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
Demystifying the Three-Tier System: The Distributor's Perspective - with Allan Carter
This week, we're thrilled to bring you a great conversation with Revenue Beverage President Allan Carter. Host Jimmy Moreland and MHW's Brigid McCabe sat down with Allan to get his perspective on the back end of the three-tier system, how growing brands can better navigate today's challenges, and what strategies can help them capitalize on market opportunities.
Find out more about Revenue Beverage | Website
More info about MHW at https://www.mhwltd.com/
Follow us! LinkedIn | Instagram
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. We're happy to welcome back MHW co-host extraordinaire Bridget McCabe. Welcome back.
Speaker 2:Thank you.
Speaker 1:Always good to have you on. We're building up a streak. I feel like we're going to have a nice run of Bridget and Jimmy episodes, and that's always exciting On this podcast. We've got a really great guest today and we really dive into some nice topics Generally speaking. Broadly speaking, I'm feeling a little bit retrospective right now because we just crossed two years of doing the MHW Mark podcast, which has me feeling nice.
Speaker 2:Happy anniversary.
Speaker 1:Yeah, and it's fun to sort of look back and sort of reflect on some of the topics that have really been a through line, and I mentioned it frequently that I think the number one through line is for brands anyway is authenticity as far as telling your brand story and sort of living your values and so forth through marketing, and I just wanted to sort of throw that out there in front of you and then ask your thoughts Do you have anything to pontificate on as we reflect on two years of the podcast?
Speaker 2:Yeah, that's a great point.
Speaker 2:I think I agree with you.
Speaker 2:I think the authenticity has been a real through line.
Speaker 2:I also believe that we've really provided brands with a look into the early starts of a process of how to launch a brand, and I think our guest today rings true to that concept because we've touched on how to establish brand values, how to market your brand, how to get set up with an importer or distributor, and the guest we have on today is going to speak a little bit about how to sell and how to get pull through and how to manage and find distributors, how to ensure that what you're doing is really working and that you're having long-term planning as a part of your sales goal posts, the people behind the brands and the importers and the distributors that's definitely a point we touch on today and building the brand and the on-premise and why that's important.
Speaker 2:So I think there's been a lot of really great conversation over the last two years about how brands can have longevity in the market, and that's really our goal here at MHW is to be long-term partners to brands, to make sure that it's not just a year or two year that they're in market, but that we can really celebrate them in 10, 20 years if it's an exit or maybe it's a family-owned brand that they want to keep in the family, but just ensuring the success over time. And so I think the podcast has been a really critical and key way for us to educate and touch base with so many people in the industry.
Speaker 1:And big thanks to the listeners who have been so supportive, whether it's through comments on social media, sharing it, liking it all that kind of stuff really helps. Yes, thank you, we appreciate it. I, your friendly podcast host, appreciate it for sure.
Speaker 2:Yes.
Speaker 1:We do have a good conversation today, so we will go ahead and jump right into it. Our guest today has over 25 years of executive experience in sales and marketing, from being president and general manager of Domain Serene to vice president of sales and marketing at Southern Glazers Wine and Spirits, to now as president of Revenue Beverage. Welcome to the show, alan Carter.
Speaker 3:Thank you so much for having me. This is great.
Speaker 1:It's great to have you here. Thanks for being here, especially you're on mountain time or western time.
Speaker 3:We're on western time, we are west coast in the fact that you know we're. Las Vegas is all beach, no ocean.
Speaker 1:Well, we appreciate you getting up early and chatting with us. Can you tell us just a little bit more, I guess, about yourself, your background and experience, and specifically about revenue beverage?
Speaker 3:Certainly so. You know, I started my professional life actually in high tech, working in the 80s and 90s for technology companies. You know, if you remember the famous dot-com bubble, I was right in the middle of all that with a really great company. And, long story short, during that process I was traveling the world selling software and I discovered at a young age that if you could pick a bottle of wine that went with the food everybody was eating, they'd buy a lot of software from you because they thought you were some kind of magical wizard. So I vocationally started studying food and wine pairing. We sold the tech company. I had to sign a big non-compete. They paid me to not work for a couple of years.
Speaker 3:So I literally went into the wine business and by went into the wine business I mean worked at a local wine shop 10 hours a week on the floor helping people with their carts find a Chardonnay they liked.
Speaker 3:And I parlayed that into a career in beverage, started with a distributor in Baltimore, where I was born and raised. In beverage I started with a distributor in Baltimore, where I was born and raised, and then got a phone call from a winery in Oregon to Main Serene and moved out there and ran that for 10 years. Then I moved to Las Vegas and started with Southern Glazers, the largest alcohol wholesaler in the country, and worked there for the last 12. So it's been, you know, I got a career by accident, it seems like, and I've sort of come full circle now with Revenue Beverage and taking all of those life skills and all of those professional skills I learned and trying to put it into something that actually you know might help people. And that's really what we're all about is trying to help people and get paid too. I'm certainly not a nonprofit.
Speaker 2:That's fantastic and you say by accident, but I think it could be by design. Maybe it was meant to be this way. So that's very exciting. We're very happy at MHW to work with Revenue Beverage, and one thing that I found very interesting when I first met Alan was he really brought me inside the mind of where the distributor is these days. So I want all of the listeners to really sort of hear this what are distributors these days actually feeling? Sure.
Speaker 3:So it's interesting there's such a unique set of challenges and the beverage industry is. You know it's an old, storied industry that goes all the way back to prohibition and you know the three-tier system that you see today and a lot of the way wholesale is set up are direct results of trying to regulate after prohibition ended, and so that's why we have the systems we have and it hasn't changed a ton. There's a little bit of innovation, things come, things go, but what we're seeing, particularly in the past few years, particularly since the pandemic, is a real shift in the consumer mindset and a real shift in the supplier mindset. So to sort of tie that together wholesalers, because they're the key to the kingdom. If you want to get into a market, because of our federal three-tier system you have to have a wholesaler. There's no other way to do it. In some markets you can direct sell, like California is a market where you can sell direct as a winery to a customer, but largely that's not the case. So if you want to be in a market like Nevada or Colorado or Arizona, you have to use a wholesaler. It's a federal thing, so they had all of the leverage and all of the power. It could be very selective. Well, what's happening right now is three things Consumers during pandemic got much more educated.
Speaker 3:People who drank the same three things all their life suddenly found themselves at home and you know drinking at home and so they would experiment and try new things and they started to realize you know what I do, you know I've always drank white Zinfandel, but you know what I do like Pinot Noir. You know what I do because they didn't want to drink the same thing every day, locked in their houses. So they went to the grocery store the only thing open and they bought all these different things and they said, wow, I like gin. Oh, my gosh, I really like, you know, mezcal. And so we came out the other side of that with a more educated consumer and with a more diverse consumer. We also came out of that with the consumer understanding the economics of wine a little bit. Why is my $19 bottle of Chardonnay $80 on a wine list? They never really thought about that before. They're on vacation, they're doing their thing, and now they've got some. You know economic knowledge as well.
Speaker 3:So it's put a lot of pressure on wholesalers and suppliers to really rethink their margins. You can't just drop 30 percent margin on things anymore and hope people will just go with it. So that's one of the pressures the distributor has. Their leverage has slipped a little bit and we're seeing a consolidation in the supplier market.
Speaker 3:There's a big five companies buying up all the small, midsize companies as they have economic struggles or as winery owners or distillery owners start to age out maybe they don't have any relatives to take over. They sell, they package to sell. That led to a large group of people investing in wineries and distilleries with the extent purpose of running it for a few years, building it up and selling it. You know that's a big thing. So now suppliers or distributors are dealing with that. And then the third thing that they're dealing with is you get to a point where you get so big that maybe you can't be everything to everyone, and some of the bigger wholesalers you know there's a handful of really big ones in the country are finding themselves now so big with 30,000 SKUs, with 3,000 suppliers, and every single one of them has that same expectation. Well, in that scenario, what's going to happen? The bigger, the louder they're going to get the attention.
Speaker 3:And so you're seeing small, medium, innovative, family-owned. You're starting to see them get squeezed out a little bit. It's not malicious. The wholesalers aren't out to try to hurt them. It's a bandwidth issue. They don't have the time, the resources or the attention span to be able to cultivate and grow brands.
Speaker 3:So you're seeing large distributors turn into literally what they were set out to be. We move a box from point A to point B, but we can't build brands and we can't have specialists. We've got to focus all those resources on what I like to call lawyers, guns and money. You know trucks paying your bills, keeping inventory, making sure your warehouse is managed correctly. That's where the pressure is.
Speaker 3:So what that's done, and I'm a glass half full guy that has created a vacuum in the market for independent wholesalers, for small. You know entrepreneurial folks who may have come from distribution or come from the supplier side to say, look, here's the things that people like me need. It doesn't exist. I'm going to create it. Ten years ago, seven years ago, creating a small, mid-sized distributor, maybe a 15 to 20 million a year distributor unheard of, because the big guys would have steamrolled you, they'd saw you coming and they'd have thrown spike strips in the road. Now they're so busy keeping those big five suppliers happy and making sure that you know they're not paying too much for fuel and shipping and that they don't have time to fight in the trenches. And it's created a really great market for smart people to create niche distributors, and that's one of the things that we're taking advantage of.
Speaker 1:So if I'm a brand and I'm say I'm a newer brand sort of trying to get started build up my business, is my best strategy to try to find one of these more niche independent distributors, or is the dream to get on the big boy roster, if you will Like? What's the approach that brands should be taking?
Speaker 3:Well, you know it's interesting because what brands should be doing and what they think they should be doing largely are never the same thing. I always equate it. I was a professional musician for 30 years. I ran a record label for 10 years and I always amazed at the similarities.
Speaker 3:When you're a young band, the goal is to get signed to a major record label and then everything's going to happen. The doors are going to kick open and rainbows and unicorns are going to fall from the sky and you're going to be rich and doing MTV Cribs. Well, anybody in the business knows that. That's the first step of the ladder, the first rung. The hard work starts if the 1% that get there get that record deal. It's the exact same thing in beverage Getting a wholesaler literally just gets you on the playing field. It doesn't make you a starter. It doesn't get you any further ahead from a marketing or brand retention standpoint. It literally just gets you on the playing field in a new market. And the mistake that brands make and I can't stress this enough you can never, as a brand, expect a wholesaler to care more about your product than you do 100%.
Speaker 3:If that is the case, you're doomed right out of the gate. You have to recognize a wholesaler for what they are. They are a federally mandated organization that literally allows your customer to get product delivered to their restaurant or to their retail shop. That, at the core of it, is it All the other stuff. We build brands and we do it's fluff. There's some of that, but at the end of the day, if an order comes in and a box moves from point A to point B, they have done their job and that's what they're there to do.
Speaker 3:Young brands, new brands, innovative brands, brands in transition need to have two things. One, they need to have a strategy for all right. If I get into this market, how am I going to create pull through? Am I doing the right socials? Am I doing the right advertising? Am I in the right places that when people come to a market or when people go out to dinner, they're going to see this and go? Oh, I heard of that, I want to buy that, because all wholesalers care about is pull through, and that's not a bad thing, it's just the reality.
Speaker 3:The second thing is presence, particularly in places where tourism drives the bus, places like Las Vegas, where I am, but even in Miami and some other places you have to have a presence because what sells? You know we're in the 21st century and anybody who's making bad juice, bad liquor, bad wine, there's no excuse for it. We have all the technology. It's cheaper, it's better, it's faster and you can make with pretty limited resources and pretty great product. So let's assume the qualitative level is here. There's some great things and some good things, but there shouldn't be any bad things anymore. You're competing with people who have a product as good as yours or better.
Speaker 3:The way that you get around that it's relationships. People buy from people they like. People buy from people that they know and that they trust. Brands that go into a market and then never visit it never try to cultivate relationships there. They're the ones that are going to struggle. You've got to have feet on the ground, shaking hands and kissing babies, because at the end of the day, when the buyer at a restaurant and it's a Thursday and they're in a pinch and their distributor just out of stock they're by the glass Chardonnay that they sell two cases a night of they want a problem solved. You want to be that phone call. You want to be the thing that pops up. Hey, alan, this happened. Can you get me this $12 Chardonnay today so that I don't miss these pours tonight? That's relationships and you can't do that via email and spreadsheets.
Speaker 2:Spot on. I'm interested to hear about how you're helping brands solve this. What are the specialties of your consulting business and how do you structure and set up your retainers? I've seen it a few different ways with field sales and sales overlay companies, and I think yours is a really sharp one. So I want to make sure that our listener has a chance to hear about all of the capabilities.
Speaker 3:So when I started Revenue Beverage and I started it I was with Southern Glaciers for 11 years, 12 years actually. And you know, with all the transition and everything going on in the distribution world and I'm very upfront about it I was part of a big layoff that affected hundreds of people, and you know. So the first thing you do when that happens is you say, all right, well, I'm going to look for another distributor, I'm going to go to my comfort zone and look for another distributor job. So I didn't really want to do that. So I said, well, maybe I can go back to the supplier side. And so I was doing interviews and I literally thought of the company on the way back on a flight back from Seattle after a job interview, after a great job interview where everything went well, I'm sitting on the plane going. I'm literally sending myself back in time 15 years, and I don't want to. I don't necessarily want to do that. I don't want to necessarily rebuild everything I've built. I'd rather take what I know and use it. So I asked myself one fundamental question and I'm leading up to answering your question, bridget when was it fun? When was what I did fun? And I'll tell you when it was fun, when I was working with small family brand that had a lot of aspirations and some really good product that just wanted people to try it. That's what they wanted. They wanted people. We're proud of what we do and we make this amazing thing and I want to get it into people's glasses and being a part of building that and getting that audience wider and wider and turning into what turned into a very successful operation. That was when it was fun and exciting and every day was different and you could be creative and you had to color outside the lines. So I said how can I take all that years of all the things that I've done and all the mistakes I've made, to be honest, and distill that into something that would be valuable to other companies and other producers like that? And that's where this idea was born.
Speaker 3:So it's built on two principles. We understand the pain points. If you are a distiller or a winery or a brewery, your love, your passion is making that product and creating it. You want to put out the best thing using the best ingredients and try to create the best product you can Selling it, marketing it, figuring out distribution and compliance and all of the paperwork and the government stuff. That's stuff you didn't think about when you planted those vineyards, probably. And now here you are. Those are pain points and the more you get caught up in that, the less you're doing the thing you love. Well, I've spent the last 20 years doing the thing they don't love.
Speaker 3:So we provide two very valuable painkillers. If you will One, if you want to be in a market and you think it's the right fit, we can help you vet distributors there, wholesalers there and find the right fit for you based on what you want to do, your volume expectations, your product, your pricing. We will help you and we will walk you from step one of meeting these people, talking to these people, pitching them all the way through to signing that paperwork and getting those orders on the ground. That's phase one. The second thing we do is perhaps you're with a wholesaler in a market that you like and you like the people, and it's great. But they have grown or they are feeling a lot of pressure and maybe they're not giving you the attention that you used to get or that you feel you should get. No fault of theirs. The world is changing and you've got a lot of people pulling in a lot of directions.
Speaker 3:When you're a big wholesaler, we can go in and work with your existing wholesaler acting as sales overlays. So we are your regional sales manager, your state manager. We will work with their sales reps. We will go into the market, we will do we drag a bag, we're not air traffic control we will get out there and we will show the wine and pour it, and show the spirits and pour them and talk up and tell your story. We try to, where we can, visit the property before we sign a contract so that we can get you know, touch the dirt if you will, and get their story. So, in a nutshell, two things Help you find distribution and if we think it's not a fit or your pricing is wrong. We're also a great marketing resource because we'll give you honest feedback. We all know the distributor can't, you know, isn't often always honest with their suppliers because you've got to tell them everything's going great. Um, customers definitely are. Customers never had a product they didn't like when they supplier sitting in front of them.
Speaker 3:We're that middle ground and you're paying me to give you honest feedback, honest research, and I'm I have no problem telling you your baby's ugly, you know, and that's that's really so. Two things help you find distribution If it's a fit, or manage the distribution that you have so that you don't have to be out of the distillery or out of the winery and dragging a bag in Las Vegas.
Speaker 1:I see a note here that Revenue Beverage specializes in on-premise. Why is that so important and why is that something that there would be a note that you specialize in on-premise? Is that super important for brands?
Speaker 3:So it definitely is. I mean the two worlds that we live in. Well, there are three worlds. There's direct-to-consumer, obviously off-premise grocery, retail, wine shops, liquor stores and then the on-premise, which is restaurants, wine bars, tasting rooms, those sort of things. So you have to have a diversified mix when you go to market. If you've ever seen some of these producers that are 100% direct-to-consumer or 100% into distribution and that's fine when it's working but what that does is it sets you up to be very vulnerable in recession situations.
Speaker 3:I always tell my clients, if you can get to 50-50 direct to consumer and distro, you're pretty much recession-proof Because as market conditions change, one will go up, one will go down, but the numbers will stay pretty much the same If all your eggs are in one basket. Volatile market conditions will change that. We're seeing that with some of the tariff issues, right? So if I'm an importer of a French wine, that's 100% distribution. All of a sudden the price of my product goes up. I'm in trouble because consumers don't want to pay $40 for something that they've been drinking for, you know, 10 years for $25. But direct to consumer is a little more lenient. So you've got to have that balance.
Speaker 3:Now when you talk about distribution. If you have a brand that is a retail-focused brand and there are several if you've got a really cool $6 Chardonnay with a Wallaby on the label and you want to sell 10,000 cases of that, retail is the way to go. You make your pitch to Costco, to Total, whoever it is, and you build your brand and your marketing around that and then you do the back-end marketing to make sure there's pull, that's fantastic and it's a very specific model. But the on-premise is where brands are built, in my opinion, because in the on-premise world you're dealing with a buyer, hopefully a very smart buyer, who's cultivating and curating a list, be it a cocktail list, a back bar, a wine list and so they want things that express their personality, things that make their program different. I mean, I live in a market where there's, you know, 10,000 bars on a four mile stretch of road, and so I've got all of these people trying to be unique in a sea of you know. All right, well, we've got here's our vodka, here's our gin and here's our tequila. They want that uniqueness. So if you can build a story and a strategy that targets them and makes them feel like by adding your product to that list or to that program. You're helping them express their individuality. That's going to breed loyalty.
Speaker 3:Retail used to have a lot of loyalty. Brand loyalty was a thing. I don't see it as much anymore. Today's really great tequila is tomorrow's mezcal is. People change and shift, and you know it's.
Speaker 3:It's not like the good old days where my father had one beer that he drank and that was it, and that was the beer he drank and he wasn't drinking any other beer because it's the beer he drank in the war or whatever. But that's gone now. That is all gone. People are looking for quality, they're looking for value, they're looking for story, and so I think the on-premise is where you grow it, because if someone is buying your product in a restaurant one, hopefully they're not having a bad time. They didn't go out to dinner because they're having a bad time. Hopefully it enhances an experience they're having, be it an anniversary or a birthday or a first date or whatever it is, and that's going to stick in their memory way more than something they grabbed off a grocery store shelf. And you see it, all the time I got this bottle, I got down on my knee, I proposed, and then I took the camera phone photo of the bottle, because that's now indelibly etched into my history. So on-premises is where brands are built. That's my biggest belief.
Speaker 2:Absolutely, and I think I second that and I know that from a memorable standpoint as well, especially when you see brands target fine dining or establishments with a really cool craft cocktail menu, things like that you're really trading off of on their brand equity in a way and the restaurant's brand equity. So there's some really cool partnerships that can be made in the on-premise that just don't resonate the same way sometimes in the off-premise, that just don't resonate the same way sometimes in the off-premise. But agree completely about the 50-50 distribution split. I think that makes a lot of sense.
Speaker 3:The other thing it gives you in our day and age. Now it gives you content. I've got a producer who makes a really cool sparkling wine from Sonoma.
Speaker 2:Sounds great.
Speaker 3:And we had one of our accounts here. They liked it so much they put it into a cocktail, where they've infused it into this cocktail, that's cotton candy.
Speaker 3:Oh yeah, it's an experience so they have this beautiful cocktail made with this sparkling that's got cotton candy. You're going to get so much mileage out of that from a social perspective, right, that's what's cool. Nobody ever goes in and takes a picture of a bottle on a shelf at an Albertsons and goes hashtag YOLO with their dark lips and their peace sign with a bottle on a shelf at a Total Wine. So so I think that it creates your, your, your, your. Only competitive edge as a brand anymore is one your quality is going to be there, but two is two is story and authenticity. And how do you get that message out? You know there's no one in that retail tour speaking to that. For you, largely, it's the shelf and your label, but in a restaurant, you've probably got a team of people talking to that, from a sommelier to a bartender, to a maitre d', to a host, and that's why it's so important.
Speaker 2:And we talked a little bit about markets. But I'm interested to know which markets you specialize in, where I know you have some primary markets, some tertiary markets. And then I'm curious to see how you recommend that brands imported by, say, mhw or other national back office importers can plug in directly with your sales overlay program.
Speaker 3:So when we started, I mean, obviously the tip of the spear for us is Nevada and Las Vegas, specifically because we live here, we're based here, we've been working here forever and a lot of people would be here. I've never met a brand who didn't want to be represented in Las Vegas. However, we try to stay towards the Southwest. I mean I have clients that I work Arizona, for California, new Mexico, colorado and we're always looking to expand. As we grow and as our offerings change, we're expanding the company. We're very, very firm on not just collecting brands. I'm not creating a museum, I'm trying to build a portfolio of things I care about. So we don't have 10 tequilas and we don't have 10 gins and we don't have 10 California Cabernets. We fill those spots and right now we've got a slot for 10 clients and at that, 10 clients. We will then expand and start hiring salespeople specifically, you know, for the markets we want to be in. I envision a day very soon where we will hire a full-time person that does what we do, but in California, in Arizona. As far as how we choose the markets geographically, yes, that makes sense because it's easy for me to travel to, I mean, I work San Diego, palm Springs. You know that area. I can drive, I have friends there, it costs me almost nothing to do it, so it's easy for me. But as we get bigger, we will look at other markets.
Speaker 3:Now, with that said, when you talk to us flyer, everybody says I have the consultation what markets do you want to be in? Everybody says the same thing California, florida, new York, texas, illinois. Okay, so you just pick the top markets in the country where every single brand on the planet wants to be, is trying to be, is throwing all their money at, and brands with a lot more money than you are spending a lot of money to do this. So I always tell them you want to be in Texas. Where does Texas's money live? Texas's money lives in Oklahoma. That's where you want to look. You want to be in LA? Okay, great. But let's look at San Diego, let's look at Palm Springs, let's look at the Valley. You want to be in San Francisco? Great. But have you looked at Sacramento? Have you looked at Berkeley? Places like that, where people live, where they spend money, where you can build a brand.
Speaker 3:So we tailor everything to whatever the expectation of our client is, but we do try to like to keep it local. I'm hesitant to run off and try to tackle New York City at this point. I think that's very smart, but if people want a good base, well, and the other side of it too. If you can prove yourself in a market like Las Vegas and start generating some placements and some sales, you're going to be more attractive. I always tell people grow your brand in a market people aren't attacking, and then the big distributors in the other markets will come after you Absolutely.
Speaker 1:Well, in five or 10 years, when revenue beverage is nationwide, we'll have you back on the podcast to talk about that story. All right, speaking of forecasting, looking ahead into the future, we've talked about how things have changed and where the market is now and some of the unique difficulties of the present, including tariffs and so forth. What are we sort of looking at in the next few years here as far as challenges and opportunities in the space for brands?
Speaker 3:You know, it's interesting as an industry where we're conditioned to panic a lot of the time. I always joke with my winery clients you're so good at long-term planning because you can't just make wine. You've got to plant a thing, cultivate a thing, grow a thing, harvest a thing, make it, age it. I mean your entire whiskey producers, your entire job is thinking long-term. And yet when you see an article in a newspaper that you know the millennials aren't drinking, it's panic, our hair's on fire, we're running around and we're trying to shove, you know, cannabis into stuff because we think that's going to fix the problem. And I always tell people that you know, this business is cyclical. But people don't stop celebrating and they don't stop enjoying the things that they like. And they don't stop enjoying the things that they like. And we can all relate to a time when maybe we were younger, when maybe the thing we drink today isn't the thing we drank then. I mean what I drank in the 80s is way different than the things I drink now. And so when people ask me, how do we solve the millennial problem or the Gen Z problem, I mean I guess it's Gen Z now Millennials are starting to age out. I always tell them the only way you're going to solve that problem is to wait for them to grow up, because we all did it and we were all there and you know drinking Boone's Farm or whatever it was, when we were younger. You know that translated. Because you do grow up and I said you know you want a new generation of whiskey drinkers. Wait till they've got mortgages and second marriages. They're going to be whiskey drinkers, they're coming. You just got to wait. So I think that the best thing we can do and no one can predict the future I think we need to one stop commoditizing. We've got to get away from saying this is the tequila and this is the gin, and because people don't respond to that and they never will, if they did, there'd be one tennis shoe manufacturer in. They did, there'd be one tennis shoe manufacturer in the world and there'd be one TV station and there'd be one. It's not that I mean, if you use TV as a great example, we had three TV stations my whole life and now I've got 27 streaming services. You know, and that is because the attention span of people, they want new, they want to be stimulated. So, number one I would say we can't commoditize. Stop trying to be Tito's or whoever the it million case brand is, and start being true to what you do. Number two be innovative. That's always cool. Everything that we see has come from some form of innovation. Champagne, even though it's hundreds of years old that's an innovation.
Speaker 3:We need to have that mindset that we're going to create the next big thing, and we need to be prepared for 10 of those things to not work. For the one thing that does you can't be afraid to take risks. So I don't know what the business is going to look like in 10 years. I can say that I think you'll see a shift in how consumers buy. I think direct consumer is going to be a more powerful thing.
Speaker 3:I think that the Amazon of beverage is going to come one day. I don't know who's going to figure out or how it's going to work, but it's coming because it has to. It's the natural evolution. The only thing preventing it right now is federal laws that govern alcohol. You know, the same laws that govern tobacco and firearms, if we're being honest. So with that in place, it's delaying it, but it won't stop it. I think the three-tier system I think needs to really take a look at itself and adapt, because, as people rely less and less on the three-tier system, the only thing we're going to have left to compete on as wholesalers is service, and I think we need to get back to a service mindset as well, because if you're consultative, if you're helping your customers, if you're solving problems for the people that are your partners, you're the company that's going to survive.
Speaker 2:Those are some great points there and I think definitely MHW co-signs the quality and service from a wholesale perspective. There's a lot of tricks and technology and things that you know a lot of folks are coming out with now and, yes, it is innovative and that's something that we have certainly pivoted to. But we've always said it's about the people and it's about who's servicing the brands. It's about the people at the brands. It's really about building, you know, a legacy at the end of the day and achieving goals and solving problems together and working together. So I think that's great.
Speaker 2:And then, what you said at the first part of your point about Gen Z you know the fingers sort of pointed at them and they're not drinking, and you know your point was they will get there. It's interesting that you say that because IWSR has been coming out with a lot of studies recently that the alcohol use in this demographic has actually risen from 66% in 2023 to 73% in 2025. So now they're actually benchmarking slightly higher than what prior generations were, and it's moderation in later generations that are contributing to it. So I totally agree with you. I think there's a lot of sort of assumptions there and as they age into you know the BevValc world. I don't think any of these categories are really going away and I think there could be fluctuation in performance there.
Speaker 3:So you know, bad news sells, and so, in the same token that that, we saw an article a bunch of years ago where red wine cures heart disease, and then everybody started drinking red wine. It was the greatest thing in the world.
Speaker 3:We had a movie sideways that made beer one of the most popular wine on the planet. We need to look at things like that, but we can't react to them in the longterm and right now, with everybody saying nobody's drinking anymore. You've got to read it, take it with a grain of salt, but go with your gut and stick to your plan. If you pivot too early based on an article in an online newspaper, you're going to have trouble. Let's, let's. If you want to target millennials or Gen Z, great, do your research, spend your money there, find out what appeals to them and make that product.
Speaker 2:Right.
Speaker 3:You know I didn't mention it before, but I think one of the trends of the future will be low-alk, not no-alk. I know there's a big movement towards no-alk and mocktails and that's fine, that's wonderful too, right, but I think low-alk the people you know, the scientists in whatever lab somewhere in Sonoma that cracked the code of how to make vodka and gin taste like vodka and gin but be 20% alcohol they're going to have a bright future because people do want to drink. You know, they want to be responsible and they want to be healthy, but they don't want to give up the things they like they really, really don't Right.
Speaker 3:There's not a one of us who hasn't at some point you know at three in the morning got up and snuck a Twinkie. We know it's bad. Know, at three in the morning, got up and snuck a Twinkie.
Speaker 1:We know it's bad, but we don't give up the things we like Absolutely For me it's popcorn, and for areas like Midcoast Maine, where I live, there's not a lot of Uber and Lyft, and so having low-alcohol options when you're out is really, really nice, because we all got to drive.
Speaker 3:Yeah, and the other side of that coin, too, that people don't think about. If you are making a low-out cocktail if I can have the gin and tonic I love or the margarita I love, but it's less alcohol I am more prone to be responsible number one. But the other side of that, too, is, whereas I could have had one cocktail, maybe I can have three because I'm getting, because the cocktail experience is not about going out and getting hammered anymore, it's social. I'm with my friends, I'm in a cool place. If it were just about getting drunk, every bar would be a dive bar. But no people are spending money building these fancy cocktail bars with themes and all this cool stuff. It's about the experience. And so how do you make money as an operator? You prolong the experience.
Speaker 1:I will not stand for disparaging my beloved dive bars, Alan.
Speaker 3:No, I am a dive bar aficionado and I always joke I could find a dive bar in Antarctica if I was given enough time. That's the places I go and I hang out. But I do know that for the people that people are trying to target right now, they want an experience. They want to have that social experience that makes it cool to be with their friends. You know they don't want to sit in the corner with that old fashioned, you know, and the cigarette with the four inch ash, just talking about how I used to be in a band.
Speaker 1:That's a very small segment of the market. I love it. I do want to talk about our fun Las Vegas connection that we have here on the podcast. Going all the way back to episode 34 of this podcast, we had Eddie Rivkin on. Eddie I understand, you know, eddie.
Speaker 2:My good buddy Eddie. Eddie is a true Las Vegas connector. We facilitate at MHW his back office services for both the Miami Spirits Competition as well as the Vegas Global Spirits Competition both the Miami Spirits Competition as well as the Vegas Global Spirits Competition and we're really happy to be introduced to Revenue Beverage through Eddie. And I think one nice thing that I just wanted to mention here that any entrants into the Las Vegas Global Spirits Award have is, if you place in metal I believe it's gold but it could be platinum as well there is an opportunity to have some sales overlay services to work through MHW at a preferred rate as well. So there will be sort of a joint program there in the future and so definitely recommend that any brands listening go ahead and enter. Even if you're not currently imported or distributed in these markets yet, mhw will go ahead and help you out and we'll jump on your COLA waiver.
Speaker 3:So please and actually to add to that Bridget, the overall winner for both Las Vegas, miami, the brand that wins the top prize, that's sort of that overall like a best in show or whatever it's called. They actually will get 90 days of our services as part of their prize Incredible so for any. It's a great value add for a brand that wins that coveted prize. You know it's a good jumpstart, so we're really proud and honored to be a part of that.
Speaker 1:It's time for our fun question that we like to ask all of our guests. Now I'm going to ask you this question twice, one for today and one, because you mentioned it, for the 1980s and that is what's your favorite cocktail or beverage? You mentioned having a drink in the 80s. I want to know what that was.
Speaker 3:So in the 80s there were two that made the rounds in my youth Number one whatever the cheapest beer you could get. Now I'm from Baltimore, so the cheapest beer, the drink of choice, was National Bohemian Natty Bo to those in the know, still around, still going strong. I still drink it when I go home for Orioles games every year.
Speaker 2:That was my college drink. I'm a terp. I don't know if you know that, Alan.
Speaker 3:Oh, there you go. So I'm a Towson Tiger Bridget, there you go. So I'm a Towson Tiger Bridget there you go, but you know it was usually the cheapest. However, you know if we could pool our money and you know anything that was $6 a case and, for the young people that are experiencing this podcast, there was a time when you could get 24 cans of beer for $6.
Speaker 2:There was.
Speaker 3:That was the time, but the liquor store was uphill both ways in the snow and we didn't have shoes. But the other thing was we made this really fun thing called Rocket Fuel, which is where you put half a glass of vodka and we didn't care what vodka, because we were not brand loyalists, we weren't call branding, we were going I'm going to make this really terrible drink. I need Tito's. No, you have vodka, you put a float on it, you floated half orange juice, then the float of vodka on top and you drank it all as a shot out of a 16-ounce glass. It was called a rocket fuel and it was a very, very bad decision to make it's like a screwdriver with more work, it seems.
Speaker 3:It was like a screwdriver.
Speaker 1:But if it were shot out of a fire hose. And now, today, we've all grown, we've all matured, our palates have developed, alan, what are we sipping on today?
Speaker 3:So there's twofold. So I was a wine guy my whole life. I sold wine. I sold fine wine. I worked at wine and it's the true adage If you ever want to stretch out and try new things, take the thing you love and do it for a living. So with wine, because when you sell wine, particularly fine wine, in your circle, your friends, you become the wine guy. And people will call you at midnight and go hey, I want to impress this guy or this girl, what do I serve with X? And you become the wine guy.
Speaker 3:So when I go out now with all of the knowledge I've amassed, if it's wine I don't order wine for myself anymore. I always find the sommelier or whoever is taking care of us that night and I say what on your list? I want to spend this much money and never be ashamed to say I'm going to spend a hundred bucks or I'm going to spend 50 bucks or there's no shame in it. People get it. Nobody's going to look down on you. Go to a restaurant and sit down and find that expert because they cultivated that list and they care about it and it's, you know, a little nursery full of their children and say what do you like? You know, what is it that you recommend? You saw what I ordered. What do you get? And they will get excited and they will help you and you will get something cool and new and that's where you'll learn. The other side of that, too, is when you do that you're giving a brand that may need the chance a chance Because most of the time they're going to recommend something cool that they want to impress you, they want to show you something. Bet you haven't had this. That's what it is. So that's wine in the wine world. So I don't have a go-to. I don't have a go-to. I don't have a sit down and pick up a bottle of wine. I like to rely on other people because that's how I learned. I love that. Now, with spirits very different animal.
Speaker 3:I'm a big fan of the craft cocktail craze. I think it's awesome. There's so much creativity. It's part alchemy and part science. So I go to a lot of the cool little you know cocktail bars that are popping up in Vegas. I lean towards gin. If you can do interesting stuff with gin, you've got me. But I also have a deep, deep love for mezcal in a cocktail, because mezcal adds a personality to a cocktail, that's you know. It's really unique and fun. So gin and mezcal in cocktails these days, and then whatever wine my sommelier is recommending.
Speaker 1:I want to say thank you so much, alan Carter, for joining us. You've been a delight to have and you're a true professional and we'd love to have you back on the podcast again.
Speaker 3:Anytime, I appreciate it. This was really, really fun and I look forward to doing it again.
Speaker 2:Thank you so much.
Speaker 1:And thank you listeners, for joining us on the MHW Mark podcast. If you want to follow up more with Revenue Beverage, the website is revenuebeveragecom. We will put links to that in the show notes. Thanks again to Bridget McCabe for joining me in hosting.
Speaker 2:Thanks as always, jimmy. Thanks listeners, we appreciate you.
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, and here's to another two years. We'll see you in two weeks, cheers.