[00:00:10] Ray Latif: Hey folks, thanks for tuning in to Taste Radio, the number one podcast for the food and beverage industry. I'm Ray Latif, the editor and producer of Taste Radio, and I'm joined by my BevNET and Nosh colleagues, John Craven, Mike Schneider, and Jacqui Brugliera. In this episode, we're joined by Brandon Schwartz & Lawrence Cisneros, the co-founders of Drinksmith. a brand of ready-to-pour fresh cocktails whose proprietary bottle on ultra-high-quality ingredients have made its products among the most unique and sought-after of offerings in the spirits industry. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we'd love it if you could review us on the Apple Podcasts app or your listening platform of choice. Well, happy St. Patrick's Day or happy St. Patrick's Day from two days ago, as of this recording, that is. I didn't celebrate as I normally do, but I don't really dress up in green and do the whole like, you know, going out to bars and stuff like that. At least I haven't in many years. Jackie, did you go out?
[00:01:10] John Craven: I didn't go out. I actually hosted a virtual Jeopardy. So I am part of a Gaelic sports team. So we play Gaelic football and Komogi. So we all wanted to do something virtual. We haven't seen each other in a year. So I put together Jeopardy and learned a lot of fun facts about Ireland and Gaelic sports.
[00:01:29] Ray Latif: There you go. What is Gaelic football again? It's awesome.
[00:01:33] John Craven: Yeah, it's kind of like Aussie football. It's like a mix of basketball, soccer, and American football.
[00:01:40] Mike Schneider: Imagine football, right? Soccer and you, you can hold the ball and you can, you can punt it forward. And it also had like the Aussie football or the American football. There's a goal posts that you can punt it through like a field goal, or you can kick it into a goal past the goalie and you can, and you're allowed to punt it into the goal. It's incredible.
[00:01:59] John Craven: So, like, I just dribble the ball and then I punt it. I play halfback, so I play defense. Pretty much just sniping any ball that comes towards me and then punting it out.
[00:02:10] Mike Schneider: Jackie bruises people. When you come over the middle, you better keep your head up, because Jackie will.
[00:02:15] John Craven: It's pretty physical, but it's fun.
[00:02:17] Ray Latif: She'll take you down. Have you been able to play during the pandemic or no?
[00:02:21] John Craven: I've just been doing some skill work, more so playing Komogi, which is a stick sport. It's a lot easier to do like wall ball or something like that. So we've been doing like some skill work individually or like in small groups outdoors, but that's about it.
[00:02:35] Ray Latif: Interesting. Interesting. Well, I know Jackie played basketball throughout her high school and college career. Mike, I assume you played soccer in high school? I did play some soccer in high school, Ray. As did I. John Craven, did you play any sports in high school or college? some running in high school once you're on, you're on the cross country team.
[00:02:55] Mike Schneider: Yeah. It did some cross country for a while, but uh, I don't know. Eventually my, my knees didn't really cooperate with that. So yeah, that's the thing got out of that game.
[00:03:06] Ray Latif: Yeah, I hear you. Walking is nice. Walking is a good exercise for sure.
[00:03:11] Mike Schneider: There's speed walking. You know, I'd like to be able to walk for a long time. So I figured I should, you know, not try to be a distance runner. Yeah.
[00:03:20] Ray Latif: Fair enough. Fair enough. Well, it's good to hear that everyone had something going on athletics wise in high school. So, uh, folks listening and paying attention to Taste Radio, which I assume is all of you in our audience. I may have noticed that we made a couple of changes to the name of our show and our schedule. Essentially, we're just trying to simplify things. So we've aligned our two shows, Taste Radio and Taste Radio Insider, and just called them Taste Radio. There's no more Insider in terms of the name of the program, just an easier way to kind of consume what we do. Also, we don't really have any numbers anymore. We've done over 350 episodes. So at this point, every new episode doesn't necessarily need a number. It's just coming out every Tuesday. And that's another thing. All new episodes will be published on Tuesdays. So just a couple of things in case y'all noticed, but nothing too major, just more great content on a regular basis and under the umbrella of Taste Radio. So some really unfortunate news that was announced about a week ago as of this recording date and that's that Industry legend, Greg Steltenpohl, who is the co-founder of Calathea Farms, the founder of Odwalla, passed away at age 67. Just a very sad day for a lot of folks. The amount of mourning that we saw on social media and on LinkedIn was really something to see. You know, I met Greg, I think for the first time, probably in 2013, when Calafia really started to expand their offerings beyond almond milk and into coffee and things like that. And he knew I was green, even in 2013. I'll admit I was a little green. And he did some handholding. And unlike some folks in the industry who knew I was green and tried to take advantage of me and BS me, Greg was never like that. He was gracious, thoughtful, and a teacher. He helped me to understand how the industry works and what to look out for when it comes to reporting accurately and objectively, and I thank him for that. I'll always consider him a friend because he always was nothing but friendly and kind to me, and I'll certainly miss him.
[00:05:41] Mike Schneider: Yeah, I think Ray, you hit the nail on the head there. You know, I've known Greg a little longer and you know, I think that's something that was true in sort of all of his endeavors and we've got plenty of stuff on our website and Jeffrey Klineman wrote a really nice remembrance of Greg and the industry reaction piece as well. I mean it's just great to see all of these people for someone who really was universally liked. And you know I think one of the things that's been kind of you know maybe hard for me to just sort of grapple with too is it's like I think it's just another thing of, you know, sort of the time lost of, you know, I think probably last saw Greg at, I don't know, the fancy food show in early 2020, I think maybe, you know, I don't know what the last one was, but it probably, my conversation probably ended with, you know, see you soon type of thing or whatever. And of course, you know, didn't, but It's really unfortunate just on top of this kind of already, you know, troubling time that we're in right now. So, you know, it kind of makes that news harder. You know, it feels like there was a disconnect, you know, a bigger loss too. But Greg, for sure, you know, he meant a lot to a lot of people in this industry and yeah, he'll be missed greatly. People use a word that you just don't just throw around for Greg's thumb pole and that's hero. He exhibited the kind of kindness to you Ray to anyone that he was talking to in the industry and so many people give him credit for. helping them with their business. So many founders would call him a friend, and he's just a special person for being able to make everybody feel that way. Whether you were green like you, Ray, or somebody who's an absolute pro in the industry, Greg treated you like you were somebody who was a pro in the industry and that you were worth his time no matter who you were. I mean, that's a really special thing to be able to do when you're somebody who is as busy as he is and as successful as he is.
[00:07:42] Ray Latif: Absolutely.
[00:07:43] John Craven: I was reading just you know all of the different reactions on social media on our sites and I think across the board to like what Mike was saying. Everyone just felt like they had a personal connection even if it was just for a couple of minutes of conversation. And they also just talked about how he was a visionary and he was a trailblazer. And he really thought that like business could promote social change or environmental change. And he did that through his businesses. So I think that was something that you know he really left his mark on the industry and he really will be missed.
[00:08:18] Ray Latif: And he was also always willing to learn. He was a student, first and foremost. He always wanted to get better, to improve, to do the kinds of things that would, as you mentioned, Jackie, drive the industry forward in a really positive way, affect positive change for people's health and for the environment. I don't think I've ever had a conversation with Greg where it was just the same repetitive kind of spiel about his brand or his products. He was always talking about something new, whether it be regenerative agriculture or personalized eating. I mean, you know, going back to a podcast interview that we did with him, we visited Calafias headquarters in downtown LA. It was me, John Craven and Jon Landis. I think that was late 2017. I couldn't even speak. I was just sitting down. I was like, I'm just not going to say anything. You just keep talking, Greg, because everything you're saying, I'm learning more and more from. Just a remarkable guy, someone that is irreplaceable. One founder who mentioned that Greg's impact on her life was really important is Madeleine Hayden, who's the founder and CEO of Nutpods. which is a brand of plant-based creamers, one of the leading brands of plant-based creamers. She wrote this beautiful piece on LinkedIn about Greg and noted that he was, without fail, always gracious, welcoming, and warm to me, greeting me with his quiet smile at industry events. He knew that there was enough space for us both to have our own measures of success. given that Calphi was also marketing and sells plant-based creamers. I know she's learned a lot from Greg. She told me that. And it was great to have his influence on her life and then her influence on other entrepreneurs' lives. She recently joined us as a co-host for Elevator Talk, our series that profiles emerging and disruptive brands. She was offering insight, advice and feedback to the early stage entrepreneurs who are participating. And it was just great to see that sort of, you know, pay it forward kind of aspect.
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[00:11:08] Ray Latif: A brand that we had on Elevator Talk a while back is a brand called Coco Mio. Coco Mio is a maker of beverages made with coconut water and pulp. This is the pineapple juice variety that I have in my hand. This is not necessarily a smoothie product, but it's using more of the coconut. I feel like I'm seeing more and more of that Intent Beverage in food or coconut-based beverages in food. Shockingly, I haven't tried this product, so I'm going to open it up. It smells like a pina colada. Oh wow, that's really good. It tastes like a pina colada with a pineapple juice too. Do you feel like you're getting caught in the rain? Do I add a little boost to that bottle?
[00:11:44] John Craven: Yeah.
[00:11:45] Ray Latif: Man, that's a good idea. Jeez, yeah. Drinking on the job. Well, it says dive in, shake well before opening and enjoy one day, within one day after opening. So I don't think that's going to last a day. That's really, really good. Well done, Coco Mio. You know what else is really, really good? And I think everyone knows this by now, but I'm a big fan of everything that Van Leeuwen Ice Cream does. Recently they introduced these new Ice Cream bars. I should have known that I was going to be addicted to these things. They're your honey mamas, Ray. I was telling Mike and Jackie before we started the show that, you know, if you remember your first love, you just, you know, you're thinking about that person day and night. You know, you're just all consumed with your love for that person. And that's kind of how I am with my Van Leeuwen Ice Cream bars right now. These are pretty amazing. And they also have vegan varieties that taste just as incredible. I don't know what they're doing over there. They have some sort of magic formula that makes everything taste incredible. But if you just look at the ingredient panel, it's a shorter ingredient panel that you'd find on a lot of Ice Cream brands and a lot of Ice Cream products. And man.
[00:12:54] Mike Schneider: Ray, that is the secret of CPG is that, yes, they have secret formulas that make things taste great. They do. That's true. So hard with high quality Ice Cream to make it taste good, right?
[00:13:07] Ray Latif: Well, I mean, yes and no. I think, you know, sometimes high quality Ice Cream is, I don't know, too indulgent in some ways. And I feel like Van Leeuwen just has nailed that balance between a sweet, delicious offering that doesn't overwhelm you, if that makes any sense. I don't know. Jackie, do you feel that way?
[00:13:28] John Craven: Yeah, you can eat the whole pint and not feel bad about it.
[00:13:31] Ray Latif: No, and you don't feel bad physically either. Not that I've eaten a whole pint of Ice Cream today. I can't do that. Yeah, I just ate that whole that whole box of bars before starting. Don't worry, don't worry. I think there's plenty of these that came to the office. Turn the box upside down, Ray. Are there any left? Yeah, no, there's this one. This one I haven't opened up yet because we definitely do not have those at the office.
[00:13:56] Mike Schneider: What? Are you sure? Um, 99% sure I was just in the freezer scouring truthfully. I mean, if we had those in the, if we do, they're hidden, they're in a, in a relative cubby somewhere, freezer cubby.
[00:14:13] Ray Latif: I don't have a freezer in the office. I don't, I don't. Yeah. Yeah. John Craven, I know your desk is as covered as my desk is, probably more so, especially as it relates to beverages. So I guess the obvious question is, what is on your desk this week?
[00:14:31] Mike Schneider: Well, we just got some of this Lalo, I think is probably how you pronounce that. It's a cava-based drink. That's pretty interesting. Just trying out the old Ste's rebranded Yerba Mate, also pretty good. The Deloche, which is a, I'm going to save this for later, but it's an espresso martini. It clocks in at a nice 11 percent ABV. Yeah.
[00:14:59] Ray Latif: Espresso martini in a can, it sounds a little bit like Bomani, the hard cold brew coffee brand that we profiled in a recent episode of Taste Radio. Interesting stuff. I wonder if that stuff will catch on, because again, I think the The question with coffee-based alcoholic drinks is how often do you drink them? What's the use occasion for those type products? It's not like you're going to have two or three in the middle of the night, not in the middle of the night, or late in the evening, that is.
[00:15:30] Mike Schneider: Well, obviously, the Espresso Martini has been popular for a while. I think they're at least recreating something that there's already demand for. Hard to say if the 11% alcohol version or the Bomani and some of those other ones that are lower, ABV, will win out, but pretty neat to see these adaptations regardless. I definitely understand how it could be a bit confusing. You might need the marketing dollars of Del Monte to be able to get the message out there and make it something that's pervasive for everyone. Did you just say Del Monte? Yeah, you said Belmonte, Del Monte.
[00:16:10] Ray Latif: Del Monte is, you mean- They have a lot of money. It's a big company. The Tropical Fruit Company?
[00:16:16] Mike Schneider: Yes, exactly. A lot of marketing dollars.
[00:16:18] Ray Latif: That is the first and last time I think we'll ever mention Del Monte on this show. Not because I'm a hater of Del Monte products, just because I'm surprised that it came up. But well done, Mike. Marketing, Mike, you know, they've got it.
[00:16:29] Mike Schneider: company that doesn't quite have the same might because they're new, but they do have a lot of might because I think we should call them Taste Radio superfans, a beverage from Drs. Tom and Amy, Intent Beverage, came across my desk this week. This is one of their new, they're calling it a circadian beverage, which we're going to have a little chat about that later this week, because I think they're trying to use science to sell this beverage that It's really great. I think that's going to be a tough word for people, circadian beverage. But if you can get someone to drink this, this is really tasty. It's also the flavors are flavors that you don't normally see combined in nature. I can't get this to focus. But lingonberry acai is the flavor that I have in my hand right now. And it tastes just like Australian red licorice. It's really good.
[00:17:19] Ray Latif: I thought you were going to say the snozzberries taste just like snozzberries. Yes, it's lickable wallpaper flavored.
[00:17:28] Mike Schneider: It's a 35 calorie drink. It's got some honey in it, organic flavors, a little elderberry juice, Panax ginseng, some caffeine from green coffee beans. It's really light and refreshing and it gives you a little boost. Yeah, this one does. It functions in some of their other SKUs and this is the only one I've had so far because I can't stop drinking it. Well done.
[00:17:52] John Craven: Yeah, speaking of functional products, I haven't tried it yet, but on Nosh, I saw MindRate. It's a line of functional bars, and they just got celebrity investment. And I think it's an interesting product, just like with the rise of awareness about mental health. And especially in this past year, I think just people looking for functional ingredients, better for you ingredients that are going to be a mood booster. And they use like adaptogens and mushrooms. And it's interesting to see that in a bar format. And I think some celebrities agree that this is something that's gonna be important for consumers moving forward.
[00:18:30] Ray Latif: Absolutely. Now, given that we have a focus on spirits in terms of our primary interview for this episode, I thought, you know, it's probably good to mix a little bit of spirits with your marinades, right? I mean, that makes sense. It was a weird transition, but I'll leave it in anyway. This is a brand called Spirit and Co. I know they sent these products to the office too. So it's a brand that makes distinctive sauces with premium liquor. The one I have in my hand, the variety I have in my hand is Irish whiskey and honey mustard. Apropos for the past week. It's great that it's in a flask package too. Yes, I forgot to mention it is in a flask package. It's a really cool package. These are the kinds of things where it's like, yes, this is a really cool gift. But I feel like it's something that you wouldn't want to give once you have it in your hand. You ever had those gifts? You're like, man, this is so cool. I don't want to give it to someone now.
[00:19:27] Mike Schneider: You're not going to re-gift it?
[00:19:28] Ray Latif: Yeah. Gotcha. Like those Ice Cream bars, right?
[00:19:32] John Craven: Anything that we have in the fridge.
[00:19:35] Ray Latif: Everything's coming back to Van Leeuwen. Last but not least, I want to mention Spindrift's latest innovation, Spindrift, the maker of fruit-infused sparkling waters, their new hard seltzer line, which they call Spindrift Spiked, Spindrift Spiked sparkling water, more specifically. We sat down with Bill Creelman, who's the founder and CEO of Spindrift, yesterday on Clubhouse for a really great conversation about the new line. And what he said was that this is bringing alcohol to its current consumer base versus hard seltzer drinkers to Spindrift. It's almost like they're creating a new opportunity and new consumers for the category by creating this type of product. But yeah, I mean, I am not a hard seltzer drinker. almost at all, but I will definitely try these products and if they're good, I'll probably drink them on a regular basis.
[00:20:32] Mike Schneider: Ray, you said line extension and I think they're looking at this as almost like a whole other product line in that they've had to really think carefully about the brand because Spindrift has been a family brand and you don't want Spindrift hard seltzer to end up in the wrong belly, essentially. So they've had to be very thoughtful about how they craft the messaging, how they craft the packaging. And, you know, just obviously the model's very different for distributing alcoholic beverages as well. Definitely.
[00:21:03] Ray Latif: Well, I don't have any of those products in my house, so I don't think anyone does quite yet. You can rest easy there. I know they'll be distributed in our neck of the woods pretty soon, but we will be looking out for those and perhaps the next year we'll have our take on spindrift spiked.
[00:21:18] Mike Schneider: I'll be crushing some hard seltzer next time, right? There you go. Nice. I truly can't wait.
[00:21:26] Ray Latif: Oh, dad joke number three. All right, it's time to get to our featured interview for this episode. That's with Brandon Schwartz & Lawrence Cisneros, the co-founders of Drinksmith. Amid a rapidly expanding market for ready-to-drink cocktails, Drinksmith has differentiated itself via an innovative package that keeps the spirit in a cold-pressed juice-based mixer separate until the time of consumption. A twist of the bottle and a quick shake, and the result is a fresh craft cocktail. Drinksmith made its official debut in early 2020 and has since built a strong direct-to-consumer business among cocktail enthusiasts thirsting for high-quality cocktails at a time when most bars around the country were shuttered. In the following interview, BevNET CEO John Craven spoke with Brandon and Lawrence about the origins of Drinksmith and how they navigated a complex web of alcohol regulation, supplier partnerships, and packaging technology to achieve their vision for the products. They also discussed how the pandemic impacted their go-to-market strategy, how they surrounded themselves with investors that understood the impact of technology within an emerging category.
[00:22:42] Mike Schneider: Hey everyone, I'm John Craven here for Taste Radio, and today I am joined by Brandon Schwartz & Lawrence Cisneros of Drinksmith. Hey guys, thanks for joining me. Thanks for having us. And for our listeners who maybe aren't familiar with Drinksmith, let's start by one or both of you guys just giving everyone an introduction to what the brand is. Go for it.
[00:23:05] Brandon Schwartz: We have invented the world's first fresh bottled cocktail using our proprietary bottle technology. It specifically separates spirits from unpasteurized cold-pressed citrus, all pre-bottled but unmixed inside the bottle. Twist the bottle, and you can mix and shake everything fresh all inside the bottle, and it tastes as if it was made freshly on a high-end cocktail bar. That's fundamentally what we do, and we've been working a number of years on it to perfect the supply chain. What's cool about the product, apart from just the proprietary bottles, is that we basically made it like a platform that encompasses a lot of different elements of a high-end cocktail bar into the bottle. We work with world-famous bartenders, we commercialize their recipes. We put their likeness, their illustration, their Instagram on the bottle, and we collaborate with a number of different spirit brands. So just like at the bar, you see a certain brand of alcohol being poured into your drink. We showcase the brand on the bottle as well. And so it kind of really recreates that live craft cocktail experience in a bottle.
[00:24:07] Mike Schneider: Lots of stuff to unpack there, but you know, really, I guess I just want to start with the most basic thing here. I mean, what made you guys decide to do this? Where did you guys come from? What was your background? And how did you end up at this, at identifying sort of an opportunity for a product like this? All right, I'll take that one. Actually, we've known each other for I think it's like 15 years now. And we've been working on this one for a few years. But just to kind of rewind it all the way back to 15 years ago, we were in college. We're both SC guys. Lawrence ended up graduating with a degree. in law. I got out with just an undergrad degree in marketing entrepreneurial studies. And we kind of always knew that we would one day start a business together. We both had this kind of entrepreneurial spirit. It took law school for Lawrence to realize like, hey, I definitely don't want to be a lawyer and I definitely want to be an entrepreneur. We were meeting over drinks a lot. I had a few years of experience under my belt at that point in CPG, mostly in the beauty business. But beauty business is crazy with innovation, focus on packaging, and a lot of this different D2C marketing type of activity. So I was able to bring that to the table. Lawrence was able to really take a legal approach to it. The alcohol business, I'm sure you guys, but for listeners, is super regulatory heavy. It's really hard to navigate. Every state has different laws. There's laws around how you have to do manufacturing and licensing that you have to acquire. So there was a a big mountain to overcome there just researching different ways that we could manufacture this type of product and then actually go to market on it. So there was a... Without that legal rigor and background and comfort, there really wouldn't have been a company that was the foundation that we're able to build it on. So we definitely combined forces. And we did it on something that we both love. We're both cocktail guys. familiar with a lot of the, you know, not familiar, we go to all the top bars in LA, obviously, before the pandemic, you know, we're friends with a lot of bartenders around here. And we were always disappointed that we couldn't really, you know, match their skill level at home, you know, you gotta have all these ingredients, and you gotta really ante up your supply on liquor. And it's it's not easy to do that at home. And then when we looked at what was at the store, you know, in a bottle, definitely some nice branding and some cool stories and all that, but yeah, a little lackluster with the liquid in the bottle. Main reason being no one's really using fresh ingredients in their product. They might be saying they're using fresh ingredients, but for the most part, it's kind of rife with artificial stuff to kind of counterbalance the effects of heat pasteurization that pretty much everyone is doing and the use of preservatives. So you know at the end of the day you drink this stuff in a bottle and back then at least there's a lot of great stuff that's happening right now. So I certainly want to acknowledge that there's a lot of innovation around taste happening right now. A lot of great companies. I could probably just spend a minute shouting out companies but no one is doing what we're doing. And the core tenant of what we're doing is fresh. we took a look at how brands in the RTD space were going about getting to market and their approach was more from a distillery's perspective. Well, how do I make a cocktail out of this distillery? And it's hard if you're wanting to use fresh ingredients to retrofit a distillery to do this kind of product with machines that can help you do the fresh filling and juicing and batching and all that. So instead, What we did is we organized around a couple of key concepts. Number one, we needed to find a co-packer that could do fresh and was adept at juicing and batching without the use of artificial ingredients and preservatives. And so there's technology that obviously you and Ray are super familiar with, high-pressure processing, for anyone listening. Basically, what we do with our bottles is we, and people who use this technology, it's been around for a little bit, but it's never been used in the cocktail space or in the alcohol business in general. You need to keep stuff refrigerated and alcohol businesses, most of what's distributed is ambient temperature. So just never really got used in the alcohol industry, but it's been used for a couple of decades now with Ice Cream cheese and hummus. And there's obviously, there's a lot of top juice companies that use it, Suja, Blueprint, Evolution Fresh. And so it goes into the high-pressure processing is bottles go into a tank, floods with cold water at 85,000 pounds per square inch. And this pressure basically inactivates the microbes that normally would spoil the drink in a couple of days. And in turn, we get five months of shelf life without having to use refrigerated, unopened, five months of shelf life without having to use artificial ingredients and preservatives. So that's huge. And there was a lot that had to go on with the bottle in order to achieve that. We've got a lot of people who look at our product, and they love the twist component. It's super cool. It's visual, and it's important for the taste. You need to keep things separate. You need to keep the spirit separate from the juice. If you put a pre-mix and challenge anybody that's listening to this to go mix a cocktail, put it in a fridge, and then taste it two, three, four, or five weeks later, it's not going to be the same as when you mix it fresh. Separating it was definitely key, but there's innovation behind that where these bottles actually have to get pressurized. at 85,000 pounds. I'll tell you, it wasn't easy to figure out how to get the bottle to go through that, a double-chamber, dual-chamber bottle that could go through high-pressure processing. That was a bear. Then we had to get the licensing, the manufacturing licensing, to be able to produce this, which took 18 months or so. We had to get the partnership, iron out the deal with the co-packer, and then lobby the government to approve the license.
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[00:30:53] Mike Schneider: I think one other kind of area just to go a little deeper on would be the bottle, which, you know, I first connected with you guys, I don't know, a couple of years ago when it seemed like this was just sort of an idea. And I guess I'm maybe connecting some dots here and tell me if I'm wrong, but it seems like a large part of that, aside from just, you know, the lobbying, getting the manufacturing, figuring out that bottle, how did that all come about?
[00:31:21] Brandon Schwartz: It was something where it was a really nice linchpin that kind of brought all the different pieces together, where even if you could get the high pressure and the alcohol licenses and all that and put a brand together, we knew that if we could pull that off, it would just make it the most ultimate product in the category. And it was something you couldn't almost even surpass. And so it was a little challenging because, you know, to find a a packaging company to do that for you. We called everyone up to activate water guides. That was the main vitamin dispersing cap out there and that wouldn't work because basically having so much liquid in the top part of the bottle, we had to basically develop something from scratch. Luckily, Brandon, through being in CPG for a while, we came across a guy who was an expert in packaging and we just iterated it from scratch on how to pull this off. and it was pretty crazy because I mean for a lot of food and beverage companies to raise capital before you actually have a product is a little daunting and we were able to do that a number of times to be able to build that technology up because we were essentially able to convey the idea that we're able to execute on now is that if we can do this there is no higher kind of level to the category and it'll set a new standard and the HPP technology is already in use there are a lot of pieces in place, and this is kind of the linchpin. And so it's worth it to take one, two, three, four years, however long it takes to make it happen. And so we, it probably about, I want to say maybe two dozen iterations. And it's not like a software iteration where you should go, okay, and we're, you know, next week, we're gonna get it done. It's all right, we got to wait another three months now, and then like hope and then test it. And then it, doesn't quite work the way you want. And then it's like, you know, you try not to feel too bad and then go right back at it. And that was a pretty long haul, but I think it's proven to be worth it.
[00:33:19] Mike Schneider: I have to ask, like, how do you win over an investor saying we need money to launch a beverage company and rather than just getting the game with like V1 or MVP product, you know, we're going to spend time and come out of the gate strong because I mean, no offense to Intent Beverage business, but there isn't really a massive track record of success with, and you mentioned Activate as an example, with companies that do have a packaging innovation as their point of differentiation. What was that like?
[00:33:53] Brandon Schwartz: I think the fundamental thing you hit on it is that a lot of packaging innovation really is not a utility and it's more of an aesthetic benefit. And so we were able to say, hey, you know, this, apart from the fact that it's cool and it's fun and it's going to look great and it's going to have a ritual kind of dimension to it and it's going to be, you know, have all those benefits, the underlying key to it is that it's a tool and it's a tool to unlock a category. And we're going to be the only ones to have this new tool. And it's essentially creating a product that everyone already loves. But you're only able to get in a few select high end bars in certain metro areas. But if you have anyone taste those drinks in the high end bar, they're like, that's delicious. It's just the availability of that and getting it to more people than ever before. And so it's not like we're saying, hey, we're making drinks that no one's ever had in the world before. It's getting people access to this. So it was something where because of that utility nature to it, that it made a lot more sense than just, hey, we're making this really cool package that's going to look really nice and people are going to buy it because it's prettier than another bottle.
[00:35:08] Mike Schneider: We definitely talked to lots of investors who didn't see that, and we're not able to see that vision. Shout out to Sebastian over at Doehler, same with the GoRodeo guys, CJ and James. They saw the same thing, even you guys. before we even got to market. A lot of nos, but that vision was what the people that we were able to get on board, they saw it right away. They were like, oh, cool. We get Bev Valk, and we see like, yeah, this is a utility, this is a tool to unlock a category that doesn't exist right now. The next thing I want to talk about is the actual liquid, because I do think that's another thing that it's not like your flavors are just the classics. You have some pretty adventurous things. To create those, you did as you hinted at earlier, involve actual bartenders and influencers to create the product. Can you talk a little bit about that both, you know, just sort of, I don't know how you ended up at that. Like, why didn't you just go to a flavor house and say, make me a margarita? Or maybe you did at some point, but if you can give some background on that and also just kind of how that's working out.
[00:36:23] Brandon Schwartz: One of the cool things about the product is that we literally use the same ingredients that they use in a bar. So we were able to actually go to a bartender and say, hey, let's make a cocktail together. You don't need anything special. Let's just work on it right now for a few hours or a few weeks or whatever. And we're going to just put those exact things. in the bottle and people are going to drink that. Whereas every other product in the category, you have to go to a flavor house. You got to work with these special ingredients in this laboratory and it's going to take, I mean, I don't even know how that works. Frankly, that's a big part of the industry. I have no idea how people do that. And really, we just, we go into bars all around LA, New York, San Francisco, and we go do R&D with bartenders. And it's awesome because I mean, it's like the most authentic thing. We're literally putting that in the bottle. And so we could have done Brandon's favorite version of the margarita, but my favorite version of like a lemon drop. But we figured it'd be way more authentic to bring in different bartenders and commercialize the recipes and give them commissions on drinks as another way to earn money from their craft. where they don't have to be at a bar putting a drink in a glass for someone and serving it. They can make money from their intellectual property, and it adds a very cool dimension to it, and it makes it more dynamic than us just putting our face all over the brand and saying, hey, you should get it because we did this great drink.
[00:37:49] Mike Schneider: And is that something that is, I suppose, sustainable going forward? Do you just continue broadening the number of bartenders that you work with? Or I guess I haven't analyzed the lineup close enough, but I don't know if any bartenders have more than one SKU, or if, I don't know, maybe someone's fighting over something that's really mainstream, like the margarita. I mean, I'd love to get a commission on every margarita sold. That sounds great. Yeah, we got you, John. You want to make a drink with us or let us know? Perfect. See you at home. You're doing some at-home mixology. I think the team would accept you. The HPP Negroni, I think that would work. Plenty of juice in there. Yeah, definitely right. I think in a retail brick and mortar situation, definitely pretty hard to program, especially with resets and everything. It's just like an endless portfolio assortment. I mean, on the e-commerce side, it's actually a little bit easier than you would think. comes down to it is we make a label, we make a recipe, you know, we got to get the government to approve it. And then, you know, the lead time for, you know, actually producing any one, we try and get it down to like two weeks. So, I mean, conceivably we launch a drink every six weeks. I mean, we kind of have been doing that.
[00:39:04] Brandon Schwartz: I would say too that, I mean, we've been, you know, in a lot of conversations with a lot of different brands, spirit brands, and they want a certain kind of drink, and maybe they don't want necessarily a particular bartender on it, but they want to have their own kind of special formulation. So we can do it that way. And there's a lot of venues, whether it's a hotel or a stadium or kind of hotel group that want their own skews of different drinks, that don't want particularly want to, you know, a certain person affiliated with those drinks. So it's much more dynamic than I would say just having a bartender on it. Having the bartender has definitely added a certain level of credibility out at the beginning that this is bartender approved, especially people that generally aren't throwing their reputations around putting it on bottled cocktails. because they just have never thought that they put their name on the line for something like that. But I think it definitely becomes definitely like a platform in a product where bartenders can play on it, brands can play on it, venues can play on it, and there's different ways you can go about it, whether it's a bartender and a brand or just a brand or bartender without a brand. So it's just never-ending possibilities.
[00:40:08] Mike Schneider: And what about the spirits brands? I mean, that's something right now that's not a part of the brand identity for Drinksmith. That seems to be something that a lot of ready-to-drink cocktail brands are, you know, maybe wrestling with, if you will. I'm curious how that sort of factors in for Drinksmith though.
[00:40:29] Brandon Schwartz: We on a number of the products have the brand of the spirit alongside the left panel where the bartender is. So it's kind of like a behind the scenes of, you know, what's inside. And that's if it makes sense to have the brand on there. So like, you know, we work with the local distillery here in Los Angeles, we put the brand on there. So when it helps kind of get our costs down a bit, because it's like a sampling and marketing activation for the brand. but it's often kind of a very delicate dance because you know we talk to brands sometimes and you know they are willing to do a lot to have their spirit in the drink but if it just or it's not the right fit, we don't do it. So it has to hit on a number of levels. Like, you know, can you supply it to us in a certain way? Can we like work on it together? Does it taste right? So we're balancing all of those considerations, but you know, we don't have it so that we have to have it. It's just, if it makes sense. And, you know, I think over time as brands get more and more familiarized with what we're doing and they see the bartenders that they are trying to engage for their brand, being a part of our brand, they want to be involved as well and so it's just kind of an ever-growing kind of conversation we're having with you know whether it's a huge supplier you know top 10 to local craft distilleries to independents and everyone in between and so it's it's definitely going to be growing but it hasn't been something where it's like another brand completely takes over our brand. It's something where we kind of like to have that Drinksmith logo on there because it conveys a certain level of quality, kind of like maybe a Tetra Pak kind of idea where you know, hey, this is looks like Tetra Pak, it feels like Tetra Pak, it is Tetra Pak. And, you know, and that's kind of how we kind of think about it.
[00:42:08] Mike Schneider: So last question about the liquid. I'm curious, you know, as you guys have been in business, what is it? Two years that you've been out with the product now? Time? I don't know. Time is like suspended right now. One year. One year. Okay. One year. Jeez. Well, it's been a long year. I'm curious, you know, what you've learned, if you don't mind sharing sort of in terms of what is the consumer actually looking for with a product like this? I mean, surely there must be learnings as far as like the types of flavors, you know, I mean, again, I could just speculate, like, I don't know, if you asked me, I'd guess like margarita or something like that's probably like the top skew, but I don't know, maybe it's the more adventurous ones. Like how is this working out in reality? People definitely don't like mezcal. I'll tell you that much right now. Or I mean, they either love mezcal or they hate mezcal. I mean, you could check out the reviews on some of our mezcal products. It's like, it's either this is the best drink I've ever had. And it's so complex and genius. Or it's like, this drink is spoiled. And none of the other drinks have spoiled, but this one's spoiled. It's pretty funny. But the bourbon sour, bourbon sour, the classics are definitely where people gravitate to up front. But I think once we've established trust that, hey, this is like something different that's super fresh, people then start to get a little bit more wild with what they go for next. I mean, we're kind of pushing it too from our sides. I think a lot of the recent launches that we've had are coming out with something that someone maybe didn't ever think that they would drink, but they're like, They got me on that first order, and now I'm willing to roll the dice. We've got a lot of crazy stuff that we've launched from the hibiscus haze, smoke watermelon. Yesterday, we just launched Clover Club. The week before, we did the Peach Inferno. These are definitely starting to get a lot more wild with what's inside. I think just people, it's fun, you know, it's like Willy Wonka, you know, you can just kind of come up with these different cool flavors and people will just trust you at this point and they all come back. So when you guys were kind of just kicking this off, I think I remember chatting about sort of how you guys were going to go into retail and, you know, that was pre pandemic. I don't know how much you expected e-commerce to play into this, but it seems now, at least from an outsider's perspective, that e-commerce is like very much a part of, you know, what you guys do and do well and sort of the DNA of the business now. I'm curious, first of all, just how all of this is maybe, was e-commerce really the right place to go heavy? Does this Brad Avery a big retail future? How do you envision it going from here? I think what Lauren said before is, we have a product and the brand is secondary. So I think the technology and the approach to how we create these cocktails can translate to not just retail, but even other countries. We can work with spirits there, bartenders there, and the palette of that particular geography. So I feel like there's definitely the flywheel, if you will, for where the brand can go. It's definitely vast, got a lot of breadth and depth that we can attack. We at the beginning of the company, or I guess at the beginning of getting into sales and launching, we definitely were looking into different arenas. We definitely knew that Ecommerce would be where... Because the product is highly visual. We have a lot of DTC background. So we knew the power of paid advertising and leveraging influencers and social media and all these different ways that you can get in front of people on their phones and on their screens. But, you know, we definitely had programs set to launch with a couple of hotels on the strip in Vegas, you know, the T-Mobile arena, Cosmopolitan, but the pandemic kind of thwarted a lot of those efforts. And frankly, we also were unknown at that time. We had a lot of inbound interest from Whole Foods and Total Wine. We actually launched one Total Wine in Huntington Beach, but With the retail game, if you're not super well capitalized, you don't have a huge team, and the margins aren't there quite yet, it can be difficult to make that work. And you're only new once in that game. Once you start to show that you're not able to do X, Y, or Z things that they expect, it's harder to get back in. And so we decided that, especially with the pandemic hitting, to really just focus in on e-commerce. It's important to us. We had... Our site is set to sell products. So we were positioned nicely in that way. And with that habit of buying alcohol online, even accelerating before the pandemic began, and then the pandemic started and then bam, it was just like 10x that habit. We just decided to take the horse by the reins and just ride the eCommerce wave as hard as possible. So the way it works is... It's pretty cool. You know consumers buy through our site and has the appearance that we're going direct but we're not going direct alcohol spirits companies can't ship direct. So what what ends up happening is through use of some pretty nifty technology. This is where code does come into play. You never thought when we made this, we started this that we'd be like, okay, cool. We have a full web development team here that is making all of this happen online. But yeah, the consumer comes to the site, and those funds actually just get sent directly to the retailers. So Drinksmith doesn't... We don't make our money until the retailer pays off their distributor and the distributor pays us. You're not violating the three tier system is basically what you're, you're saying there. Yeah, I think you know, a year ago or pre pandemic, if someone said they wanted to start a e commerce focused like spirits business that too is. what a difference a year makes. I'm curious just what your overall outlook is now for the ready-to-drink cocktail space. I don't know, I feel like a new product entering the space every week. It maybe is only behind hard seltzers right now in terms of just the flood of people trying to get in the game. I'm curious if you can you know, just from the trenches, give some category insight to where we're at and where we're going. Yeah, I mean, in 2020, RTDs drove volume growth. They're set to explode this year. I mean, you've got Uber just bought Drizzly. You know, there's a lot going on with e-commerce. And then RTDs seem to be kind of like the biggest thing in the e-commerce game. You know, bars are closed. People are looking for, you know, cocktails in it. I think from our vantage point, we're excited to see all of the all different entrants come in because they're just, you know, they're just raising the awareness on the category in general versus, you know, maybe five years ago, there was less players. And so you really had to kind of do a lot of like, behavior cultivation where now it's like well there's a lot of different entrants coming in here talking about craft cocktails in a bottle and the consumer is really getting used to and interested in trying in the category. So you know this year when you're looking at the data and the research and the trends you know RTD is going to be led by the consumer looking for really high end premium good tasting options. So we feel we feel really well positioned. I would say I think if you're if you're looking to come out with something you focus on ingredients you know focus on what you're putting inside make sure that what you got really tastes good, you know, you want people to come back. So a lot of people get kind of thrown off with pretty pictures and fonts and stuff like that. And they forget that, hey, actually, like this person that's going to buy this from you wants to like it and you want them to like it so that they come back to buy it. So yeah, make it good.
[00:50:01] Brandon Schwartz: Well, I think what's a cool part of, you know, our product, as opposed to I would say, most other categories in general is the noticeable taste difference. That's can pinpoint for our brand. So I mean, like, even with different wines and different kind of price points, you know, $15 wine versus $25 wine, you take the brand label off, it's kind of hard to know the difference for a normal consumer. Same with beer, you know, even if it is a more premium beer, what is the way it's actually tastes better than another beer, kind of hard to notice. And obviously spirits, I would say it's generally the case too, unless you're, you know, a very high end kind of maybe whiskey or something like that, but then you're paying a far, far higher price. And so in the category, I'd say, you know, we try a lot of different products. And because they're working with a certain kind of framework, a certain tool, a can, a bottle, there's only so much you can do with that. But I think we're really excited to kind of where we're positioned because, you know, you can literally line up our product amongst literally every other product in the category and it's noticeable improvement and it's distinguishable and it's something no one can just kind of recreate in a few months or even a few years.
[00:51:10] Mike Schneider: Agreed, Lawrence, on that one. Well, certainly, it seems like you guys have a nice head start. I'm sure there will be other competitors at some point. That's usually the sign of you have a good idea and no one wants to copy a bad idea, right? You've seen a couple now at this point. There's a couple that I won't name. I won't give them any credit. Good luck to you guys. There you go. Some healthy words there. One other question I want to ask about the fundraising end of it. We talked a little bit about going to an investor where you're basically like, I'm going to spend a lot of your money to make a bottle. What about the pitch to an investor to even get in the game on the spirits side of things? Do they just see dollar signs because of things like Cosamigos or What's that like? Do you investors understand this sort of, you know, white space for ready to drink cocktails or is that still a real arm twisting event? you've got to be targeted for sure. You know not everyone is wanting to invest in a beverage and not everyone is wanting to invest in the back. And I think there's definitely those types of investors that are their thesis or their you know their framework for investing really requires you to be in the market. And then there's those investors who are you know they're the way bigger risk takers and they're really looking at game changing types of products or services. I think the group that we have, Sebastian, CJ, James from GoRodeo, Sebastian from Dohler, they come from the industry, and they've been able to see the power that certain technologies or certain ways of marketing a product can really unlock things and create a lot of value. So you got to match up your vision with the investor's vision and appetite for risk. you know, then you can find something. It takes a long time sometimes to find that right person and, you know, have that conversation. So get a subscription to PitchBook is my recommendation there.
[00:53:16] Brandon Schwartz: And I mentioned too, which is interesting, I think even from the very beginning, I think we saw the lack of high end or premium RTDs in the largest suppliers or larger spirit companies from a Diageo, Pernod, Bacardi, Constellation, you name it, all the way down, and they pride themselves on having luxury premium spirits. And a lot of them had maybe not so premium RTDs, or they were kind of playing in that category. And so they've tried to come out with higher-end RTDs, but haven't quite been able to accomplish that. And so I think, from an investor standpoint, they look at it as, wow, these big brands have been trying to do it. They haven't figured it out. We have figured it out. There's a dozen of them. that could use this not only as an RTD by itself in their portfolio, but as a way to incorporate all of the different spirits in their portfolio inside us as an additional synergy of partnering with us or even acquiring us. I think from an investment standpoint, it's less of, are people going to like us? It's what is a big brand going to do to partner with us in the future or acquire us? I think that supply and demand dimension, I think drives a lot of what we've been able to do.
[00:54:27] Mike Schneider: So with that, I mean, I think there's one just follow up question. You're talking about larger strategics on the spirits, and I think, you know, it seems like the category of ready to drink cocktails right now is, I would say, the minority are actual spirits based cocktails. A lot of them are, you know, malt beverages sort of positioned as cocktails. You know, where do you think that's all going to go? Like, it seems like just from what you guys are saying, it's certainly harder to launch in the spirits category. Do you think there would be a ton more products competing with you on the spirits end? Or will the majority of the challengers come from like the flavored malt beverages?
[00:55:11] Brandon Schwartz: there's definitely going to be, I think, a more on the wine-based side, because it has a similar kind of lighter regulatory load than spirits. And you can get pretty good taste with that, whether it's a sake or a soju, and even playing in that world. But you don't see a ton of RTDs in the space right now in that kind of world. But I would definitely say that because the category has shown to be helpful, especially in a pandemic as a hedge for on-premise closing down, that the bigger suppliers are just going to go, you know what? let's just invest into spirit-based RTDs. And I think because consumers know the difference now, they've been, I think, much more educated. But like how we have going to high-end cocktail bars last 10, 15 years, they know what a real drink is, and they know an imitation. And so I think the time has passed for big suppliers to try and fake it in a malt version of a cocktail.
[00:56:06] Mike Schneider: This has been great, really appreciate you guys joining me and definitely excited to see what you guys launch in 2021 and best of luck. Thanks, John. Much appreciated. Thanks for having us.
[00:56:21] Ray Latif: That brings us to the end of this episode of Taste Radio. Thank you so much for listening and thanks to our guests, Brandon Schwartz & Lawrence Cisneros. Please subscribe to Taste Radio on the Apple Podcasts app, Spotify, Stitcher, or Google Podcasts. As always, for questions, comments, ideas for future podcasts, please send us an email to ask at Taste Radio. On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time.
