The MHW Mark Podcast
Welcome to the MHW podcast, bringing you conversations with experts and leaders in the alcoholic beverage industry. Covering topics ranging from selling alcohol online, creating a new brand from scratch, and what you need to know when you start doing business internationally. Hosted by Jimmy Moreland and a rotating cast of cohosts from the folks at MHW.
The MHW Mark Podcast
Deep Dive on Market Data: RTD Edition - with Jessie Ott
Join us as we once again delve deep into the data weeds. This time we're looking at market data with special attention to RTDs with CrossRoads Solutions Founder and CEO Jessie Ott. Host Jimmy Moreland and MHW's Brigid McCabe talk about strategies that any brand can use to capitalize on these market trends.
Dive deeper into the data discussed in this episode with CrossRoads Solutions: Website
Check out Jessie's Thirsty Thursdays podcast: Apple Podcasts | Spotify
More info about MHW at https://www.mhwltd.com/
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Welcome to the MHW Mark podcast, where we take deep dives into various aspects of the alcohol industry. My name is Jimmy Moreland. Mhw is a US and EU beverage alcohol importer, distributor and service provider. Co-hosting with me today welcoming back returning champion MHW's Bridget McCabe Howdy.
Speaker 2:Thanks, jimmy, good to be here.
Speaker 1:It's great to be here with you. We've got a really fun chat today with our guest. We get into one of my favorite areas. We get down in the weeds with data.
Speaker 2:Yes.
Speaker 1:Are you a data person?
Speaker 2:I am a data person, so I think sometimes the idea is that marketing people are all rooted in creative and design, and while I do love those aspects, I cannot do my job properly without data and real statistics.
Speaker 2:So it is something we love here and specifically the data that we're digging into today is around ready-to-serves, or RTDs ready-to-drinks however you'd like to refer to them, rtds ready to drinks, however you'd like to refer to them and broadly speaking, rtds have driven some of the largest growth in not just MHW as an importer and distributor, but also distributors around the US. So we've seen RTDs consistently grow in both the off-premise as well as the on-premise, and that is actually an interesting data point that we talk about as well. But then also some qualitative analysis in terms of our guest, jessie Ott. She has a very strong supply chain background. She's actually a podcaster of Thirsty Thursdays and has had some members of the MHW team on her podcast and she consults for a variety of different brands. So she gets to see on the front lines of what the retailers are saying, what consumers are purchasing, and it gives us a really good insight into how RTDs can evolve and what's next in the space.
Speaker 1:Well, this episode does get a little bit into the weeds, which is where we like to be, but if there ever was an episode, to check the links in the show notes so that you can follow along. We dropped some really good links to where you can follow along with what our guest is actually talking about, so that you can see some nice charts and graphs and all that good stuff. So check the show notes.
Speaker 2:Absolutely, and I'm a big fan of doing this speed setting as well. I enjoy listening to my podcast on a two speed.
Speaker 1:You're a 2x person. I can't go more than 1.5. Really, bridget's busy, she's got no time for you. 1x and 1.5x people. Well, that's you know. Listeners, beware, listen at whatever speed you like and if you're not driving or something like that, by all means hit the show notes and pull up some documents so that you can follow along. But let's get into our lovely discussion. Our guest today is the founder and CEO of Crossroads Solutions. Welcome to the show, jessie Ott.
Speaker 3:Yeah, thank you. Thank you for having me. I'm super excited, by the way, you all are my first podcast to be on the other side of the mic, so I'm so excited.
Speaker 1:That's right. We've got a true podcast professional here. Jessie runs the Thirsty Thursdays podcast. Why don't you start? Just tell us a little bit we can cross promote. Tell us a little bit about that.
Speaker 3:Yeah, sure. So I was in a tech company and I was in charge of marketing and sales and it was a startup and I was thinking of ways to not have to do all this direct sales all the time. And so I was thinking of ways to not have to do all this direct sales all the time. And so I was thinking, oh, I could do a podcast and I can run commercials on it and that way I can get people to learn about this company indirectly. And it's something that I've kind of always had a knack for or wanted to do, and it was a little bit before podcasts were cool Like this is.
Speaker 3:I'm in my third year and I know people have been doing it for 10 or 15, but really the last few years it's gotten really, really popular and I called one of my mentors and said would you be my first guest? And it just went from there and I got amazing guests that first year. It took over, it had a life of its own and here we are. It's just. It's been one of the greatest experiences that I've ever had and I hope I, you know, make an impact and a contribution to the industry through these stories of these journeys, of these careers, of these people, because everybody has their own story, everybody has their own journey. Everybody gets to where they are from a different place and a different reason and it's just so fun to learn what those are. You know, and we get to taste on the podcast from time to time and I'm just meet such incredible people doing amazing things.
Speaker 1:Well, let's learn a little bit more about you. Can you tell us a little bit about your personal background and then go into a little bit about Crossroads Solutions and what y'all do and everything?
Speaker 3:Yeah, so my background is in the beverage space. I crossed over a little bit in food but people, I do a quarterly review for beverage now and I tried to do the same thing for food and they were. They were just like kind of tiptoeing around it and I'm like I don't think I have the roots to actually do a full on like food podcast, on just trends and whatever, and so I'm kind of just back in just focusing on, you know, the beverage trend, which is what I've been entrenched with for over 20 years. I worked at Remy back in the day. I was a field marketer so I managed 18 markets for them in the South and Southeast, lived in Miami area. Then I moved to St Michelle Wine Estates where I built sales territories. So that's where a lot of the analytics came into play, which is really cool because we would build sales territories based on the different types of volume and prestige accounts but also based on drive times, because you can't be everywhere and it was the 80-20 rule and whatnot. And that was really fun and interesting. And then I switched over into the brokerage side of the business, working in the military side, which I called on the four exchanges the Army, air Force, marines, navy and Coast Guard, and so I just love those relationships.
Speaker 3:And when that I worked there at that brokerage for I think, around almost 10 years and we parted ways and then that's when I kind of got into the tech side of things and that's when I created Crossroads Solutions the tech side of things. And that's when I created Crossroads Solutions because I saw what it was like to manage business, multiple businesses, as a broker and it's all the same effort. It doesn't matter the size of the company, it's still the same emails, it's still the same paperwork, it's still all the same things. And so I was like, wow, I'm going to build this system to help people manage multiple businesses. And once I started showing my platform and this kind of crosses over into crossroads, once I started showing people the platform, they're like, oh my gosh, any CPG company could use this out here in this world. Cause I've been kind of in the military, you know, not really sucked in and and and but, but at the same time very busy within that segment and so I didn't know all the things that were happening out and we call it outside the gate, by the way, one of the terms and so, yeah, so that's when I was like, well, why would I stop there and not just offer it to CPG in general?
Speaker 3:Because the platform is basically built to support sales, basically built to support sales. So, whether you're VIP or whether you're in 20 states and you're going and grabbing all that data and you're looking at them one by one, we will do that for you and then we will add all your promotions within each of those states or each of those markets and we track your inventory, make sure if it's getting low at certain thresholds or KPIs that we want to manage. We can do all that within the system, and so we just go out and we take all the different sources. Whether you want finance operations within your company, we put all of that into what I call is our CRS data hub, and then, within our data hub, we create custom dashboards so each customer can review the business the way they need to, and we can also separate it by level. So if you just have an investor dashboard, you want, for you know, just a basic overview. You want a sales, you know finance, we can build all that out.
Speaker 3:It's really fun, and I'm such a nerd for saying that. No, I love that. It's really fun. I love that.
Speaker 1:I have to take the opportunity to really quick jump into a little bit of an A-fees rabbit hole. Okay, I'm a veteran and so I have done many a shopping trip to my local PX or BX, depending on where I was stationed. Okay, I actually I grew up in North Dallas, texas, where A-fees is headquartered, and I actually went to high school where AFES is headquartered, and I actually went to high school. One of my good friends in high school, his dad was the three-star lieutenant general in command of AFES.
Speaker 3:Really, that is awesome, that's really cool.
Speaker 1:So I don't know how long ago this stuff was for you, but at some point General Thurgood was a neighbor of mine and it was strange to join the military and go like, oh, that's what he does for a living, Because his portrait was on the wall of my local base exchange in Misawa, Japan. It was a trip, to say the least.
Speaker 3:That is so cool, that's really cool. Yeah, so I'm in North Dallas right now, whereabouts.
Speaker 1:So I went to Plano Senior High School and I moved around all over North Dallas. So I've been to Rowlett schools, garland, richardson, allen, just you name it. I've probably caused trouble there. That's funny. We'll do some North Texas chat off air, but suffice to say that there's a fun and interesting connection there, but let's get back to work, shall we? Okay, bridget, can you bring us back to earth?
Speaker 2:No, no, I love it, I love being a part of this and have a lot of support for the military. So thank you both. So today what we're doing is we're kicking off some trend discussion around ready-to-drinks sometimes called ready-to-serve it really just varies. Sometimes called ready to serve really just varies. And RTDs can really utilize any base, whether that's spirit, malt, beer, wine, wine product. I mean, we've really seen it all.
Speaker 2:And so the reason that we thought Jessie would be such a great fit to speak to some of the trends is because she has a variety of guests on her show, she's working with a variety of RTD brands as well as has great relationships with the retailers. So she kind of sees each tier of the three-tier system and how it's responding to RTDs all the way to the consumer. So really pleased to have you on today, jessie. And, if it's okay, I'm just going to jump in with our first question here, which is to kind of pick your brain on what are the current trends in RTDs right now and sort of, where do you see it going in the future?
Speaker 3:Yeah, and you know I failed to mention another business that I'm building right now. It's called SpecialtyBrandsnet and we're export. So I also have some insight into kind of what different parts of the world are interested in RTDs as well. So it's interesting to see the current. I have a couple of slides that basically will tell you the exact story of what's happening, because the data is there right to really tell that story.
Speaker 3:But you're looking at premiumization in the sense that consumers are trading up for better ingredients. They want lower sugar. You know the spirit-based versus the malt-based. You know the spirit-based they just taste better. It's kind of like a no-brainer, right. I mean, we've all tasted them. There's some that are better than others, but I personally I think the spirit-based ones they just taste better and they don't have like that aftertaste to them.
Speaker 3:You know we're seeing more health conscious choices low ABV, the functional, the adaptogens, nootropics, non-alcoholics those are all helping drive this consumer. I wouldn't call it a change, I'd call it adaptability. You know, and I think really we give credit to Athletic Brewing that really put that whole non-alcoholic trend on a grand scale, not a large scale, a grand scale. They're over in the UK killing it over there. So you know, they, I think, gave a lot of the, even the beer guys, you know, the opportunity to go hey, I can go and I can make non-alcoholic beer and they've done it and it's good and, and so I think that came along with different events, and I know that there is a question about post-COVID, about how that all of that has really been important and how it evolved. It has evolved.
Speaker 3:The category flavors I think you mentioned something about the base doesn't really matter and one of our quarterly reviews, erica Ducey, has some research on how the. You know Gen Zers and Wise, they don't care so much about whether it's a vodka or wine base or what it might be. You know, and that's been evidenced in some of these other brands that are growing, like Beatbox and Buzzballs, and you know these orange wine flavored, deliciously flavored cocktails that are, you know, single serve. Single serve is also really important. The cans have surged.
Speaker 3:You know single serve, single serve is also really important. The cans have surged, you know, in the last five years the 355 milliliter cans, I think a lot of it is. It's on premise to some degree, but it's also these sports venues and these concerts, beaches, this grab and go sense of in a hurry or you can get it at even at convenience stores have helped us because it's expanded so much you can get it even at convenience stores. Have helped this because it's expanded so much they can be in wine and beer stores a lot of times, depending upon the alcohol percentage. So I think there's just a lot of laws and a lot of momentum behind why these are working so well.
Speaker 2:That's such a great point that you bring up about the legislative shift that's happening and obviously, mhw being a distributor and compliance provider, that's something that, state to state, we have to follow very closely. So, you know, post COVID we saw such a huge shift in the convenience stores being able to carry, like, different bases, depending on the ABV or what the spirit was, depending on the ABV or what the spirit was, you know, to go cocktails, being really strong for RTDs and not even shifting, like on premise, starting to carry them, which was a little bit interesting, where we never thought we'd see a bartender sort of, and so it was a little bit of a shift in the model. What are some other things that you've noticed within the RTD landscape changing since the pandemic? And I'll keep it pretty broad because I know that there's been a lot, so feel free to comment on anything.
Speaker 3:Well, can I finish up just a couple of more trends that I'm seeing that I think are really important and kind of big to the bigger picture. Absolutely, what I found very interesting is that these big CPG conglomerates are now releasing some kind of a cocktail. So you've got Sunny D with a vodka based, you've got Ocean Spray, who just did something with Absolute, You've got Vita Coco doing Captain Morgan. Even Welch's Juice is doing a vodka based a, a grape-based vodka transfusion thing. Minute Maid, wine-based cocktails, Kraft Heinz with Crystal Light cocktails A lot of these brands that we knew as kids are now making cocktails.
Speaker 3:I saw it in Total Wine over here in Dallas not too long ago and you know they've got their section, their RTD section. It says Minute Maid right there and it's just so wild and so bizarre. But I think that's going to have a huge impact and I think it's also going to be interesting to see how successful they are, because what kind of distribution do they have? It's different right on the spirit side than it is in grocery and whatnot, and so I'm just very fascinated with what's going to happen with these versus like a carbless who's just an independent family going after it and killing it. And I've got some data to share if you're interested on that. And then you've got Beatbox, who now has Shaq, as he's an investor now and he's a spokesman. So I think that's a huge transformation for them and they are killing it as well. They're in a great spot. So I think these are really important things that we need to be watching.
Speaker 2:That's such a great point, the CPG involvement and obviously your strength and background in that space. Have you seen and I think there was obviously a lot of buzz around Tito's going to Reyes in California and the beer distributor? I mean the same thought kind of applies here for CPG. Like they just know how to merchandise and do it right on a national scale. Their logistics, like everything is just going to be top par because they've been doing it for so long. How do you think that sets them apart to do these cross collaborations, maybe even more so than just like the marketing side of it? You know you're so strong in the supply chain side. I'm curious to see, like, does it give them a leg up a little bit from the other independents?
Speaker 3:I think it's different. I think they are motivated and they have a giant sales team to support it, right, because they have a very small territory versus a liquor or spirits, you know, supplier or even rep in the streets, and I mean that's just my assumption, because I feel like they have, you know, all the convenience that they have to get to, and that's why companies like Carbless are going to these distributors and they're going to them by neighborhood at a time and conquering that neighborhood, and then they're going to the next neighborhood and then they're getting on-premise, which Carbless is, 50% on-premise, which just blows my mind. That blows my mind too With the spirits, though it's a different sales approach and it's a different. It's a hand sell, right. It's not so much a transaction like beer, and so I'm curious I mean, we're all curious, right and we talked about this on our Q1 quarterly review about what were those meetings like and what.
Speaker 3:What were the points that Reyes made to move the needle, to make that happen? Because clearly it's happening and it's not just one company, right, and so I think that that is certainly a trend that is going to be continuing. For, you know, I think everybody's watching, right, everybody's watching, and you know to your point, merchandising it also came up on our podcast. The beer companies just do it right. They know how to do it, you know, and it's a strong point for them.
Speaker 1:I'm curious about how the Bev alcohol brands might approach collaborating with CPGs to take advantage of some of these benefits that you talk about. Obviously, direct collaboration via, you know, working together to do an RTD that sounds like a lot of investment and sort of a long time horizon to make something like that work. But even just like co-merchandising, like you say, you know, if I've got a vodka brand I might reach out to like the local juice producer or whatever, and say, hey, can we find some way to get on some, you know, shared shelf space or something like that. Is that a thing that brands are doing or what would you recommend like a way to sort of develop some of these strategies?
Speaker 3:Yeah, I think you are amend like a way to sort of develop some of these strategies. Yeah, I think you are. You've got the Jack and Coke and the Beam and Coke collaborations that I think probably are doing very, very well. They're both really big names. You know, like I mentioned, vita, coco and Absolute.
Speaker 3:I don't know, I don't have the inside gut feeling that this is going to be a bigger trend than what it is, just because there's so many other things filling that space so fast. Because I think, once we see how some of the ones that are already in the market are doing and how it works, like I just Crystal Light and drinking alcohol is a really hard one for me, minute Maid and drinking alcohol is just really hard. So I think it really depends on what the brands are, how they resonate to consumer and what their brand stories are. And I hate to keep coming back to carbless, but, like the name, carbless is not something you have to explain what it is Right, you know what it is. It's. It's low carb beverage in a can.
Speaker 3:It just makes it obvious, and so I think that there's no real training or education that has to come with that, whereas some of these other ones, like Welch's grape juice. I'm not sure that. I'm not sure that that's going to go well for me. You know what I mean. That's a lot harder to explain, and so I think even these big CPG companies have a lot of money and they have a lot of power, but what do they have? How are they going to get from a kid's drink to an adult beverage and drill that education in between there? I think that's going to be a really difficult road for them, right.
Speaker 2:And like, how far does the nostalgia play go? Right, like seeing the Sunny D. I think that's a novel thing at first, a Sunny D cocktail in store, but are you really getting the pull through? Are you really getting those repeat purchases, or is it just someone that's like, oh, this is fun to have?
Speaker 3:Yeah, I drank this in the 80s.
Speaker 2:And it's also like, I think, in terms of the collaborations between, like, for example, I think Beam and Coke is such a great example, like that collaboration happened so long ago. I kind of feel like we're probably at the end of the timeline for external partners cross collaborating like that. I think if a brand who is a soda, like a major soda or juice purveyor, they're probably going to take that R&D in-house and create their own Like they're going to want all equity of that, so they're going to just make it like their mixer plus a spirit that you're co-packing with or something. I doubt they unless there's really like a top name out there that you know is going to collab with them.
Speaker 3:So I could be wrong, or they need to put protein in it. Yeah, just put protein in it and make it keto.
Speaker 2:They need to put protein in it, just put protein in it and make it keto, have a little alcohol and you're all set. Yeah, that's actually a great point. I will say and this is very off topic but if they created a Jones blue soda RTD, I might buy one if it was like a simple herb just for old time sakes.
Speaker 3:Yeah, that's awesome, that's great. Yeah, I just it's hard to say, I just think there's, you know, the kid factor. I know there's parents that are not very comfortable with it, right. And where are they going to merchandise it? They're not going to be in grocery, at least in most States, I think, because they're going to have to be in a liquor store, right? Although some of them are wine based. So it'll, it'll just be interesting. I'm just fascinated with that.
Speaker 3:I don't know if you've seen the beatbox. Beatbox posted a the Schenken newsletter, the impact newsletter, and it's just for RTDs. And you've got high noon, beatbox, surfside, all the the ones you expect, right? So when you take that and you look at the circercana data and you look at it this year, last 52 weeks, the only thing that's different in terms of growth there's, out of the top 35 brands, only two of them are spirits, the rest of them are RTDs. Nine of them are RTDs.
Speaker 3:So it's almost the identical picture that you're looking at. You've got Crown and you've got Don Julio, and then you know, when you look at it this year, I was really shocked. So, year to date, high Noon jumps down to number six and Buzzballs jumps up and they're up 14, over 14 million, almost three times the second highest growth company, don Julio. And what you can't see here from the chart that I created is that the distribution, the max that you can get most of these brands that are growing like they are, are 20%. A couple of them are, you know, the Don Julio buzz balls they're 70%. Julio Buzzballs they're 70%. So you look at Surfside they're at 28%. High Noon's at 92%. They're there. They're going to have to just be creative with flavors at this point right, and keep that velocity up. But there is so much room for growth for these companies that are just knocking it out of the park right now. I don't see it stopping anytime soon.
Speaker 2:Right, and we're definitely seeing the same on MHW's end as well. Some of our highest growth clients in terms of volume and sales have definitely been the RTD category, and so that's exciting from not only a consumer perspective but a distributional perspective, an access perspective. I think and I just want to make a note we're going to have this data in the show notes for you so that you can access any of these data points that Jesse is recalling right now after the podcast. So, just moving into, we talked a little bit about the brands that have high growth and that are winning right now. Not that I'm going to make you pick a favorite, because it's like picking a favorite child, but which is the brand that you think is one to watch for the future?
Speaker 3:I am completely obsessed with Carbless because they're doing it for being outsiders, are doing it so right. You know they're building it one, one beer house at a time and they're creating, they're demoing liquid to lips, liquid to lips, liquid to lips. They're not doing any, they're not trying to be everywhere all at once. They're focused and it's showing and you know you can only get them in a couple of markets, but they're they're exploding and their velocity is is unbelievable in the stores that they're actually selling in, you know they. They also have a lot of flavors, so they do have a lot of offerings there. It's vodka based and I think they has a couple of tequila based ones. And you know the the name I think is is so important to the times that we're living in, because keto is a big deal. People don't want carbs, people are trying to be healthy. You know that's the whole thing, where you kind of have this perfect storm of greatness and they know they just seem to pick it up really fast and get it done.
Speaker 2:What are some interesting data points that you've seen around RTDs. You shared a lot, but is there one in particular that you were like, wow, I really did not expect that.
Speaker 3:Yeah, I will. I will say that I there's so much growth for on-premise on this, and I don't know the exact numbers, but it seems like it's less than 10% when you think about it. It's mostly driven by off-premise, but on-premise, obviously, is where they're going to be tasting it for the most part, unless they happen to walk into a demo, and so I feel like I feel like there's just so much more growth in that area. And, to your point, bridget, like it's cans aren't going to be in your cocktail bars, they're going to be in your bars and restaurants and maybe a few offerings and some, you know, your local restaurants and stuff like that. But these cocktail forward and these cocktail driven restaurants and concepts, that I don't see it happening Right.
Speaker 2:And it's interesting because we're almost seeing like the reverse happen, where now some of the top mixologists are creating RTDs Like let me bring a lot of them to you.
Speaker 2:And it's like it's kind of like a uno reversal there, which is fun because they're bringing what a lot of consumers like maybe they don't get a chance to go to Manhattan or Sweden or wherever they're based they can taste the magic at home in a canned format. So I think that's really exciting. When I went to a bar convent Berlin last, there was quite a few of those that were present and I was eager to get them over to the US.
Speaker 3:Yeah, you know one thing and I don't mean to sidebar here, but I think one some data that is really important for us to keep in mind, because we're not an industry that is a have to have. It's just you want to have the experience. So when you look at consumer debt and where it's at right now it's at an all time high. It's not, it's not good. We're borderline recession. You know, you've got the tariff back in. You know whiplash and many there are quite a few, you know investment companies that are like, yeah, this whiplash is could easily put us into recession because people don't know what to do. They don't know if we should what to buy.
Speaker 3:I mean, for me as an export company, we're getting worldwide brands. We're getting worldwide brands. We're getting the pricing in their own countries, so we can just avoid the mess. Then the headaches and the math of it all. But when you think about that in terms of RTDs and how, you know, inflation is high and consumer debt is over $10,000 per home. More people are getting home equity loans on their homes more than 17 years. So these are trends that aren't great for any economy, you know. But then where do we fit in all that? And I think you know that single serve with RTDs helps ease that squeeze. You know they're affordable, they're a little bit healthier. You know they can't afford to buy maybe a 40 or $50 bottle of bourbon or tequila. So okay, well, I'll just. I'll just get some cocktails in a can for five or, you know, 10, 12 bucks and it'll get me through whatever Like. So I think I think all those pieces kind of come into play on that too.
Speaker 2:Yeah, that's such a great point. The macroeconomic always affects RTDs and, you know, even during the pandemic, people had a lot of disposable income because they weren't going out or couldn't go out and socialize anymore, so that they were spending in terms of like off-premise right and we were seeing that actual happy uptick in e-commerce and things like that. And so now we're seeing almost a little bit of a trend reversal there, where the consumer, even though they're still trending towards premiumization, their shopping occasions or cart occasions are less we're seeing, you know, less than that, and I agree that that's a. It's really important to have the single serve as a part of your strategy if you're an RTD, because providing that experience or that sort of like grab and go is how you're going to build your consumer base really at the end of the day, during what can be a tough economic time right now. So you really covered on all points of it in terms of creativity, merchandising, consumer experience and macro economics. So I'm so happy to have you on, jessie.
Speaker 3:Oh, I'm so happy to be here. This is so fun.
Speaker 2:Yeah, absolutely, and so I think you know if we can round it out. I would love to get your idea around what is the future of RTDs? And then, knowing that so many MHW listeners are brands themselves and they might be new early in their journey, yeah, from your perspective, what would be some advice for them and how could they move forward in this environment?
Speaker 3:Yeah, I think, as I learn more also, and you see different laws come through and it's, it's. It is kind of confusing, especially when you you know we didn't talk too much about THC and CBD, but that is certainly a huge trend that's happening and some people are getting out because it gets really confusing. And then there's certain ingredients you can and can't use for sprouts and whatever retailers, and so I think if you are a new brand, I think there are certain things that you really need to focus on, and one of the first things I'd probably do is get an appointment with a lawyer that actually knows what's going on, because if you're going to do CBD or THC, you got to understand the laws and the headaches that come along with that. And I think if also, like, contracts are really important. I know, you know, I was just listening to the to Adam with Carbless and he doesn't do contracts and, to his point, it probably was to his benefit. But just be very careful about those contracts because you can get really hurt if you don't know them. You don't know what you're doing and then locking your ingredients with this global turmoil. If you can get long-term contracts and get a fixed price, that can help ease the cost and the volatility of your fixed costs, of your fixed costs and what we've seen, obviously, with Carbolis and others.
Speaker 3:There is this trend to going to those Midwest markets, those C&D even markets that have growth, where people are leaving the cities, coming to these cities and raising their families and building it one market at a time. And you have to be different, you have to be good and you have to have a story. Everything is about a story and so if you can nail all those things, I think, if you can differentiate yourself, then I think you've got a brand that can stand out. It's just there's so much noise right now it's going to be hard For the more established brands. I think there is going to be a lot more focus on the functional. We talked about cross-category collaborations, maybe even some seasonal flavors. There's some really fun yuzu flavors that are really popular lychee flavors. I think if they can get a little bit, you know, creative with what their offerings are and stick with the vodka based, if you can, I mean, or like what buzz balls, what they do is really smart because they have the wine based flavored and they have the spirit based flavored. That way you can be everywhere and it's working for them, which was which is huge, you know, and I think the other thing is that even distributors.
Speaker 3:One of the takeaways from WSWA that I heard from Sam Anderson was we're focused on velocity. It's not that we don't want to take on new brands. We need brands that are going to focus on velocity. We need tastings, you know. Focus on that one market at a time. Build it out a little at a time. That way you're gaining momentum. Build it out a little at a time. That way you're gaining momentum, you're gaining a little cash.
Speaker 3:You can get more production and just kind of, instead of just, you know, widespread everywhere. You know it's not something that works. Or, you know, especially with the storytelling and the direct to consumer relationship that brands have to have with these days, you got to be really strategic about how you go about that and know who your consumer is. And then I think to what we talked about earlier is these strategic partnerships. You know, maybe you know I'll tell you what if Jim Beam had protein in it, I'd be winning, you know. I mean, for a woman of you know, almost 50 years old, we've got to start paying attention to the protein and it's a big deal, right, like protein. Protein, I mean it's like ugh. But yeah, you put a little liquor in there.
Speaker 1:The Jim Beam muscle milk collaboration we all need.
Speaker 2:Yes, I mean energy drinks with protein that are cross-collabing with like everything from candy to. I mean energy drinks with protein that are cross collabing with like everything from candy to. I mean. You're just seeing it all, so it's, it's interesting. I wonder what sort of preventing that from more of a I'm wondering if it's compliance related reason there's not as many clubs too is with industry.
Speaker 3:You know they're down. There's maybe less cash to invest in some r&d that could, you know, be a factor, but I think I think it's interesting. Rtds are not going away ever, right. I think these spirit-based ones are going to continue to grow. High news going to continue to grow. I think you're going to see the thC and CBDs grow as well just a smaller base. Obviously. Non-alcoholics are going to grow. It's not going away ever either. It's a smaller base, but I think people are trading. They're drinking one or the other. They're just not wanting to go. My example is when I drive the family over to my in-laws. We like to hang out in their pool. Well, I'll just drink the athletic brewing, because you still have that experience of this beautiful can. It tastes like beer, tastes good, and who cares if there's alcohol in it, it doesn't matter.
Speaker 2:Right, right. But then you feel like, oh, you get to relax and, yeah, I definitely agree with you.
Speaker 1:It's interesting the different, I guess, cultural things that can drive these kinds of shifts to things like low and no alcohol. I was stationed in Japan during a time where Japan had just dramatically changed their national drunk driving laws. They had changed it from a limit like a blood alcohol content limit, pretty similar to the US, to where now the blood alcohol limit in Japan to be qualified as like serious trouble DUI is basically one drink and you're over the limit. Japan really clamped down, they took it really seriously and so, almost overnight, they sort of scrambled and developed this huge industry of low and no alcohol options. And this was in 2009, 2010, thereabouts that I was seeing this over there, and now, sometime later, we're seeing, you know, this huge shift for completely different reasons, ones that are more generational and sort of these other factors that are informing this shift that we're seeing on this side of the Pacific, and I just I find that really interesting how different exogenic factors can cause these kinds of major, major market shifts.
Speaker 3:Yeah, major, major, I mean now in Japan you can get sake and highballs on the vending machine.
Speaker 1:Oh yeah, that's always been a thing.
Speaker 3:That's so great.
Speaker 1:Our final fun question that we like to ask everybody, Jessie, is what is your favorite adult beverage?
Speaker 3:Old-fashioned.
Speaker 1:How do you take your old-fashioned Cherry?
Speaker 3:Oh yeah, the good cherries Okay.
Speaker 1:Yeah, you like the expensive.
Speaker 3:Yeah, yeah, yeah.
Speaker 1:I don't know if we'll say the brand, the expensive cherry, yeah, the $24 for a jar, like, yeah, they're worth it, they're so good. And you like orange zest, or do you go a little fancy for the lemon? Some people go for the lemon, I like the orange.
Speaker 3:I love the orange with the bourbon. Okay, I just do I really. I love it, and when I make them at home, I'll use I'll even use a little orange bitters, and then I'll usually muddle a little bit of orange with it.
Speaker 1:Nice.
Speaker 3:Makes me feel a little healthy.
Speaker 1:How heavy on the bitters do you go I? Like heavy, heavy bitters. Yeah, and I like rye instead of bourbon.
Speaker 3:I get that. Yeah, I like Rye too, but I am such a stickler for my go-to is Jim Beam. They call it seven-year now, it used to be Jim Beam Black, but I just love that flavor. I love it with the orange bitters. Yeah, I'm heavy on the bitters. I probably use four or five drops when I make mine, and then sometimes I'll just add just a little bit of the cherry juice in there too, just to sweeten it up, just a little bit soften it up and just kind of those flavors meld really well. People say that only old people drink those, but I don't think so. Oh, no.
Speaker 3:I think they've got a renaissance. You know, you can make them with tequila now and rum, and you know people are doing the silly little smoke globe over it.
Speaker 1:The whole thing yeah.
Speaker 3:Yes.
Speaker 1:Well, all right, so a an old fashioned, a very dark colored old fashioned for Jesse is the answer there, which is a good answer. Jesse Ott, we want to thank you so much. The company and the website Crossroads Solutions is the company. Jesse Ott, we want to thank you so much. The company and the website Crossroads Solutions is the company. We will have the website and other links in our show notes so that you can follow up, find out more. Check all that out, jesse. Thanks so much for stopping by.
Speaker 3:Oh, thank you for having me. I'm so stoked to be here. You guys have been wonderful. This has been so fun.
Speaker 1:It's been a great time. You can also check out. If you want to hear more from Jesse, you can check out the Thirsty Thursdays podcast.
Speaker 3:Did I see? It's every Thursday at 3 pm Eastern. I premiere every Thursday, but I have shorts that for that particular episode run from Monday to Sunday, sometimes beyond, and I'm on all the social channels. I post them everywhere, but, yeah, youtube is my primary place where I post things. Now I've got 125,000 views, almost 2000 subscribers, so we're growing right now and it's really fun.
Speaker 1:A real pro. Well, we here at the MHW Mark podcast are just hoping to ride your coattails.
Speaker 3:Let's go.
Speaker 1:Well, this has been great fun. Thanks so much for swinging by and thank you listeners for joining us on the MHW Mark podcast, and thanks again to Bridget McCabe for joining me in hosting.
Speaker 2:Thank you so much for having me again.
Speaker 1:This podcast is produced by me, Jimmy Moreland, with booking and planning support by Cassidy Poe and Bridget McCabe. It's presented by MHW. Find out more at mhwltdcom or connect with MHW on LinkedIn. Lend us a hand by subscribing, rating and reviewing this podcast wherever you listen. We'll be back in your feed in two weeks. We'll see you then, Cheers.