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
Sampling Strategy and Acquisitions - with Josh Jacobs
Come along with us as we explore sampling as a marketing strategy. Host Jimmy Moreland and MHW’s Brigid McCabe welcome Flaviar SVP of Strategic Partnerships Josh Jacobs to talk about how brands can capitalize on this oft-underutilized customer touchpoint. Josh also talks details about Flaviar’s acquisition of Speakeasy, which he cofounded.
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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. Today we have an excellent discussion lined up for you. We'll be talking about some interesting approaches that brands can add to their marketing and distribution strategies, and we take an unexpected but fruitful detour into acquisitions, and it sort of echoes the three-part series we did on M&A back in October and November of last year, but with some detailed specifics but with some detailed specifics.
Speaker 1:Now. Normally, you'd hear my MHW co-host with me during this introduction, but the team has been extra busy with a full events calendar. Hopefully they got to take a bit of a breather this Memorial Day weekend and I hope you did too, dear listener. Mhw's Bridget McCabe will join the discussion, which we may as well get started. All right. Our guest today was the co-founder and CEO of the e-commerce and fulfillment platform, speakeasy, which was recently acquired by Flaviar, where he is now senior vice president of strategic partnerships. Welcome to the show, josh Jacobs.
Speaker 2:Thanks for having me, Jimmy, and Bridget Welcome Josh.
Speaker 1:It's great to have you here. Thanks for making the time. Can you tell us a little bit about Speakeasy, about Flaviar, about yourself, how this all came to be and why you're here on the podcast today?
Speaker 2:Absolutely Well, jimmy. In today's crowded market, consumers are overwhelmed and brands are fighting to stand out. Flaviar solves this with a unique funnel that turns discovery into a revenue driver, converting curiosity into premium spirit sales. Across our multi-channel platform, we generate and very few people actually know this over $100 million in alcohol sales alongside over 500 brand partners that we have, from global leaders like Diageo, pernod, ricard, constellation, to the most innovative emerging craft brands, and this is all powered by six interconnected growth lovers that I'll quickly hit on. The first is marketplace exposure. We have four marketplaces Flaviar, wine Searcher, kaskers and Mash Grape that connect brands with over 65 million premium spirit shoppers annually. So really enormous ecosystem delivering unmatched visibility across key discovery touch points through a single partnership, all under the Flavio umbrella.
Speaker 2:Second piece sampling and discovery. This is what Flavio was really most known for and the program that got the company off the ground in 2012. And we've ultimately sold over or shipped over three and a half million tasting vials since our inception. We've turned product discovery into a powerful sales engine through this, and what's evolved to become our flagship is our advent calendar, our whiskey advent calendar. Last year, we shipped 888,000 samples through that program alone and completely sold out. So this is about placing our brand partner spirits directly in the hands of high intent, curious consumers. It's a proven way to spark brand love and drive full bottle sales.
Speaker 2:The third pillar that I wanted to hit on is memberships and subscription depletions. We have Flaviar Black, which is the Amazon prime of spirits, offering members free shipping, special pricing and early access to exclusive allocation drops. It's a powerful way to keep brands in front of tens of thousands of highly engaged consumers within the Flaviar community. On the subscription side so the membership side you pay an annual fee and then you get access to certain things that you have to buy into. With a subscription, you actually get bottle or liquid directly and we can guarantee large-scale repletions. Right now we're currently offering up to 4,000 bottles for our Bourbon of the Month Club and we place this again directly in the hands of high intent spirit enthusiasts. It's a turnkey way to drive trial and what's great about our subscription program is currently this is focused on full-size 750 ml bottles. So we're driving trial but also depletions.
Speaker 2:The next pillar is branded e-commerce and fulfillment what we call Flavio Checkout, and this is what Speakeasy folds into on the white label side, and our checkout solution powers direct sales from the brand websites in a three-tier compliant fashion and is trusted by over 500 brands alone with this one offering and we have the industry first hybrid model offering both flexible fulfillment through managed warehouses and also the traditional network of retailer fulfillment, all optimized to our brand partners goals.
Speaker 2:The fifth pillar I wanted to hit on is data and insights, really powered by WineSearcher, which gives us real-time visibility into almost 37,000 global retailers, and every single day we're pulling product availability and price points so we're able to tap into product and demographic trends and really understand consumer behavior across such a big ecosystem. And then the last piece is our marketplace amplification. So top partners are seeing seven-figure sales annually in campaigns across the Flaviar ecosystem, leveraging placements, sponsored content, email sampling something we call hubs that we can talk more about and it's all about being front and center with our community. Campaigns start in the four-figure range and really scale from there into the high hundreds of thousands, and it's about giving our brand partners a flexible, high-impact way to amplify visibility where consumers are already existing rather than having to find them themselves.
Speaker 3:That's a great overview, josh. It's a really, really multifaceted and integrated system and I think you guys really own the market on data in terms of all of these different facets. So many MHW clients utilized Speakeasy, many utilized Flaviar. Can you talk a little bit about how Flaviar and Speakeasy really complement each other, as well as possibly even some of these others that you mentioned, like Wine Searcher, from a data perspective, and how has this acquisition immediately benefited your clients?
Speaker 2:Great question, bridget. The motivations underlying the merger were really three main dimensions. The first is from a fulfillment perspective. Speakeasy, we were winning brands because of our warehouses, our managed fulfillment and some of those unique capabilities which I'm sure we'll delve deeper into. And then Flaviar and other platforms would occasionally beat us on some opportunities, specifically on the white label side, what we now call Flaviar Checkout. Because of the network of retailers and to bring all of this together, the industry's first hybrid model as I hit on in the opening segment all under one roof, has proven to be extraordinarily valuable. And this isn't just offering independent solutions. This is creating one fused solution whereby SKU we can determine whether or not hey, this is a widely available product, let's get it to the consumer as fast as possible with the least expensive shipping option. Versus. This is a merchandise bundle where liquor stores. They lack the warehousing capacity, the trained personnel and the infrastructure to support that. Ultimately, let's have that funnel through the warehouses so we can optimize the best route to market. Not just let's have that funnel through the warehouses so we can optimize the best route to market, not just by brand but by SKU, which is proving to be exceptionally powerful and thus far, the amount of existing brand partners that are opting to leverage. That has been really, really high, and then, as we're talking to new potential partners, this has been a major differentiator for Flaviar.
Speaker 2:The second motivation behind the merger was the fact that Flaviar grew up as a direct-to-consumer company with the sampling program and then acquired Kaskers and started building up the marketplace and then started offering all these different memberships and subscriptions. And then started offering all these different memberships and subscriptions, but as they continued, as we continued to grow our consumer base, all of a sudden there was a really appealing opportunity for brands to tap into it, and thus a B2B side of the business was born. But building that from scratch and not having the infrastructure takes time. There's a lot of learnings there. On the flip side, speakeasy we didn't have a marketplace. We didn't have our own direct-to-consumer business. Everything we did was what we call B2B, as in Speakeasy, was supporting other brands. You could really think of it as B2B2C. We were helping other brands get to the consumer, so our entire business was modeled around supporting brands, and so we were able to come in and be this part of the Flaviar business that is not just a fulfillment engine, but an entire team, with account managers, with marketing services and other aspects of the business that Flaviar didn't have or that we could bolster. And so all of a sudden, now we can take advantage and this is the third piece of it of the entire Flaviar flywheel and offer this to brand partners in a way that we couldn't necessarily before, since we didn't have the full team supporting it.
Speaker 2:And your other question Bridget around some of the other acquisitions. So Flaviar, I mentioned, acquired Kaskers and then, most recently, wine Searcher and Barcar, and this is really about creating the most diverse ecosystem where we have an offering for brands of every single shape, size and stage which is really exciting and really powerful. And a lot of people, as we were talking about at the beginning, don't necessarily have visibility into the diversity of the Flaviar ecosystem and we tend to blow brands' minds when we get into all these different pieces, and the toughest thing is not whether or not they want to work with us, it's where do I get started.
Speaker 3:Right, there's so many options and there's a fit for every single brand out there.
Speaker 1:It's amazing, this success story, that it's quite the journey from co-founding Speakeasy to an acquisition that took place, I think, in September is when it was official. Can you tell us, can you walk us through, I don't know, maybe a peek behind the curtain, at just the psychology personally yourself, josh Jacobs, of what it was like for a lot of people? That's it. They exit and they personally exit. They're out. Thank you, cash the check, but you know you have chosen to stay on and take on this new role. How has your day-to-day changed? How has your, you know, personal involvement with the operations of your company and your sort of your career? How has that changed?
Speaker 2:Absolutely, Jimmy. So for me personally, as you might imagine, to then scaling the team from zero employees to 45 employees, to just having that be part of my identity. The name Speakeasy and Speakeasy sure people refer to it, but now it theoretically folds into Flaviar Checkout. So the business doesn't really exist. It's really been incorporated and fused into Flaviar. So you can't necessarily tell what was Flaviar, what was speakeasy, and that was part of what was so alluring about the merger to begin with. But that required some grieving and some mourning and that's not necessarily a bad thing. But that's just a chapter of my life that I had to take the time to sit with and acknowledge that there was going to be a really big change. But on the very positive side, this was actually a mostly stock transaction and that's because we saw so much potential to continue scaling the speakeasy side of the business, but as part of Flaviar, and also to turbocharge the existing Flaviar business.
Speaker 2:So I'm as committed as I ever was before, but of course in a slightly different role, I will say as an entrepreneur. Your role is always in flux and you're always growing and evolving as an individual and a leader. But over the last six, seven months, however long it's been since the merger was announced, since the acquisition was announced, that has been accelerated and the amount of flux has increased significantly, as you could imagine, but at a very high level. My role has remained quite similar, where I continue to focus on all things external Brands, wholesale partners like this, media relations, investor relations. So at a very high level, I'm fulfilling a similar role, but, of course, there are some big changes and what's really exciting for me, since I'm no longer the CEO, I have a lot more time to spend with brands, which is what really gets me out of bed in the morning and also that's where I can have the most value as a leader in the organization.
Speaker 3:Absolutely, and I just have to say we are so proud of you over at MHW.
Speaker 3:I mean, if any brand listening has ever been at any trade show, any webinar, podcast, I mean Josh has really been in the mix and is super involved on the front lines with brands and I think that goes a long way because you can experience sort of what they're experiencing and obviously, with today's competitive market, I mean there's a lot of edge that brands need from that perspective.
Speaker 3:So to have Josh so plugged in with everything that really all three tiers are doing within the beverage alcohol system, it was really cool and we were all so proud of you to see that acquisition. And I think it's really exciting for us to see you, you know, taking the, the larger Flaviar brand, to the next level and being able to seamlessly integrate all these different parts of the business and and create an offering for brands that can really help them. Obviously, you know MHW we're a service model, so we don't do the hands-on field, sales and marketing for brands. So brands like yours are really important for us because that's what helps everybody win at the end of the day. So just wanted to mention that, that we're really proud of you and before we kind of pivot here into the next conversation about sampling and merchandising and all the things, Josh, can I ask?
Speaker 1:you know we did on this podcast God, about a year ago. We did a multi-part series on mergers and acquisitions and I understand if there are things that you cannot get into, but I'm curious about that process, like, how long did that process take? Did you actively shop around for someone to acquire you? Did you you know? What kind of legal or consultant type assistance did you contract with to help facilitate these kinds of things? Can you just give us maybe what you can share in a nutshell?
Speaker 2:Absolutely Happy to. And first I want to just say, bridget really appreciate those kind words. It warms my heart. It's comments like those that really help me take a moment, take a breath and feel proud in everything we've accomplished. Everyone, no matter who they are, they're so busy and it's very easy to just get caught up in the flow of life and not stop and smell the roses. So thank you for sharing that, bridget. That truly means a lot to me, and I also want to take a moment to recognize MHW as a really integral partner, not just cheering from the sidelines, but actually we've been deep partners since the very early days. Mhw was one of the first organizations to really buy into the idea and trust the vision that we were building at Speakeasy, so I'll always hold a special place in my heart for MHW.
Speaker 3:Thank you so much for that.
Speaker 2:Yeah, of course. And Jimmy, awesome question on the merger. Happy to share. I would say this is probably something that isn't talked about enough. Just because mergers and acquisitions a lot of times are pretty hush hush in terms of them coming together and then everyone's focused on the business models, but not necessarily what led to that moment. I'm happy to share as much as I possibly can.
Speaker 2:The first person I want to call out is Mark Levitt. He was our investment banker. Without Mark we would have undoubtedly not gotten this deal over the finish line, and I always tell this story because it's such a stark memory for me. In one of the first conversations with Mark he said buckle up, just know, every single deal will die at least three times before it gets over the finish line. And I kind of just laughed it off. I didn't understand what it meant at that time. Oh, my goodness, was he right.
Speaker 2:This was a full test of our grit and determination and, at the end of the day, mergers that come to fruition only do because there is enormous motivation on both sides. Otherwise they would fall apart because our deal died at least three times. And as an investment banker, I think you feed off of that type of energy and rush, but, as an entrepreneur, when all your eggs are in one basket and you've been focused for months on bringing something together and you don't see a path forwards, it's extremely disheartening and I'm sure I lost several years of my life through the process. But it was definitely a great process of learning. Just not sure I want to go through it again. And the last thing that I want to mention is whether or not we shopped around, and the answer is yes. So Flaviar is really this under the radar giant.
Speaker 2:Even myself, being as plugged in as you possibly could be into e-commerce, Bev Alk, I wasn't fully aware of the depth and breadth of the Flaviar business, and so we had conversations with every single player and we're considering a transaction from every angle whether that was us acquiring, of course, being acquired, looking at mergers and we initially approached Flaviar with the concept of a strategic partnership, where we kept hearing that marketplaces were really suffering because of fulfillment and that was a core competency for our business. So we said, wow, we really can come together in a unique way. So we started talking with the marketplaces and Flaviar was the first one to say you know what? We probably are too much of competitors for us to be strategic partners. We've built this muscle of acquiring businesses. What do you think? And initially we said nope, absolutely not. We're having an absolute blast. We're on a tear. Why would we mess with that? And Fred, who is the CFO and COO of Flaviar and who comes from the M&A world, he said let's just spend a couple of weeks together, let's give me a few hours, let's put it on paper and go from there. And so we put it on paper. I was happy to do that because I just instantly developed rapport with Fred and when we put it on paper after those couple of weeks, it was immediately clear that being acquired by Flaviar was the right business move. So my head got there first, but it took a while for me to warm up to.
Speaker 2:That idea of actually giving up the keys was my initial thought. No longer am I going to be in control of Speakeasy. But flying to Slovenia, where the two co-founders are from and where the real headquarters of the business is, and spending time with Fred and the other leaders, especially ones that had been previously acquired, I realized it's not about giving the keys of the business. It's about expanding the brain trust where it was. My co-founder, Michael Bowen, and I running Speakeasy. And now all of a sudden we're going to expand that with a bunch of high-powered entrepreneurs who have a crazy successful track record. And all of a sudden we realized and that was the turning point that it was about working together with a very exciting team. And we realized at that point all right, we got to get this deal done. And then it took almost another year from that point in time, so it was about almost almost a 18 month process from soup to nuts. So it takes a while and, as I mentioned before, you have to be fully in it, Otherwise it's not going to materialize.
Speaker 3:I love that. We took that deep dive, though, because it is so interesting and I was curious about it too. How can brands, whether they're new or experienced, utilize Flaviar in their marketing strategy? If they have a digital marketing strategy, how can they pivot it to include and optimize utilizing Flaviar?
Speaker 2:Something that was always a challenge at Speakeasy was that we had one main offering and we really only catered to a very narrow spectrum of brands.
Speaker 2:But what's been so energizing being part of Flaviar I mentioned this before is we can confidently go into a conversation knowing that we have something to offer that brand, something for brands of all shapes, sizes and stages. And the way that we typically approach it is we try to understand what is that brand's budget or, even better, what is that brand's goals, and then, given the breadth of opportunities and solutions and offerings that we have at our disposal, we typically like to craft bespoke proposals for each brand. In general, we recommend having a consistent presence and really thinking about all the different offerings throughout and across the funnel, from discovery to sampling to conversion, and it's really fun to not just over and over again pitch speakeasy which was really fun but to go into a conversation and be much more consultative, learn about what that brand is focused on, what are those 10 pull moments, and then we can pull from a bunch of different products that we have up our sleeve to then ultimately help amplify that brand and help them hit their goals.
Speaker 1:You mentioned up top a whiskey advent calendar. Holiday season prior to last year, I believe, I got one of your whiskey advent calendars as a gift from my partner. So I want to say thank you for that first of all, and I'm just curious about how a brand gets to be in one of those little windows that opens up. You know, is it something that they pitch themselves to you? Do you? Is there someone who's like the lead sort of tasting or product designer who curates the selection according to X, Y, Z? How does that work? I'm just interested.
Speaker 2:Yeah, I love that you've experienced the Whiskey Advent Calendar yourself. It is such a cool product, such a cool experience, an amazing gift, and a lot happens behind the scenes to pull this together. We used to joke at Speakeasy that there were two seasons. It was OND and preparing for OND, and with the Advent calendar I think it's just one season. We're always working on the Advent calendar, whether we're trying to bring up brands, whether we're working on the production, the design.
Speaker 2:Every single year has a really significant change and there's a ton of focus into the backstory and all of the unboxing experience and the videos that go with it. So it's a massive, massive project and curation is certainly part of that. So we work with our product team and Grisha in particular, one of the co-founders, who's heavily involved this was really his brain baby and we work together on, for example, last year was Hotel Flaviar and we were really focused on having certain types of products in certain regions covered in the hotel. But one way to sum it up is we are looking to cover a bunch of different countries, a bunch of different types of whiskeys and bourbons, and we've even started flirting with the idea of going to adjacent whiskey. Of course, the vast majority will be whiskey, but what are some other products? At the end of the day, consumers are looking to Flaviar, to be the tastemakers and to keep the finger on the pulse of what's cutting edge and not just have very mainstream brands that they might be familiar with. So we spend a lot of time and energy into the individual products and then, from a brand perspective, it is an amazing opportunity.
Speaker 2:So last year we sold 37,000 advent calendars and, based on our surveying, maybe up to 50% of consumers are sharing their samples. So 37,500 purchased them. Maybe 50% more had also sampled it. So 50,000 plus samples last year. You can't really name a single opportunity in the industry where in one swoop, you're gonna put your brand in the homes of 50,000 people. So brands are clamoring to get inside of the advent calendar. Such an amazing opportunity, not just for sampling. But we do very much focus on the conversion to selling full-size bottles as well, and so we have all this gamification and all this interaction and engagement with our consumers to continuously promote those 24 brands, and part of it is in-person experiences. Other part of it is traditional PR and digital marketing. I mentioned videos that we worked with. So it's this whole experience and this whole world really that we've built around the Advent Calendar it's this whole experience in this whole world, really, that we've built around the advent calendar.
Speaker 1:I will give you one point of data that you converted two full-size bottle sales out of that advent calendar. There were two that we just just knocked our socks off, that we'd never heard of the brands before and we were just like, yep, those are the ones let's let's buy two 750s out of out of those.
Speaker 2:So it works music to our ears, ears, absolutely.
Speaker 1:I'll take my check after we can.
Speaker 2:Okay, I love it. I love it. And we've seen so much success with the Whiskey Advent Calendar that last year, under the wine searcher name, we rolled out our inaugural wine advent, and there's something up our sleeve for later this year. That is another new category that we'll be introducing, so keep an eye on that. Something cool is on its way in an emerging category that's really on fire. Okay.
Speaker 3:Well, excellent. What is your advice that you would give to brands to optimize their sampling strategy via digital methods?
Speaker 2:So one thing to comment on is we have the advent calendars, of course, but then what we have is what we call small format as well tasting boxes we have curated which a brand can be part of a box with other brands, and this is usually three or five 50 ml vials. We also offer custom tasting boxes where a brand can solely feature their own skews. For example, if an agave brand, a tequila brand wanted to have a Blanco, a Repo and an Anejo and no other brands, we can work on that as well and we have these for sale not just during the holiday season but year round. We have these curated and custom tasting boxes. So there's always sampling opportunities and we recommend thinking about not just the advent calendars, the Big Bang, but also some of these other sampling opportunities. But it's important to be thinking about a holistic strategy beyond just sampling. We've already talked about as part and built into our own sampling efforts.
Speaker 2:At Flaviar. We're focused on selling full-size bottles, but what we really see is their synergistic effect. When our brand partners are in an advent calendar, they might be in a small format tasting box, they're advertising on our hubs, they're in our subscription as well. When we see brands just focus on one of these verticals, there's certainly success and it's worthwhile. But when we see two or three or four, the amplification of this is really, really exciting. Two or three or four, the amplification of this is really, really exciting. And that's when we start seeing brands completely take off and start separating from the rest of the pack.
Speaker 2:Sort of an extra wide funnel, I suppose, to convert from more sources, exactly, and there's always that marketing adage that it takes seven touches with a consumer to convert them. And so if we can get your product in their hands and they sample it, well, not everyone is going to be like Jimmy, you and your partner and they go online and they take that immediate action. Some people might forget about it, even though they really loved it in the back of their mind, and then all of a sudden they see a different ad or engagement or activation on Flaviar and that reminds them and they ultimately purchase it. Then and there Maybe they even forgotten about what they had, but in the back of their mind they're drawn to that product because they had actually tasted it previously. So that's where we start seeing some of the synergistic effects.
Speaker 3:That's great, and I'm thinking a little bit about like the data side of things, because even with Speakeasy, that was always such a strong point and now with WineSearcher and all of these integrated the capability for brands to have multiple touches. Is there anything that you offer in terms of like industry report or purchasing data? Or, I'm a little bit curious in terms of like the data side of things, what can brands ungate and get access to?
Speaker 2:Yeah, I always. One of the first observations I had as a BevAlc entrepreneur, coming from a data background and a data science background, was how brands are forced to essentially scale in the dark with no first party data and no access directly to the consumer. And my mind was blown and that's ultimately what gave birth to the idea for Speakeasy. But with Speakeasy we've really tried to silo our partners' data and they own their individual customers. But we always knew there was an opportunity that we could aggregate the data, that we could look at it in different ways, but we never ultimately got a product off the ground.
Speaker 2:Fortunately, flaviar has already invested in their data program and we have such great visibility through Weinsters we talked a little bit about earlier in the episode 37,000 retailers that we crawl every single day, and through these 37,000 retailers we're looking at product availability and price points, and so for a brand to understand where they're carried, where they're not carried, where their competitors are carried and how their products are being priced is really really valuable data.
Speaker 2:And what makes wine searcher data especially unique is it's a different slice of the market. Nielsen, for example, is heavily focused on major chains, wheresearcher is predominantly focused on independent retailers. So it's a very different perspective, and what's also very neat about WineSearcher is we are much more approachable in terms of pricing, and that enables partners to go more granular A lot of times with other data sellers, people, early emerging brands. They want to pay the least amount possible, so they get very high level data where, as part of our offering off the shelf, you can drill down not just by country or state, but get all the way down to the town, to the individual merchant, and understand what's going on at each of those individual levels. So that's really really powerful. And what that doesn't necessarily have is the actual conversions. But that's where the Flaviar marketplace comes into play. Flaviar Caster, the Flaviar ecosystem comes into place, since we actually have the conversion data as well, and so we have all these different unique data points that we can look at to pull together to tell that full story.
Speaker 3:How can brands stand out from the pack in terms of merchandising to increase sales?
Speaker 2:Yeah, I'd really bifurcate this and think about how to activate the marketplace, how to drive sales through the brand's website, and what we're seeing is that these can have a great effect in conjunction rather than just focusing on one or the other and starting on the marketplace side. It's not about reaching out and ensuring, yeah, your product is being carried. Yes, you want to check that box, but there are thousands, tens of thousands. Or, in the case of WineSearcher, we have about a million SKUs on WineSearcher, so the likelihood that someone's just going to stumble upon your product is not necessarily very high. Brands need to be thinking about an advertising and marketing, sponsorship and strategy with the marketplace that they work with. So we really encourage brands. Yes, reach out, make sure we carry your products. But let's also have a conversation about advertising to ensure consumers actually see your product, because if it's on page 27 on a search, the likelihood that a consumer gets there is not very high. And then, on the white label side, we have a hypothesis that consumers are going to go to brand websites. Yes, maybe for convenience, but we really think Instacart and Uber Eats really the marketplaces own the convenience space. We believe that consumers are going to go to a brand's website to access something unique, and accessing something unique can be the bottle itself, something premium, craft, hard to find.
Speaker 2:But the other piece of this is thinking beyond the bottle custom packaging, merchandise, cocktail kits, engraving.
Speaker 2:What we're seeing is this major mindset shift with our top partners from being spirit brands, from being bevel companies, to being lifestyle brands that sell alcohol, and with the high cost of shipping, selling merchandise is a great way to bring in some extra margin, offset that shipping cost, to juice up that average order value.
Speaker 2:And the other thing is to think about is all this great AI and upsell checkout technology, a tool called Rebuy, for example, we typically recommend our partners leverage. If you only have three SKUs and they're all $50 bottles, the likelihood of someone checking out and deciding last second. They want an extra $50 bottle, not necessarily high, but if you have a $30 t-shirt or a $20 hat or a $20 maple syrup in the case of Whistlepig that they have from their farm in Vermont glassware, all these unique things, that is something that a consumer is far more likely to add and you can create bundles. And what we're seeing is the vast majority of dollars still flowing through the platform, through the brand websites, is still the alcohol, but a significant percent up to 50% of orders with our top partners include products beyond the bottle.
Speaker 1:What else can brands do or what can they offer in terms of, you know, the sampling strategy that we've talked about, or collaborations? What other sort of advice or things can brands do?
Speaker 2:Yeah, we've talked a lot about the marketplace, so diving a little bit deeper and spending an extra second on the white label side collaborations is absolutely something that we've seen be extremely successful. An example would be Whistlepig and Traeger Grills. Everyone wants to partner with the alcohol industry. Don't blame them. We're cool, we're fun, we're different and, as an alcohol brand, if you can lean on an existing brand outside of the industry that has already built a customer base and has their own email distribution list and you can tap into that, that can be really really valuable where, all of a sudden, overnight, you can drive thousands, tens of thousands, hundreds of thousands or millions of new potential buyers to your brand and to your website. And so we've seen a lot of very cool unique offerings with celebrities, with other brands. There's a lot of different ways to play this. A couple other strategies that we've seen be successful.
Speaker 2:One spirits clubs. So Westward Whiskey is one in particular that I'd want to call out that they've really been a champion where every single quarter set it and forget it. You receive a bottle of some innovative experimental skew, and what you also have the opportunity to do, since that bottle is already being shipped, is to add some of the evergreen bottles as well. So it's not just driving depletions of this experimental SKU, but also of the core SKUs as well. What we're also seeing is a real big focus on barrels over the last 18 months, and there's two different flavors of barrels. One is doing single barrel picks Frey Ranch I'd want to specifically highlight as a champion, where they focused on filling the top of the funnel. They have an enormous CRM, an enormous database, and what they do is they'll, every month or two they'll pick a new barrel and their fans are just salivating waiting for the next barrel to drop. And the recent barrel they just sold out in 18 minutes entire barrel boom, 18 minutes, just like that.
Speaker 2:The other approach is selling entire barrels and, yes, for years brands have been focused on selling entire barrels to accounts, but we're enabling that direct to consumer as well and, to be candid, I was pretty dubious on the potential of individual buyers buying an entire barrel.
Speaker 2:But between whiskey clubs aggregating together to buy a barrel, whether it is a wedding looking for gifts, if it's corporate gifting or a charitable organization, we are seeing that there is a significant thirst for buying entire barrels and we have one of our top partners who, since launch has sold close to 100 barrels, and these go 15, 20 grand a pop. And then we have another partner who's focused on very premium, high-end barrels. They sold a $590,000 barrel. Yep, you heard me right $590,000. There was a handler, so we don't actually know who the buyer was, and we had to build this secure special website. And then their whiskey cave wasn't finished with construction, so we had to hold on to the barrel for a little bit longer until the whiskey cave was complete. But they've sold over a million dollars of barrels since launching their program now.
Speaker 1:Forgive me if this is a dumb question, but it's a very funny picture in my head, I'm sure. I'm sure, when you sell a barrel, what you're meaning is that okay, you've bought the barrel and now they're going to bottle it all for you in individual bottles that maybe have a cool like oh, this is bottle number X of Y of this particular barrel. But in my brain I'm tickled by the idea of a customer taking delivery of a barrel. I'm tickled by the idea of a customer taking delivery of a barrel.
Speaker 2:Is that an option? I wish, jimmy, but for compliance reasons the liquid has to be in the barrel. But to make you happy, we do send the empty barrel with the bottles. Are consumers then pouring it back in? I don't know. Are they keeping that as a keepsake? We're not sure what necessarily consumers are doing with it, but we think it's super cool. Yeah, a pallet shows up with all the bottles and then that empty barrel sitting on top.
Speaker 1:And the barrel's there too. Yeah, such a cool experience. That's cool. That's cool. I want the—if I bought the barrel.
Speaker 2:I want the barrel too.
Speaker 1:Yeah, I want the liquid. That's cool. So we've been talking sort of broadly. You have mentioned a couple of specific brands that have these cool ideas no-transcript.
Speaker 2:We work with, as we've talked about 500 different brands Diageo, pernod, moet Hennessy, constellation, remy, cointreau, and then lots of fun exciting craft brands with Frey Ranch, westward Whiskey, we work with Westland so many different players, whistlepig, and what I do want to highlight are it's just some data, because a lot of times brands will approach me hey, josh, yeah, there's some really cool projects that you've shared, but at the end of the day, is it driving depletions? Are we moving bottles? That's the most important thing. And last year, on the marketplace side of our business, our top supplier invested nearly a million dollars with us on just the marketplace side of the business and, of course, they drove into the millions in terms of total bottle sales. So really, really, you can drive a lot of volume on the marketplace side without even thinking about your own white label website, marketplace side, without even thinking about your own white label website.
Speaker 2:On the white label website, there is really an opportunity to drive sustainable growth and scale. And to give you a sense, our top partner, a single brand last year, a single brand supplier last year, eclipsed over 5 million in sales on the platform. Truly, truly incredible. And then the fun success story that we always like to share the feather in our cap is Tesla Tequila over $10 million sold on the platform of those lightning bolt shaped bottles. So yes, ecom BevAlk is a material sales channel and it's one of the bright spots and only growing segments of the industry in the current climate. Only growing segments of the industry in the current climate.
Speaker 1:All right, we'll jump into our final fun question that we like to ask everybody, and that is what is your favorite adult beverage?
Speaker 2:If you want to make my day at the bar, jimmy, introduce me to a new Sivin Mescal. I prefer Mescal Neat and I'm always exploring new brands and agave strands, but I would say Tobala is typically a winner for me.
Speaker 1:And you just take it neat.
Speaker 2:Absolutely.
Speaker 1:All right, that's such a common answer nowadays, and I think I've just been burned too many times. A tequila or mezcal sherpa, someone who can guide me through the valley of the shadow of death that is tequila for me, anyway and can explain to me what I'm looking for, what I'm trying to notice as I'm tasting, rather than just bad memories.
Speaker 2:Yeah, I fall in that bad memory bucket and I think so many of us had that bad experience one night in college and I was really turned off from tequila for many years because tequila for me was plastic bottle tequila Not that there's anything wrong with that, but when you drink too much of it at a young age it just has a negative effect. And ultimately it was mezcal that really brought me back into the agave world. And it was because it was so different at least the first mezcals that I was introduced to. It was so different than tequila that my brain wasn't thinking about tequila whatsoever.
Speaker 2:And then as I tried and the first mezcals that I tried were espadins, they're very, very smoky, but there are mezcals that are not very smoky. Yes, they have some elements of smoke, but on the spectrum it is very wide. And once I started enjoying some not very smoky mezcals, I said hey, it's time to make the leap and try tequila. And when I started trying tequila for the first time in many years, I quickly fell in love with it as well. So I really enjoy tequila at this point I can point you to some of our partners to try and ultimately Mezcal stole my preference, but I do enjoy both.
Speaker 1:Very good. I will say I have a little bit of a barrier to entry as far as acquiring things locally here because I live in Maine and not a lot of tequila drinking happening up here in Maine. But thankfully we've got someone like you providing some lovely e-commerce options for people like me. So thanks for that.
Speaker 2:Gotta get through the winter somehow.
Speaker 1:Well, josh Jacobs, thank you so much for coming by the podcast and sharing your knowledge with us For listeners who want to follow up, find out more, maybe even try to get their whiskey brand involved in an advent calendar or something like that. You can check out Flaviar. We will put links in the show notes so that you can do some follow-up and some research there. Josh, thanks for stopping by.
Speaker 2:Jamie Bridget. Thank you so much for having me and anyone listening. Feel free to reach out to me directly, josh at flaviarcom. I'll get back to you and let's make something happen.
Speaker 1:There you go. Thank you, listeners, for joining us on the MHW Mark podcast, and thanks again to Bridget McCabe for joining me in hosting 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.