEO of Reserve Bar. It's an e commerce company specializing in rare and high end spirits and also, of course the company that runs Mini Bar Delivery. Derek joins us on Zoom from Bedford, New York. Derek, good to have you with us this afternoon. We made a joke earlier in the day about dry January giving up your phone for January, but of course, drive January is when people tend to
give up booze. How is business? Do you notice a drop off when it comes to January as a result of dry January?
Hi? Tim? Yeah, thanks for having me on. Yeah, definitely. In fact, starting about five or six years ago, it started to be a noticeable thing. And I would actually say that it seems that dry January is becoming more popular, which is a great thing. There's a lot more beverages available to satisfy, you know, a not drinking situation where you can still drink a quality non alcohol beer or a mocktail. So there's a lot better options in the market now.
So how much of that you're Tim? You're into mocktails.
Oh yeah, And I'm all about the acoholocolic beer, the mocktails. It's like, yeah, it's kind of funny. I mean I drink more of that than the actual real stuff.
So Derek, you tell that as well, correct.
Yeah, we do, and increasingly so. So we have those products on our platform as well, and in fact, you know, even on an everyday basis, if you're using our platform to provision because you're having a party or you're getting stuff for your own home, we always encourage people to
buy non alcohol product as well. If you're a host, that's the way to be a good host is to serve a great variety of beer, wine, and spirits and cocktails, but also have non olk drinks available for your guests, many of them who don't drink even when it's not January.
I see this at restaurants all over the city. Kill do you see this where you look at the wine list or you look at the beer list and it always includes in this in twenty twenty three, twenty twenty four, a list of mocktails or non alcoholic options.
Totally see.
It hasn't always been like.
That, No, it hasn't. So this is where I want to go. Derek, you guys correct me if I'm wrong. I think you started back in twenty thirteen, Is that correct?
Yeah? Pretty much right around the same time as Drizzly.
All right, all right, so tell us about that. That's a good look at kind of this market. So a decade in how has the market changed and what are the trends that we were seeing today when it comes to ordering this way.
Yeah, so the market grew pretty steadily and you know, relatively conservative, conservatively for a lot of that time. Then, of course, COVID came along and shut down bars and restaurants and to a certain extent even shut down retail because people weren't out, and that really accelerated the e
commerce adoption rate. When you know, for the most part, it was the only way to get beveridge alcohol, So that accelerated all the businesses, including Reserve Bar and Drizzly and Mini Bar at the time was not owned by us, and we acquired Mini Bar Delivery during the midst of the pandemic. And since then, you know, now the restaurants and bars are open, there's been a little bit of
a cooling off. People are going back out and enjoying restaurants and bars and their favorite contails and drinks out. But e commerce, in addition to the platforms, is happening in a lot of new ways. So when we saw that Uber acquired Drizzly, we fully expected them at some point to ingested into the Uber EAT's platform. That makes sense. But people are buying on platforms like Minibar Delivery, which can get you most products you could ever want in
an hour. On Reserve Bar, where we offer a little bit more curated, higher end information rich experience. That's better for people who are enthusiasts and want to explore new bourbons and scotches and so forth. But increasingly people are buying, you know, they're not just shopping intentionally. That only happens about fifteen or twenty minutes a day. That's when you end up on a platform like reserve Bar and mini
Bar Delivery. But when you're reading an article about great spirits, or you're out and you're watching a video and it includes a great cocktail. We're creating shoppable moments in all of those instances, because even though you weren't shopping, if you're exposed to the right product at the right moment and you can buy it right, then people are and that's really the future of e commerce.
Hey, Derek, So I want to go back to this idea of what Carol was talking about in the trend of what you're just seeing on the platform. I was doing some research ahead of this, and it turns out that I'm not alone Carol when it comes to you know, not drinking alcohol anymore. So, Gallup says that younger adults these days, oh, I don't know if I'm considered younger adult anymore. Anyway, are less likely to drink than those of the same age two decades ago. So that's happening. However,
older adults are drinking more. So is there this shift happening where young people aren't drinking as much and they're going to continue not drinking as much, or they're going to actually start to drink more as they get older.
You know, that's a really interesting question. What we're seeing is people are drinking differently. I think the older people who have more disposable income are drinking better. And especially during the pandemic, we saw a lot of premiumization of you know, people weren't spending money at restaurants or bars, they were not going on vacation. They had more money,
so they started to explore higher marks. If they liked scotch, they started drinking nicer scotches, drank gin, they drank nicer ones. The younger people, I think, when I say they're drinking differently, they're drinking more mindfully, They're thinking more about how and when they drink. They're more dialed into calories and wellness in general. They actually drink cocktails more frequently than younger people did, even as recently as four or five years ago,
when young people mostly drank beer and wine. So the things are changing, and you know, the nice thing about our platforms is we have an immediate view, literally day by day, minute by minute, as to what the consumer is doing and can constantly adapt our product assortment and our tactics to those those changes.
You know, we do a beach house typically we have with kind of our family and extended family, so it's you know, the kids have grown up. They're all teenagers or in their twenties and thirties, and it's just interesting. It's not beer. It's a lot of wine, but it's also a lot of cocktails that we increasingly are making and that's what they want to make as well. Having said that, is there a core consumer that is doing the most business on your platform?
Derek? Yeah, So you know, we have different platforms and different people use them for different occasions and for different things. Right, Mini bar delivery is perfect for provisioning your everyday products. You have some friends coming over you realize you're out of beer or you need some vodka, you can get that brought to your house in an hour. Reserve Bar is more you know, you're maybe sort of just kind of flexing yourself into knowing about bourbon, and so you're
coming because you can learn more about bourbon. You can you know, immerse yourself in deep information about distillation methods and ingredients, and that becomes, especially for the younger consumer, not only valuable on that path to purchase and that customer journey and providing that, but increasingly, you know, beverage alcoo is a very social thing and there's kind of social currency and knowing about knowing about bourbon and knowing
how to make a great Manhattan or boulevardier. So younger people are often coming to our platform not just to buy, but also because it has the content they need to continue their journey of education and knowledge.
Are you seeing more growth on Mini Bar Delivery or on Reserve Bar?
You know, they both again because they serve as different customers, they grow differently at different times. Reserve Bar does a lot of gifting business and corporate gifting, so it has a tremendous you know, October November December. Mini Bar actually pops other times a lot of times for parties like Halloween for instance. Is not a big deal for Reserve Bar, but it is a big deal for Mini Bar. So they both grow, and they grow in different ways at different times for different occasions.
And needs time to pop the cork, which I just did. And continue with Derek Correa. He is the CEO of Reserve Bar, at e commerce company specializing in rare and high spirits. As you know, we've just been talking with him. He's also the company and it is the company that runs minibar delivery. Derek continues with us on Zoom from Bedford, New York. I do have a terrible record, Derek, of breaking quirks here at home.
It's just I gotta as long as you're good at drinking the wine that.
It's okay drinking. Yeah, we're going to pour some wine that you have been kind enough to share with us. But I want to get to some of the brands because Tim and I have been kind of all over your platforms, both Mini Bar and Reserve Bar, and it's really quite a range and quite a variety. So talk to us about some of what you want to make sure is out there for customers.
Yeah. So the great thing about these two platforms is another difference as Mini Bar Delivery as over thirty five hundred retailers and you can buy essentially all of the products that are available from those retailers. So that's kind of a max assortment, which is great. You can search for and find anything. Products are merchandise within categories. The shopping ees are easy. All of your favorite brands are going to be there, whether it's Teto's vodka or Bullet Bourbon,
and you can find some unique stuff too. Reserve Bar is more curated, so we've actually spent the time with our experts to find really the best stuff to have a lot more information and education and intrigue and those shopping journeys for people who are more passionate to find rare and limited products. We are the main platform in this industry for launching new products, which includes new products from all of the brands and the companies that create
new brands, as well as a lot of celebrity. We just launched the Rolling Stones have a new rum called Crossfire Hurricane Cool and that was just launched on our platform. So oftentimes you can get products on Reserve Bar that really aren't available anywhere else, and including our own cask selections for those of you who are really into bourbon and tequila, we go to distilleries and pick tasks specifically for us that we bottle off and have very limited quantity.
Derek, how does how does fulfillment work with with Reserve Bar? Do you actually have the inventory and you guys are responsible for shipping it out or do you do you outsource that like you do with Mini bar delivery.
Yeah, that's a good question. Tim. None of our platforms and we as a company do not hold a license, so we never touch any bottles of alcohol. We don't have any inventory. We're really a technology company that has very deep technology to comply with beverage alcohol laws and to connect with our network of retailers to match you as a as a customer who's interested in buying something with a retailer that as that product that a good price.
So if that overhead, yeah, so if you. But if you want to buy something that is exclusively available on your platform, who then ends up fulfilling that order?
Yeah, there's certain retailers in our network that benefit from being associated with us and our relationships with the distributors and the brands, so we know that they're going to be the ones that are getting that prim and were then able to route the orders or.
These But are these retailers like mom and pop liquor stores. I mean I remember ordering a bottle of bourbon from my mom that she really liked and the only the closest place it was available was somewhere in Long Island.
Nice.
Yeah, she liked it, but it was it was it was something that was kind of hard to find, but it came from essentially a local store on Long Island that just had it.
I don't even know. Maybe I used reserve bar, I don't remember. But is that how it works? Like they're the ones who then ship it and you guys don't you guys don't ever touch it.
Yeah, right, So for widely available products that were available near you, if you were wanting it for yourself or near your mom, it would come from that local retailer and be delivered locally. But you get to shop a more interesting assortment that might not be available near you or a gift recipient, and will then ship that product to them in a compliant fashion, very packaged, very nicely
and safely. So that's how you can access a more compelling product assortment that you might otherwise be able to get locally.
So then for as the business model, we're Bloomberg and we're always interested in this kind of stuff, so kind of getting in the weeds. So do you guys just get a percentage of the order or do you just get a set fee on every order that's made? How does it work?
Yeah, that's exactly right. So we're basically a marketing service for the retailers in our network, and the reason they sign up with us is because we're sending them incremental orders. So in exchange for that, they give us a small fee associated with sourcing that order because it's incremental to their business and they wouldn't have otherwise. Got it, all right?
Tell us two about pricing strategy, and I'm going to pour a little bit of wine. You guys have been kind enough to send.
What's got new? I would have had my own wine as well.
I wish you had. I feel terrible. I'm not quite drinking alone, but it would be nice to have you as a part of this. You shared with us a bottle of Josh Seller's legacy red Bland, Red Bland. Excuse me, looking on the website Mini Bar Delivery, it's about fourteen dollars a bottle. But you guys have quite a range of stuff that's out there. How do you think about price point in terms of I'm going to share it, this is.
This, I'm going to share this one is a meme?
Now did you know that? I know it is a meme? Our producer was talking about one of our producers. How do you think about price point? Is there any strategy behind that? Yeah?
So, you know, one of the hardest things about operating in this industry is the regulations federal, state, county, city, and one of those that's very clear is that retailers have to be the ones that sell you beverage alcohol, wine, spirits, beer, and they have to set the price for it. That
is a universal regulatory situation. So the prices that you see on our platforms are actually the prices from the retailers in our network, and so our technology is seeing is the product you want available, which retailer has the best price, which one is closest to you, and kind of doing all of that hard work for you as a shopper to match you with a retailer and a product that can get to you quickly at a good price.
Derek, what was the strategy of getting all these retailers on the platform? Was it old fashioned shoe leather? Was it picking up the phones like it's it's a one off thing, it's I mean, this is tough to do.
Yeah, it's all of those things. And in the early days it was a slog you know, when you were calling you were telling me you were calling from reserve bar and they'd say, who what, and you'd have to explain the entire concept of e commerce. Nowadays, I think it's pretty universally understood and the retailers. We are still you know, reaching out to retailers, but many are coming to us curious about the benefits to them and the
commercial terms of joining our platform. And it is open to you know, expansion, and we are still in the process of adding more throughout the country.
Hey, Derek, just got about twenty seconds left here, twenty five seconds. What's next for you guys? As we are going to sample the wine and because it is Josha clock somewhere, but what's next for you guys?
Well, what's next is what's right now? Actually, which is because we don't hold license a license, we're able to syndicate our technology in all kinds of interesting places, like if you were to read an article on Whiskey Advocate about the twenty best scotches, you could buy any of those scotches right there without leaving Whiskey Advocate and continue
consuming that content and also buy whatever you wanted. And we're also powering the websites of brands because lots of people go to visit sites like Tennessee dot com or the McAllen dot com and they can't sell you about of alcohol directly because of the three tier system. But our technology enables you to shop and buy because you actually are buying from a license retailer, You're going to take a lot more innovation of that kind.
Yeah, it's interesting you guys are doing. Hey listen, come back soon and hopefully then we can share a drink together. But I'd love to kind of hear as you continue on in this business. Derek Correa, who's CEO Reserve Bar and also of course to the company that runs many bar delivery