Getting ahead of the curve in-store w/ Jessica Kogan, HSP Brands

Hey listeners, have you heard of the term "brand differentiated commerce?" Probably not, since I made it up chatting with the folks at Offset about what they do. Offset is a proudly independent, wine commerce platform and brand studio rolled into one based in wine country. Their platform, Offset Commerce, has been shaped by listening to smart wine businesses over the last 16 years, and unlike other platforms on the market, it empowers individual wine business models rather than a one-size-fits-all approach. That's why iconic wineries and merchants, like Larkmead Vineyards, kill Cita Creek and Kermit Lynch Wine Merchant, trust Offset Commerce to handle the unique ways in which they sell. Go to OffsetCommerce.com to learn more. That's OFF-S-E-T-Commerce.com to learn more. Welcome to X-Sheto! X-Sheto! The podcast that navigates the business of wine with unique perspectives and insights. With your host, Robert Vernick, and Peter Young. Welcome to this episode of X-Sheto. Today, we are joined by Justin Erkogen, the CEO and founder of HSP Brands, who was a former guest back on episode 144 in 2023. Jessica, welcome back to the show. Thank you for having me. How long have you guys been doing this? Since the pandemic has started six years, yeah, six and a half, six and a half years. Yeah, some like that. So you've been tracking the rise and the change. There's been a lot of change in the wine industry in this time. That's for sure. That's where we are not short of interesting conversations to have. For those listeners who haven't listened to the episode because it is a while back and we're pretty deep into our episode list, can you give a brief overview of your program with emphasis on what's changed over the last couple of years? Sure. So I've been in the industry, the wine industry, Adele Bev, for over 25 years and started way back when we a wine company called Cameron. He's wine that I founded with Cameron. And we entered the business in around 2005 when, as I'm sure you guys have reflected on, there was, you know, a big oversupply in the industry and there was some concern about kind of the fate of wine. And our business really focused on buying silver bullet wines and selling them by lot as one offs and our primary distribution partner at the time was Costco. At the same time, we were building our direct consumer business and this was in 2005 when the big, you know, Supreme Court decision came about where you're allowed to ship across state lines and that really changed the nature of direct consumer for wine in general. That company grew. We ended up selling it to vintage wine estates. I joined vintage wine estates overseeing their entire hospitality, direct consumer business and ended up becoming their chief market officer and grew their direct business from I think it was about 25 million when I joined to about three years later to 150 million. At the same time, a business that I had began at Cameron use wine as part of our effort to connect consumers to wine was, you know, tasting in stores and that what we call like an ambassador program or in store activations was a company that came along with the acquisition of Cameron use wine for vintage wine estates. I bought that company back from vintage wine estates and have gone back to that business over the last years and it's just been a really fascinating time to see what's going on in the industry and we not only do wine we do across liquor so we're doing everything and so having the grounding in wine and seeing kind of what's happening across category outside of wine has been just fascinating. So you mentioned just real quick for definitions. Silver bullet wines could you define that for the audience? Yes. When a winery or a wine maker is making a wine, it is artistic. You know, you do and I'm sure that I think Peter could probably speak very, very, very, very intelligently here as an operator for better than me here but you know they make bets. There are certain blocks kind of have a sense of what the blend is going to be but sometimes that percentage of Merlot is not going to go in and that Merlot is like super, super iron but you only have like 500 cases of it versus like 5,000. That's what we call us and it's a super high end, super highly made, super customized, super amazing and it doesn't really need a lot of blending. It just needs maybe a slight little add in to the mid palette but in general it's not an extension. It's just you're taking that silver bullet wine, doing a slight bit of change and then selling it under your own label. Got it. Thanks. And so you bought HSB brands for vintage and then you bought it from vintage? Was it always called HSB brands? No, it wasn't always called HSB brands. It was, it had a different name. It was a drag along as part of Cameroon's wine. It's really what made Cameroon's wine so well known to consumers because we used to deploy, that's really where we spent all of our marketing dollars, which is just in store selling, in store all the time every weekend, 50 stores a weekend. That's literally where all our money went and so we built that team within the infrastructure and so that team came along and I've entered one of states, that team moved outside of just doing wine, working with suppliers all over the industry from beer to liquor, you know, to to spirits to their I say non-alcohol right now. And so for vintage it became, you know, just wasn't like a core business for them. And so I just, you know, put my hand up and asked if I could buy the company back. And after I left vintage, you know, began to see kind of, I was curious to see what was going on in the industry and was able to get back into the business because that vintage, just because I was an officer of a publicly traded company, I couldn't be super involved in the business. There was like a Chinese wall. And then yeah, I've been at it for the last two years full on and it's, it's just one of the coolest things to be part of right now, especially with the industry so in transition. It has created so much clarity about what we see needs to be happening, but that's, it's, it's difficult to convey that to everybody in the industry because, you know, everybody has their own fears and issues and concerns going on. So you mentioned it's in store tastings, but I think it's a little bit more than that. Can you tell us what HSP brands is and what it does? So, I mean, we are in in store adult beverage activations company for off premise, off premise, primarily, that that's like our primary focus. So national grocery, Albertson Safeway, HEB Whole Foods, any national chain grocery store where they set, they have a liquor aisle, it is likely that our team is doing our executing tastings on behalf of suppliers. We do that independently. Suppliers reach out to us directly and we also work directly with Albertson Safeway in Northern California in helping them manage their calendar and in Arizona as well. And so, but I think the solution has more than just the tasting component, really like what, what, what can you describe? Yeah, so the fair, no, no, no, well said Peter. I read your marketing materials. Oh, thank you. Thank you so much. I am like it. So the reason and probably why I'm like, this is, it's such an interesting industry. What we do is we put folks in store to talk to consumers, shoppers. We also send shoppers and consumers to store. We think of tasting events as, you know, these moments that are like, you know, you hosting an event at your own home, right? People should know about it. You want, when you invite people to your house, you want it, they need to know to be invited. So we do that piece where we digitally market, sitting in between the retailer and the supplier, bringing consumers to store. But the big part of what we do is we are collecting insights. We have a very large data platform where every interaction we have with a consumer is documented and translated into KPIs, translated into insights about how your brand is performing, what the hesitations are for consumers and shoppers, what recommendations, what recommendations consumers are saying that you may not be hearing from a marketing standpoint. Like, of course, I will say this, but I truly believe this is just a person who cares deeply about the industry. Any person who's in marketing and any person who's in sales should be reading the data we put on our platform. Because if you want to know what consumers are thinking about your product, you go on our platform and you will see it. And is it just always one supplier at a time when you do a tasting or do you have a few at the same time or do you do like Pepsi Challenge type competitive tastings? We don't do competitive tastings, but we do multiple tastings for many different clients. So, so we'll like, I'll just use an example like of a, you know, like if we were doing wenti, we would go across your portfolio. We prefer to go across your portfolio because it helps, it really helps ground the consumer and helps them trade up, typically trade up or, you know, see the help understand the story. I mean, we are storytellers at the end of the day. We usually only sample one product because they're just so many compliance rules, but typically we generally like it's more fun when we work with clients who have a lot, who have a diversity in their portfolio. We enjoy that, but it's always one supplier at a time at each tasting, and if they have a family of brands, we'll typically make a recommendation of what else should be brought to the tasting, but we only will typically pour one or two depending on the tasting. Got it. And you mentioned a data platform, what technologies do you use in your solution? It's a custom-built SQL database driven that's on super old school with, you know, with some, with some amped up beautiful AI going on in there, but the AI really just bubbles up a lot of the data that lives in structure, but it is just a custom-built solution that enables like if we're working with a distributor and they have 50 different suppliers. They can see their 50 different suppliers, and they can manage the calendar, they can see the KPIs from all of the tasting events, they can see pictures, they can see how many samples were given, how many people were talked to? What are the key things that shoppers are saying? What are the learnings? We'll do that for distributor as we'll do for a very, you know, for just a direct client that is working with us nationally in different markets. We interviewed Fitvine quite a while ago before they were acquired by O'Neal and they said they did tons of in-person tastings. Oh, yeah. Like, you know, at all the exercise events or whatever, thinking that that was a core part of their strategy, is that-- We did all of them in store for them. Got it. We did all of them. That is, I think, to find such a good touchstone for a lot of wine brands right now, to think about how your programming dollars are spent. The issue with wine remains the same for so many shoppers, is that there is the paradox of choice, which was, you know, we all know about. But it's more for many shoppers is that-- and it hasn't changed is that they lack confidence when they go into the aisle because they don't know what to buy. And so in the face of not knowing what to buy, though they love wine, they all love wine. They're just like, you know what? I'm just going to defer to something else that is calling. I'm going to think about what is the occasion. I'm just going to go to a occasion. I'm going to go to something that my mind doesn't get stuck in. I don't know Pino, I don't know Cabernet, I don't know Sharnay. I just want somebody to tell me what is going to be good for this moment. Well, and that could be the shelf tag that says it's 92 points or whatever. It could be a brand that they know or recognize or heard of as being quality. I mean, I think that's where some of the really big brands are getting bigger. Like Josh is doing quite well, you know, probably on the backs of that kind of thing. And they're big enough where they're able to market, right? More aggressively and have people know about it. So it's a combination. But the average person who goes in and just sees the wall is like overwhelmed for sure. There's a reason that Costco does samples. Well, Costco doesn't sample actually. They can't legally. You want to California? I'm talking about like for food. There's a high correlation to the person doing the sampling. So you're basically doing that for one. Totally. And like, honestly, that's the best such a good understanding of the situation is that like wine must sample. Like more than any other product. It's like tasting rooms exist. Like retail off premise is the largest tasting room in the country. It boggles my mind that wine companies do not allocate all of their trade money that they're doing in like discounting. Like just don't discount for a month. Take all that money and put it towards tastings. Just see what happens. Just try it. Did away from hospital, they get into getting the mid convert in customers through tasting. It's also just the confidence level, right? Like when, of course, not every person who's going to walk in the store is going to be like, I want to taste your wine. That doesn't work that way. But here's the thing. If you look at all the spaces in which people are experimenting outside of wine, it's very easy. They lean in, they buy, you know, a canned product. It's like not super expensive for them. They're like, if I don't like it, it's no big deal. Wine is just always a larger commitment regardless of price because it's heavier, it's bigger, it's just all of these things. And it's also different. You know, people, consumers, shoppers, they walk in and they're like, I don't know what I don't know. I don't know a lot. And so, yes, you're right, like Peter, they will defer to a Josh, but it's not because they think Josh is better. They just know it. It's like Robert Mandavi back in the day. They know the name. And honestly, I don't think that's good for wine. I don't think that's good for wine because the shopper is saying to you with the consumer saying to you, it's like, I don't know what else to do. Yeah. So getting more like tactical into these brand ambassadors or brand activators that you have, how are they sourced or trained? Are they dialed in per product? Is it kind of like a giga economy or they direct employees or part time? Like, what is the logistics of these activators that you have? Is that the right term brand activators? Yeah, we call them brand activators exactly. And I love that you bring up gig economy. So initially, you know, back in the day, when I started the business, it was gig economy, but that was changed when Gavin Newsom signed SB4. And I'm sure you remember the whole thing with Instacard and Uber and Lyft. So once that change took hold, it moved from contractor. So a person who's kind of an independent worker who inhabited like different areas of our industry, like worked in real estate, worked at, you know, a lot of folks who are just independent workers to a W2 part time situation. And the folks we bring in are many of them want to work in adult beverage industry. They're in liquor, they're bartending, they're in hospitality. They just are very, very, they want to continue to hone and leverage their skills in liquor. We do see a lot more people coming back from real estate who are, you know, want to maintain like a community presence. A lot of these stores that we work in are still community hubs. And so a lot of folks who go in and do a lot of the hand selling and representation. We have a lot of like connections within the kind of like the town square. And what better way to get people like to hang out, you know, just come here and taste with my friends and with friends of their friends. So we're seeing all kinds of folks. We're also seeing a lot of real influx of college kids of new of recent graduates, which is very interesting. And that's just like a, you know, something to note that we haven't seen over the last few years. And I don't know if that's a result of what we're seeing kind of competitively for recent grads. We love having them. But we're definitely seeing an influx. Anything that's due to flexible schedule or due to like that's like what they're doing after they graduate. I think it's a combination of things. One, it's like it's a great gig. If you are interested in liquor, your interest in wine, you're interested in like understanding your interests. It's also, I mean, it's, it's a great way to learn quite frankly, how to present and to interact and to talk to people. It's like a literally a master class in connection and engagement. And also, I think that they are looking for what it is that they probably studied in college and haven't yet found that opportunity to be like that's, and that's just my like assumption here. I don't have any data to back up what I'm, what I'm saying, like very specifically on a, on a wholesale. But it sounds like there's also a secondary value to brands who utilize your service because if a lot of these people are bartenders or in hospitality or whatnot, then they really know the brand's story. And it's not just the in store tasting, but what they do for their other jobs. They're so passionate like it, you know, being that we're in the industry, we sometimes forget how everyone else feels. And people who like, I mean, I guess it would appear like tack were like in the tactical operational stuff that's not super sexy. The passion that people feel for wine that they feel for, you know, for whiskey that they feel for beer. or that they feel for non-alcohol is so real. Like, it's how a fashionista feels about fashion. Like, they just love it, they live it. This is what they do and they want to go out there and talk about it. And I think it's really wonderful. I also noticed one thing that's really interesting is that a lot of these Gen Z kids, like they're really into learning how to connect now, which I think is very exciting to see. They didn't, like, the millennial cohort. I mean, the business has been around for six years. The millennial cohort, like, not as super engaged. The boomer, we have a big troop of boomers, but seeing these, like, top funnel Gen Z people come in more. It's exciting. I'm happy to see it. I don't think it's all doom and gloom for the industry. It's been around for 8,000 years. I'm sure we'll continue for a while. Do you see big variation in performance with this, you know, set a very varied set of people? These are good questions. So we do. So I'm sure you won't be surprised to hear this, but the boomers do a great job in selling wine. Drank a lot more of it. They slay it. And maybe they look like the people they're selling to. They slay it. And to be fair, though, I mean, we do see millennials and Gen Z buying and, you know, Gen X, like, what I'm in. Like, we don't count, of course, you know, like, we're outside any meaningful cohort. But they do a really good job. I will say that our millennials and Gen Z in particular, it's not that they don't know how to sell wine. It's that, again, I'm just going to hit home on this kind of concept of they think in occasions. They don't think in, like, the technical detail of things, right? They're more like, what are you coming in for today? Not, like, let me tell you about this wonderful Cabernet. Their sales approach is a little bit different. And it's really more in line with kind of how they live socially versus-- Yeah, more femoral, like, of the moment, you know? It's just different. And I will say, and we were talking earlier about, like, kind of the salsa air effect with Taylor Swift. And I'm totally with you. But I also think that, again, you're just going back to kind of a really big observation for us, in general, with wine, is that we are the industry sells by varietal and within the US, outside of imports. And that, at a time, was advantageous to the industry. I don't necessarily think that that's an advantage anymore. Just throwing it out there, monkey wrench and everything. I do think that the way we see shoppers come in, the way consumers talk, the way they talk about brands, they are interested or want to experiment with, is, like, would this be good for dinner on Tuesday? Would this be good for me to take to this festival? Would this be good for me? Like, is this a good outside of the national holidays that the industry is kind of stuck in that cycle? I'm not talking about that. I'm talking about, like, I'm going to the pool today and hanging out with friends. Like, these ideas around book club, these ideas around, you know, I'm going to go to the dog park, it's dog park Friday. It sounds, like, trite talking, like, when we talk about it, you're like, well, that's just a feel so limited. It's really isn't because that's contextually how, when consumers are coming into store, that's how they're thinking. Yeah, and you see a lot of brands succeeding in that with their labeling or logos, names, evoking things, you know, like C-glass or C-Swept or whatever, right? Like, things like that, so you picture the beach or that kind of occasion. But it's interesting since the original intent of writing labeling was to do that, right? It was to kind of connotate a style, connotate an authenticity. I mean, went to was like the first winery to write a label post-prohibition to communicate an authenticity and a clarity of what's inside the bottle when, at the time, anything could be written on the bottle, right? Things are hardy burgundy, and who knows what it was inside? And what it tasted like, right? But so then if you wrote Kenonore, you knew, oh, this tastes more like this profile, right? So the idea was to communicate that, and I don't know if it's people just aren't familiar with that. That's too much, and something else, or the styles have just started to diverge to broadly within each bridal category, which could be, you always have that problem with Chardonnay or, like, Saraw or something, right? Where there's so different styles out there that it's really hard to do it, but that could go on for a long time in this discussion. I don't know if it's a style thing, because what we see so much with consumers is that they are so willing to explore. I mean, you're seeing that they're like going across category and trying everything. But it's knowing what's in the bottle, right? So like if it says Chardonnay, it could be a really oaky Chardonnay, it could be an un-oak Chardonnay, and so that's such a different thing, and so you have this, like, anything but Chardonnay movement picking up steam again. That's why where my Chardonnay hat a lot, but it's because they view it as, oh, that's the rambour, the really oaky wine, right? And I don't like that oaky wine versus, like, that the Chardonnay that's in front of them may or may not actually do that, or, you know. And totally, but I also think that, so it's really interesting, it was a lot of people who try like an oaky Chardonnay and a non-oak Chardonnay that we've seen, like, a lot of folks don't even know the difference if that makes any sense. - Yeah, I feel like that's sometimes industry speed. That's how industry is an assessment of that. - Like they just don't really know, and I'm not, there is a group that are, I would say California are the most experienced when it comes to those kind of distinctions. But what I would say is that what we see consumers gravitate towards is just like, how do I talk about this with my friends? Like, give me an occasion to love this. Why would this be like perfect for me, doing like the five o'clock like babysitter club with like our three year olds? You know, I don't know, like, it's just, they're more like, okay, when they taste it, they're like, oh yeah, I could see this for like my thing today, let me just taste it. And then they taste it and they're like, oh, I can't like this, can you tell me a little bit more? And that technical, then they want to have a technical conversation. And so I think that again, like, you know, my prescription for wine in particular is, like you just got to get people tasting and give them a reason to taste, and it's not necessarily a variety of least. It's just like, taste this wine, you're going to love it. Like, what are you shopping for today? What do you need today? What occasion? Outside of Thanksgiving, Christmas and, you know, Labor Day and Memorial Day, which is like, pick a little bone with the wine industry. It's like, you are spending money when everybody else is spending money to taste. Why are you not spending money outside of the days that are like not as hot and not interesting and like just tasting people all the time? - So going back to your activator first thing, so you have this wide group of activators. Do you guys track data on like, you already said that some are more successful than others and that the boomers are great at selling wine? But I guess I have a couple questions. Like, are you choosing the right activator for the right location based on like the time of day and like it's potential, the venues, potential like traffic at that time? And are you finding that different age groups sell better to different cohorts of customers? - Yes, so it's funny that you should ask that because so first of all, we're very strategic with our clients about where and when they should be tasting and so we're very well versed in the national chains and we specialize California, Arizona, Texas and Nevada, but in particular, we know with our retail partners where they're like, especially in certain populations or wine is just going to be much stronger no matter what, then let's say a non-alc beer. However, when we're doing like an innovation program where we're just testing stuff, typically what we like to do is we're, you know, bring our bays that are probably skew a little bit younger 'cause they're more innovation driven and they're more willing to try new things. So yes, we do pair as best we can team members with the right brands and typically we'll also get feedback from stores, from all the store managers like, "Hey, we really like, you know, this person on wine, they're doing great job," and we can see it in the numbers. The numbers, we see the numbers within typically 48 hours, how many people are sampled, how many bottles, because we're in stores, we're bottle sales, we're not glass sales. So how many bottles were sold? How many people were actually in the store in the area? So we can, you are able, if you're our supplier, you're able to see kind of what's going on in the store, also, and to see if we met the strategic alignment, right? Like, the answer is yes, we do pairing, and yes, we do think very, very, very strategically about which stores and where. That being said, and Peter knows this, he'll give his sales team like, "I want you to do all these stores." That's your mandate. You have to do sampling in 50 stores and that's it. And so you have folks who are just like, I need these for the next video. stores. I don't care if it's strategic. I just have to have it as it needs to be a checked box. I would counter that that is just a very, that shouldn't be that way. It's a strategic privilege to be able to taste in stores. And so retailers want you to do it. So I always think you should approach it with the utmost, like, how do I maximize this opportunistically to not only drive volume and drive sales, but the bump that I get from tasting that maintains. So how do you go about sourcing and training the brand optimators? So I mean, we recruit folks from all the different, I think they're like job listing boards or, you know, across, like, there are boards dedicated to our industry. There's a whole industry of folks who, who are in kind of tasting activations. And they're the ones that you think of in Costco that cut sausage. And then there are the ones who have got more education driven for, and those are our folks. And yeah, that's, I mean, we find them there. And then the training is a multitude, like three, basically three big steps. The first is, you know, we, there's interviewing and we do in-person interviewing. We don't do Zoom interviewing because our job is an in-person job. If we think that there's a role, we then have them meet with one of our current brand activators to actually go through an event and see what it's like and see if this really fits for them. And then once we see that there's, this is a, this is a match, we then put them through our training module that we've built ourselves. And it's like a nine-part module system. And it's all, you know, digitally driven. And then they go out to their first event and, you know, they check in and check out with our app. They write down everything that's going on. They take pictures of everything. They are required to write a 500-word narrative of what happened. And it's pretty cool. Awesome. So obviously, it just p-brands. It has been doing this for, you said six years and just on previous, going through this. I guess I'm curious what makes your offering kind of unique compared to other people who are maybe doing something. So a lot of Peter and probably knows about this in the industry. A lot of folks who inhabit our area of the universe, they are not reporting results. It is zero visibility on your, on your return on investment. And which is why I think so many wine companies and a dope of, you know, just big companies are just like hesitant to do it because they're like, I give this to my like local sales manager, my, you know, regional sales manager and they pick an agency that they work with. And like, I have no idea if this is translating into anything. And so the difference is like, because of my experience in tech and been doing tech for longer than being in the industry, I was part of the team that built Schwab.com back in 1999. Like, I've been doing it for a long time. I do not function without visibility and seeing results. And so that is really the difference. Any person that we have that goes into store, you will see the results within 48 hours. And you will be able to take those results and put a return on investment on there, whether you measure that in sales, whether you measure that in samples given, whether you measure that in the growth that you're seeing from over the time that that that we did attasting. There's so many different measurements, but you have it right there. Yeah. And we do it for many large companies and lots of small companies. So how many programs have you run today measure? Yeah. So, I mean, we have, we sold, I mean, I was looking at the other day, we sold over a hundred million dollars worth of product. We've last year we talked to a million consumers like actual conversations. We at any one time are working with probably 50 to 100 different suppliers. And yeah, I mean, we really work with everybody. And we are seeing, we can see trends before they happen. We can see sentiment before it happens. Like, like what we see in Nielsen is like literally usually like eight to 12 weeks after what we've already identified. It's really cool. It's really interesting. And I hope the industry does turn back to a more serious and consolidated approach to tasting because to what we see is that shoppers want a different kind of engagement when they're in store and they're very open and willing. And so to me, investing in this versus a TPR or all the traditional kind of couponing or discounting is not good for your brand. Also, you're not really learning anything from your consumers. So, I mean, already in this podcast, you've had a few hot takes in terms of, you know, brands should stop, you know, stop, pause their discounting and invest in doing tastings. And also, they shouldn't be, you know, competing at the peak times of, you know, the couple major holidays where a lot of wine is purchased. So, I am curious for another hot takeout. What is the best brands suited to your programs? Like, what is their size or the profile looked like? What is the ideal kind of that will get the most out of this? I love your questions. Okay. So, I will say, brands that are, so there's two kinds. One, that is, gets the persistent and consistent, right? They're like, they're like, I am in it to win it. That's the all-year-round tasting. All-year-round. I understand that in order for my brand to have longevity and meaning and have a piece of a consumer's brain in my brand, I need to be out there all the time in the stores. On the front line. Yeah. And that, so the persistent, consistent, combined with a connection to like their first party data. So, like, understanding that the end consumer that we talk to, that they are taking the information that we're giving them and they're connecting that to just their general marketing to consumers. That's one and then the other one is innovation. Anybody who wants to understand how consumers are going to react to their brands and a brand extension, you know, they are thinking about doing non-alc and they are testing it to see if it will grow their basket size. Like, we are perfect for them because the results tell you very quickly what, like, kind of the risk factor or the high-risk low-risk. It just gives you indicative information. On the innovation side, though, you don't, so you don't need mass marketing behind that. You just, you can be literally, you know, essentially early user testing trial runs of things and your team will convey the message and you won't need, because a lot of the other kind of, I'm assuming samples that require, kind of like generic marketing out there in order to help resonate, right? It just needs to be on the shelf. It just needs to be on the shelf and it needs to have, I mean, it is ideal. I mean, I would say any, with innovation, you do have to do a little bit of, like, you do have to have a website, you do have to have, you know, try and have your product in some type of meaningful distribution within the area, because it's very difficult to test a product that's like this one store said this, right? It's, it kind of has to be across the board. I would say that we're seeing that a lot with non-alc, you know, there's a lot of testing going on over there and, you know, we can tell you pretty quickly if it's going to work or not work. Also, just getting really creative in your programming, so sometimes I'll just use non-alc as an example, because it's non-alc, you can give product away. So there's an opportunity to do that and also hit your depletions. So getting very creative about it, you can really get a sense of what that area is going to do like with it. You can basically track for six weeks to see after you've done six weeks of activations, like the next three weeks, if you see the numbers go up, up, up, up, up, that's going to be a winner. And so obviously at retail, you can track the data of what's happening, but, and you mentioned you partnered with Fitvine back in the day, do you not do like event-based marketing or activations where, you know, someone just hires you to outsource, like going to a sporting event or concert or whatever that and do as well. I mean, we'll do it, but we typically, you know, we prefer to stay in the lane of being in stores. It's where we really are. All of our technology is designed to support that. So on one hand, we're doing, you know, tasting events are intended to create choice to create interest, to create discussions. But what we're really trying to do is get information back to our clients, to the suppliers, to the distributor, about whittaker. happening. And so you talk about doing these types of things frequently and consistently, consistently, what kind of money are we talking about here? What's the pricing model of these programs? Yeah, so typically $225 for three hours and $375 an hour basically. And is that one person or two people? It's one person. It's one person. We do a minimum of three hours. Like four hours is a sweet spot because you're going to get some real rich information. And typically, you know, we recommend, you know, depending on the size of the client and and what's going on if you're doing the consistent persistent. Like you want to do at least 50 to 100 events in like just two markets, right? And if you look at what you're spending in your trade budget, like it's a really small amount compared to what you have in your trade budget. And I always challenge our clients to think in those terms just like just one month, just don't do it. Just don't do it. And just just put your money here and just see what happens. But yeah, I mean, that's it's very affordable. The question really is, are you going to use the information to help you do better? So obviously, I've got spend and you said one of your strengths is connecting that data. But in terms of like ROI, how it causes a lot of the other providers are black boxes in terms of ROI. Like what kind of ROI could have, outside of the innovation group for a typical like wine that has, you know, relative permutation, like what kind of ROI did that do you think an average client get? It's huge. Like if we just use CAC as a measure, right? Like as I come from digital, like a cost for acquisition, and you factor in sales, right? Bottle sales, you factor in samples given, you factor in conversations had, you factor in those elements. Typically what you're coming out is like a cost proposition to convert somebody who's left and left with a bottle is usually no more than a dollar. I just think about that for a minute. Like a cost proposition, typically for consumer in DTC is currently in the adult, like liquor industry is like, it's like $100, $100, $125. It's nothing. It's literally nothing. So in terms of, I guess with a dollar perspective per bottle or whatever that they're going to apply to. Or case or whatever. Or case, whatever. Yeah, I'm assuming, yeah, I guess depends on what we're measuring in terms of how many bottles they buy. I guess it's not measuring the basket at that point. No, that's a good way to think about it because different people have different dollars per bottle. Right? It's different gross margin dollars per bottle. If it's a $10 bottle or a $50 bottle or whatever, it's going to look very different. But I would imagine your cost per customer acquisition changes too because the market changes very differently if you're a $50 bottle at the grocery store versus like a $15 bottle. It does, but we are factoring in the cost of the bottle, right? So it's not just how many bottles we saw, you know, it does factor in price. Typically, you know, the $50 plus bottle winds, it will say that they sound scary to sell because it's like, oh, you know, like, oh, $50. But if you sell six bottles over a three-hour event, that's really incredible because the way you have to think about it is, okay, those six bottles that are going home with these people, and I'm not counting the people, let's say we sold a case, okay? Six bottles were first people who know the brand super well. Six bottles are people who don't know the brand, but fell in love with it right there. You have to think about the knock-on of that. Right. And what that is going to mean, like, again, or put you in the place of a thinking, like in that consumer mindset, they leave the store, they go home, that bottle is sitting on their counter. It wasn't sitting there before. There are other people who live in their home. There are other people that are going to be in their home, or they're going to take it somewhere. And that bottle is, they're having an interaction and a relationship with that bottle that they would not have otherwise had had that person not been standing in the store sampling them. Yeah. But too, if your average, you know, four-hour event is $300, that means you have 300 people buying the wine or the product. No, because we're talking about so we're factoring samples given, right? And then we're factoring in purchases, and we're factoring in people that are in there, and that are walking up and down the aisle, and we're factoring in folks who, afterwards, within a 24-hour period, have purchased the product. So we get that data back from retail to let us know, to basically validate what it is that we sold. So we're looking at like the 24 hours. It's not just in the, okay, it's not just in that four hours, but for the next 24 hours, you 300 people would have bought it. Well, in this case, I mean, you're looking at it a one-to-one, and it's not a one-to-one, because samples given are given a weight, and that's not a conversion. It's not a direct conversion on the bottle. Is it, isn't that just a cost the samples given? It's a, isn't that just add to the cost of awareness? It's awareness. That's right. That's why she's tracking that. Right. But it's a dollar per acquired customer, right? So. Well, so again, like it's, it's a CAC measure, and so a CAC measure is not just a, it's not a direct purchase conversion. It factors in purchase conversion in addition to awareness. It's like an average, it's an impressions-based conversion. While we're also including, yes, we sold some bottles. We're giving the sale of bottles a weight, but we're also giving awareness a weight with the concept that a conversion will happen as a result of that. Got it. So it's more of an acquisition of advertising than it is for purchase. Right. So DTC is a very direct, direct, direct. But even if I look at DTC, and we say, okay, it's $125, let's just say like what we're doing is like $50. It's $125 for DTC. DTC, it's one person ordering from a website or from somewhere coming back to them. What we're doing is we're saying, come in store, buy about, they didn't even know they were going to buy it. They didn't even know that they needed it. Didn't even know that they wanted it. They bought it. They come home and they're talking about it. So you have like this whole kind of different level of first-party marketing like all this like extra stuff that is added to that whole contextual moment of purchasing that they didn't have in DTC. And I'm a DTC person, but it just changes the dynamic completely. Interesting. So what's next for HSP brands? Yeah, I mean, we're just continuing to do what we're doing. We are, so one of the big things that we're doing right now is we're continuing to build out our portal. We're, as it just mentioned earlier, we're building out in Codex and we're making improvements all the time with this incredible AI technology that we have going. We also support our clients with, as I mentioned, we do digital ads in which we get consumers and shoppers. We to come into store and come taste product. And we're just seeing just kind of exponential growth. And as the wine industry, in particular, looks for solutions on how to reconnect with consumers. We're providing guidance and advisory and support to those clients. And are you thinking about opening up or geographies? Not right now. Not at this moment, but our application. So the platform can be used by any supplier on a national scale. So if they have agencies that they work with, the agencies can report into this application. And they have one dashboard and one point of visibility. I know CFOs really love that in particular. So we do offer that. We do it somewhat in a limited context right now, simply because if we have clients who want to do this nationally, typically there's just lots of different, there's like many different agencies who have many different ways of doing things and trying to get them to do it one way can be a lot of onboarding. So it's a limited service right now. So just guys, we wrap up every episode we do like to end on a personal note and our questions always changing. But we'd really like to know what has been the most moral winery visit that you've had and why? So I'm going to give you my most recent one. You know, I'm aging. So the memory doesn't go that far. I love Belly Union. So Belly Union is owned by Barniante. And I, I cannot tell you what he's stunning atmosphere with these incredibly modern finishes yet comforting and comfortable space. That is so, it's such an elegant execution of architecture, wine, style, design. It feels so elevated and at the same time so comfortable. Wasn't it designed for Gen Z or Millennials or something? I remember reading an article or something about that. - Yeah, I mean. I don't know. I mean, I, I just loved it. I just, I, I just think that the, the, the way they've done everything they're so gorgeous. I love tasting every, I love going to wineries and tasting like all the time. I just have to, I just was very impressed in the wines or delicious, but I just, I really, really like it. It's not too over the top. I guess it just for me hits the right cord, but I also loved all the, the wineries that I was overseeing when I was at vintage. And I don't know if it's Shane, but Cundee was one of my favorites. So Billy, you're the vibe. I've never been, but I just took it up. It reminds me of a little bit of the Ashes and Diamonds vibe. Oh, yes, that's awesome. I, that kind of like this entry margarine was like, yeah, exactly. Just, yeah. I'm definitely not the target, but I will tell you, I just like, it is so beautiful. Like, I just, they're just well, the, the, the, the hosts and the, you know, the tasting room staff are smart. They just very like, it's a very welcoming and graceful environment and probably too expensive, but whatever, you know, that's the most basic. But we want to thank you so much for sharing all your knowledge and specifically what your business is doing in the tasting space in, in sight of off-premises. So it's great to hear all those insights. Thanks for having me. Hey listeners, if you love the show, support it by buying a show notes book. They not only compile two years of episodes, but also organizes them into themes for better learning. They can be an inspiration to listen to or relist into an episode or provide a quick reference of the key learnings from a show. Go to xchatto.com and click on the store page for easy links to buy. Thanks for listening.