What RNDC, Breakthru & Winebow Want from Spirits Brands in 2025
43m 32s
Send us a textIn 2025, the spirits distribution landscape has become increasingly competitive, with traditional powerhouses like RNDC, Breakthru, and Winebow facing new market pressures while brands struggle to secure distribution partnerships in an oversaturated environment. As distributors become more selective about their portfolios, the brands that are successfully breaking through the noise are taking fundamentally different approaches to partnerships and market positioning.In this episode of the Park Street Insider Podcast, Emmett Strack sits down with some of the country's top distributors to uncover how they view the current state of the industry and...
Transcription
8665 Words, 46198 Characters
Welcome back to the Park Street Insider podcast. I am your host, Emmett Strack. And today we are diving deep into a segment we have held now for a couple years running, always one of our most anticipated episodes of the year. And this one is coming from a recent roundtable discussion with some of the top distributors in the US that Park Street University held in Brooklyn earlier this month at Bar Convent. I had the opportunity to sit down with executives from some of the top distributors in the country, including RNDC, Breakthrough Beverage Group, and Winebow. And this conversation really gets at the current state of play across the three-tier system and what's driving this new era of supplier-distributor collaboration that we're seeing right now. We explore why some brands are breaking through the noise while others struggle to secure partnerships. And we uncover the specific strategies that winning brands are developing to stand out in this constrained marketplace. These distributors are going to share insights on how they're evaluating potential brand partners, what red flags immediately disqualify some applicants, and the evolving criteria that separate must-have brands from the hundreds of pitches they're seeing each month. We'll also dig into the practical side, how brands can maximize their distribution partnerships once secured, some of the metrics that distributors are actually tracking, and the support systems that drive mutual success between brands and distributors. So no matter what stage of brand building you find yourself in, whether that's the early pitching stages, whether you already have a distribution agreement, this episode is going to deliver a lot of insights that you will need to navigate the complex world of beverage alcohol distribution in 2025. It's great to have you with us, and with that, let's dive on in. Today, joining me right on my right here, we have Monique Houston, who is the Vice President of Spirits Portfolio at Winebow Fine Wine and Spirits, where she leads a team of 200 supplier partners across 14 states. After her, we have John Oliver, who is the Senior Director of Supplier Business Development at Breakthrough Beverage Group. John sits within the Trident team, where he leads the performance and growth for a variety of Spirit suppliers within Breakthrough's portfolio. Finally, we have Melissa Linehan, the Northeast Region President of Republic National Distributing Company, RNDC, where she's responsible for managing approximately 1,000 employees to deliver brand execution and distribution of hundreds of supplier portfolios in Virginia, Maryland, DC, and New York. Guys, I don't think those introductions did you full justice, so I just want to take a moment for each of you to expound on them, talk about your experience in the industry, and your various roles at your various organizations, and we'll start with Monique here. Hi, everybody. It is wonderful, really rewarding to see the room packed. Sure, because we're going to talk about things that we're all really excited about talking about. You probably know, if you know me, I'm from Omaha. That's why I don't have an accent. I'm based in Chicago, and basically just get to have my dream job where I get to work with really exceptional partners across the Spirits industry to really put a great portfolio of Spirits brands together and lead a team in educating our markets about them. I just get to be a nerd and get paid for it. It's awesome. Good afternoon, everybody. John Oliver here. I'm based here in the New York Tri-State area. I work on Breakthrough's supplier business development team. I've been with Breakthrough for about 18 years. Many of those years, I spent helping to build a lot of our new to market and emerging brands and really helping them incubate and grow within our network and have now started to grow a lot of our mid-tier supplier brands. Looking forward to talking to you how to graduate throughout the different life cycles of your brand. I don't know how many people are brand owners here. I'm assuming most are, but looking forward to that conversation. Thank you. Good afternoon. Again, my name is Melissa Linehan, and I've been in the industry for over 27 years, 25 of which on the supplier side. So I fully understand where you're coming from. And I've spent the last two on the distributor side. And it's been an amazing experience to transition over to distributor to understand the things that probably you all get frustrated with on a day-to-day basis and really understand what it takes to distribute brands and the challenges that are out there and really have a good perspective from both sides. I've worked for large companies, small companies. I've incubated small brands and worked on really big, successful brands like Jameson. So I'm looking forward to the conversation today. That's great, guys. What we're really here to do is kind of get under the hood of what supplier and distributor collaboration looks like in 2025 and really get a sense of that. But I think before we get started, the best place to start is to kind of get some context for the market landscape that we find ourselves in right now. We all know that 2024 was a mixed bag of a year, a lot of headwinds and tailwinds kind of converging on the industry. And 2025 has been similar so far, although the set of challenges has seemingly shifted a little bit. I just want each of your assessments on where we're at in 2025 right now. What are your observations in terms of what we're seeing? Just from our perspective across the Breakthrough Network, it's still a very challenging year. Past several years have kind of challenged us in terms of setting supply chain correcting and making sure that both from a customer standpoint, meaning the stores and bars that we sell to, as well as within our own warehouses from the distributor tier, as well as yourselves as brand owners, coming out of that post-pandemic wave that we had from 2020 to 2022. And 2025, while we have corrected a lot of that over the past two years, we're still seeing a lot of fatigue. Fatigue in terms of a new generation coming into our beverage alcohol space, new categories that are challenging the traditional categories, how that plays across every single tier. And also, I think we did get a little too rich during those COVID years. And a lot of what is happening now is kind of a regulation in terms of velocity, the way that your brands are being pulled, how frequently customers or consumers are actually going into a bar or going into a store, and how they've become a bit more selective in what they choose to either consume on site or bring home with them. So these are all different challenges that we're facing this year. Not so much supply chain. We had that for the past two years. This is a lot more consumer-driven challenges that we're seeing, at least within our network. I don't know if you're seeing similar. I would agree. And I don't think we need to spend too much time on this because I think we'd all have to be living under a rock to know that ozempic and marijuana and all of these things are impacting our business today. I think, to me, the reason I joined the distributor side of the business is because I saw a massive consolidation across total beverage alcohol, or total beverage, I should say, with Coke and Pepsi getting in the business. And then the increase and influx of brands out there, and then the consumer changes, it's been extremely challenging. And I think we have to think about doing it differently. And I would encourage all of you guys today to make sure you challenge us to answer questions that are about what does doing it differently mean? Because, again, I've been doing this right out of college. And if I was asked to predict what was happening this year, I would never have predicted this in a million years. So I think we have to think differently. And now is the time. I completely agree with both of you. The first half of this year, I would say for probably all of us and probably most of our retail and on-trade customers, most difficult period anybody's ever gone through in talking to 40, 50-year veterans. So yeah, you'd have to be living under a rock. So we've all acknowledged that. How do we move forward together? And I think one of the single biggest challenges is the newer drinkers coming online, yes, have lots of choices and Ozempic and all these other things, but it's getting people out of the house, getting people out of the house into the on-premise, getting people out to even buy things, getting them out to socialize, getting them out. And the new drinker came of age during COVID. They couldn't even leave. And it's just thinking about meeting them where they are. And yeah, overcoming challenges differently, but I think two old categories maybe didn't work. Newer categories are new and exciting. But the way that we're reaching people in a lot of ways has almost leveled the playing field for a lot of brands. It's not about who has the most money having access to everyone. It might be like who has the coolest TikTok video that you can make for free. So I think the landscape has just changed really dramatically, and we're just having to think on our feet a lot. Yeah, brands are definitely really needing to get creative and find alternative routes to market, alternative distribution strategies. You guys brought up a lot of interesting challenges there that suppliers and brands are facing right now. How have these challenges kind of filtered into the types of brands that you're taking into your portfolios, but also the volume of business and brands that you're signing on right now? I will say for RNDC, we've chosen to be extremely selective in who we're bringing in. Listen, I think we talked earlier about the difference about doing business today versus 10 years ago. 10 years ago, it was a lot about relationships. They mattered. I don't want to say relationships don't matter, but they don't matter alone. There needs to be a 360 plan on these brands. So unless a supplier comes to me, all of us, with a fully baked plan to drive their business in the marketplace, that's going to give us pause. And even then, I think from my perspective, it isn't about hoarding brands and over-promising and then under-delivering. It's about being selective where I have a well-balanced portfolio. So you might say to me, tequila is the hottest thing out there. It would be wrong of me, in my opinion, to take all the tequilas that walk through the door and believe me, I get like five a day. That would be irresponsible of us. And I think that that's a shift in the business. I think distributors typically were afraid to pass up a brand because it could be the next big thing. And I think that's irresponsible. I think that we owe it to our supplier partners to be very selective and not over-promise. And I think to build upon that, the reason why we use distributors are even more selective than we have been probably any years previous is because we've already committed. We have such a challenge to sell what we already have. The suppliers that we've already committed to in this challenging environment that a lot of our resources are probably stretched even more than they ever have been historically in the past maybe decade of within our industry. So a new brand coming in last year, we got approached by over 1100 brands alone that wanted to come in one or more of our markets within the breakthrough network. Maybe we took on 40 of those. It has to be that tight and that the value proposition has to be above and beyond all those other thousands of brands that are still trying to come in because you have to realize there's so many brands out there. Yes, consumers want variety. They want something that speaks to them. But there is a lot of that out there and a lot of it is pretty damn good juice. And so the challenge for a new brand is even that much more challenging than it ever has been in years past. And that's why we need to be selective with that. I would say too when we talk about coming to market with like a fully baked plan, every initial sale you make into a bar or retailer is a liability. It is not a sale. It is not a high-five moment. It is not like my job here is done on the distributor end or on the supplier. You have sold in a liability that two months later could just be covered in dust and that bar or that store is doing inventory and pissed off and now I'm going to discontinue it. So the plan has to be from all the way from the supplier through the distributor is how is that bottle moving off the back bar? How am I as a supplier partner or as your distributor partner, how are we working together to have conversations about educating to get that bottle off the back bar, that bottle into the hands of someone at the store shelves? And you know 10 years ago you got it into retail. The competitive set wasn't that big. People would then stand there and google and you know figure it out and make decisions about buying things. Now we have to present to the customer and part of the presentation is how this is coming back off the shelf and I think that's a massive shift from even five years ago. I'm a little bit curious about how you guys deal with taking on new innovative brands right now and in some of those brands that do break through this really challenging environment like what are they doing differently? I want to talk about your guys' vetting process for brands a little bit later on but just from a high level like what are brands that you are signing right now kind of doing to push the needle and what do you really want to be seeing? First and foremost it's about market level support. I think you need to tell us what you're solving for or who your demographic is or who you're going after but have a very clear understanding. You'd be surprised about how many presentations we see that you know they're like this is my consumer and this is my consumer and that's and like it's very schizophrenic and it's challenging for us to see through that, see beyond that as an opportunity. So very clear target market is a first and foremost. Then we need to know what you're going to do to invest in the marketplace to support the brand and create the consumer pull. I just recently read an article that said the world has changed and emerging brands should be matching the distributor's effort in the marketplace. I imagine that's not a popular thing to say but that unfortunately is the reality and again it's hard for me 25 years on the supplier side to now be here two years and go wait why can't we get it done because I was the one complaining on the other side of the table for a long time. But we really do need to see effort in the marketplace and a clear strategy against brand growth because that's the other thing. I think a lot of these brands think I'm just going to give you the brand and you're going to go put it anywhere and and it's going to let my job's done and you know what I'm seeing with some of the emerging brands that we have taken on in the last couple years where they have chosen to focus on very target take a very targeted approach whether it's five states or five pockets within a state that has really risen above and proven to be very successful. I think at the core do you have a proof of concept or have you shown that this actually works in a market where you've tested it. Have you gone deep in your zip code in your county in your state can you prove that. There's a lot of good brand concepts out there but does it actually work in the market and do you have the numbers to back up to prove that. Yes you need market level support but is it actually working and what does that look like. Back to your point originally what is that velocity what does that pole look like. That's the true indicator of your brand health at this early of a stage. Not the number of accounts that you're in but where you're in is it working. So that's a huge part. I think too there's solutions like Park Street where you can actually be self-distribute in some markets and I'm blown away sometimes when people say I've been self-distributing for three years in California and I have a thousand accounts and I've sold three thousand cases and like wow you got out there you dragged the bag you did the education you dealt with the invoices and you know all the other things like you did everything yourself. That was really impressive like when someone comes to me with those numbers if they came to any of us we'd be like whoa like that is really notable. I think too you also have to like worst case scenario what if there are some SKUs that aren't moving hey if this isn't moving in a year we'll buy that back like we have to understand that different things are going to work in different markets or once we hit 500 cases or you know 200 accounts I'm going to hire a full-time person and that's going to look like this. So really thinking beyond and actually answering our questions before we can even ask them I think is really really impressive. I when you know when I see a presentation that's like the first to do this the best to do this like this celebrity DJ I'm like oh god I've heard this story before right I just I just want to know I want to talk about like work ethic and you know like I've gotten out there and I've done these things and we when we see that you've done a lot of this yourself just by virtue of simply having a brand I mean that's amazing I'm not brave enough to do that but just by virtue of having it doesn't mean that it's going to succeed. I mean a lot of restaurants every other type of business I mean it just doesn't succeed so what are you doing personally to go the extra mile. Yeah and we were talking about I mean John you brought up a couple of numbers that you want to see brands have when they come to you and and velocity was one of those things that you mentioned what are some of the other KPIs you really want to see brands when they approach you have and also is it just about the KPIs or what do you really want to be seeing from these founders. I mean yes the velocity and that's important but at the first even just that first pass it's if anybody's seen some other seminars I don't always talk about like the 10 Ps like people, purpose, place, package, price, profitability all these things this is what we really measure when we're trying to vet a brand and a lot of that will determine okay who's behind the brand why are you creating this brand what is inside that bottle what is that bottle look like everyone judges a book by their cover when they shop down an aisle whether we like it or not so there's a lot of so many factors you know and then we're talking about like navigating distributors but like obviously we need to make sure that from a profitability standpoint it makes sense for us to devote our resources and back of the house in front of the house resources to helping to build your brand as well so there's so many factors in play that it goes beyond but of course the velocity is really going to be that true indicator of brand health like is it pulling there's so many so many other things that I think a metric that those are all great and I agree that a metric that really matters to me is your timeline from a funding standpoint I understand how challenging it is to raise funds but do you have the patience and the stomach to go the long haul I mean I pulled some numbers Tito's for example was started in 1997 when did you guys start hearing about Tito's a while right so like that's just an obvious one but it's really daunting for us as distributors to take on brands and a year later find out that you ran out of funding and I got a quote from my finance department the other day that we have four brands a day that have gone out of business and we are stuck with inventory and a whole other mess of problems that we have to deal with we've just we've made accounts upset because we didn't have stock all of that so what's your longevity how long are you in this game what can you stomach because it's a slow burn to incubate a brand Tito's didn't end up being Tito's overnight patience well there's no one two three year plan I mean you've been in the spirits business 27 years too and it's like if your plan isn't five years at the near term this probably isn't the right business for you and it's hard when there's private equity behind you and people want to see a you know a profitability turn in a year that's crazy but it's crazier when your partners don't know that and so we might have gotten the story just like the market did that it's family and it's that you know all these things and then a year later it's like wow went out of business or you know I think a lot of think transparency adds up to a lot and adds up to strengthening a lot of relationships but saying I really need to do this in this amount of time or I need to get to this number and I'd say being transparent from the beginning really can be incredibly helpful because we know earlier on whether or not we can help you achieve those goals and if those timelines make sense and just one more thing on that is that I wish everyone in this room ends up like George Clooney and can sell a brand right but when you come in and make a ton of money um but when you come in and sit with us and tell us that your goal is to sell the brand in three years that's not the most attractive thing to say because we don't know where it's going to go after that and you'd be shocked how many people say that to us don't want to speak for you guys but I'm sure you've heard 100 one of the things we hear so often Park Street University is that suppliers will come and they'll say oh my distributor isn't doing enough for me and sometimes it just really feels like there's a real misalignment of expectations from when they come in versus what the role of the distributor can actually do I'm just hoping you guys could speak about realistic expectation and goal setting and what suppliers should really expect from these uh partnerships it probably sounds harsh but at at base level your distributor it's right there in the name is there to distribute so we are there to be a legal means of being UPS and DHL and literally delivering from a warehouse to an account if your distributor can't do that we have a huge problem you know and obviously you want them to be able to pay their bills on time and all that kind of stuff like all those things are important and everything beyond that I would say it used to be maybe I don't 15 years ago it was like the distributors were more selective and it was really like I'm going to go out there and be able to do all this work at this point we are the most congested tier in the industry by far and so it is kind of a feeling when people come to you and say all I want you to do is deliver these cases I'm going to hire people I'm going to come in and do it we just need you to get them from point A to point B that's not how I want to operate our business like we do want to get behind the right partners and tell their stories and be their ambassadors in market but then we have a very limited amount of bandwidth and you don't want to get into a position where you're you know yeah collecting brands and not able to actually do the job so we are certainly asking more and more of our supplier partners all the time and I think it goes back kind of to a point that John brought up is that you got to be number one in your home market number one in your region where people can come visit you maybe at the distillery or you know you can literally you as the brand owner or distiller can go visit those accounts and do that you know do the things that you can close to home I'm not saying you have to spend all your money and travel all the time and stay in hotels and all that stuff but if you don't have the resources to put a full-time person in California maybe California is not the right market for you and so I think it's just determining where you can actually properly operate deep I'd rather see somebody have a hundred accounts that do a hundred cases in a year you know than a thousand single points of distribution that we can't maintain and you did ask about goal setting and there's a lot of data out there that can help you guys think about reasonable achievable goals and if if you don't have access to that data the distributor does and so my suggestion would be to not go in with these grandiose plans before you've spoken to them and have a good idea about what the market can bear for your for your brands and a phased approach to get there just because you want a brand to sell 10,000 cases doesn't mean it's going to without without the full plan yeah do not come with a goal that is volume driven you where you are if this is all truly emerging brands in your brand life cycle you're still building those brands you're still trying to find the right homes for those brands so your goals need to be that targeted that specific that qualitatively driven as opposed to quantitatively driven that is really going to be more valuable to us as a distributor because we know that you like you have a good idea as to like where this really needs to build and who you're going after and is it going to most of the brands that were built that became big brands started organically like that and had a real targeted purpose of who and where they were going after it's not about quantity it's about quality i cannot stress that enough and it's your job really to understand where you want to go to prove that to us that it's working somewhere take a stair-step approach if you're going into a new market maybe find five accounts that really matter to your brand and where your consumers are and show that it works there then you have the right to go to another five accounts and another 10 and another 10 and so on and so forth then that's a great way to really start to build your brand and get a little wider but in a very targeted and slow organic way yeah i think going deep and instead of wide is is a perspective that all emerging brands should kind of start from and then and build from there we're talking about the vetting process just a final question on this one what what are some red flags that you guys hear and might lead to an immediate no as a supplier is pitching to you for the first time when someone comes to us and says i want to be in all your markets it's a hard no right there know where you want to go and why you want to go in that market and how you're going to support it every brand that says all bbg when they fill out our new item form we don't even bother calling them because you're going to go to too far too quickly and you're not going to have the resources to support what you need to do properly in that market and then to what monique was saying before we could get it out there and then it's just going to sit there because you don't have anybody there trying to help drive the poll trying to help drive the awareness you're only one person or two or three people can only be in so many places at so many times so really be that is a huge huge red flag know what market you want to go into and why and how you're going to do that i think we said a lot of the things that are red flags right don't come in without a plan don't don't come in without funding that you know those are the things that give me pause when i just see a couple of slides and it's like here's my brand and i i feel like it has to be very well thought out but i will tell a story about when i joined rndc two years ago and as if any of you guys are from the new york market you know that we were new in the market and i met with the my very first supplier on my very first day and he was starting of a brand and and i said again we were new in the market i said so why did you choose to come to us because i wasn't part of the process and he said well because i know you're small and i know that you're just building and he said but i don't need you to do anything and i was like really that's the first i've ever heard a supplier say that uh so i was like what what's this guy all about he said i'm just gonna go to this pocket of new york i'm gonna spend all my money and my time in this pocket for the summer and then i'm gonna go on the road and i'm gonna go meet that consumer where they go in the winter and then i'm gonna go meet them when they go for you know nights out and all of that in miami and so he had a clear plan and i was like huh that was two years ago the brand is on fire and so i would feel that that builds on your your story that it's lalo but that was their strategy it was very targeted approach and i think it's a big takeaway for all of you guys that if you can start in those smaller footprints and and drill down and over invest you won't break the bank as john was saying trying to be everything to everyone we're not as big as you guys and so um i i wouldn't say more picky but certainly like a narrower portfolio my red flags i mean when people do not know the name of the human being distilling their product i have a real problem with that or when they can't disclose it or like the nom that their portfolio comes from but it's also know the book that you're approaching and where you want to be so if there are different divisions or if you're looking at winebow if you don't know who the rest of my agave partners are you better take a look and understand do you actually stand shoulder to shoulder with what we stand for do you actually do you really think these products you're putting out there are as great as all of these other things because otherwise there's no reason that we would bring you on board um but it's also even just like i understand and i totally have respect for people that are contract distilling or anything else but there has to be a level of transparency there has to be a level of like input and i just we just really appreciate people being transparent about it so when i get something and we do we get these all the time contract brand can't tell you where it's being distilled don't have any input into it you know c-level celebrity attached to it and we just know you know it's like we read that and they're like yeah no this is not how you're not passionate about it how am i gonna get passionate about it how am i gonna get my team excited about it just be your own biggest advocate at the end of the day don't go into a market with no sales teams or no support there like have someone there. Don't expect your distributor to do all that selling for you because that's just not really going to lead anywhere. I think this segues kind of nicely into talking about a later part of the brand journey. So we talked about the vetting process a little bit. I'm sure there are a lot of suppliers in the room who already have distribution agreements and maybe want to be getting a little bit more out of them. What advice would you guys give to people who already have these partnerships and want to improve them or want to demonstrate more to their distributor in terms of getting more out of it? I kind of alluded to this in a previous answer, but a lot of it is showing that it works in key accounts that really bring your brand to life or have the consumers there. When our reps, because they're not going to think about it, if you're going to say, okay, I'm brand new to this market, why can't you just put the bottle in every rep's bag and just have them present it? That'll only take a minute. It's a minute. It's a minute less than they have for all the 4,000 other SKUs that they have to sell in a book that they know, many of which are a guaranteed sale. So number one. Number two, they're a little nervous because that bottle could, like many others, end up with a lot of dust on it and then the buyer in that account is like, you told me to do you a solid and bring that in and look at it, it's just still sitting here collecting dust. It gives our reps a bad reputation. So then they get nervous about that. But if you as a brand owner or your team or whoever's in that market can start planting the seed and saying, hey, guess what? It works here and it works there and you've gotten three reorders out of it. Well, all our reps chitter chatter with each other about things all the time and they start saying, hey, you know what? This guy got this in for me and it's making me some good commission dollars. Why don't you give it a try? And that's how it starts to work. That's how you can start getting a little bit of attention because you're not going to get any attention right off the bat. I'm telling you right now, I wish that we as an organization could devote so much more time to brands that have independent owners and that have the are scrappy and that like really want to do this. But the resources just aren't there. And so the resources need to be at your tier as owners as gatekeepers of these brands right now in the market that we are in. We were just talking beforehand like pre 2020. A lot of us did have a lot of resources to really build brands and be those ambassadors of the brands and bring it to life. It's not the case now in 2025. I hope we get back to that sooner or later. It would be a beautiful thing because there's a lot of great stuff being created by probably people in this room and beyond around here. But you got to be aware of the reality of the situation and you got to make your own name and build it. And that I think will help start getting reps talking about it and feeling confident to actually sell your brand and account. Really quick. I was building. It's kind of similar, but visibility. When I was probably maybe 10 years into this, my supplier jobs as a distributor said to me or to my boss, which was even better, she is the most visible supplier we have. And so that never left me. And I realized he was the president of that distributor. And that was probably the best compliment I've ever gotten. And it fueled my fire to make sure that everyone I worked with, no matter what supplier I was working for or what distributor I was walking into, that they knew that I was more visible than the other suppliers walking in the door and I was going to get the jump balls. I was going to get the phone calls. And so I really encourage you to show up, show up and add value. Don't just show up and stand around. You do see those guys on a Friday at the distributor too, or girls, I should say. But show up, add value, be visible and make yourself available. Always answer the phone. I totally agree. And two, like you have a budget. If the budget is yourself, I'm a human being, then be as available as you can. But if your budget's, funny, quick story, one time we just had four huge boxes show up at the warehouse with my portfolio manager's name on them. What are these boxes? You go out, you open them up. They were Mr. Freeze, like really good frozen cocktail machines, but they were branded with a Sambuca brand. We didn't ask for them. Our opinion was not asked, but that's $10,000 worth of equipment that is now branded with something no one wants to buy. No one wants to make a Sambuca frozen cocktail. So those sat and collected dust. And then we ended up shipping them back and had someone simply said, we have a $10,000 budget. What should we do with it? That's not nothing. We could have come up with some really cool things, but I will say, be there, show up as a human being. But the other really big one right now, so many new things coming on the market, if you cannot afford to put at a hundred percent build back to you, if you cannot afford to put a bottle of your product in every sales consultant's hands, you cannot afford to do business in that market. That to me, it's insanity that people are like, no, I can't afford a hundred bottles of samples. Oh boy, then we're in trouble. So we've been really tough sitting up here, I think, giving you lots of, but I will say this, and I don't know if these guys will agree with me. I fully agree with the sample comment, but you should also hold us accountable. I'm a big believer in what's the ROI against that spend. And we should give you that. You shouldn't be handing out samples willy nilly. So accountability should work both ways. If we're gonna lean on you guys for accountability, you should also lean on us. One of the things that's come up a few times in the conversation is having a level of transparency with your distributor. And in order to do that, you need a really solid line of communication between the two different parties. What are some best practices for instilling the best possible communication that you can do? You mentioned showing up all the time. That's one thing. What are some other things that you can do to install positive communication practices between suppliers and distributors? I'll start. For me, what's been surprising, I feel like I'm dating myself here, but is how many suppliers lately are texting and texting large groups. And I know that's not that uncommon, but I think in the old days, it was emails or actually face-to-face meetings. Nowadays, a quick text about what they've got going on in the market or their hits to the people that can really impact their brands. I feel like no one's reading emails, trackers. We get trackers after tracker after tracker. So just making it easy for people to absorb the information you're trying to get across to me is simplicity and allows you to be visible but quick because people have a lot on their plate. I think it's about the best examples that I've seen of younger emerging brands is just constantly showing wins. Showing wins that you're getting in both retail and on-premise. Whatever it is, however small or however big it is, sharing those wins with the people that matter in our organization, that is the most important. With the on-premise channel director, retail channel, whatever it might be, trade development, these are the type of things that are going to get our teams talking and saying, hey, maybe we should put a bit more resources, a bit more focus on it. Trying to just call and be like, hey, can we go out? Can we do this? No, just go out and do it yourself and show that it won. Don't wait to be like, well, nobody got back to me. Nobody did this. There's 4,000 other SKUs that are trying to be managed here. And again, small amount of resources that are happening in 2025, you got to show those wins. That's the best way to get heard and focused on. I would say to reach out with something positive as easy and often as you would with something negative. Doesn't matter what it was, a great interaction with the salesperson. Hey, I saw that somebody went in and placed this bottle. Thank you, I saw that. It is so rare to just out of the blue, get a really positive, no strings attached text or email. I'm like, and two, put the person's boss on it. Hey, I just want to call out that this person did this thing. People do talk. It really, really resonates. So yeah, and every win, no matter how small, single bottle into a great account, every win is a win at this point. Yeah, like really prove to these distributors that they should have your product in their bag when they go to market. And I think that that's really the best thing that you can do. I want to end before we kind of shift into a Q&A from the audience on reasons that we've been a little doom and gloom up here. Any reasons for emerging brands to be really positive right now, strategies that you see working, high growth categories, reasons for optimism kind of for emerging brands? Well, I'll just say that, I mean, the industry is not dead, right? Like there's plenty of people drinking out there and there's, I'm still super excited about it. I wouldn't be here after 27 years, right? Don't believe all of the hype. Be aware of what's going on and be honest with yourselves about what your brands are, but you just have to be more creative than you ever were in the, had to be in the past, I would say. But there's a lot to be positive of. You talk about new categories and new brands. This is a cyclical business. People want to talk about it, this being monumental, this time in the business, people drinking good times and bad times, they drink differently. But I think even the younger generation of 21 to 30 year olds, they're going to come back to alcohol in a different way, but they're going to come back. So I'm not too worried about it. In terms of emerging trends, obviously everyone's talking about marijuana, THC infused drinks that are popular, no low. I mean, you guys know all the trends. If I knew the next hottest trend, I probably wouldn't be sitting here. So maybe you guys know it. I think some of the best success stories, there are reasons to believe in this industry, no doubt. People still go out and celebrate. Treat yourself is still a thing that people want to do. Like there is a lot going on. It's just being done differently in different generations. And you as brand owners and us as distributors need to know how to pivot and speak to each one of those generations and answer their occasions, why they want to buy something, whether it's on the shelf or on the back bar. And a lot of brands now tap into different, especially when they're speaking to Gen Z or millennials, especially is like tapping into a lot of social media driven cocktail concepts. What are people talking about and trending, whether it's a term, a phrase, an action, an occasion, piggyback onto those. Figure out how to weave your brand, whether it's cocktail driven or just overall brand driven for a reason for being part of that conversation. I think we as brand owners and distributors have gotten just so caught up with trying to chase that number or make that goal or whatever, that we really need to bring it back to celebrating what this industry is all about. And that's connections. That's the romance of the connection between different generations, between the generations themselves and why spirits should be at the core of that. I think, too, we're at a spirits conference. Thank goodness. I really do feel blessed that we're not all on the wine side. Maybe some of you are. I'm sorry. But you want to talk about like things that I'm concerned about right now. I'm talking about beer and wine. So I mean, at least our products don't expire. And I do think, you know, like lots of spirits are trending. So a couple of good points there. But it's also, you know, people are drinking. And so again, it's like meeting them where they are. What are they drinking? Why are they drinking it? And approaching them there. And I think it's a really exciting time in the industry. I think we're kind of like food has gotten more global and drinks have gotten more global. People are asking questions. At the end of the day, the consumer doesn't even know that like the suppliers and distributors, they don't know about any of that stuff. They don't care. They want a cool new thing in the glass in front of them, a cool bottle with a cool story on the store shelf. Like they don't know that we're all stressed out and they're reading the same news that we are, but they are still interested. They are still consuming. So it's just making sure like the right packaging, like get the bottle picked up off the shelf or like notice back there, getting those bartenders talking about it. I think we are getting back to brands being built back on premise again. So I think getting back out there and, you know, just reattaching ourselves to those folks, which we can all do at an individual level. And we got to get people out of the house. That's one thing I did. I was remiss, I didn't say, but experiential. There needs to be a return to that. Again, it might look different. I saw, I'm judging the panel tomorrow with Women of the Vine and Spirits, and I saw one of the entries was amazingly experiential. I thought that was, it unfortunately didn't win, make the final cut, but I voted for it because I thought it really talked to that 21 to 30 year old consumer. And then the one last trend I didn't mention is small sizes. I do think whether it's the economy or generational, this started actually a while ago where you found consumers wanting to celebrate a different occasion every night of the week. In the old days, you know, it was, if you were a vodka drinker, you were a vodka drinker. Now it's like one night I feel like a margarita, the next night I want, you name it. I think the smaller concepts or smaller sizes allow for a lot of different trial. And I don't think that's going away. I think small sizes are here to say, which also leads to convenience. Again, in the old days, you, a spirit brand wouldn't typically target a convenience store where legal. I think you're going to see more of that in states where legal. Yeah. I mean, even if you look at the on-premise, like the types of outlets that are growing, so many of them are experiential, you know, sports venues. Those are, those are the ones that are really getting through volumes right now. And same thing with convenience. I think that's why so many brands are opting to get into that channel. Plenty of room for optimism, guys. Can we just have a round of applause for these guys? Hey everyone, it's Evan again. We really appreciate you tuning in for this episode and hope you found it valuable. The executive producer for this podcast is myself, Emmitt Strack, and it's co-produced by Brianna Dawson. If you like the show, we'd love to hear your feedback. The best way to do that is taking a moment and leaving us a review or a rating on your preferred platform. It really does help grow the show. If you're interested in getting involved with the podcast, please send an email to psuatparkstreet.com, which is listed in the show notes. You can also find more educational materials on our website, parkstreet.com, or YouTube channel, search Park Street University. Thanks a lot and cheers until next time.
Key Points:
Distributors from top companies like RNDC, Breakthrough Beverage Group, and Winebow discuss the current state of the three-tier system in the US.
They highlight the importance of brand-distributor collaboration and strategies for brand success in the beverage alcohol distribution market.
Distributors emphasize the need for clear target markets, market-level support, and proof of concept in new brands they consider for their portfolios.
Summary:
In the Park Street Insider podcast episode, top distributors in the US, including RNDC, Breakthrough Beverage Group, and Winebow, delve into the dynamics of the beverage alcohol distribution market. They focus on the evolving supplier-distributor collaboration and strategies for brands to succeed in a competitive landscape. Key points discussed include the significance of having a clear target market, investing in market-level support, and demonstrating a proof of concept for new brands. Distributors stress the importance of a well-balanced portfolio and being selective in adding brands to ensure mutual success. Additionally, they highlight the need for brands to show effort in the marketplace, have a strategic growth plan, and be prepared for a challenging market environment. The discussion underscores the changing consumer preferences, the impact of new entrants in the market, and the necessity for innovative approaches to drive brand success amidst industry challenges in 2025.
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