[00:00:05] John Craven: We've received so much feedback of late from retailers, service providers, investors, and suppliers about how vital BevNET, Nosh, Taste Radio, Taste Radio Insider are to the industry, and we are grateful. It's really humbling to be a part of something that brands and industry experts find vital. This audience of heavy hitters makes advertising with us a high signal audience for brands looking to raise capital, find retail partners, improve messaging, and scale their products.
[00:00:33] Mike Schneider: Our team can walk experienced marketers through our offerings to help them find exactly what they need to plan for this year's story arc.
[00:00:40] John Craven: And for those new to advertising, don't worry. We can help explain what each of the components do for you and help you build packages around the right times to be in market.
[00:00:48] Mike Schneider: To learn more, visit mediakit.BevNET.com Or if you're ready to talk, reach out to sales at BevNET.com and send us 200 words explaining what you're trying to achieve, and we'll be in touch quickly.
[00:01:00] John Craven: And now, Taste Radio.
[00:01:07] Ray Latif: Hey everyone, I'm Ray Latif, and you're listening to episode 31 of Taste Radio Insider. I'm with my BevNET colleagues, John and Mike Schneider, and Jon Landis, and we're recording from the Taste Radio studio in Watertown, Mass. In this episode, we profile Christian Krogstad and Thomas Mooney, the co-founders of trailblazing spirit brand Westward Whiskey. Christian and Tom discuss the origins of their relationship and how a patient and thoughtful approach to partnerships has guided the company's business strategy. Just a reminder to our listeners, if you like what you hear on Taste Radio Insider, please share the podcast with friends and colleagues. And of course, we'd love it if you could rate us on iTunes or your listening platform of choice. Welcome back, Mike. Welcome back, John Craven. Thanks. Thanks, Ray. So excited to be here. It sounds like it. Certainly sounds like it.
[00:01:52] Mike Schneider: Mike, you were in Vermont? I was in Vermont. The Green Mountain State. The Green Mountain State now becoming the CBD state. You could find it anywhere, even like the laundromat has some CBD.
[00:02:01] Ray Latif: I think that's not a record, but it's pretty close to the record in getting a mention of CBD. I know I got it in this fashion. Yeah, well done, well done. Yeah, I consumed a lot.
[00:02:09] Mike Schneider: Good job. Yeah, it's everywhere. It's like in, you know, your standard local Vermont, like Nutty Steph's chocolate has CBD everything now. And I felt like you could find it in laundry detergent. The co-ops, of course, all have it. And John Craven told me about some great co-ops to try out. So I went and checked out as many of those as I could. Where's the heady topper at, bro? I got some for you, bro, don't worry. I mean, focal banger.
[00:02:29] Ray Latif: Oh yeah, right. It's flowing like a river.
[00:02:31] Mike Schneider: You can get it anywhere now.
[00:02:32] Ray Latif: Nice. John Craven, you were in California.
[00:02:35] John Craven: Was I in the THC state then?
[00:02:38] Ray Latif: Yeah.
[00:02:38] John Craven: The melting state. Yeah. Spent a week out in LA at the beautiful Los Santa Monica. Getting ready for Bed Night Live now. was at the Lowe's but not getting ready for BevNET Live. Although it's always neat walking around that hotel and seeing the maid carts that have a couple of BevNET Live bags hanging on them, a couple of Hugh chocolate bags. So we definitely leave our mark there year round. Got to go to my first KombuchaCon down in Long Beach last week. What is KombuchaCon for listeners who are not aware of said event? Sure. Well, that's basically a trade event for Humm Kombucha Brewers International.
[00:03:19] Ray Latif: It's a trade group that represents Humm Kombucha industry or category?
[00:03:23] John Craven: Exactly. Exactly. So, you know, I kind of compare it to like the Craft Brewers Conference for beer. You know, it's got some technical components. you know, a group that is trying to bring the industry together as opposed to, you know, make everyone kind of competitors against one another. You know, recognizing that Humm Kombucha category, while it's grown, is still, I think they said, at 9% household penetration or something around that. So lots of opportunity ahead. Did a panel talk there, which was fun. And I think got to try, jeez, I don't know how many different kombuchas. Some really, some neat ones I had never had before. There was Kombucha Iceland, obviously from Iceland. Did it have like fermented shark? No, unfortunately. But, you know, it was interesting to really see kind of where the flavors are at in different countries, which clearly the U.S. market is pretty refined at this point. And, you know, I think some of the international companies are kind of crafting their own style to it, which is kind of neat. What's cool about KombuchaCon is it's grown into something that all of the major producers in the U.S. are participating in and really bringing the community together. Yeah, and I think it's pretty neat. Like, there was a guy who asked a question to our panel that started with, I just quit my job and cashed in my life savings to start Humm Kombucha company, you know, all the way up to GT Dave and Brew Doctor and Hum were some of the companies that I saw there. So, you know, it's kind of neat just to see, at this point, how much it's evolved. And also, it's interesting that, you know, you had players that are in the alcoholic beverage space like Boochcraft and, you know, you have CBD Kombucha Iceland, you know, just kind of all these different things that have come out of it. So pretty neat category. I also went back to the scene of Mike's near death too.
[00:05:22] Mike Schneider: Oh God. Oh no. Yeah, he sends me, so this guy sends me one message and he's like, good thing we weren't sitting here. And it's the Rose Cafe and it's right by the fire pit where, you know, cause I would have fallen right into this fire pit. And he says to me, he's like, I gotta, I gotta tell you, bro, I wouldn't have, I wouldn't have helped you. I would have gone for the gram.
[00:05:42] John Craven: It would be like our CMO is legit, you know, fire emoji, right? CMO's on fire. By the way, side note, since we were out there for Expo West, the Med Men shop has closed and moved into a smaller store. And I asked the guy at the door, I'm like, what's going on here? And he said, oh, no, no, we're expanding and remodeling. They felt they had to up their game with the interior. And then right down the block, There's now a shop for the dosist that opened just in time for Coachella and apparently had some celebrities lining up to go to a dosist shop.
[00:06:20] Mike Schneider: So those like the Apple and Google of weed shops or what?
[00:06:24] John Craven: Well, no, dosist is... Well, they were described as the Apple of... of cannabis. The problem with these vaping devices is what Dosis is trying to solve, because you're not able to control how much you drag on a vaping device. And so they're trying to give you measured doses of THC or CBD through their proprietary device.
[00:06:46] Mike Schneider: It sounds like this is for me.
[00:06:47] John Craven: Yeah, I think it's... It's really the right way to make this whole- The whole micro-dosing phenomenon, yeah. Sweep of products, all of these concentrates. It's very, very hard for people who have no experience to break into that world. So this is like the training wheels to getting into vaping marijuana. Interesting. Yeah. And it's huge, there's like, we've seen a number of CPG investors who are involved in it and it's really attracting a lot of capital and a lot of attention as a brand because it is so clean and people do relate it to Apple in that sense, but it's not really a company that you could compare to Apple. Well, it was definitely an eye-catching store because of its white exterior and very clean interior. And unlike the med men that has, you know, security guy out front, everyone there had, you know, white shirts on and lanyard looking things, you know, very much. At first I was like, what, what is this? Like, I didn't realize like what it is. I'm not familiar with doses. Whereas MedMen, on the other hand, I was walking down there, it was 4.20 and they were running a 4.20 promotion, which I thought is pretty interesting.
[00:08:05] Mike Schneider: The time was 4.20 or the date was 4.20? The date was 4.20. Was it 4.20 at 4.20? That would have been awesome.
[00:08:09] John Craven: I don't think so. I think we were walking to dinner, but anyway. Point being that it's interesting that for a somewhat highly regulated product and industry that it's legal to have discounts and promotions to upsell people to more of it. I think that that's the Massachusetts coming out in you. Yes, I'm saying that purely as someone who lives in Massachusetts where you can't promote alcohol even. Happy hour is illegal. This state does not promote happy hour. I don't know why we all live here. pretty happy here.
[00:08:46] Ray Latif: You don't like paying $8 for a beer?
[00:08:47] John Craven: I mean, they try to like skip around the law by discounting food, but it's just not the same. But anyway, you can discount weed, apparently. Yeah. The other thing I was going to say, just as I was walking down Abbott Kinney I noticed just the sheer number of places that had CBD as like an add-on or a core component of a food product they sold. I went to the new Cha Cha Cha that opened there, and you know, of course they've got CBD drinks in there. Of course. The other thing I noticed that I never noticed before is that like probably 50% of the places, if I were to generalize, on Abbot Kinney are named something and something. And I'm like, wow, this is really. They named themselves after the street.
[00:09:36] Ray Latif: Well, it's the co-founders, you know, they've got ego issues, right? It can't just be one person's name.
[00:09:41] Mike Schneider: Well, all the one person's names are taken too, I mean.
[00:09:44] John Craven: Well, okay, fair enough. I thought about that, but do these people really have cool sounding names that pair nicely together? That's just, that can't be coincidence.
[00:09:52] Ray Latif: Instead of calling, you know, BevNET, the name of the parent company, you could call it like Craven and Craven or, you know, something like that. Craven, Craven, Craven. I wish people could see Craven's face.
[00:10:05] Mike Schneider: You know what one of the best parts about coming back is like the fridges are full again with different stuff. Cause we go through a lot of product around here. And one of the things I found was this, this smash pack. You guys tried smash pack? It's a smoothie and there's also a pudding and it's basically like a, you know, like a squeeze pouch for the Muscle Milk crowd and the Owen crowd. One of the things I just wanted to point out here is like, I was, I was doing a little review on the, on the branding and the packaging and I was talking about the hierarchy and that the product is the hero on this package and things like that. And then I got a DM from somebody that was like, yeah, but it's too medical. It's like, maybe, maybe, but I think it also has cues of the category, which is really important. Like I was talking about this from a perspective of, is this a good design for the category versus would I create, I don't ever talk about packages from a perspective of would I create this package? Well, how does it taste? So the pudding is pretty good. It tastes good. The consistency's odd. It has like a kind of sunscreen consistency to it, but the taste is good.
[00:11:06] John Craven: Did you say it has a sunscreen consistency to it? Yeah, it's weird. I mean, I was asking you like kind of a leading question, because when I see a product that literally screams protein in capital letters, in my head, it's screaming, does not taste good.
[00:11:17] Mike Schneider: The smoothie's a little grainy. It tastes kind of like Smarties. I'm sold.
[00:11:21] John Craven: I don't need to like supplement my body with additional protein. So, I mean, it's not my lifestyle, so I don't consume those types of products in general. And that puts me kind of in the same camp as Craven where I'm just like, you saw me, I grabbed a handful of popcorn out in the kitchen earlier and it was protein popcorn. And I'm like, oh man, this isn't really what I was hoping for. Yeah, you were not hoping for eight grams of protein in your popcorn. You were like, I want some butter. So, I mean, there's definitely a crowd and a consumer for it, like how large that is, it seems to be quite big.
[00:11:54] Mike Schneider: But the key here on the packaging is that you make it look like it's for that crowd because if, and when I'm evaluating the taste of this and saying it tastes good, I'm evaluating against the taste of other things that tastes like this in that category and would, and do I think people would eat this? And I think the answer is yes. Like I think this is a,
[00:12:12] John Craven: I agree with you. I think that the design of that package fits in squarely with what I would expect, which makes me understand it a lot more easily.
[00:12:22] Mike Schneider: Right. Same with this Lemon Perfect that I have in my hand too. I think this is definitely for a different crowd. It's definitely more of a hipster drink.
[00:12:30] Ray Latif: What is Lemon Perfect?
[00:12:31] Mike Schneider: Lemon Perfect is a cold press lemon water, five calories, zero sugar.
[00:12:35] John Craven: There you go.
[00:12:35] Mike Schneider: Yeah, there you go.
[00:12:36] John Craven: I will say that's definitely one of the better tasting stevia and erythritol. And I know that that blend is sort of like the winning combo from a flavor perspective, it seems. Citrus and stevia or citrus and erythritol? Stevia and erythritol.
[00:12:52] Mike Schneider: You're definitely not getting the aftertaste that you usually get from stevia. You're not going, like the stevia alarm bells are not going off. They're not, right.
[00:12:59] Ray Latif: Yeah. Can we go back to the KBI, the KombuchaCon? So it feels like KBI as an organization has grown up a lot since I've been at BevNET, and it seems like KombuchaCon has gotten bigger and bigger. But I feel like a lot of times when I talk to kombucha professionals, there are still some underlying issues between them and just folks that there's some kumbaya, but there's also, hey, I wish this person wouldn't do this or that. Kumbaya Khan. I mean, did you feel that John Craven when you were there? Did you feel like there was still some underlying issues or did you feel like there was a stronger sense of solidarity?
[00:13:32] John Craven: I look at it a little differently. I think, you know, there are some people there that are very much on a crusade and then there's sort of the other end of it. And it's, you know, a crusade for health and whatnot. It's nothing that I would throw shade at. And then I think there's the other end, which is that this is a, you know, real business at this point. And there are people in it that are, you know, purely in it for the business opportunity and commercialization of it. Again, nothing wrong with that either. The friction that I notice is just where those two things kind of meet. And, you know, a lot of that I think comes back to also part of what KBI is setting out to do of, you know, creating a definition of what is legally kombucha.
[00:14:12] Mike Schneider: Well, in your panel, you actually talked about that. You talked about some of the opportunities for products that are called kombucha right now, but are maybe closer to a sparkling water.
[00:14:20] John Craven: What I said on the panel is that I think, you know, a lot of times I hear, you know, pitches from kombucha companies and other functional like food and beverage companies where they're really getting down in the weeds of what it does to your body and this and that. and I use buy as an example, like a lot of times the most successful products are ones that simply offer, you know, the consumer the chance of something that is more healthy than what they're consuming today. So you don't need to sell me on the probiotics and kombucha, like changing my biome and my body. Like you just need to sell me on this tastes good and it's better for you than that soda or whatever you're drinking.
[00:14:58] Ray Latif: That's certainly the mainstream consumer you're talking about.
[00:15:00] John Craven: Well, and really that's what they need at this point. I mean, you know, I think converting, if the goal of the category or any of these companies is to convert only the hardcore kombucha drinker, well, I think that's going to be a struggle to be a real business. So I just was sort of urging simplicity in that. And that's something that for someone who's coming into this for pure, you know, passion, where kombucha that they made at home, like really changed their life. Like, you know, they wanna go out and share that message.
[00:15:29] Mike Schneider: So again, I'm not- I think there's a place and a time to share that message, but it's not on your package. Or if it is on your package, it's the one thing you're saying about it. Like you basically told them less is more. You know, you're in this conference where a lot of the conversation is highly technical. I watched some of it too. And it's like, you're going back to like, I'm urging you, That simplicity is what you want. You want somebody to come in and try your kombucha. You don't, you don't want them to get lost in, in all the, you know, the promises.
[00:15:56] John Craven: Well, and I think it's just, you know, something I've said before about being an educator versus, you know, being someone who's out there building a company. And I just think, you know, there isn't enough like time in anyone's day to go out and like hand convert consumers with a very, you detailed like health science message. So, you know, you can have that live somewhere, but it just can't. That's where the influencers are coming. It is tough for, you know, some of these passionate entrepreneurs because they are working in tandem and building a category and building a social consciousness of what kombucha is. And if some people decide to take that and make it a healthy halo and, you know, not really provide the benefits and not really provide those things and drag the category down, But that's not what he's saying. I'm not saying that anyone's saying that, but that's what people are very concerned about. That's why they get their pitchforks out and stuff. I have a pitchfork. That's exactly what I was trying to get to. I think that's where the things collide. if you're using the Healthy Halo without a legitimate product or something that isn't actually, you know, what the product is saying it is, that's a problem. And it's a problem for this category the same way as kind of imposter, you know, craft beer was for the beer industry. So, but on the other hand, you know, this category is, it's a drop in the bucket compared to beer. I think, you know, Hannah's trying to, and it seemed like, you know, the vibe was very much build the industry as opposed to like, you know, duke it out. So we'll see. Exactly.
[00:17:30] Mike Schneider: How many CBD kombuchas did you try?
[00:17:32] John Craven: There was only one. Really? I think. I think it was just the one guy from Toronto. There wasn't someone running around with like CBD droppers just spiking everyone'Humm Kombucha?
[00:17:43] Mike Schneider: I gotta improve your booch.
[00:17:45] John Craven: I ran out of time to look at all their supplier exhibitors, but they had a lot of flavor companies and a lot of stuff that looked like it belongs in a brewery, so keg companies and whatnot.
[00:17:56] Mike Schneider: Cool.
[00:17:56] Ray Latif: Yeah. Well, I have to imagine that some of the challenges and opportunities discussed at KombuchaCon are similar in nature to that of the craft spirits industry, which is represented by its own trade group, the American Craft Spirits Association, or ACSA for short. One of its leaders is Thomas Mooney, who, as I mentioned at the top of the show, is a co-founder of Westward Whiskey, a distillery based in Portland, Oregon, that specializes in American single malt whiskey and draws inspiration from Oregon's deep-rooted craft beer culture. Originally called House Spirits Distillery, Westward Whiskey launched by Christian Krogstad in 2004. Tom came aboard approximately 10 years ago, and together they have built one of the country's leading craft distilling companies. Last year, Distill Ventures, the venture capital arm House Spirits conglomerate Diageo, acquired a minority stake in Westward, a partnership expected to expand production and availability of the distillery's whiskey. I recently had an opportunity to visit the Westward Distillery and sat down with Christian and Tom for a conversation about the backstory of the company and brand, and how they fomented a personal relationship prior to formalizing their professional one. They also discussed Westward's alignment with Distill Ventures and how they determined it was the right partner, what the notion of a quote, better whiskey means to them, and why they believe that brands belong to the people who enjoy them, not the people who make the products. Hey, folks, it's Ray with Taste Radio. I'm in Portland, Oregon. I'm at the Westward Whiskey Distillery, and with me are the co-founders of Westward Whiskey, Christian Krogstad and Thomas Mooney. Did I pronounce that correctly, Christian? Close enough. Close enough.
[00:19:41] Christian Krogstad: There's no D. You don't say the D. It's a silent D. It's Krogstad, but that's a quibbling. That's a Norwegian name.
[00:19:48] Ray Latif: What's the, oh, Norwegian, okay.
[00:19:50] Christian Krogstad: Okay, very good. So the final D after a consonant or after a vowel is silent. It's like comb. C-O-M-B, you know, comb. Right, right, right, right, sure. Exactly like that.
[00:20:02] Ray Latif: Exactly like comb. Christian, you launched the distillery, which was originally named House Spirits. Tell us about how you got into the business. Sure.
[00:20:12] Christian Krogstad: So my background was in brewing. I moved to Portland actually to become a brewer. I moved here in 1991. And at that time, there were more breweries in Portland than anywhere else in the country. There were 14 breweries here. Now there are 90, I think. There's also a lot of trains here in Portland, too, if our audience can hear. We get some trains around here. It's a busy transportation hub. There's a lot of commerce happening here. But we're on the right side of the tracks. That's right. Well done, Tom. So I started off my career in beer brewing, but of course, every brewer loves whiskey. It is just another phase of whiskey. It's concentrated whiskey. And I got a chance to see that for myself and experience it when I Towards the end of my brewing career, I was managing the Edgefield Brewery for McMinimins, which is a chain of brew pubs. They have, gosh, I think 70 locations now in Oregon and Washington, 25 of them brew beer. So I was managing their brew pub, the Edgefield Brewery, and it was their largest brewery location. And they set up a distillery there for the purpose of making single malt whiskey. And at that time, we weren't thinking so much about the category or whether what we were going to call it. We were many years away from calling it an American single malt. But really what it was, was we were taking our excellent ale and distilling it and aging it in various woods. And I got a chance to see what was involved in making whiskey, especially single malt whiskey, and that gave me the inspiration and the sort of the confidence to branch out and start my own place.
[00:22:07] Ray Latif: And it was more than just whiskey. When you originally launched House Spirits, perhaps your most famous brand was Aviation Gin, which you sold or the company sold a couple of years ago.
[00:22:16] Christian Krogstad: Yeah, the original inspiration for starting a distillery was to make single malt whiskey, but along the way I realized that it would be many years before there was a single malt whiskey available to sell that we had produced and we needed some product to keep the lights on and to pay the rent. So we sort of looked around and looked at what we thought was interesting. I had a background in restaurants a love for gin and so we ended up with gin as a natural sort of, you know, I thought of it as a cash flow product. I realized afterwards that it wasn't really, it wasn't a positive cash flow product, but it was a great, great experience and a great way to get our name and our distillery out into the world and for us to gain experience in distribution and sales and marketing House Spirits.
[00:23:11] Ray Latif: And Tom, your background is a little bit more business focused. When did you come to Westward, which again, it was originally named House Spirits. What was your background in this business?
[00:23:22] Thomas Mooney: My background is in brand building primarily in the consumer products industry and then toward the end of that in beverages in particular. My first job out of college was at Procter & Gamble. I worked at Kellogg after that and then for a few years at Fiji Water. And it was really at Fiji Water that I fell in love with the beverage industry and was looking for something to do independently in the industry. And that was now about 10 years ago. And that's when I met Christian. And in meeting, we realized that we had a lot of a shared vision of what could be done in whiskey and very complimentary experience. So I have loved whiskey for as long as I can remember. but I'd never made any and Christian was already making spectacular whiskey at that time. I had built brands in some categories that I was passionate about and some that paid the bills but weren't that excited. So it was an amazing opportunity to combine brand building experience with spectacular whiskey that Christian and House Spirits were already making and to go into this together.
[00:24:29] Ray Latif: If I'm being honest, you know, when I came to Portland and I'd heard about Thomas Mooney and Christian Krogstad, did I get that? I'm trying. Kroksta. That's really good. I imagined a distiller, a visionary booze maker, and I imagined the buttoned up Harvard Business School industry executive. And now I look at you guys at the table and I'm like, these guys are cousins. They have similar beard styles, hairstyles, they dress similar. You know, when you guys first met, did you identify that you were so, I mean, did you identify similarities in who you were and how you operated?
[00:25:10] Thomas Mooney: Well, I did mean to get a haircut before I met you, but my, my flight was three hours delayed and the barber at PDX Christian's hair is, is a little muss it up a little, you know,
[00:25:25] Ray Latif: personalities are so important in partnerships and Working together and learning how to bounce ideas off each other and do it in a way that's productive And I can see just again just on the surface looking at you guys. It seems like you have a similar style Was that the case right from the outset?
[00:25:42] Christian Krogstad: Yeah, I think so. I mean, I think there are a lot of people especially a lot of entrepreneurs or craftsmen who enjoy drama, and I don't. And Tom doesn't enjoy drama either. I think that that's something that really unites us is that we're both pretty level-headed.
[00:26:04] Ray Latif: When you say drama, do you mean sort of ego? Yeah. Forward conversations and butting heads is, you know, a fun thing to do on a daily basis. Because I know those people. Yeah, yeah, yeah.
[00:26:13] Christian Krogstad: I know plenty of those people.
[00:26:14] Ray Latif: Yeah, exactly.
[00:26:15] Christian Krogstad: And I think that that's... I mean, I know that that's true in all manner of businesses, but especially in creative industries where, you know, restaurants, breweries, you know, these sort of consumer-focused creative industries, there tends to be a lot of ego. I guess you say that about artists. Artists can be a little dramatic, and we've shied away from that.
[00:26:45] Thomas Mooney: Yeah, I think we share a strong belief that it is Westward, not either of us, that should be famous and that we want our whiskey to do the talking. Ultimately, brands belong to the people who enjoy them, not to the people who make the products. And we want the brand to be successful and we want people to appreciate what we do. But it's not about us, it's about Westward.
[00:27:12] Ray Latif: So what about Tom's pitch, Christian, did you appreciate? And I don't know if it was so much a pitch as it was a conversation.
[00:27:20] Christian Krogstad: There was one really great hook. Tom professed at the time, he might have changed his mind.
[00:27:27] Thomas Mooney: No, I remember.
[00:27:29] Christian Krogstad: He professed to enjoy working with distributors. And I found that by far the most frustrating thing that I did.
[00:27:39] Thomas Mooney: And over the last 10 years, we have both spent our fair share of time working with our distributors. But yes, I have taken over most of the work we do with our distributors, and that's been fine. You know, I really love the entrepreneurial experience that Christian had. I had spent some time at fairly large companies. I learned a ton, but one of the things I learned for sure is you can't build a successful entrepreneurial venture doing it the way a big company does. And so Christian had done, you know, not once but several times, something I had never done, which was, you know, really build a brand and build a company from scratch, whether it was a restaurant or a distillery or anything else. And so I did not have that experience. And so I think recognizing that I could not make products the way Christian did and that I had never started a business from scratch the way Christian had, those were kind of very compelling reasons to want to be his partner. I think the most important part, though, was we got along and we gave ourselves not a few weeks or even months, but more than a year to really get to know each other. to work together on what that business would look like if we ran it together. And so by the time we met at Clyde Common in 2011 to sign all sorts of documents, we really knew what we were getting into. And we had really gotten to know each other well. And I think that has served us well over time because there have been many more good times than bad times. But to get through the bad times, there has to be trust and there has to be respect. And we had a lot of that from the beginning.
[00:29:24] Ray Latif: A big decision that the company made was executed last year when Distill Ventures, the venture capital arm of Diageo, the beer and spirits conglomerate, acquired a minority stake in Westward Whiskey. You know, what was that decision like? Because that's a huge step to align with the strategic. And there are several out there right now across the board, food, beverage, alcoholic beverages. You know, what went into that decision? Tom, how long ago did you first meet with DV Distill Ventures? And, you know, what was their pitch to you guys?
[00:30:01] Thomas Mooney: I mean, we have for quite some time been very open about our belief that in order to accomplish our goals, we needed a strategic partner.
[00:30:09] Ray Latif: And so what are those goals entail? Like, what were you trying to do that required that strategic partner?
[00:30:15] Thomas Mooney: to build Westwood into the leading American single malt whiskey brand and to have it available across the country and around the world and to really let the brand be everything it can be based on the quality of the product. And we operate in a sector of our industry that When Christian founded House Spirits back in 2004, there were a handful of craft distilleries. When Christian and I met 12 years ago or 10 years ago, there were maybe a couple hundred, and today it's over 2,000. It's a great time for American craft spirits, but also a very difficult time to break through that clutter and build a national brand and build something really to the size that we know Westward can be based on the product. We believe it transcended what you can solve by throwing money at it. It really is about market access and we felt that we needed a larger strategic partner to work with us to have that access to the market. We've been very open about this for years, probably going back five years or more. And in that process, we met a number of the companies who are large enough to fit that description and interested enough in entrepreneurial ventures like ours to invest in them. And the Diageo conversation specifically began with meeting Dan Gasper. Years ago, five years ago. So long ago that I can't remember, but it was at a bar. And it really began as a social, more personal conversation that led to exploring, you know, an investment from them and a partnership amongst us all. So we, not unlike, you know, how Christian and I met, but even, you know, with a longer term or over more time, we really got to know each other. And anybody who knows Westward knows that not only is it a fantastic American single malt whiskey, but it is very deeply rooted in the brewing culture of Oregon and that there probably isn't a place that is more committed to the beer that we brew to make our whiskey. And so if you could choose any partner in the world and looking at strategic partners, The world's leading producer of single malt whiskey, who's also one of the world's leading brewers, is kind of the ideal partner. Diageo does make a good stout.
[00:32:52] Ray Latif: Guinness is a... They have a stout. That's a pretty good brand, for sure. Yeah. Christian, were you on board? You know, again, being the founder, the craft distiller, the visionary, aligning with a strategic... There might be some folks that are critical of that decision.
[00:33:07] Christian Krogstad: Yeah, I mean, I... think that what's most interesting is what they were most... interested in about us was our innovation. I mean, they're interested in what makes us us. And they're not looking for more capacity to distill the whiskeys that go into Johnny Walker. They're looking for a new brand, a new category, a new expression of whiskey. They're looking for the things that make us cool, you know, and that make us, the things that make us interesting to them, make us interesting to a lot of consumers. And so, you know, they're demonstrating an interest in us as creatives and us as a creative venture.
[00:34:01] Ray Latif: It was interesting because earlier today, and I think yesterday also, we brought up this idea of a better whiskey. And, you know, across the food and beverage industry, people are trading up to a better whatever. Is that a goal of Westward Whiskey to make a better whiskey to challenge the current state of American whiskey? Yes.
[00:34:24] Christian Krogstad: In a nutshell, yes. we're always trying to get better. And really being a smaller company with a small advertising budget, essentially a non-existent advertising budget and a small marketing budget.
[00:34:38] Ray Latif: You have a sign outside, I saw it.
[00:34:40] Christian Krogstad: We do, we do have a sign. That's required by the TPB, by the way. So that's not like a marketing decision, that's a compliance expense. We're not going to get our position and we're not going to achieve our goals by convincing the whiskey drinking public that we have the funniest ads or the most interesting celebrity endorsements. We're going to convince them by really by having a great product. And in order to get there, we have to really always challenge ourselves and, you know, we can never be complacent in our product development.
[00:35:23] Thomas Mooney: Yeah, and I'll just add that better or best are very subjective terms, and so ultimately what is better or what is best is what people who love whiskey find compelling, maybe even more compelling than anything they've come across before. And Christian and I speak about this all the time. we would always fail if we went out to create our version of something else that already exists. The story of Westward Whiskey the story of creating an entire expression of whiskey that is, again, deeply rooted in the, let's say, cultural terroir of where we are, but unlike anything that there has ever been, because we can't be compelling By being like something, we can only be more compelling by offering people something, something new, something they didn't expect, something they now really want but never realized they wanted.
[00:36:23] Ray Latif: We often talk about super premium brands, especially for early stage companies when they launch, they are essentially in a super premium strata. They have a higher price point. A lot of times the ingredients are different than what's currently on the market. That super premium consumer though, is it the same consumer across the board? I mean, are you seeing the same people who are buying say a box of cookies that's like $8 as the same person who's buying a single bottle of Westward Whiskey, or is it something different? How are you targeting, how are you identifying your consumer base?
[00:37:00] Christian Krogstad: I think luckily for us, people who love whiskey, especially premium whiskey, love premium whiskey. They aren't brand loyal. curious about the category and they're willing to try new things, whereas, you know, in a lot House Spirits categories... the super premium products have created their market through advertising and marketing that creates loyalty just to that brand. But people who are willing to, you know, spend a few extra dollars for one whiskey are, they're putting themselves in the, in the group of people who are explorers, who are really looking, looking for that next flavor and looking for, you know, something exciting for their, for their palate.
[00:37:50] Ray Latif: That brings up an interesting point, Christian, because we had been talking about innovation. And one thing that stuck with me that you said earlier was that it's not so much about innovation as it is about refinement. And always, as you mentioned earlier, trying to get better. There is an innovation component to what you do though, extending your line into new expressions. How important is that to keep the consumer interested, particularly when it comes to whiskey and House Spirits industry?
[00:38:19] Thomas Mooney: I think it's crucial. People, like Christian was saying, people like to taste across multiple products and different ideas. And for most of the life of our Westward brand, we had one core expression by design because we wanted to establish what the brand is before we started innovating around it. But the more recent release of Westward Organ Stout Cask allowed us to bring new thinking into the brand and still rooted in that brewing culture. Now, you know, all of our collaborations with Oregon Stout Breweries, it's exciting to people. They want to try different things. And now that they get to try a second expression of Westward Whiskey begin to ask what's next. We have a facility with thousands of barrels full of many things that are next, and that'll be a really exciting part of the Westward story, you know, over the next few years, as we can bring some of those interesting projects we've been working on for years finally to market.
[00:39:23] Christian Krogstad: Just to expand on that, you know, earlier Tom said, you know, that a brand, you know, rightly so, a brand belongs to the consumer. you know, Westward Whiskey belongs to the people who drink it. And, you know, they're going to really tell us what's important. You know, we launched our core westward American single malt whiskey as our, you know, sort of offering to the whiskey drinking public. Now we've launched this Oregon stout cask finish. It's conceivable that in 10 years, that's the core product. And eventually we could even, you know, what is currently the core expression could be a thing of the past. That's part of innovation is that, you know, we're kind of putting our feelers out there and seeing what we like. And if we really like it, we're going to share it with the public. And if the public says, wow, I like that, new expression better than your last expression, you know, we'll see where it leads. We're not dogmatic.
[00:40:32] Thomas Mooney: Yeah, and to that point, we're a little less than a month into the release of Westward Organ Stout Cask. We had expected it to be about 20% of the brand's volume, with the core expression being the other 80%. And at this point, maybe three weeks into it, it's about half and half. Wow. And so that is significantly more than we expected. It's scaring us. Yeah, we didn't see that coming, but it's awesome.
[00:41:02] Ray Latif: So following up on the stout cask finished whiskey, you know, and going back to the notion of Westward as being a beer-philic distillery, it seems to me that the challenge would be on the marketing front.
[00:41:16] Christian Krogstad: what is interesting about Westward Whiskey're trying to articulate how it's made, we're trying to articulate the innovation and the collaborations and the real sort of groundbreaking work that goes into a lot of what we do. And of course, as part of this, we're trying to get people to try it, whether that's in a public tasting or at a bar or restaurant. We feel like having it on someone's palate is the best way to sell it. But short of that, you know, the pricing discussion is difficult because ideally, I think, you know, I think whiskey should be free. It's a God-given right. that, you know, we, as part of our, you know, should be one of the, you know, 10, not 10 commandments, but third faucet. Exactly. It is expensive. to be innovative when you're trying new products and trying to create new processes and using new ingredients and you're a startup company. There's a lot of expense to all of that. And so the price we charge is just reflective of all the inputs that go into creating it. Ultimately, at the end of the day, it's up to the whisky-consuming public, to each person, whether the price that we're asking for that bottle is worth it to them.
[00:42:50] Ray Latif: So Christian, Tom, you know, this has been a truly amazing experience for me personally, coming out to your distillery, you know, seeing how you fit into the fabric of Portland and the American craft spirit scene. And I sincerely appreciate you having me here and I wish you the best of luck going forward. Thank you. Thank you, Ray.
[00:43:08] Christian Krogstad: All right.
[00:43:09] Ray Latif: Been great to have you out here.
[00:43:10] Christian Krogstad: Thank you.
[00:43:11] Ray Latif: Come back. I will. That brings us to the end of episode 31 of Taste Radio Insider. Thank you so much for listening, and thanks to our guests, Thomas Mooney and Christian Krogstad. Please subscribe to Taste Radio Insider on iTunes, Spotify, Stitcher, SoundCloud, and Google Play. 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 so much for listening, and we'll talk to you next time.
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