Reshaping the Spirits Industry

say it would be even better. What's going to happen? What do you say, Carol? If we were all together and we were sharing a glass of McQueen and the Violet Fog, it would be a lot sweeter, That's all I'm gonna say. When when's going to happen? Brett? How are you? Yeah? Well, for me, it already started. I'm drinking. Well that makes one of us. Yeah, I get for the three of us. So we'll happy Friday. We'll talk to us about the business because I think, you know,

we cover a lot. We talked with a lot in the wine industry, with the spirits industry, talked to us about you know, we saw a lot of buying during the pandemic. So where are we in terms of the business right now? Uh, pre pandemic level is today, And I'm curious about what kind of supply chain difficulties you might have, if any business. Well, business was pretty wild with during COVID, just because it was changing in consumer habits, where with the shutting down of bars and restaurants and

consumers going to stores. I think what you're now seeing is is, uh, there's life back in the in the streets. Um. I was talking to I mean not just in the US, but everywhere. I was talking to one of our colleagues in the UK, UM, and they're celebrating the Queen's jubileeem and it's is it's the most vibrant it's ever been right now. So you're almost you're almost sitting a tilt back to the center hopefully and that that's that's everyone's goal. Brett.

How are you? How are your costs? How are your input costs? Supply chain stuff challenges, getting ingredients, employee paying employees to attract and retain them. It's tim everything's going up, um question. And I think it all you know, it all started this. It's a global issue, and it all started with uh. Once that chain stops, ever, there's pent up all of a sudden, there's so much demand and

now you know, we're all playing catchup. So we went months and months without inventory and because we just couldn't get it, and then we're ordering more and more so we can play catch up for the future. So we personally on our side with our brands bell Air, Bamboo, McQueen, um and our new brand Vonne. Now we're in a good position because we've over ordered, if that makes sense.

Now we've actually heard that from a lot of the retailers where they did over because their inventory levels were up because they were over ordering to make sure that they had, um, you know, what they needed for their consumers. Um. So, based on what you're seeing, what kind of field do you have on the economic outlook? And I do feel like to some extent, alcohol might be a little bit recession proof, but that's not true. Like when you're spending to fill up your tank, you might not have as

much money to spend on some other things. So how do you see it? Yeah, I think, you know, when I think back to two thousand six and seven, I think there's always gonna be When people talk about recession, it's basically, ah, you're trading down in some cases, you know which you maybe we're drinking. Uh, you'll you'll drink, You'll continue to drink, but maybe you'll trade down to something else. Um. So I can see that happening. But

for us, I don't know. I think I think this is one of the reason why I love our industry is you know, it's it is true in good times people drink and bad times people drink. So um uh, it's a very very resilient industry. So they used to prove it. What are people drinking? What do they like most of all? Just my brands? No, no, no, that's not true, Brett, Sorry no, but really is it? Is it? Gen's is it? RUMs? Is it? You know? We talked to people in the in the brewery business, like what

what do you think? What are you getting? And and who is your demo? I'm curious, Well, you're asking the wrong person because I'm I'm not a trend follower. Um. We like to build on my side. We like to build brands that that uh, and we do it based on no advertising where it's that organic brand building. It's almost like when a when a TV show is hot on Netflix or Hulu and they're not advertising, people are just talking about it. So to me, you know, our

brands do well, but they're they're in different categories. So my bel Air brand is in the champagne sparkling category. It's now the number one brand the United States. Are Rum Bamboo, that's hot, that's the number one premium rum and the fastest growing. That's a great segment for us. But as an example, Carol is an example. You know, when we launched that brand, everyone told us, don't do it because it's not hot. So I just don't like to follow trends. So what we like to do, what

we're doing. I'm wondering about you more of your history here, because years ago you sold Ace of Spades to Jay Z. How do you build? How do you when you know, to sell a brand versus to keep holding onto it and to connnia build it? Good question. Well, I think it all depends in the situation. So in my case, I didn't have any money. Uh that's a good answer. And I had lots of ideas and no money, and uh, it was the most difficult decision I could ever make

in my life. It's like selling a child. Um. But but what it did is it made us bigger and stronger, and now I get to do these other brands. So I think everyone's position is different and the reason you do it and why for me, it gave me capital to do all these other brands. Um my team has grown sixfold, sevenfold. Um, we're in a hundred plus countries. So it's the way I get up the ladder is Uh,

it's allowed me to get up the ladder. Are you always thinking about the breadth of developing your brand, cultivating it, you know, and then eventually selling it off or that's not necessarily the end game? Always? No, it's funny, and I may be it comes from just a reality check, you know. I get those presentations that that that uh for a pitch book on a brand and you know, in five years, if I could get one percent or two percent of the category and that there's a multiple

of acts, and I'll sell it. Um. I was that that guy twenty plus years ago. And if you're thinking like that, to me, brand building never works. It just doesn't work that way. Um, you gotta be patient, you've gotta be long term. I don't think like that. Uh. If it happens. It happens. But to me it's you're you're thinking too narrow and uh and to me it's I've learned my lesson. It's not about the money. It's about building something special and good things come when you build.

When you think like that, how do you compete as a small player, relatively small player for shelf space and for the district distribution. Just in the last minute that we have with you, it's everything to mean, it's everything from we gotta be we gotta work harder. Um, we've gotta be different, we gotta be more creative. We've got

to constantly try to reinvent ourselves. Um. You know, I've got this brand Bamboo, which, as I said, as our rum, we have more followers on Instagram than Captain Morgan and McCarty and they have hundreds of millions of dollars in advertising. That's hard, but it's it shows. I'm the I'm the the example of you work real hard, you put everything into it and you can get there. And Uh. Just the key is don't think you can. Don't don't compete with them the way they do business, because you can't.

You've got to compete. You do business and then you can well bottoms up. Next time come in studio and next time bring a bottle and we'll talk to there's two of using three. Cheers, Cheers, bread, have a good weekend, Bred Barrows. He's found in seat at Sovereign Brands, joining us via zoom in Connecticut. Great way to wrap up this week