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
The Bad Idea Factory - with Michelle Ivey
On this episode, we're joined by the co-founder of 11C & Company Michelle Ivey. Host Jimmy Moreland and MHW's head of BrandArc Ian Perez chat about the challenges brands face from ideation to sales and marketing. Michelle's experience shines through with valuable and entertaining industry stories, including the "bad idea factory."
Find out more about 11C and Co. | Website
Come say hi to the MHW team at Bar Convent Berlin at Booth #PEG021
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. Welcoming back to the show, returning champion, the OG co-host, Ian Perez. Welcome back, sir.
SPEAKER_02:Jimmy, I know it's been so long. How have you been?
SPEAKER_01:I've been really well. I went back and looked in the feed, and the last time we had you on the podcast was July of 2024. It's been over a year. My how the time flies. Can you believe we've been doing this podcast for over two years now?
SPEAKER_02:I cannot believe. I'm so happy that we are. And I'm actually more shocked that we haven't spoken since July of last year, so we need to rectify that going forward. Hopefully, we can find more ways to get myself on because I always enjoy chatting with you and all of our wonderful guests.
SPEAKER_01:Well, you know, I always see uh your Instagram stories of you playing guitar, so I feel like we still have the connection there.
SPEAKER_02:Appreciate it.
SPEAKER_01:You and my mom. For the listeners, you're really missing out on some quality electric guitar solos. No, it's just you and my mom. The only two viewers I have, which I'm thankful for. I'm gonna cut one of those into this podcast so that people can hear. Um looking at the calendar here, as listeners get this episode, we will be right in the middle of Bar Convent Berlin. Now, will you be there? What's going on? I unfortunately will not be there.
SPEAKER_02:Um, it is probably the premier show to go to, especially from the bar perspective, plus the name Bar Comment Um Berlin. It's a really great spot to see a lot of new interesting spirit brands, especially. Um, so especially if you're into cocktails, there's gonna be cool all types of whiskeys, some gins, vodkas, and tequila and mezcal. So, in terms of the shows to go to, it's one of the best ones to go to, especially from um an attendee level, because there's again wonderful cocktails, great people. It's a show that people put a lot of money into. So you'll see the displays are like phenomenal um in terms of all like the LEDs and lighting and all the accouchments that those banners have. So um, it's a really big show. So you definitely have to have your comfy shoes on to try and see as much of it as you can. But for brands looking to either um European-based brands or further and looking to get export into the United States is a great way to be visible for uh US importers like MHW visiting those shows, but also it's a great opportunity for North American, South American brands to kind of put a flagpole in Europe and announce themselves to the world for the big EU distributors and distributors from like Asia and Southeast Asia and Africa as well.
SPEAKER_01:So for people hearing this podcast, they either know that because they're there, or they're feeling some serious FOMO out there. But we've got a good episode here for you to tide you over with some good Bev Alk industry content for you. So let's jump right into it. Our guest today is the co-founder of 11C Co. Welcome to the show, Michelle Ivey.
SPEAKER_00:Thank you. Great to be here.
SPEAKER_01:Michelle, thanks for joining us. Can you tell us a little bit about Eleven C Co and sort of what falls under that umbrella and what other things you're involved in?
SPEAKER_00:Sure. So 11C Company was founded uh quite a while ago, actually. It was founded back in 2014 when myself and my co-founder Caleb Rexer were working on a brand that we were also founders of called Illegal Mezcal. And way back then, we were a very, very poor startup Mezcal brand with zero dollars. And as everyone in this industry knows, we work in something in the US called the three-tier system. And brands have a lot of activities that you might want to do, particularly in the on-premise, where you really have to have an agency execute on your behalf. And because we had zero dollars, we found it was best to create our own agency and hire ourselves. So that is the actual origin of Eleven C and Company was we created the agency so that we could execute on our own behalf and do agency work in the United States for the brand Illegal Mezcal that we were also founders of. So Eleven C is the address of a bar called Cafe No Say in Antigua, Guatemala, which is where Illegal Mezcal was created by a man named John Rexer, who is Caitlin Rexer's uncle. So sort of a small family of us, and sort of adopted into that family. Created Illegal Mezcal. It's where we all met. It's also known as the Bad Idea Factory. Eleven C Co is awesome, the Bad Idea Factory. It's where we test out anything and everything for brands. So, what 11C Company is today, since we have actually exited from Illegal Mezcal, we exited that brand fully to Bacardi in 2023. 11CM Company has uh stuck around. It is now a full service agency to the point where it's not just a creative agency, it's not just a brand agency. We can do anything from ideation of a new product someone might want to create all the way to getting something on the shelf. So we uh meet with founders, we meet with startups, that's the level we prefer to work in, and do any kind of service from creating new labels for a Tasmanian whiskey, which we did recently, to actually executing still on behalf of Illegal Mezcal. Now our client is Bacardi at Americana Fest in Nashville just last week. So all kinds of activities going on at 11C and Company, which is based in Greenpoint, Brooklyn.
SPEAKER_01:I love the bad idea factory. That's great.
SPEAKER_00:But if you don't go through all the bad ideas, you'll never get to the good ones. So that's okay. Bad ideas are fantastic.
SPEAKER_01:What's the Thomas Edison quote? I found a thousand ways that didn't work. I just had to find the one way that did or something.
SPEAKER_00:But that's what it is, right? And even through 11C and Company, I am now also serving as the general manager for a phenomenal tequila brand that launched this year called Chica Steve Artides. I am working on that brand on behalf of Rock Nation and Megan Thee Stallion. They wanted to launch a tequila brand. It is the first project that Rock Nation and one of their artists has done as a fully independent project. It is not done with one of the multinationals as a partner. So I helped them launch that project. We launched in March, fully into market, completely independent. That's been pretty phenomenal. That's a very major project that also has come through that agency too.
SPEAKER_02:That's amazing. And just actually on that, so with especially the rise in tequilas and mezcos, like how do you balance like trend chasing with like brand authenticity with like such a huge like machine like Rock Nation and the various artists that are within that?
SPEAKER_00:So interestingly, I don't think one, tequila isn't a trend, right? I mean, it is uh it is a heritage category. So one of the interesting things that I think has really grown out of that heritage category is the appreciation in the United States for the aged expressions. Megan herself has gone through this health journey. I think she surprised the industry when she came out with a tequila and not a cognac, which is she used to formally be known as the cognac queen. However, tequila is interestingly known to potentially be less impactful on your glycemic index and all of these other things. So some people consider it a healthier drink option. I am not making any kind of FDA claims. Don't come at me, FTC. I'm just saying that that is perceived, right? And so I guess in that perspective, there's a bit of trend chasing there. But I mean, drinking better has always been something that has been an option in our industry. If you think of people always trading up it, right? It's just a different language people are using for it now, drinking better. So for Megan to come out with this after her health journey over the last couple of years, if anyone's seen her recently, her health is phenomenal. She's very concerned about her diet. She's really changed her workout routines and she looks amazing. And she's produced the tequila, and her ways of drinking it are either reposado on the rocks or ranch water, which is a very clean way of drinking a beautiful heritage spirit. She's working with a phenomenal factory that has multi-generational ownership. It's been around for 120 years. It's called Centinella in the Highlands and has a phenomenal vertical, owns their own agave. So it's really, in a way, trend chasing, if you want to talk about Better For You being a trend, but it's also heritage. So I think it's a really balanced project.
SPEAKER_01:When you are launching, you know, whether they're new products or campaigns or what have you, talk to me about market research. We talk about that kind of thing a lot on this podcast. And I'm curious about how you're able to leverage that and has it changed a lot in the past few years? Obviously, social media and celebrity-involved products, a lot of these social media companies are a little bit close-hold with some of the data that they'll actually release to people who would really like to leverage that data. How do you navigate all of that? And, you know, we talk about the Bad Ideas Factory. Do you have sort of a scientific method when it comes to market research, the way that you do as far as it comes to brand audition and so forth?
SPEAKER_00:Yes and no. So I think that you need to marry your gut with data. I don't think there's been a successful brand, a truly really big successful brand that didn't have both of those things. There is another project. This is a brand that I currently own that has recently launched. It is not an alcohol project. It's my first time personally doing a project that is not alcohol. It is called Como No, which means why not in Spanish. It is caffeinated sparkling water. It is in the better for you functional energy beverage space. So it is a 12-ounce tall slimline can, has 100 milligrams of caffeine, zero calories, zero sugar. And it's presented in a line of flavors that have a Latin American approach. So we have prickly pear and lime, pineapple tamarind, mango chili. It's coming from that perspective. And the way we develop those flavor profiles. Well, let me talk about where the project came from in the first place. Because the whole thing, the way it developed and where it came from is a mix of gut and data, right? Because it's slapping us in the face every day in the news about better for you beverage, better for you energy, better for you functional. Walmart has changed its entire soda aisle just because of the data that's out there on this type of beverage category. But three years ago, when myself and some of the other team for Illegal were at events like South by Southwest and Coachella, and you do all this branding work and you build out this whole activation for Illegal Mezcal, and the most popular drink is a ranch water, and you've got somebody there like Topo Chico, and everybody takes your very well-branded shot of Illegal Mezcal, pours it in their bottle of Topo Chico, and walks away. And all you see out there is a sea of Topo Chico bottles. You're a little frustrated. So we that idea factory got together and brainstormed around what's coming, what are you seeing? What's out there? Because you've got to be out there in the world. You can't create a brand from behind a computer screen. You can't know what's really going on from a spreadsheet, like what's happening in the world, what are people actually doing? And that's where the whole idea for this drink started in the first place. And then we're a bunch of caffeine junkies. So instead of just having a sparkling water, we decided we wanted to have caffeine in it too. And then, based on what's just happening in the functional energy world, we decided to add L-theanine also. And then we created the first product. It was actually called Cafe No Say, it was not called this. And we took it to South by Southwest the next year, and we took it to Coachella the next year, and we gave it away. And we got feedback from everyone. And so we did our market research on our budget, which was nothing. And we just solicited all the feedback we could get. And one, we realized that everyone in the United States that sees the word cafe on a bottle or a can thinks it has coffee in it. And our caffeine came from green tea leaves. So that's a problem. That's confusing. So then we decided, well, we better readdress our name because this is problematic. And then we went back, looked at our flavors, took back on all the data, all the feedback everybody gave us. We realized we needed to kind of punch up the bubbles a little bit based on the data that we received from everyone, which we got back for free because we just went out there and solicited it ourselves. We also did a lot of surveys on our own social media accounts about the feedback on the caffeine amounts, on the L-theanine levels, and all of these things. And then we went to a company called Carrie, K-E-R-R-Y. They're an actual ingredients company. There are tons of ingredients companies out there that will actually do RD as your partner for free because once they get you to a place that you have a formula, you need a place to buy ingredients. Then you're their customer. So we went to them, they helped us reformulate, we renamed the package Come Ono. We came to a phenomenal product and we just launched like three months ago. So I guess what I'm saying is that, you know, you've got to have a combination of data and gut. And like there's a thousand ways to get data that you don't have to pay for if you're willing to do the work.
SPEAKER_01:I'm curious, how does 11C and Company interface or work with MHW? Sort of what brought about the converging of all of these minds on this very podcast?
SPEAKER_00:The way MHW and 11C intersect initially is through the Chicas D Vertitas project. Chica's is looking to do some innovation. I, on site at Chica's, as the GM running the brand on behalf of them, I'm essentially a team of one. I mean, I have a million resources through the Rock Nation team, but I'm essentially a team of one. And as I was looking out there to say, how am I going to manage some innovation projects? And I need, I need some support. And the innovation they're looking to do is through some major national retailers. There's a lot of work there. We all know the back work there. I can innovate a project all day long. But then there's forecasting, there's all kinds of supply chain, lots of things that need to be done. And then I was introduced through Bridget to Ian with the concept of Brand Arc, which I found fascinating and it's amazing. And I have been discussing BrandArc since that introduction with so many people now in the industry to say, like, I feel like it's like you're able to bring onto your team a full-time project manager, like immediately, instant, an instant, full-time experience project manager. And I think it's a fascinating service. And that's how we connected.
SPEAKER_02:And to go from there, like being in that in that space, talking to like prospective brand owners, talking about their ideas, you're really the kind of like North Star, like the playbook that people want to recreate in terms of someone who started a brand, did it the right way, built it up over time, and exited. Um, what what keeps you coming back to working with new brands, seeing as you've kind of been through it and as you know, it's a very taxing, uh, taxing role. So, what what excites you to come back and work with other brands and just to kind of get back on the horse and do it all over again?
SPEAKER_00:I love it. So I love it. And I've been asked this question, and I say I learned so much. So Illegal Mezcal was my first spirits brand. I've been in the hospitality and spirits industry my whole life. I started as a dive bartender in Philly at 18 years old. Go birds. But I will say that I learned a massive amount. Over my time at Illegal, I led all our rounds of fundraising, I led all of our innovation. I led all our ops. I built our sales team. I did all our rollouts in every market when we went national with southern. Sometimes I look back and I have no idea. Like I must not have slept. But I learned so much and I know how to do it all better now. And I so I want to do it again for myself and I want to help and coach other brands through doing it better. It's that's it. Like I feel like if I don't do it again, and if I don't do it again with others, it's almost like things go to waste because I know more, more better. Now I really sound like I'm from Philly. I know more better how to do it. That's the answer.
SPEAKER_01:You've talked about how you've been there, you've done all of that. Do you have, I guess, any specific pieces of advice for newer brands out there who are trying to do it all on a shoestring budget, other than perhaps just hire you or hire Ian?
SPEAKER_00:Yeah. Yes. And you've had people on this, I'm sure, say it before. It's a couple of things. It's stay narrow and focused. However, I think that can mean different things for different brands. I was just discussing this with someone the other day. It doesn't necessarily mean one or two markets. It could mean eight states, but in those eight states, it's very, very, very well defined where you're going to be, but narrow and focused. And that has to be very specifically defined. On top of that, you just need to say no. You need to say no a lot. Like things are going to be like flashy, great opportunities, like just say no, especially say no. I'm so sorry. But say no to Costco. Say no to all the big box stores. Just say no. Say no, say no, say no. Because you just really need to work in your brand build for a very, very long time, infinitely longer than you think that you do. And your distributor and everyone else is going to push you for these deals that they have and just say no. Just say no. And the last one is do not launch in New York City unless New York City is your backyard. Launch in your backyard. I don't care what your backyard is. I don't care. I don't know. I'm going to piss off people from Sheboykan. I don't even know where Sheboykan is. Like whatever your yard is, that's where you belong. Like that's your network. You launch in your network because it's a waste to like to not do that.
SPEAKER_01:Wisconsinites catching strays on the podcast here. I do want to ask, can you I'm the lay person on this podcast. I do not have a background in this industry, though I have learned a lot in the past two years doing this podcast. Um when you say say no to Costco, obviously you're just you're just throwing out an example, but can you, for someone outside of this this industry, to me that sounds like, oh my God, you've made it. This is it, you've hit the big time. Can you tell me why you might want to pump the brakes on something like that?
SPEAKER_00:I'm saying why because there's um a lot of complications with margins and costs and supply chain issues and forecasting and demands that get really complicated, that you definitely need a person like Ian to help you with. They're very advanced company strategies, more than a brand strategy. And I feel that often, especially larger distributors, because they want to pack you in with some other things they're already doing, really push small brands into these situations that they don't belong in.
SPEAKER_02:I have a question, honestly, since you referenced the bad ideas factory, like I'm dying to know. Like, is there one that you and your colleagues like still kind of reminisce over or talk about? Or is there one that maybe is like a really bad idea, but you'd love to turn it into a good idea at a very high level as an example? Is there is there one that like specific example that you could talk about?
SPEAKER_00:I can tell you this is more than a bad idea. This is the dumbest, dumbest, dumb, dumb, dumb idea you've ever heard. And I don't even care. John Rexer's probably gonna be mad at me for telling you, and that's okay. In the very early days of Illegal, like so early, myself and Caitlin Rexer weren't involved yet. Because even though we're considered founders, we weren't there on day one. But a couple of the people that John had with him on day one were not the brightest bulbs in the forest. And one of the people he had working with him could not figure out how they were gonna get the label to adhere to the bottle. So he decided that the best way to do it was to use Velcro. And he created a label that would be velcroed to the bottle.
SPEAKER_01:But how do you get the velcro to stick to the bottle?
SPEAKER_00:Exactly.
SPEAKER_01:The back of the velcro.
SPEAKER_00:Well, that already had glue on it. I guess he was gonna like hand create labels and velcro them to the bottle. I'm pretty sure that John in Cafe No Sain in Guatemala still has one of the Velcro bottles. He is basically has a museum down there in his little tiny office. Velcro. What the who how? How? How? Have you never drank anything in your life? How do you have you not even gotten drunk at a frat party and peeled a coarse light label off a bottle before? Like what is wrong with you?
SPEAKER_01:I'm picturing a very, very niche application for military people. Patches are really, really common, not just for units, but they're also, we call them moto patches, motivational patches, which are just they're usually some kind of joke, a lot of dark humor involved. And to be able to slap a patch on your bottle, that's kind of that's kind of cool. I I think when I was in the military, I'd be up for that.
SPEAKER_00:Okay, see, but this is why there are no bad ideas. Because now we're gonna make something.
SPEAKER_02:This was what I was gonna say, there's a fine line, I think, between a really bad idea and a really good idea. And kind of my whenever I'm talking to like potential brands and they're they're pitching ideas and we're we're ideating, my worst fear is being a quote in 20 years' time in like the New York Times of like this will never work. Like one I always think of is uh Lord Alan Sugar from the UK, who famously, I think in like the early 2000s was like the iPod like won't make it past Christmas um of that year. And then you laugh at now, like the Apple is obviously a trillion, trillion dollar company. So it's like in the moment it can come across as like, how is this gonna work? But actually, sometimes the crazy people that just keep going and making it to try and make it happen tend to look back and uh have the last laugh all the way to the bank.
SPEAKER_00:Okay, now you've got me stuck on it, Jimmy. Now we're gonna make a brand that has Velcro. But I'm like, how do you get past how do you get a cola approval on a Velcro label?
SPEAKER_01:I know what a what a fun just one-off, maybe just a promotional thing, like slap your patch on there. I don't know. It would kill in A-Fies, PX, and BXs around the world, which is not a very big market, but you said hyper focus.
SPEAKER_00:You wanna I mean I will say some common things that are honestly bad ideas that people do early on are pack size. People are like, everybody wants 200 mls, everybody wants 375s, everybody wants 50 mls. You know, you just need to focus on growing your brand. Like you don't need to be doing that. You don't need to be doing all that right now.
SPEAKER_01:What's the broad general recommendation? Do you just do a 750 if you're a spirit?
SPEAKER_00:Yes, although I think it's it'd be interesting to do a whole nother podcast thinking around now that there's broader accepted pack sizes in the US, you can look at doing 700 MLs now, which I think is a really interesting idea to talk about margins and cost savings and like you're still kind of looking on the shelf like the other sizes, but but you still just need to focus on your one size.
SPEAKER_01:Is that a shift that we're seeing? Because I haven't noticed 700s on my local shelves. Is it shrinkflation? What is this?
SPEAKER_00:People are talking about doing it. Because in Europe, if you're already only in a 700 ml, I think brands are gonna stop creating a 750 for the United States because why bother doing it now that you don't have to do it anymore? So I think you're gonna start seeing them. And so then once you're starting to see them in popular brands that are coming from out of the country, maybe US brands should start doing a 700 ml because your cost of goods is gonna be better.
SPEAKER_02:Especially if you're looking to export to to foreign markets where the 700 is the kind of king. And just to add to that, just one brand that I really love, and I'll give them a free plug with Boat Yard Irish Gin, in the European markets, they have a 2.8 liter pouch that they use on trade.
SPEAKER_00:Interesting.
SPEAKER_02:So it's part of their sustainability push, they're a B Cor certified um company. And what's cool about in the UK, they have an arrangement with the with the government where they have um essentially free posts. So essentially, if a bar buys six of these 2.8-liter pouches, they could fill up all their bottles that they have on shelf and in the well, and they essentially just like empty them out and then pop them in the mailbox and they go back to the distillery and they can be reused and re-bashed and retracked. So that's great. That's something that I actually talked about on a previous talk I did recently for the Irish Drinks Forum in terms of innovation for the United States. So obviously, the US as a market is obviously there's a lot of doom and gloom about the industry as a whole, with the kind of current economic climate and political climate, but there is like room for innovation, and sometimes during the hardest times is when the best innovations occur. So I feel like that for brands that are heavily on premise and they want to like reduce their carbon footprint, and by doing so, reducing cogs, that that could be something really interesting to check out is the boatyard gin um 2.8 liter pouch, because I think a three-liter is acceptable now on the the new TTB standards of fill for spirits.
SPEAKER_00:I think that's right. I think that's the big size that got added on.
SPEAKER_01:And now for our final fun question that we like to ask all of our guests. What is your favorite adult beverage of choice lately?
SPEAKER_00:I am not a cop out. I enjoy a lot of different kinds of beverages because I just took a very lengthy trip to Maine. I enjoyed a lot of beer. Uh, hit a lot of breweries up there, but I routinely I am a classic cocktail drinker. I am a Manhattan and a martini drinker, to be honest. Gin martinis and Manhattan's. That's those are my drinks of choice.
SPEAKER_01:A local beer, a gin martini, and a Manhattan can't beat it. Michelle Ivey, we want to say thank you so much for sharing your time and expertise with us. Um, we'd love to have you back on the podcast sometime.
SPEAKER_00:I would love it. It was great. Thank you both so much. Ian, Jimmy, I had a great time.
SPEAKER_01:And thank you, listeners, for joining us on the MHW Mark Podcast. And thanks again to Ian Perez for joining me and hosting.
SPEAKER_02:Thank you so much, Jimmy. Pleasure as always. Hopefully, I will not have to wait another year to chat.
SPEAKER_01: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 MHWLTD.com 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.