[00:00:10] Ray Latif: Hello, and thanks for tuning in to Taste Radio, the number one podcast for anyone building a business in food or beverage. I'm Ray Latif, the editor and producer of Taste Radio, and I'm with my co-host for this episode, John Craven, and filling in for Mike Schneider and Melissa Traverse, Zoe Licata. In this episode, we dive into the explosive growth of hard sodas and hard sports drinks. and why alcohol brands are embracing the language of health, wellness and functionality to earn a better-for-you halo. We also break down the surprising Costco and Deschutes split and how Guinness is winning over a new generation of drinkers. Welcome Zoe Licata to the Taste Radio studio. This is the BevNET studio. You've recorded in here as well.
[00:01:00] John Craven: I have. It looks a lot different than the last time I was in here.
[00:01:02] Ray Latif: When was the last time you were in here?
[00:01:04] John Craven: We had like a full table set up going on. We were doing probably Brewbound Live like award videos. So it's been a minute.
[00:01:12] Ray Latif: Okay. RIP table.
[00:01:13] John Craven: Yeah.
[00:01:15] Ray Latif: Well, for folks who are not familiar with Zoe, she is one of a triumvirate of reporters on Brewbound. Brewbound is the sister publication of BevNET, Nosh, Taste Radio, and reports on the beer industry, beer and adjacent beverages.
[00:01:31] John Craven: Yeah, it's expanded quite a bit.
[00:01:33] Ray Latif: Yes, hard seltzers, ciders. cocktails, things like that, then it's all exciting stuff. I mean, even though, you know, beer is not in its heyday or not the craft beer heyday of, of yesteryear or 10 years ago. You know, it's still a fun and interesting category to be a part of.
[00:01:50] John Craven: There's still plenty going on and there are still just as many folks that are finding growth even when generally the market is not doing so well.
[00:02:00] Ray Latif: Yes, yes. Weird times. It is weird times. But before we even hop into all the craziness that's going on. No pun intended. Yes, exactly. No pun intended. Oh, I see what you did there.
[00:02:09] Mike Schneider: Yeah. I almost interjected before with hazy times, you know, make bad beer buns. OK, fair enough. I could ask you about Harry Styles.
[00:02:17] John Craven: Oh, you don't give me an excuse to talk about Harry Styles. I'll go on forever.
[00:02:22] Ray Latif: Okay. So Zoe, and you did this too, John, didn't you go to London? Yeah, I went to Harry Styles. I definitely did not love it as much as Zoe, I'm sure. Okay. In the calendar, it had noted that Zoe was going to specifically see Harry. I don't even think she mentioned London.
[00:02:37] John Craven: Yeah. I think I wrote London, Harry Calling.
[00:02:39] Ray Latif: Okay. Harry Calling. Okay. John just said London. But you went elsewhere too, I think you went to?
[00:02:44] Mike Schneider: I Instagrammed from it.
[00:02:46] Ray Latif: Okay.
[00:02:47] Mike Schneider: Just a photo like a loser.
[00:02:48] Ray Latif: Okay.
[00:02:49] Mike Schneider: That was not the part of my trip. I didn't post on social media, but we won't talk about that.
[00:02:54] Ray Latif: I've always wanted to see Harry Styles. Excellent performer. Really, really talented guy.
[00:02:58] John Craven: He puts on a great show.
[00:02:59] Ray Latif: Do you have good tickets? Good seats?
[00:03:00] John Craven: Yeah. We were in GA down right by the stage. We were right up in there. Real sweaty, but good time.
[00:03:07] Ray Latif: So it's just like a mosh pit down there? There's no seats or?
[00:03:10] John Craven: Yeah, there's no seats. It's in his stage set up at this particular show is massive. Okay, massive. So it's the entire Wembley field and his stage kind of takes up three quarters of it. And there's sections that you kind of are in within that stage.
[00:03:25] Mike Schneider: There was a point where he ran around the whole thing and it took him like a couple minutes. Yeah. Okay. It's a big kind of like U shaped thing connected to the main stage. It's kind of wild.
[00:03:34] Ray Latif: He also connects generations, because as we know, John Craven. Hardcore fan. Hardcore fan. Gen Xer. Yep. Zoe. Gen Zer.
[00:03:42] John Craven: Technically, I guess.
[00:03:43] Ray Latif: Technically. Cusper. Gen Z millennial. Yeah. Yeah. Yeah. What was the drinking scene like there at the stadium?
[00:03:49] John Craven: Um, not a ton of drinking, I think.
[00:03:53] Mike Schneider: What? You're in the wrong part of this. Well, yes.
[00:03:56] John Craven: Okay. Yes. To be fair, we were in an area where a lot of those people had been there for hours and hours to get right up on the stage. So we came in later and weren't near that, but we didn't deal with any lines or anything. Did deal with some excellent prices compared to Boston prices.
[00:04:11] Ray Latif: Yeah. For beer or cocktails?
[00:04:13] John Craven: We got 20 ounce vodka lemonade pours. They were on draft. I think it was nine pounds each.
[00:04:18] Mike Schneider: Food and bev is way cheaper there. And also the food at Wembley's, it's just gross.
[00:04:23] John Craven: Yeah, we didn't touch the food.
[00:04:25] Mike Schneider: I mean, I'll say this, you know, the drinking age is 18 over there. It's not a good thing. Like, we've been to a couple concerts in Europe and at one, which was outdoors in Ireland, which was a Noah Kahn concert, by the way, not exactly crazy. But my wife had to help up a drunk, passed out, I don't know, probably 19-year-old girl. And the show hadn't even started yet, because they can drink, and it's cheap as crap. It's cheap. Like, if you could drink at Fenway and you're underage, you don't have the money for that.
[00:04:55] John Craven: No. And they start really early. Like, they start drinking as soon as they get up, because things close early-ish too.
[00:05:03] Ray Latif: This is a good segue, right? Because in this country, supposedly, high school kids aren't drinking as much. No, they don't drink at all. 21. College age kids are drinking less. Gen Z as a generation is drinking less. Kind of. But is that specific to this country or has that permeated, has better for you health and wellness trends have permeated into other parts of the world. It doesn't seem like it, based on what you're saying. Now, this is just that we're talking about two countries, literally.
[00:05:29] John Craven: Yeah, maybe not necessarily yet, but we also tend to be the ones that have any alcohol-related trends first. It tends to trickle over to the other places later, so we might see more of it.
[00:05:40] Ray Latif: How about that? American exceptionalism, even in drinking, even in boozing.
[00:05:44] John Craven: Yeah.
[00:05:45] Ray Latif: Yeah.
[00:05:45] John Craven: Any trends, any alcohol-related trends really kind of start over here first.
[00:05:49] Mike Schneider: I don't know. I'm pretty sure they invented the lunchtime beer in England. That's true. Yeah. That definitely hasn't made its way here.
[00:05:55] John Craven: Yeah.
[00:05:56] Ray Latif: Well, I mean, every beverage company seems to be trying to find ways to attract new consumers via better-for-you ingredients, better-for-you formulations. I don't know, kitschy ideas like hard soda. Okay. I'm just being a hater. Before we hopped in the mics, I was trying to figure out how to address this, but it's so interesting to see how big beverage companies, whether they're traditionally beverage alcohol companies or traditionally non-alcoholic ones. If you think about Coca-Cola, which has expanded or introduced new products via its billion dollar brands, think of Simply Spiked or, you know, the Fresca products out there. Jack and Coke. Jack and Coke. It seems like they're all trying to attract the attention of legal drinking-age consumers, young legal drinking-age consumers. Has that been your experience? Is that what you're seeing as well, Joey?
[00:06:53] John Craven: Yeah, that generation group is almost alien to a lot of beverage alcohol folks. They can't quite figure out what they want to drink, how they're drinking. It still seems a bit mysterious. And I think part of that is because a lot of them aren't legal drinking age yet. Like Gen Z, there's only a chunk of that that is legal drinking age. They're still getting older, still exploring. COVID was happening during college, so they weren't out socializing as much. They weren't drinking as much. And so they're still experimenting and figuring out what they like. And so, yeah, they're coming out with these new products that kind of speak to beverages that they're familiar with, but as an alcoholic beverage. And it's had varying degrees of success. I think a lot of the ones that you just mentioned maybe had hot starts and then they kind of fizzled out after that first initial launch. And part of that is they attached themselves to hard seltzer and hard seltzer's decline and saying, hey, we're your next option. And that didn't quite translate. But we're seeing newer products come out from kind of smaller and independent brands that are getting some traction and will probably be picked up by some of those bigger companies somewhat soon.
[00:07:57] Ray Latif: It's curious to me because, well, if we start with hard soda, I think hard soda has a point of reference that is an easy one for most consumers. And it's an easy one. It's a sort of, if you're trading up from non-alcoholic to alcoholic, it's easier probably for a lot of people than it is to go from, say, soda to beer, maybe, I would think. Soda to cocktail soda to wine, so why not just make an alcoholic soda? I mean is that the idea there?
[00:08:25] Mike Schneider: I mean they're also drinks that people drink already right? I mean I think we're used to things like I don't know rum and cokes and Dark and stormies and Moscow mules that are basically just boozy soda, right? But they're not soda soda. Well, they're not packaged or position is what we're seeing right now is being positioned. Yes It's like an evolutionary step.
[00:08:47] John Craven: Yeah, and most of those that are coming out now are specifically saying we are an alcoholic version of those better-for-you sodas that you've seen so, you know an Ollie pop a poppy and I had a fun conversation with Jenny Ripps, who is one of the founders of Owls Brew and recently on the BevNET stage. And she said, you know, alcohol trends when it comes to just the straight beverage seem to be like three, three and a half years behind other non-alcoholic beverages. And so we saw this big surge of those functional sodas. And she said the real trigger for the industry in alcohol was when that deal where poppy got acquired. They said, OK, this is people paying attention. This is working. We should make a spiked version of this. And now we're seeing quite a few of them.
[00:09:33] Ray Latif: OK, but as we all know, alcohol isn't good for you. Yes. And you can't market alcohol as a better for you healthy beverage. So this is where it gets really weird and sticky.
[00:09:45] John Craven: We don't really know how to say it either. It's always just in quotes, better for you because it is not better for you. It's still alcohol. So you can't say it has any sort of health benefits. You can't market it in any way that is saying that it is good for you. They're essentially comparing it to iterations that have happened in the past and saying, this is way lower calorie. These are ingredients that are cleaner, fresher. This product itself is made up of other things that are going to be, quote unquote, better for you than maybe products you've tried in the past.
[00:10:16] Ray Latif: Better for you being the key term. Not good for you, but better for you. But is it really better for you?
[00:10:22] Mike Schneider: John Craven. Well, I was going to say, for what it's worth, a lot of the companies producing non-alcoholic versions of these products have gotten into trouble with their health claims anyway.
[00:10:31] Melissa Traverse: Yeah.
[00:10:32] Mike Schneider: So I think the more Matter of fact, brands have gotten with their marketing copy, like contains fiber as opposed to like promotes gut health, the better off you are. I assume you could make a BevAlc product with fiber and say it has fiber in it. Like make your own conclusion. I don't know.
[00:10:50] John Craven: Yeah, you can list the ingredients in it. Yeah, you just can't say it does anything to you.
[00:10:54] Ray Latif: I just wonder what the longevity of this stuff is, right? Like if you think about hard soda and you think about hard seltzer and hard seltzer is still around, they still sell plenty. I mean, what's the, uh, in terms of total sales of hard seltzer in this country, do you know what it is?
[00:11:08] John Craven: I mean, it's teeny tiny still. It's very small. It has kind of leveled out a bit. It's not in that steep decline we were seeing anymore, but it's still pretty small.
[00:11:17] Ray Latif: I just think with hard soda, people are going to age out of it, right? Like you're going to want something different than hard soda. I mean, you start out maybe when you're 21, I don't know, three years later, you're like, okay, I don't want this anymore. I want it more adult type of beverage.
[00:11:33] John Craven: I think there's a couple of things that could help it. One is there is a decent amount of this consumer base that are middle-aged women that is targeting a consumer base that hasn't been spoken to from beer products or other products. Even though marketing around a lot of these are targeting Gen Z, they have found success with that demographic group of, you know, like moms going to the beach are going to drink a hard soda because they're drinking an Ollie Pop or a Poppy when they're at home. Another part of it is, I know there are some folks that are trying to use this as a way to introduce those younger consumers into fermented beverages or alcohol to be like, hey, you've tried this now. Can I bring you back into our industry and into our category with other products as you learn more and mature?
[00:12:22] Ray Latif: Did you tune in to Ben Weiss's talk at Badminton Live? So Ben Weiss, best known as the founder of Buy, which was famously sold to Dr. Pepper for $1.7 billion. So he made quite a bit of money on that. He has since come out with a couple of different products or at least two brands that are somehow aligned. Initially it was Crooked Number, which was a hard seltzer type of product. Yeah. That has evolved into Crooked Pop, which is a hard soda. Now Ben on stage at BevNET Live said that he has spent $40 million trying to prove out this concept, which is crazy to say the least. But I am just looking at that brand and I'm saying, Ben, you're a smart guy. I mean, you know, do you really think you're going to see that $40 million ever again?
[00:13:13] John Craven: Yeah, he has bold aspirations for everything. And he's essentially attempting to totally kind of reinvent alcohol or create a new form of alcohol for folks. The alcohol base in those products, it's a fermented alcohol, but it uses quinoa and cassava root and a bunch of other products. What he's saying this is going to do is introduce people to a fermented beverage and then they'll come back to other fermented beverages. I'm curious to see what he sees to give him that hope that people will make that transition. It's really hard to introduce a concept in any sort of CPG that consumers don't know what it is. That learning and marketing takes so much work. So yeah, I'm fascinated to see how he does it and how it works out.
[00:13:57] Mike Schneider: You know, it's kind of interesting, I think, looking at just sort of what happened in the beer space too, where it feels like there were just these categories. I don't know, maybe hard seltzer will be looked at one in the long run, but they just feel like they're stops along the way versus like the destination, you know? And I think that's probably the thing that with any of these, be it, you know, the hard sodas or, you know, these, we have one of these, uh, hard like electrolyte sports drink products around, you know, they seem plausible. They're pretty good, but are they products that, you know, in 10 years a consumer is still going to be like, man, I love drinking this. And that's the thing that no one knows.
[00:14:36] Ray Latif: No one knows, but there are clues, right? I mean, there are, again, cyclical trends out there that'll tell you whether a Zima might actually return. And, you know, Zima was the great case study where it was hot for, what, three years? Tried to make a comeback. The comeback maybe lasted a year. And that was that.
[00:14:56] John Craven: Isolated to Canada, basically. There you go.
[00:14:59] Ray Latif: So for me, I look at a product like this, which I brought this, this is called Super Light. Now this blows my mind even more than hard soda. This is an alcoholic sports drink. Long pause there, because what does that even mean? I mean, what is going on here, Zoe?
[00:15:16] John Craven: So yeah, this is from Stateside Hard. So they're the same folks that made, you know, like Surfside, that vodka-based tea, Stateside Hard Seltzer. So this is their vodka-based sports drink.
[00:15:29] Ray Latif: Which they don't call it a sports drink.
[00:15:31] John Craven: No, they call it an aid.
[00:15:32] Ray Latif: And the statement of identification is vodka cocktail. Yeah. But it says vodka aid, vodka plus aid, A-D-E, that is. I guess the flavor is called Blue Chill.
[00:15:42] Zoe Licata: Yep.
[00:15:43] Ray Latif: And it might be intuitive to some folks that this is a hydration type product.
[00:15:48] Zoe Licata: I mean, it's got light in there. L-Y-T-E. What else could it mean?
[00:15:52] John Craven: Yeah.
[00:15:52] Zoe Licata: Yeah, but when did this product come out?
[00:15:55] John Craven: It had its full launch like this year. It sprinkled out a little bit last year, but it was really this kind of a big launch for this spring and it hit the ground running. They had the first five weeks, it was 120,000 cases sold. and they are targeting 1.5 million for the full year. So it's been going really well for them. And I think part of it is their existing relationship with their distributors because Surfside is still so hot. They partner with a lot of sports teams, particularly they're based out of Philly. They have a lot of connections there that are working well for them. And they're still doing the old school stuff of just going out and doing tons of tastings and demonstrations. And this is a product where it's, Brightly colored it looks just like the liquid of any other sort of sports drink. It tastes very similar to Yes, yeah, it tastes very similar to products folks are familiar with and Yeah, the flavor is it's not hit you in your face with alcohol. They're what people cling on to the sessionable. It's It hits a lot of things It definitely hits. Yeah.
[00:17:03] Ray Latif: In a really strange way. It tastes like a Gatorade.
[00:17:06] John Craven: Yeah.
[00:17:07] Ray Latif: Which is kind of- With a little splash of booze brings you back to your high school days? No, I never did that. But there's a slight hint of alcohol. tiny, tiny burn. I don't even know if it's a burn.
[00:17:20] John Craven: It's just like, it's very subtle.
[00:17:22] Ray Latif: Yeah. Yeah. I think this is interesting. And when I try it, I get why some younger consumers would be attracted to this, especially at the beach. Yeah. And feel like, okay, well, I can drink this instead of drinking a beer and a water. The mindset is probably that.
[00:17:38] John Craven: Yeah.
[00:17:39] Ray Latif: Where I can, I don't have to drink two drinks. This is all in one.
[00:17:41] John Craven: Yeah, Ferenc Zalnicker, I think, made the initial connection that this is essentially a BORG in a can form. So if you remember, the BORGs were really popular with the youth. They create their own alcoholic beverage in a gallon of water mixed with electrolytes.
[00:17:58] Ray Latif: And BORG is an acronym, which stands for Blackout Rage Gallon. Rage Gallon. Yes. And if you haven't seen it, folks, you can Google it. It is hideous.
[00:18:08] John Craven: Yeah. But they were mixing essentially vodka and electrolytes and making their own version of this. So this is kind of a more sophisticated, already made version.
[00:18:17] Mike Schneider: Lower proof.
[00:18:18] John Craven: Yeah. It's only 4.5, 4.5. So there are a couple different brands that are doing similar things. They're all under 5% ABV. So they're meant to, you know, drink a good couple of them. Like you would a hard seltzer.
[00:18:30] Ray Latif: Yeah. And, you know, clearly if people are drinking Gatorade or the traditional version of Gatorade, they don't really care about the ingredients in this can. Those ingredients include sucralose, which is an artificial sweetener, Ace K, another artificial sweetener, and FD&C blue number one, the best of all FD&C colors, of course. Yep. I'm so glad that you're with us, Zoe, because this has been blowing my mind and making me agitated for a long time. And you're bringing some insights and light to a category that maybe I'm just too old. I don't understand, but I get why if you're a company like Stateside, you are jumping onto this and saying, we don't care if it lasts two years. We don't care if it's three years. We're just going to sell as much as we can right now and get it well going is good. For emerging brands though, for entrepreneurial brands that are thinking about getting into this space, what would you tell them? I'm not asking you to give a recommendation on whether or not you should get into the business, but is your perspective on alcoholic sports drinks or super light drinks or whatever you want to call them, that this is going to be around past two years?
[00:19:37] John Craven: I think it will be, but it will be maybe one brand.
[00:19:40] Ray Latif: Okay.
[00:19:41] John Craven: any smaller folks or anyone looking to come in, if you can focus very locally or on whatever your direct market is and you can create an option that's maybe more affordable or has a local connection, then sure, you'll be able to have some traction with that. But this is one of those trends, like most alcoholic trends, where if you're already seeing it in the market, if you try to do it now, you're already behind.
[00:20:05] Ray Latif: Well, I have a feeling no matter what, we're going to see some hard sports drink brands at Brewbound Live, perhaps on stage for the Brewbound Pitch Slam. And who knows? I mean, maybe they will blow people's minds and be like, hey, this is a much better version of the Superlite that I'm holding in my hand. Or maybe the branding or the package design is just fantastic to a point where maybe it does have a shot.
[00:20:29] John Craven: So vodka aid, Spiked Ade, there was a couple other things that came out a couple of years ago before this. Spiked Ade, when it came out, we kind of talked crap about it on the BrewPound podcast of saying we don't quite understand this. I do remember that, yes. This was a year and a half ago, maybe. We didn't get it. And then we sampled the products at, I think it was National Beer Wholesaler Association's big event, and It made sense the look of the product, the taste of the product. It started to connect the dots for us and now they're doing great and they're expanding. So we were definitely skeptical of it as well at the beginning, but it's finding traction.
[00:21:05] Ray Latif: Yeah. Yeah. You know, it's funny you say that because I remember. It was probably 10 years ago, we had some folks come into the office who said, we're going to create an RTD version of Pedialyte. And we see a trend where people are drinking Pedialyte for recovery, definitely for hangovers. And we see an opportunity to do an RTD version of that, that tastes better, that just looks better, easy grab and go type of product. And I remember being like, this is never going to work. You got no shot. Nobody drinks Pedialyte like that. I don't, I mean, maybe. I think that was more than 10 years ago. No. But then you've seen the rise of brands like Electrolyte, obviously. There's a brand called Hoist, and those are the two guys that came to our office. Pedialyte makes a version that's supposedly like a sports drink or hangover recovery product. There's a lot of those products. A lot of those products out there now. So yeah, you know, the idea might sound stupid at first, but again, entrepreneurs see things that most people don't, and that's why they're called entrepreneurs. But yeah, I'm really excited to see what happens or how this thing unfolds. And again, I think in about five months when Brewbound Live does happen, Marina Del Rey, it might make more sense to me than it does today.
[00:22:13] John Craven: I mean, I will say drinking a couple of those at a beer conference, you're probably going to feel better the next day than if you drink a bunch of...
[00:22:21] Ray Latif: Double IPAs.
[00:22:21] John Craven: Yeah, exactly.
[00:22:23] Ray Latif: Okay.
[00:22:24] John Craven: Yeah.
[00:22:25] Ray Latif: But again, I don't think you're going to see a whole bunch of 45, 50 year old distributors and wholesalers and old school beer guys drinking or coming near this.
[00:22:33] John Craven: Maybe. We'll see. We'll see. We got a few months till that big conference, so we'll keep our eyes out.
[00:22:38] Ray Latif: Okay.
[00:22:39] John Craven: Okay.
[00:22:39] Ray Latif: Well, I mentioned Brewbound Live a few times, and obviously you have a very big role in Brewbound Live. And I'm really excited for that event. I'm really excited for all events in Marina Del Rey, BevNET Live, Notch Live, Brewbound Live are all happening soon. If you want to learn more about any of the events, just head to BevNET.com slash events. We've also got a really cool event coming up in Chicago on August 13th. That's a Thursday from 5 to 7.30 PM. Pilot Project Brewing is going to be hosting our next Taste Radio Meetup. It is going to be a blast. We want you to be there. To learn more about that event, go to tasteredio.com slash meetups and you'll get all the details. You'll find out how to RSVP. If you're based in Chicago or anywhere near the Chicagoland area, please RSVP. We want to see you there. It's free. It is free. Yeah. And there's very cool people that are going to be in there. I was counting the list of the number of investors that are going to be attending and are signed up for the event. If you're looking for money, what better way to do it than to speak to somebody face to face about your product or brand and why they should finance it. You know, John Craven, I love Costco, even though I've never actually stepped foot inside of Costco.
[00:23:59] Zoe Licata: Really?
[00:23:59] Ray Latif: I've never been in a Costco. But I love the idea of Costco, because it seems like they are a retailer that's fully invested in the consumer and delivering really good products, high quality products at everyday low prices. I know that sounds like Walmart, but it's actually more specific.
[00:24:14] Mike Schneider: Sounds like they sponsored the podcast.
[00:24:17] Ray Latif: I feel like that's more in line with what Costco is really trying to do. From everything I've heard, everything that they sell there has to be top notch, has to be top quality. And that includes their beer selection. It includes their private label products as well. And one of their private label products was a beloved brand called Zoe.
[00:24:34] John Craven: It was two offerings. It was the Costco Deschutes partnership, but they had the Kirkland Helles Lager and the Kirkland Signature Vintage Ale. Right.
[00:24:42] Ray Latif: Kirkland is their private label brand and Deschutes was the maker of their beers.
[00:24:47] John Craven: Yeah.
[00:24:48] Ray Latif: Big breakup.
[00:24:49] John Craven: Big breakup.
[00:24:49] Ray Latif: Not happening.
[00:24:50] John Craven: Heartbreaking for a lot of folks.
[00:24:52] Ray Latif: So is there going to be a Kirkland beer anymore or is it just Deschutes not making it?
[00:24:55] John Craven: Undetermined, our pure guess is yes. I don't think they're out of this completely. Maybe they're exploring other partnerships or exploring new ways to do this, but this particular partnership is over. It had a limited deal in the first place. Deschutes itself is looking for ways it can bring back at least the Hellas in some other way or shape or form because it had a huge cult following. People loved it.
[00:25:20] Ray Latif: And yeah, just for some context, Deschutes is a brewery based in Bend, Oregon, one of the pioneers of craft beer, a beloved brand, I think pretty well known that it was the maker of Kirkland beer. So there's got to be some concern among consumers about whether that beer is actually going to taste good anymore or, you know, whether they should continue to buy beer from Costco. So it's kind of, it's an interesting breakup where, I don't know, what's the upside for Costco?
[00:25:49] John Craven: I mean, this is purely speculation. They declined to comment.
[00:25:53] Ray Latif: You've talked about this in a recent episode of the Brewbound podcast.
[00:25:55] John Craven: I mean, our guess is potentially they just want a cheaper partnership or a cheaper way to produce something, go with another sort of third party contractor to make a product. Potentially they're looking with just another brewery that could produce something else for them. They want to keep something new, keep moving things around. they have a couple of options of what they're looking at. I don't think they're really relying on these beer sales necessarily. It's not a huge thing for them. So they can kind of try new things and experiment.
[00:26:25] Ray Latif: I started by saying that Costco's priority in their selection is to sell the highest quality products. If they're looking for a cheaper option, that doesn't sound like it's in line with their overall strategy though. And I'm wondering if there's a change overall in terms of how Costco thinks about their selection and have you seen it in other parts of the store?
[00:26:47] John Craven: We don't have too much insight to it. We do know that they relatively recently have gotten a new person to oversee all of their kind of alcohol strategy. So that could be something. They're definitely reevaluating what they're doing. We also don't really know what that Costco alcohol buyer wants, if they care about this super high quality product, if they want maybe, you know, bulk with a cheaper price. We're seeing in the other side of alcohol, a lot of these low priced loggers, they're having so much momentum. Are they going to focus on something like that, their own version of like a garage beer or something? Potentially.
[00:27:24] Ray Latif: Costco Mexican lager?
[00:27:26] John Craven: Yeah.
[00:27:26] Ray Latif: I mean, why not though? If people are looking for value options with beer, I'm sure that Costco doesn't necessarily care that it has a brand name associated with that beer. I mean, again, if most people already knew that Deschutes was making those products, if they don't care about that anymore, or if less people care about that, then why do it?
[00:27:49] John Craven: Yeah, I mean, it's back to the whole what's happening with craft beer in general right now is how much do folks care that it's a craft product? Do they care who makes it? It's craft is tackling a bunch of different things when it comes to the consumer. And so Costco trying to figure out what works is what everyone is trying to figure out.
[00:28:06] Mike Schneider: I mean, it's kind of like a bit of a head scratcher anyway of like, how much do you care about craft beer when you're buying this suitcase of Kirkland just lager, you know? Yeah. Right. It's interesting. Like I've, I've seen like friends have sent me that, you know, pictures of that beer who aren't up on like, well, they probably don't know what shoots is because we're on the East coast and it's pretty limited here, but like, Yeah, I mean, I don't think it was looked at as a quality thing just the same way when like Kirkland Scotch came out. It just seems kind of funny relative to some of the other Kirkland products they make for whatever reason.
[00:28:43] John Craven: Yeah, it had a very niche group. that included a lot of folks that were in alcohol that really enjoyed it. It was an award winning beer. They submitted it to competitions. And so that very specific group knew it and appreciated it. And I think now we're very vocal about how upset they are that it's gone. But I would think it's safe to assume majority of Costco consumers didn't really know much about it.
[00:29:07] Ray Latif: They're still selling Guinness though, right?
[00:29:09] Speaker: Yeah.
[00:29:10] Mike Schneider: They're probably selling a ton of Guinness.
[00:29:11] John Craven: I would assume so.
[00:29:12] Mike Schneider: What size format is it? Like how many cans do you get?
[00:29:15] Ray Latif: I don't know.
[00:29:16] Mike Schneider: Is it like 36 or something? The more the merrier for Guinness. I was at a, I mean, just side tangent, was at a, like a family event over the weekend where whoever picked up all the stuff for it. This almost sounds like it's going to devolve into a fist fight. Is that where you're going? No, no. Well, no, no, no fist fight there. But, um, you know, someone bought all this stuff Crafty Costco and man, I had never with my own eyes seen the, God, I don't know how many cans it was of Diet Pepsi in one.
[00:29:44] John Craven: Yeah.
[00:29:44] Mike Schneider: I mean, it legit looked like an actual piece of luggage size.
[00:29:49] John Craven: Yeah, we stocked my sister's wedding a couple of years ago with purely Costco beverages, alcohol and non-alcoholic.
[00:29:55] Ray Latif: We typically do that for our San Diego events though, right? For Taste Radio, San Diego.
[00:29:59] Mike Schneider: I mean, we have a Costco next door. Yeah, there you go. We usually, sorry Pepsi, don't go in and buy a giant ass case of Diet Pepsi.
[00:30:07] Ray Latif: Not because we don't love Pepsi. It's just because our attendees aren't expecting Diet Pepsi at our event.
[00:30:13] Mike Schneider: That'd be a little off brand. Yeah, a little bit.
[00:30:16] Ray Latif: I want to wrap up just by talking quickly about Guinness, because as you know, I'm a big fan of Guinness. And hey, Diageo, I always say this, if you ever want to just send Guinness to our office, we'll take it. We'll find somewhere to put it.
[00:30:27] John Craven: We can install a nice little keg over here, have our own Guinness pours.
[00:30:31] Ray Latif: I wouldn't be opposed to that. They're going to send you the bottle of Guinness. I'm not going to hit on the bottle of Guinness. The bottle of Guinness is fine.
[00:30:38] Mike Schneider: It's bad.
[00:30:39] Ray Latif: Sorry. But Guinness is a cultural phenomenon at this point where every bar you go into in America, and certainly in the UK, it just seems like the vast majority of people are drinking that beer. And even though craft beer isn't as consumed as much as it had been in the past in this country, it feels like people are still drinking beer. It's just Guinness this time.
[00:31:00] John Craven: Yeah. Yeah, they're doing a couple things. Guinness is definitely a big one of them. I think they were helped a lot by that social media trend to split the G. I think that introduced Guinness to a ton of people who were hesitant to try it before, because if you don't know what a Guinness is, you're just like, oh, that looks like dark, heavy, no, no thank you. I've had several friends in the past couple of years where I've had to give them their first Guinness and now they order them all the time. So I think that on-premise initial trial really introduced tons of folks to it and now they're having it a lot.
[00:31:33] Ray Latif: It's the old gamification.
[00:31:35] John Craven: Yeah.
[00:31:35] Ray Latif: Isn't that interesting? Your demo was a game, split this G, and then you're like, well, this isn't too bad. And then you learn more about it and you say, actually, this is lighter than some of the beers I've been drinking, despite its color, despite its head. Oh, this is actually, what is it, 120 calories?
[00:31:52] John Craven: Yeah, it's not very high. There are a lot of reports of it not being good for you, but not necessarily being as bad for you as other things.
[00:32:00] Ray Latif: Yeah, 4.2% alcohol, something like that. And you get more of it. If you get an Imperial Pine, you get 20 ounces instead of 12 or 16. So you don't feel like you're getting as ripped off by the bugs.
[00:32:10] John Craven: And something about the split the G trend has stuck around. Like people are still doing it, maybe not posting on social media. A lot of folks who are going out and getting Guinness, they're still going to try to split the G on the first one.
[00:32:23] Mike Schneider: I've seen people doing it recently. Yeah. I mean, it is kind of weird that it's stuck around.
[00:32:27] John Craven: It's still here. Yeah.
[00:32:28] Ray Latif: I think Jess told me this, Jessica Infante, who's the managing editor of Brewbound. She said that she has seen at bars people who will order Guinness, try to split the G. They don't do it on the first try, so they order another one and they order another one until they actually do it. Now, I assume they'll finish all the beers at some point, but it's an easy way to sell two, three beers without having to do much.
[00:32:48] John Craven: I mean, if you're essentially chugging a third to a half of your beer immediately, you're definitely going to go through them a lot faster.
[00:32:56] Ray Latif: I attempted to split the G at our BevNET outing. What was that, three weeks ago? Zoe put something on Slack that was very upsetting.
[00:33:03] John Craven: I saw the video footage. I was disappointed in everybody, honestly.
[00:33:07] Ray Latif: If she could have spit in our faces and our beer, she would have, yes.
[00:33:10] John Craven: If I did not have to hop on a flight to go see Harry, I could have been there to teach you all.
[00:33:15] Ray Latif: You see that? Zoe, you're a pro. We just came completely full circle there. Thank you so much for being on the show today. We really appreciate it. We've got to have you on more often. And obviously listeners know by now that Zoe is brilliant and her entire team at Brewbound is brilliant. If you are interested in the space or following the space or involved in the space in any which way, follow Brewbound.com. Listen to their podcast, Brewbound Podcast. It's on every major platform and come to BevNET Live, Nosh Live, and of course, Brewbound Live in December in Marina Del Rey. Zoe, thanks so much again.
[00:33:49] Speaker: Thanks.
[00:33:50] Ray Latif: That brings us to the end of this episode of Taste Radio. Thank you so much for listening. Taste Radio is a production of BevNET.com, Incorporated. Our audio engineer for Taste Radio is Joe Cracci. Our technical director is Joshua Pratt, and our video editor is Ryan Galang. Our social marketing manager is Amanda Smerlinski, and our designer is Amanda Huang. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we would love it if you could review us on the Apple Podcasts app or your listening platform of choice. Check us out on Instagram. Our handle is bevnettasteradio. As always, for questions, comments, ideas for future podcasts, please send us an email to ask at Taste Radio.com. On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time.
[00:34:40] Melissa Traverse: you
