Special Edition Round Table 2026 Q1 Review - Beverage Industry Facing Massive Reset

This week 📢I talk🎙️with Kate Jerkens at Uncle Nearest, Erica Duecy with Business of Drinks and Caitlyn LuBell at BoozeBiz and we discuss the beverage industry changes and updates in 2026. 👏🍷 🎇 🎉 ✨ 👏 🥂 😁

👀📹 Watch here: 👉👉 YouTube🚀✨🍹

The beverage alcohol industry is in the middle of a massive reset. 🍷📉
In this powerhouse panel, JessieO sits down with leaders from whiskey, recruiting, consulting, and beverage strategy to unpack what’s really happening behind the scenes. 

From distributor consolidation and exploding RTDs to THC beverage regulation, tariffs, inflation, and consumer spending shifts… this conversation is packed with real-time data, analytics, and honest insight from the front lines of the beverage business.

💥 Key Takeaways:

📦 RNDC, Reyes & distributor consolidation explained
💸 Why $25 cocktails are becoming the new normal
🍹 RTD growth, Surfside momentum & Tito’s comeback
🌿 THC drinks, hemp regulation & cannabis beverages
📉 Why emerging brands are struggling right now
📲 How Hampton Water used TikTok & community to explode growth
🧠 Why sales teams matter more than ever
🌎 How tariffs & global politics are impacting beverage imports
🚚 Why warehouse space & inventory are becoming major problems
🔥 The future of distribution, portfolio strategy & consolidation

👉 If you work in wine, spirits, beer, THC beverages, RTDs, distribution, marketing, or hospitality… this episode is a MUST WATCH.

🎯 CTA:
Subscribe, like, and share this episode with your beverage industry community! 🍻

Comment below: What’s the biggest challenge facing the industry right now?

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Host Jessie Ott's Profile on LinkedIn

Transcript

Jessie Ott (00:29)

Hello everybody and welcome to Thursday Thursdays. I've got an awesome guest panel as we have done here in the past couple of years. We always really enjoy it. So we always come back together and kind of talk about the state of affairs of our beverage industry, which we have a lot to talk about because it's changing. I just learned two things from Kate in two minutes about our industry that I didn't know. So there's a lot to unfold and unravel.

Kate, why don't you go ahead and introduce yourself?

Kate Jerkens (00:55)

Good morning or good afternoon, wherever we are today. I'm Kate Jerkins. I'm the Chief Business Officer for Uncle Nearest Premium Whiskey.

Jessie Ott (01:01)

Urca?

Business Of Drinks (01:02)

Yeah, I'm Erica Ducey, a founder of Business of Drinks, which is a podcast and advisory service. We advise emerging brands as to all sorts of things, how to enter markets, strategies around portfolio development, product formulation, we help them find.

formulators, for example, so a whole range of services across sort of every part of the product lifestyle cycle.

Caitlyn LuBell (01:30)

I'm Caitlin Lubell, founder and chief connection officer of BoozeBiz. And we are a recruiting niche recruiting agency for the beverage industry, all beverage and beverage related across the US from admin to C suite. And we do have some

exciting things rolling out that we'll be able to talk about on our next podcast. we focus on, yeah, but currently we're focusing on direct hire and higher level fractional roles and some other contract roles. And yeah, we doing our best to help all these people get jobs as many as we can.

Jessie Ott (02:07)

Nice. Thankfully, Caitlin, you're out there helping these people because it's a busy job. Well, as I always do, I've prepared a few slides that I just want to run through real quick just to start up high. And we'll dive deep into the beverage industry here. Let's see. Last time I saw I found a slide from Visual Capitalist.

Caitlyn LuBell (02:12)

We are trying. Yes, we are trying.

Jessie Ott (02:32)

And I found another one that I wanted to share and it's pretty sad. So for those of you that are listening, ⁓ like that, Kate. So this is ⁓ basically the sentiment of a little bit of South Africa. ⁓

Kate Jerkens (02:39)

At least it's pink though, so that makes it a little happier. Sorry.

Caitlyn LuBell (02:39)

off.

Business Of Drinks (02:42)

Hahaha.

Caitlyn LuBell (02:43)

No, that's good, that's good.

Jessie Ott (02:58)

Canada, some European countries, South American countries on the, countries losing trust in the US and it's pretty much double digits. I'm surprised that Canada is at ⁓ minus 52. I figured it'd be a lot higher. ⁓ The British was surprising down 13, know, hopefully that will change now that the Scotch tariffs have.

been dropped because the king and queen came to say hi to Trump and shake hands and kiss babies, but whatever. It's a step in the right direction for our industry, that's for sure. Because I think it's reciprocal, right? With the bourbons and whiskeys from the US. So that's a positive thing. So then ⁓ just, ⁓ this is nothing we don't already know, but I thought some historical context would be interesting. And so you can kind of see how

Kate Jerkens (03:39)

Yeah.

Jessie Ott (03:51)

the prices have really gone up obviously since 2020, right? Like it's we just haven't recovered. And that's a that's a huge problem for for every American. And last time gas prices were going down this but not anymore. Kate, I know you're feeling this pain out in California.

Kate Jerkens (04:11)

yeah, it's six dollars a

gallon right down the street from me right now at least.

Caitlyn LuBell (04:14)

just in

California I couldn't believe the pricing I was like yeah over six dollars a gallon it's crazy

Kate Jerkens (04:17)

Yeah, it's unreal.

Jessie Ott (04:23)

So

if you look at the average, you know, over the, have this from 1950 onwards, you know, the seventies were pretty flat and then it was pretty steady until 2020. And we averaged about 44 points increase per decade and we're at 72 points and an increase of 71 % in six years. That's alarming. That's pretty alarming. That's, that's really scary. And then when it comes, it's not, it isn't.

Kate Jerkens (04:49)

It's not sustainable.

Jessie Ott (04:52)

It isn't. Absolutely not.

Caitlyn LuBell (04:53)

And I just

bought a car after not having one for six years. like, was not good timing. Yeah, oops. I barely drive it. It sits in the garage.

Business Of Drinks (04:56)

Yeah.

Jessie Ott (04:58)

Yep. Or buy an electric one.

Business Of Drinks (05:01)

Yeah.

Hahaha

Jessie Ott (05:08)

And then last March, I started this where we're looking at the economic indicators. Consumer spending was down. That was a concern. Last Q4, Q3, we looked at it and it was the LEI, which is really more of the consumer sentiment. The consumers were really kind of concerned about the future of the economy.

And obviously it's not doing well. They say we're not in a recession, but there's a lot of indicators that are weakening that ⁓ I would say we really need to stay on top of to see what happens next. And with that, I'll switch it ⁓ over to the beverage category unless anybody else has anything they want to talk about from the economic perspective.

Business Of Drinks (05:50)

I mean, I think we're just seeing it really play out in terms of consumer spending. I mean, I think all of us can agree that we go to the grocery store these days and our bill is a hundred to $200 more for my family of four than it was just six months ago. So I think especially for younger audiences, what we see is that, especially for on-premise,

Jessie Ott (06:07)

Yep.

Business Of Drinks (06:14)

the number of orders that consumers would put in for like cocktail, wine, beer, what have you, are really reducing. And so people are going out, they may be pre-gaming before they go to a bar. And we know that buzz balls are so, so popular, for example, as a pre-game. And I hear that anecdotally just in the market where I am where...

People are like, I can't afford to go to a bar if I do, it is for one drink and I'll have something before I go there. So I think at this point, we can probably all agree that we're starting to see the drinks industry really be impacted by the economic situation.

Kate Jerkens (06:54)

Absolutely.

Yeah, I mean, it's like I'm a family of five. We rarely go out to dinner anymore. And if we go out to dinner, it's like it's more picking stuff up for the kids. It's like more fast casual than we've ever done before. And if we used to go out, the five of us, like my husband and I would have a drink at dinner. We're just actually just not doing it as much anymore.

My voice, one of my voice is a teenager now and I think that might be part of the problem because he's eating us out of house and home and it's all more expensive. You to get that protein. And then I'm just noticing that the prices and I, and by the way, this is not a criticism of the on-premise accounts, but the prices of cocktails, glasses of wine, beer are out of this world, but they don't have a choice because their cost of food is so high. So you just, it's hard to justify a casual $25 to $30 cocktail. You just.

Business Of Drinks (07:18)

Thank

Jessie Ott (07:29)

It's crazy.

Kate Jerkens (07:43)

I went to an account the other night and had an Uncle Neer's cocktail and after I tipped and everything it was nearly $30. And I can't, that's a lot of money.

Caitlyn LuBell (07:52)

Well, I know it.

Jessie Ott (07:52)

What are the prices

in New York, Erica?

Business Of Drinks (07:55)

Yeah. I mean, it's very common to see glasses of wine that are north of $25. So a lot of restaurants that I go to that kind of their top level, uh, wine on wine, uh, by the glass on the menu will be 40, $45. Um, just for a single, yeah. Yes. For a glass of wine at a lot of restaurants. Right. And I'm not talking, this is not like, you know, uh, Le Bernardin. This is like, you know, kind of.

Kate Jerkens (07:56)

you

Jessie Ott (08:13)

Wait, for a glass, not a bottle.

Caitlyn LuBell (08:14)

Yes. Yes.

Kate Jerkens (08:16)

That's so obscene.

Jessie Ott (08:18)

So obscene.

Business Of Drinks (08:24)

casual but slightly upscale restaurants around Manhattan, maybe in the West Village. So it's not unusual for me to see, and you just can't afford to do that. more.

Jessie Ott (08:26)

Wow.

You can't afford to do that.

Wow, we spent $40 for

a bottle of wine at an Italian restaurant last night here in Florida.

Business Of Drinks (08:38)

Exactly. And you know, and I think that's one of

Caitlyn LuBell (08:38)

my God.

Business Of Drinks (08:41)

the challenges for wine in particular is that, uh, at least if you're getting a cocktail, let's say there's two $20 items, right? One is a cocktail. One is a glass of wine. It oftentimes is just more appealing to people to feel like that's been customized and tweaked tinkered with, uh, so that some effort is going into making a cocktail. So that oftentimes feels like more of a value than a glass of wine. And I think that's.

Kate Jerkens (08:44)

Yes.

Yeah.

Business Of Drinks (09:07)

particularly hitting the wine industry so, hard.

Caitlyn LuBell (09:11)

Well, unless the cocktail is like that big and then they're like, oh, that's three sips for $24. So maybe I will get a glass of wine because...

Kate Jerkens (09:18)

Yeah. Well, that happened to me in Texas

a few weeks ago. was with Victoria, our master blender, and she ordered me a drink and I showed up at the bar. I'm like, that's not an old fashioned. That's like a tasting of an old fashioned. The next day she's like, I ordered you a double. Because I was like, mean, come on now. But that's true. Like the there's not a lot of free. There's not a lot of free pouring happening. It's very measured. You know, no pun intended, but it is.

Caitlyn LuBell (09:29)

Yeah, that's like a shot.

Business Of Drinks (09:30)

Yeah, yeah.

Jessie Ott (09:32)

Yeah.

Caitlyn LuBell (09:34)

ha ha.

Business Of Drinks (09:35)

Ha ha ha!

Caitlyn LuBell (09:39)

It's all ridiculous.

But I agree that

it's much more fun to have like at least somebody spending some time and energy creating the cocktail. But I'll tell you, I mean, we talked about the Gen Zs last time, so we don't need to go down that rabbit hole, but you know.

Kate Jerkens (09:50)

Yeah.

Caitlyn LuBell (09:58)

I couldn't afford a $24 cocktail when I was 21 years old. mean, of course they're not drinking out and we pre-gamed, of course we pre-gamed. Anyway, even with our $9 cocktails, of course they're pre-gaming with the $24 cocktails or $25 cocktails, right? I mean, it's, and it is, I do feel bad for the restaurants because they're not as busy and there's so many things stacked against them.

Kate Jerkens (10:15)

Yeah.

Yeah.

Caitlyn LuBell (10:27)

for so many other reasons, but especially the pricing and they're like, how much higher can I raise my prices? People were already struggling to get people into the door. And now our cogs just went up more and you know, or now they're charging me a $15 delivery fee because of the gas or, know, exactly. Yeah.

Jessie Ott (10:34)

Yeah.

Kate Jerkens (10:42)

The only place you can do it is with alcohol.

It's like alcohol and even to be honest, like a soda, like all that kind of stuff. Everything you're consuming that's not water is much more expensive in a restaurant right now. Cause it's just like, it can kind of hide there a little bit easier, I think.

Jessie Ott (11:01)

Yeah. What I'm seeing too is a lot more happy hours and happy hours extended longer than just four to six, for example. And so I think that kind of helps too. know for when we, during COVID, my wife and I, we just moved down here to Florida and like around four o'clock on Friday, we'd go out and hit happy hour and be home by 6.30 and you know, be, you know, done for the evening. But you know, that's probably

going to be coming back and it's not because of COVID, it's because of cost.

Kate Jerkens (11:31)

Yeah.

Yeah, I agree. I agree.

Jessie Ott (11:36)

So a couple of takeaways, just talking points. We've kind of talked about this before that the industry isn't necessarily shrinking, it's just rebalancing a little bit. We've got the THCs and the RTDs and all the things. And then obviously, Kate, and as we talked about right before we started to hit record, the distribution power of shifting. And so there...

Kate Jerkens (11:55)

Yeah. Yeah.

Jessie Ott (11:56)

that seems to be a wave of conversation about RNDC and how that's all going to shake out. I think it's actually happening a lot quicker than I thought, to be honest, the fact that

Kate Jerkens (12:06)

It

seems to have, obviously California was our kind of first, okay, that's a big deal. That's a big piece of the pie to pull out of the fifth largest economy in the world.

Jessie Ott (12:11)

Right.

Kate Jerkens (12:19)

With that one in many ways, maybe it was a little simpler because they weren't getting bought. They just were moving out. This has now been more interesting because they're really looking for these partnerships. based on, we're aligned with them in many states. So we have a lot of firsthand. I think the Rayas deal is going to be great. And I think it's going be great for their employees as well. And every RNDC employee I speak with and have spoken to in person even is actually not.

they're happy. They think it's going to be a great deal for them. So they're very excited. But then just lots of other little things that are happening. you know, for smaller suppliers that my raise is not as concerning raise is coming in and taking over. But there's all these other little acquisitions and LOIs that have come out in the last few weeks. And there will be some challenges for smaller suppliers, because some of those distributors just may not have the bandwidth for everything that RNDC see had in their house.

and just in general. think these distributors, I was speaking with somebody who's no longer in the business at this moment, just talking about the last few years of suppliers, big suppliers squeezing every bit of margin out of these distributors, right? Because we came out of COVID like fat cats, right? We were in charge, our products were flying and we're like,

we're going to make you like you this is too easy for you guys, right? And so a lot of big guys, not me as much because we don't have as much like we're not at but there was a lot of negotiating and a lot of deals that I think distributors especially RDC felt compelled to take that, you know, as a as we started to reset those those margins because the volume wasn't there just stopped working. And so we've done a little bit of this to ourselves, quite frankly. And I think that smaller suppliers are going to have a tougher time. They're going to have to

they're gonna have to do a lot more heavy lifting on their side than they already do in order to survive all of this.

Caitlyn LuBell (14:08)

Well, but they just don't have the warehouse space. mean, that's part of the big problem for these brands is, you know, these small to medium sized distributors, they just don't have the space for.

for more brands. mean, I remember when I worked at Southern in New York and we would hit capacity at like two o'clock in the afternoon because literally, and that's after they built a whole new warehouse space and they still, wasn't enough. know, I think warehouse.

Kate Jerkens (14:28)

Yeah.

But do you find

that some of that has to do because some of those distributors were told they had to buy X amount, they're stuffing their warehouses with a ton of product that they don't need for the next 90 days, alone like 30 days, let alone 90 versus six months. that's, the warehouse space is also self-inflicted, right? Because they're being asked to buy obscene quantities to keep up with these numbers that people were reporting five years ago.

Jessie Ott (14:45)

Ugh.

Caitlyn LuBell (14:47)

Totally.

Yeah.

Yes.

and an oversaturation of brands too. So many brands. Sorry, go ahead, Erica.

Kate Jerkens (15:05)

That just...

Business Of Drinks (15:05)

Yeah.

Kate Jerkens (15:08)

Yeah.

Business Of Drinks (15:10)

Yeah.

No, I was going to say, I saw a interesting sort of comparison in, in Schenken Impact Newsletter that was talking about, you know, we are moving from a model where there was the big three Southern RNDC and breakthrough to a situation where we have the big five, which is Southern breakthrough Reyes Johnson brothers and RNDC being the smallest of all of those. So they did this analysis in April and they said, you know, Reyes went from last year being about

Kate Jerkens (15:31)

Yeah.

Business Of Drinks (15:40)

2.8 % of the projected share of wine and spirits wholesale revenue to this year being projected 10 % about. And this was before last week's announcement that Martin Yeti will be taking over the 17 control states. So Reyes now is going to potentially, so at the end of 2026, Southern was estimated to have about 36 % share

Breakthru about 12 % share, Reyes about 10 % share, and Reyes' piece is just going to get bigger with the introduction of these new states. So potentially it could become practically overnight the number two wholesaler in the US.

Kate Jerkens (16:16)

Absolutely.

And what's interesting about them is how diverse they are too. And I'm sorry, Jesse, but like one of the things with Reyes and I think why they're so successful is they also distribute quite a bit of non-alch and they're a number one distributor for Coca-Cola and all this other stuff. So they're very diverse. And so they have cash to invest and like that's what's really, that's I think what's, it's not even, think it's what's helped them so much. And I think that diversity is going to be key for some of these other guys as well.

Jessie Ott (16:24)

Question.

Business Of Drinks (16:35)

Yeah.

Jessie Ott (16:42)

Yeah.

Caitlyn LuBell (16:50)

Well, this is huge because look at Southern is, you it's not as noisy, but Southern is grabbing Anheuser-Busch and then Manhattan beer with RNDC Opici in New York. I mean, it is every single day I see at least one, if not three

Business Of Drinks (16:51)

Yeah, absolutely.

Kate Jerkens (17:02)

Right.

Caitlyn LuBell (17:07)

mergers, acquisitions, brands moving distributors. I mean, it is just been mind blowing non stop.

every single day, I feel like since the beginning of the year, it's just been wild. I feel like I keep saying to my team by the end of the year, it is gonna be completely different. But I think that's a really good point is that these wine and spirits distributors and beer distributors are now blending, right? And I think that it is because of the rise of THC brands and non-alc and things like that. So the wine and spirits guys wanna be involved in that.

And then I'm not sure you know better, Kate, because you're working with the beer side, but from what I'm being told, the margins are better from the beer companies. Right.

Kate Jerkens (17:52)

They are better. So they have more cash in their pockets. Yeah, they're

it's like it's a safer. It's not it's not it's safer. Like it's like there's the margins are just so much better. And beer is just I mean, especially when you think about convenience and some of these places. It's just like those orders come fast and heavy, right? People drink like, you know, again, the beer the market is not where it was either. But it still is a higher it's a high volume business, no matter how you look at it.

Caitlyn LuBell (18:02)

Yeah.

I think a lot of it

has to do with the alt-beb sector. mean, know, Erica, you talked to a lot of these alt-beb companies, right? And with them just rising, rising, everybody wants to get in on it, including the wine and spirits distributors, right? So.

Kate Jerkens (18:31)

Yeah. Yeah,

absolutely.

Business Of Drinks (18:34)

Yeah, absolutely.

It seems like the portfolios are just becoming more and more diverse and it's like a portfolio hygiene sort of situation where it's like, let's just have as much diversity as possible knowing that things will be up and down in various years. So yeah, it definitely seems like we are in an accumulation phase for the biggest wholesalers.

Kate Jerkens (18:42)

Mmm.

Agreed.

Absolutely. also because, go ahead. Sorry, go ahead, Caitlin.

Caitlyn LuBell (18:57)

And then I, no, I was just gonna

say I'm seeing and foreseeing a huge rise for companies like LibDib and MHW and Park Street because there's no home for them. And so to be honest, that's where BoozBiz says, great, go with those guys and we'll help you hire some people.

Kate Jerkens (19:08)

Mmm, for sure.

Caitlyn LuBell (19:19)

and to do the sales and call it a day for now until the dust settles at least, if not, you know, and some just keep going with it. They're like, this is working. So and the margins are smaller. And so we'll do it this way instead. So it's so interesting.

Kate Jerkens (19:29)

Yeah.

I mean, people

on the street selling your brand are gonna be invaluable no matter what and you've got to figure that out in your budget. That's just it. I mean, I was talking to a distributor, a rep and...

Caitlyn LuBell (19:42)

Yep, a million percent. We see it all the time.

Kate Jerkens (19:51)

He's like the other day he's like I feel like I can't do my job anymore and he's like or not do it well and he's like it's just disappointing he's like the number of accounts that fall in his into his purview now his the number of accounts that fall into his purview this one single singular person was like 3,000 accounts of which of which

Caitlyn LuBell (20:06)

geez!

Kate Jerkens (20:09)

maybe 180 consistently order and like 960 had ordered in the last year. And he's like, and then I mean, I have to do a work with all these new guys every single week. And he's just one guy anecdotally sharing this. And so it's like, he's overwhelmed. doesn't feel like he's doing his job well. He's not the only one if he's sharing that openly with me. And to me, all I can think is I've got to get more people in this market or we're not gonna have any share of mine.

Caitlyn LuBell (20:15)

that's insane.

100%.

Business Of Drinks (20:36)

Yeah, definitely.

Kate Jerkens (20:37)

and it's not his fault.

Business Of Drinks (20:38)

Yeah. I mean, we see that with a lot of emerging brands that we advise that, you know, it's just impossible, even if you're a midsize brand right now to get attention from the distributors, because the distributors know what sells and that's what's paying their bills. So are they going to sell Surfside over an emerging brand? Yes, because that is what is moving volume right now. So I think that, you know,

Kate Jerkens (20:53)

Yeah.

Yeah.

Business Of Drinks (21:01)

One of the things we advise is just for any brand that's coming into the market. Like you have to have your own sales people. That's just like the cost of doing business these days because distributors, we're discussing, just, you know, they, their role has changed over a period of time to where they're really just, you know, moving things from point A to point B. And when you have 3000 accounts for one rep, I mean, how can you expect really any, anything more than that?

Kate Jerkens (21:07)

You have to.

Jessie Ott (21:28)

Can't.

Caitlyn LuBell (21:29)

I have a friend that had 74, works for a large distributor, used to have 74 accounts back in the day and now has 187. And I thought that that was a lot. I've not heard about 3000, but he's...

Kate Jerkens (21:40)

Yeah, but this is because this person's

being asked to do like a region that's like just they it's just obscene. It's an obscene region that they're handling, but still but even 180 is too many in my opinion. Yeah.

Caitlyn LuBell (21:46)

Yeah, but he said he said, I can't even care. He said, I can't

carry a bottle anymore. I go to, you know, two accounts and I'm stuck at I mean, they're doing surveys for the top suppliers, or I'm just stuck there entering orders. And yes, you know,

Kate Jerkens (22:03)

They're just taking orders

and then they're helping with merchandising. All these guys also, especially in the off-prem, they don't have as many people working for them. And so our distributor reps a lot of times are literally helping them stock items. I I was just with another distributor rep in Texas and he has one key account that he's at six hours a day and basically is like a paid employee at that, is like an unpaid employee at that retail store.

Caitlyn LuBell (22:28)

That's

so illegal in New York. You can't do that. You can't even touch a bottle. You can't even put a Necker on a bottle. remember doing it. Yeah, I remember going out once to Oregon to help Southern when Southern transition or sorry, St. Michelle Wine Estates transition. think maybe we were the Youngs and we transitioned to Southern or something. And it was the first time I ever saw anybody like

Business Of Drinks (22:29)

Wow.

Kate Jerkens (22:31)

Yeah.

Yeah, I know New York is definitely like, yeah.

Caitlyn LuBell (22:53)

going in the bag, getting cases, bringing them out, stack, putting them on the shelf and stacking them. I was like, what are you doing? That's not legal. You can't do that. They're like, this is my job. I was like, no, that's the store's job.

Kate Jerkens (23:01)

Where? Put that down! Yeah.

Yeah, in a lot of markets there's an expectation.

Yeah, it's expectation.

Caitlyn LuBell (23:10)

That blows my mind.

Jessie Ott (23:11)

question.

Can I go back to Reyes for a second? I was curious to talk about how many states they're in and I'm surprised at the states that the quick search said. Like California, Florida, Hawaii, which I'm surprised. Illinois, Indiana, Maryland, Michigan, South Carolina, Tennessee, Texas, Virginia, and then DC. And it's saying here that the only markets there

Kate Jerkens (23:15)

Sure.

Jessie Ott (23:34)

acquiring from RNDC is Arizona, Colorado, Louisiana, and Oklahoma, but they're more than that.

Caitlyn LuBell (23:38)

No, that's not.

Kate Jerkens (23:39)

No, it's way more than that. They're getting

Caitlyn LuBell (23:40)

Yeah. Illinois.

Kate Jerkens (23:40)

they're also getting Texas, Florida, DC, Maryland, Illinois, Oklahoma. Yeah, yeah. But Reyes was never in Texas, so that there's a few states where it's like they're entering for the first time. Texas is one of those. Sorry, go ahead, Erica.

Jessie Ott (23:45)

That must be then RNDC sees markets. Yeah. Okay.

Business Of Drinks (23:49)

Right, so yeah, so that.

Yeah.

Jessie Ott (23:57)

Okay, so

that's what that is then. And it also says

Business Of Drinks (23:59)

My understanding was 11 RNDC markets is what Reyes was taking over. then, right. And then now there'll be an even more.

Kate Jerkens (24:02)

Yeah, correct.

Jessie Ott (24:02)

Yeah.

And to your point, Kate, it says here that Reyes they have a Coca-Cola bottling services in like 10 states. So you're right.

Kate Jerkens (24:13)

Yeah, they do, and then they, one of

Caitlyn LuBell (24:15)

I didn't even know they did Coca-Cola.

Kate Jerkens (24:16)

their reps was telling

me they also supply Coca-Cola for like Chick-fil-A, for McDonald's, like really like major, I mean, when you think about the money behind that, you know, like,

Business Of Drinks (24:22)

Mm-hmm.

Jessie Ott (24:24)

Wow.

Yep.

Kate Jerkens (24:28)

Big deal. I then I was trying to get the secrets on why the diet cokes at McDonald's are better than any diet coke in the world, but I can't get the secret. So I'll let you know if I hear. But I feel like they have the best. McDonald's still owns the best fountains in the world. I swear, I don't know what they're doing. But it's pretty diverse. And that's going to put money in their pockets to be able to invest. mean, they're

Jessie Ott (24:28)

That's, yeah.

Caitlyn LuBell (24:35)

you

Jessie Ott (24:37)

Hahaha!

But, right.

Kate Jerkens (24:48)

talking about investing nine figures into where they're going with RNDC in terms of innovation and infrastructure and all that kind of stuff. And that's why these RNDC employees are excited. Like, wow, this could be a really big deal. And then maybe we can win back some of these suppliers as well that have kind of gone different directions the last few years.

Business Of Drinks (25:08)

And I think

Jessie Ott (25:09)

Mm.

Business Of Drinks (25:09)

to your point, it's interesting because, know, so yes, there are supply, like they're doing McDonald's, they've got Coca-Cola, they've got Miller Coors, Sazerac, Boston Beer Company. So, you know, these are like Reyes' most important suppliers. But when you're dealing with companies and portfolios of that scale,

And then you're bringing on RNDC's brands. So RNDC's brands, its biggest brands were, know, or portfolios were like Brown Forman, Pernod Ricard, Duckhorn Kobrand. So when you bring those over to Reyes, now those big players from RNDC are suddenly middle tier, right? So how do they possibly get as much attention as a Coca-Cola or a Boston beer or a Sazerac? And that's not

Kate Jerkens (25:49)

Mm-hmm.

Interesting.

Business Of Drinks (25:56)

my thinking, I read a great analysis about this very topic by Matt Rice, is has a newsletter called the Quench Report. But, you know, reading that I was like, wow, this is actually a really interesting analysis that I think is going to very much play out. You know, suddenly, what who are the big players with one portfolio are the small

Kate Jerkens (26:06)

That's pretty interesting though.

Business Of Drinks (26:18)

small players, you know, for another. And so he talks about in his post that brands perform a hundred to 200 basis points better when they're a top priority for a distributor. So materially that performance could change, not to mention the shakeout of these, the integration between the teams, right? Like that's just always messy.

Kate Jerkens (26:40)

Yeah,

yeah. I wrote that down. I have to check this one out. That's really interesting.

Caitlyn LuBell (26:44)

Yeah.

Yeah, but...

Jessie Ott (26:45)

So Kate, it says

here too that they are the largest privately held food and beer distribution company. Wow, you're right. Who would have thought that that diversification would be in a place to...

Kate Jerkens (26:51)

They do do food as well, yeah. Yeah.

Yeah, and people like to work there.

I've met people that have just started there, but I've also met these I met these two guys that were great. I wish I could remember but they both been there for over 14 years and like one of them met their wife at Reyes and now they're married like and they're genuinely happy and it wasn't a shtick like it was like they they're happy as a family the family's very much involved but not in like a too involved with like the right kind of involvement and

There's a lot of visibility. Like even in California, I met someone who was working in California. They're seeing, they see the Reyes family. Like there's, it just feels like they're, I'm excited to watch it because I actually, from what I'm seeing, it feels like it could be a really good, interesting thing for these, for this group of RNDC folks.

Jessie Ott (27:37)

Yeah.

If they can keep that same culture, that would be fabulous for our industry. And it says here they do over 40 billion in annual revenue. That's huge. That is just monstrous. Yeah. Huge. Thank God. Thank God someone was out there in the industry that could do this transition the way they are, because what would we be doing otherwise?

Kate Jerkens (27:48)

Yeah. Yeah.

which is why a simple drop of nine figures into RNDC see for some updates they can handle. But that's great, you know.

Yeah.

Business Of Drinks (28:12)

Well, I mean, what I would love to see is like the growth of smaller distributors just to provide much more diversity within the marketplace. I think that's one of the challenges is over a period of decades, we've seen fewer and fewer distributors as like they've all become consolidated, right? But then that offers fewer routes to market for the smaller brands.

Jessie Ott (28:17)

Yeah.

Kate Jerkens (28:18)

I agree.

Correct.

Business Of Drinks (28:39)

so I think the challenge there, really is, you know, go out, go out and open a distributor, but then again, no one wants to open a distributor. Yeah.

Caitlyn LuBell (28:44)

I tell everybody that. I tell everyone that. I'm like, forget brand. Just launch a distributor,

Jessie Ott (28:47)

Nobody wants to do it.

Caitlyn LuBell (28:51)

please, because I can fill your book. I mean, I talked to that many emerging brands.

Kate Jerkens (28:55)

Right, but what's that show? Nobody

wants this. That's literally this. Nobody wants this because it's a lot. It is.

Business Of Drinks (28:58)

Yes, yes. I mean, that's the challenge.

Caitlyn LuBell (28:59)

think it's just a lot of money to, you know,

but it's a lot of money to start a brand too. especially for these people, I don't know. You know, I don't know. I think I love emerging brands. I get very excited. I love seeing new things. But I think that as a result of all of this,

Kate Jerkens (29:06)

Agreed.

Me too.

Caitlyn LuBell (29:18)

that is gonna slow down. I talked to a lot of consultants and fractional people and they're starting to advise people like, don't bring in a new brand to the US right now. Don't launch a new brand right now. It's just not the time. And unless you have the finances to hire a sales team yourself and go through, you know, a third party, you know, LibDib or MHW or Park Street, just do something.

go launch a food company or something. I'm like, no, tell them to launch a distributor. That's what we need right now.

Kate Jerkens (29:47)

Yeah.

Or also come in

Jessie Ott (29:49)

Yeah

Business Of Drinks (29:49)

Yeah.

Kate Jerkens (29:50)

with real correct expectations, right? And like understand, like to me, like if you're doing it in your America, if you're living in the US and you live in, what's a good, I don't know, Colorado, like just be great in Colorado. Like invest everything where you are, where you can put in the most work and like don't try to build too fast right now.

Caitlyn LuBell (30:08)

Yeah.

Listen, did a yeah, the last time with Jesse, we did a podcast with Gary and Ben Salisbury and Ben is awesome because he talks about this all the time. And he's somebody who's been in the industry a really long time, but yet he gets the current landscape. And all of us, I think I'm sure Erica, you're advising the same thing as we are. It's just like, no, just and honestly, like

Kate Jerkens (30:17)

you know, and like, let everybody in Colorado love you and then figure it out from there, you know.

Yeah.

Caitlyn LuBell (30:45)

for me it's like sure let's hire 15 people across the country right but that I know that that's I was talking to somebody back recently and I was at my friend's house working from there because I was traveling and she's hitting me and she's going what you're taking money out of your own pocket like why are you doing that and I'm like because it's completely unsustainable like I cannot let

Kate Jerkens (30:50)

Right.

Hahaha

And this will work

in your favor in the future to do this.

Caitlyn LuBell (31:10)

That's right. If I

tell you don't hire 12 people, hire three people, dig in strong and slowly grow, then they're going to be a long-term partner for BoosBiz. And so I'm guiding them the right way. I think... Listen.

Kate Jerkens (31:20)

Yeah, yeah, you're so right in that. Yeah.

Jessie Ott (31:21)

Yeah.

Business Of Drinks (31:21)

Yeah.

Jessie Ott (31:24)

And Ben

Business Of Drinks (31:24)

Right.

Jessie Ott (31:25)

talked about doing spirits direct, just pick a channel because to their point, their margins double and they're gonna put it on every aisle. We're gonna put it prominently out there and promote their spirits direct brands. Yeah, Total Wine, Goody Goody, ⁓ Florida.

Caitlyn LuBell (31:35)

Yeah.

Kate Jerkens (31:39)

The total wine program you mean? absolutely. I mean, yeah, any of those. Mission cocktails,

Caitlyn LuBell (31:44)

Yeah.

Kate Jerkens (31:47)

which is like a great, great alternative to on the rocks, no offense, otherwise, but mission cocktails did that. And their business is insane right now, like because they did the spirits direct. And it's like beautifully, every time I go to a new state, I'm like, I send them pictures. like, you guys, it's literally, it was in the total wine corporate office, a big display. was like, you guys really did it. It's like a good job. You know?

Business Of Drinks (32:06)

Wow.

Jessie Ott (32:07)

That's cool.

Kate Jerkens (32:09)

Makes sense.

Jessie Ott (32:10)

So

I have a question, Kate, as you travel around the different markets. I know that we had talked about this in California. I don't know, maybe it was six months ago about how people are really discounting a lot. Is that still happening out there?

Kate Jerkens (32:23)

Yeah, and actually you're gonna see it really pronounced in fact happened to my own brand today. You're gonna see it really pronounced not that we're discounting it, but especially in these big RNDC markets, if they have any inventory that's aging, there is a push like anyone that's getting any it's not even just any distributors being acquired anything aging, they're gonna try to get those out of their warehouses. And so unfortunately, you're gonna see

Jessie Ott (32:37)

Mm.

Kate Jerkens (32:48)

It's not even the brands trying to do it, but I think distributors are going to take a loss on some of these, some of the product that's in their warehouse is just to get it out, out because of the aging impact because it's And it's, and so yeah, you're going to, Hey, if you want to stock up on some booze, I think it's going to be a good time to stock up on some booze the next couple of months. Cause I think you're going to see it.

Jessie Ott (33:05)

You think there'll be a lot of discounting this this holiday season?

Kate Jerkens (33:09)

Probably. Probably.

Caitlyn LuBell (33:11)

Erica, you've seen that a lot

Jessie Ott (33:12)

Yeah.

Caitlyn LuBell (33:12)

with RTDs and things like that because they do definitely have a shelf life compared to spirits.

Kate Jerkens (33:17)

The shelf life is a challenge, right? Yeah.

Jessie Ott (33:18)

Yeah.

Business Of Drinks (33:18)

Yeah. Yeah. I'm

not seeing as much, but I am noticing that smaller brands are being pretty careful about their production runs and really making sure that they have the demand in place and that they're not going to be, you know, making too much product. So I think that I've seen more conservative, like behavior on that side.

Caitlyn LuBell (33:27)

Yeah.

Kate Jerkens (33:28)

Bye.

Caitlyn LuBell (33:32)

Good.

Kate Jerkens (33:35)

Yeah.

Caitlyn LuBell (33:39)

Yeah, that's good to hear.

Kate Jerkens (33:39)

Like, win with scarcity

marketing. Like if you go out of stock for a week, that's better than having too much in my opinion, right?

Caitlyn LuBell (33:47)

a hundred percent. Listen,

I'm from, you know, I've done wine in spirits my whole life, but wine, you know, was more dominant for me and my career in the sales side. you know, we got...

you know, vintage matters and you got us all through, you know, I remember one particular brand that I love to sell, but we could just never get into current inventory, like current vintage. We just couldn't because they wouldn't close out the old vintage and so we couldn't sell it. So then the new, you know, the winemakers releasing new vintages, we just can't even get there. So we were just stuck. And I kept saying, if you're not going to destroy some of the

Kate Jerkens (34:02)

Mmm.

Yeah.

Caitlyn LuBell (34:27)

product and get me into current vintage, you might as well just stop the brand because we're never going to get there. You're destroying the brand and then the stores that are bringing it in, they're bringing old product. It doesn't taste good. So then somebody's not going to buy it again because it doesn't taste good because it's on its way down. Right. So why not? It's a big problem. But I would just, I would think RTDs too, if they're not smart about that, then, then

Kate Jerkens (34:32)

Yeah.

All right. Right.

Jessie Ott (34:42)

Right.

Caitlyn LuBell (34:53)

Yeah, they're gonna be stuck with lot of closeouts and a lot of, yeah.

Business Of Drinks (34:56)

Yeah.

I mean, I think inventory levels are at a historic high right now. And that's, you know, that absolutely is in the middle of a correction. But I think it's, you know, even more than just the inventory. think what we're starting to see is, you know, even from 24, 2024 to 2025, we saw fewer, like substantially fewer craft spirit producers, substantially fewer wineries, substantially fewer craft breweries, right?

Kate Jerkens (35:11)

Excuse me. Thank you.

Caitlyn LuBell (35:12)

us.

Business Of Drinks (35:23)

So like that shakeout, like we are in this period of consolidation that, you know, when you think about like a lot of markets, they go through this life cycle, cycle, is like emergence and discovery going to like a growth period, going to proliferation and overcrowding, then sort of, you know, maturity or slowing growth, then contraction and shakeout where we are right now.

then consolidation and professionalization and then renewal and the next cycle and it starts all over again. So like that's a lot of industries see that, but it seems to me, especially visible in the drinks industry right now, kind of across all categories. So I think we're, you know, we're going through this adjustment period. There's this shakeout happening. I think that and a space is going to just continue to, you know, continue to.

explode. We've seen so much &A happening across all of the different categories this year so far. And in the back half of last year, I think that's just going to continue to accelerate for a couple reasons. One portfolio, portfolio, like again, that word portfolio hygiene, right? So for example, the wine group just acquired several constellation brands.

but they also went into RTDs with the acquisition of St. Agrestis, which is the maker of the phony Negroni, NA, and their regular Negronis. So they went into the RTD space for the first time, right? So I think that that's one of the key reasons that we're going to see a lot of &A. And then secondly, we're gonna see &A of distressed assets, right? Which is, you

Kate Jerkens (36:49)

Interesting.

Business Of Drinks (37:00)

These emerging brands are these middle-sized brands that are over-leveraged and they just can't get funding to continue. So I think those two reasons are like going to be driving the back half of 2026 for M &A.

Kate Jerkens (37:15)

Interesting.

Jessie Ott (37:17)

Yeah.

Caitlyn LuBell (37:17)

⁓ I don't I don't think we're anywhere near done

at all. I and I at this point, it's like every morning I'm sending my team something that's like, did you see this like because I like them to understand obviously what's what's going on in the market and then you know, where are where the opportunities but also where are going to need to

do our best to help, right? And so, ⁓ gosh, these two distributors just merged or whatever. okay, we may start getting a lot of phone calls from these salespeople and things like that. And not just salespeople, by the way, it's a lot of back at house office roles as well, data analysts and finance managers and...

Kate Jerkens (37:41)

Yeah.

Caitlyn LuBell (38:00)

poor marketing and PR people. mean, we haven't had a marketing role in probably over a year to fill and they just, they're calling every day and it just breaks my, and I see a few marketing roles here and there on like LinkedIn, but there's just, there's just not a lot of jobs for them. And it's so heartbreaking. And you know, we're just kind of.

Jessie Ott (38:08)

Wow.

Kate Jerkens (38:22)

It's not a good idea though either because you I mean if I was someone I you don't need you need a you need the pull through and you need someone who is an ideas person and an executor so as long as your marketers are not too precious that they can come up with ideas and execute at the same time I think that's another part of this business is like marketing became super layered with lots and lots and lots of people you can't it can't be like that as much anymore

Caitlyn LuBell (38:26)

You need the pull-through.

Yes.

Kate Jerkens (38:46)

But there's some really good I know some to your point. I know some really great marketers out there like you're sort of silly to not bring them on like someone should make some room for them for sure.

Caitlyn LuBell (38:50)

amazing marketing people that I'm like how

And how

is this poor person not have a job right now because there's so, I can tell where I know first or second degree, they're amazing. you know, there's just, yeah. And 100 %

Kate Jerkens (38:59)

Yeah. Yeah.

Yeah Yeah, make it make sense. You're like you yeah, I Would not I

would not I would not not invest in marketing for any small brand right now Even if again just one great person even or fractional like a fractional, you know

Caitlyn LuBell (39:17)

Fractional, I was gonna say,

every time I have discovery calls, especially for emerging brands, I'll try and sell in fractional people. I'm like, look, if you don't have somebody in marketing, and e-comm, if you don't have somebody in marketing and e-comm, I have fractional people for you that are amazing that will step right in. we are pushing that really hard because I think we're definitely pulling.

Kate Jerkens (39:26)

Yeah.

Yeah, correct.

Caitlyn LuBell (39:45)

pushing high level fractional hard, but especially marketing people. Yes, you need it and you need both, right? I don't want to throw my anyone under the bus, but I remember working for working with a supplier and they did a huge marketing campaign and couldn't find the brand anywhere because it just wasn't sold in yet. So you have to not put the cart before the horse, but you need both sides and you have to get the pull through or or there's no reorders.

Kate Jerkens (40:06)

Yeah.

Exactly.

Business Of Drinks (40:13)

Yeah. And I think you have to be scrappy. Like to your point, I think you, it's both the ideas and the execution, right? It's like, so, um, we just did an episode on business of drinks, uh, with Jesse Bon Jovi of Hampton water. So they grew 20 % year over year to 150,000 cases. And how did they do it? They built this incredible online platform of people that are, you know, very rabid fans.

Kate Jerkens (40:14)

That's exactly it.

Caitlyn LuBell (40:25)

Yeah.

Kate Jerkens (40:27)

Mmm.

Business Of Drinks (40:39)

So, you know, when they were building the brand, said, he said like, accounts were not interested in like his celebrity dad, John Bon Jovi. They'd be like, you know, leave, leave a sample. Thanks so much. Get out. ⁓ So it was a bit of a, yeah.

Kate Jerkens (40:41)

Wow.

Caitlyn LuBell (40:53)

Well, they had one skew and they were competing against

Whispering Angel at the time. And because I remember in New York, we had it and it was like, everyone was like, this is too expensive and whatever, they didn't care. And now they're doing amazing. So happy for them.

Business Of Drinks (40:58)

Totally. Yeah. Yeah.

Yeah. But now it's just, it's incredible. And so what they did

Kate Jerkens (41:08)

Just so

funny.

Business Of Drinks (41:09)

have was the leverage on social media. So I think their smart thing was that they turned their social into an ROI positive endeavor, right? Where they like their marketing is tied to ROI. So they are actually selling on TikTok. In fact, they've become the most followed alcohol brand.

Kate Jerkens (41:15)

Smart.

Business Of Drinks (41:33)

across categories on TikTok, Hampton Water, right? So there are things that are working, ⁓ but you know, what they do is they activate their communities. know, Jesse was talking about last year, they did this summer thing where they went to 11 cities and they'd post on social channels that they were going to meet up at a bar and be pouring Rose from magnums. 600 people would show up. And like once that happens,

Caitlyn LuBell (41:35)

Wow, that's awesome. Good for them. Yeah.

Nice.

Kate Jerkens (41:57)

Amazing.

That's so smart.

Business Of Drinks (41:59)

And once that happens, like you become as a brand, a strong partner for your on-premise, for your off-premise, because you say exactly, you say like, can bring, you're having an event. can help. So I think turning that marketing into that ROI positive, ⁓ you know, funnel is like kind of what I see as the future there.

Kate Jerkens (42:06)

God, you just brought 600 people? Yeah.

Caitlyn LuBell (42:07)

Fray our distributor.

Well.

Kate Jerkens (42:13)

That's awesome.

Jessie Ott (42:17)

That's great.

Caitlyn LuBell (42:21)

Well, definitely

in trade marketing too. mean, experiences, everything I read about this new generation, they're all about experiences, right? You can have all the brands you want and all those stories, you know, our generation, we like stories, right? The new generation likes experiences and that, you know, that's all there is to it. So that's, that's an awesome success story. love hearing that because

Kate Jerkens (42:21)

I think that's so smart.

Jessie Ott (42:42)

Yeah,

definitely.

Kate Jerkens (42:43)

I want to go, I'm

writing it down because I want to go see their stuff. It's interesting.

Caitlyn LuBell (42:47)

Yeah.

Jessie Ott (42:48)

And one of the last major points is these tariffs. Do we have them? Do we not? It's so confusing. I'm sure it's a deterrent for a lot of brands to even bother with us at this point. And I mentioned earlier in the podcast that the king and queen of the UK came over and all of a sudden there's no tariffs on scotch. So I'm curious. There's not too many people around the world that have that kind of power, but we'll see what happens.

Kate Jerkens (43:12)

Hmm.

Caitlyn LuBell (43:13)

Well, Canada.

Jessie Ott (43:15)

other things

could fall into play after that success story. Because you know people are going, what can we do? How do we fix this? from my perspective as an export person or we deal with non-US markets for the most part, we don't want to deal with any product in the US. We want everything to ship from their original country because it's just too much of a mess and to track it all.

Kate Jerkens (43:39)

It is. Yeah.

Jessie Ott (43:42)

with this unwarranted war and gas prices escalating, have customers in Malaysia that want to buy our scotch and our single malts in Switzerland. because of the skyrocketing escalation of shipping, it's put everything at a standstill. It's really frustrating. it's, yeah, OK, I don't affect the US markets as much.

Caitlyn LuBell (43:58)

next.

Kate Jerkens (44:05)

Yeah.

Jessie Ott (44:11)

It's a large impact around the world.

Kate Jerkens (44:12)

There's trickle down like it's yeah.

Caitlyn LuBell (44:13)

Yes.

I recently spoke with a Canadian distributor and he said that...

Jessie Ott (44:18)

Ready, and.

Caitlyn LuBell (44:21)

They were down purchasing 72 % of US wine and spirits. And the only area that's still purchasing right now that has product on the shelf is Alberta, which is like the smallest territory. like you just said, Kate, that has huge trickle down. mean, whether it's, you know, that's just US products of Canada and vice versa, but even overseas there, there's always gonna like, we're gonna feel it. We're gonna feel the trickle down.

for sure.

Business Of Drinks (44:52)

Yeah, I was just talking to the people from Bodega Garzon and they're in Uruguay, a wine producer in Uruguay. they, you know, it's like, it's interesting to see that there's opportunities growing in some places and shrinking in others. So for example, now that no American wine or, you know, a lot of other categories can't get into Canada or most parts, except for Alberta, then,

Kate Jerkens (45:08)

Yeah.

Business Of Drinks (45:18)

essentially like their wine shipments up to Canada have pretty much gone to zero, but Bodega Garzón, that was an opportunity for them. And their exports into Canada grew by almost 200 % year over year because people are looking for high quality Alberino and reds and sparkling. And so that was an opportunity for them.

Jessie Ott (45:36)

Right.

Business Of Drinks (45:42)

but previous to a couple months ago, their highest growth channel had been in Dubai. And then like now this war starts that dries up completely. So this geopolitical instability is causing yes opportunities in some places and just so many challenges in others. For the US, I will say thank God for Victor Schwartz.

of VOS selections who took the tariffs all the way to the Supreme Court and won. So, you know, the recent decision to refund or return some $160 billion in refunds across industries is underway. I have no doubt that it will be delayed for probably the foreseeable future.

Caitlyn LuBell (46:07)

Yeah.

Yeah.

Kate Jerkens (46:25)

Massive.

Caitlyn LuBell (46:27)

yeah.

Business Of Drinks (46:29)

But that we were able to get some traction there was at least heartening to understand that the tariffs were illegal and the Supreme Court has now agreed with that.

Caitlyn LuBell (46:42)

I really hope that they all get paid back and, know, selfishly, I'm like, hey, we struggled as well as a result of this. I can't, you know, I'm not getting a refund over here. I'm not getting anything back. But I really, really hope, especially for these small importers and distributors, I really hope that they do get paid.

Kate Jerkens (46:44)

Me too.

Caitlyn LuBell (47:00)

money back. But you know, I've also seen a lot of chatter online of like, great. Well, but that's not going to trickle down to the consumer. The consumer is not going to get their money back. Right. So it's, yeah, you know, somebody is always going to be upset about things, right. But I am, I am a great kudos to the fighting and pushing and like, I'm very happy to see that at least some companies will vote.

Kate Jerkens (47:01)

Agreed.

Jessie Ott (47:09)

No.

Kate Jerkens (47:15)

Yeah.

Caitlyn LuBell (47:26)

get some refunds. Hopefully maybe if they have like a gas surcharge or delivery surcharge, maybe they'll pull that back as a result. Just to trickle to the consumer a little more to the retailer and restaurant. But, but huge. I mean, that was huge. Sometimes things are worth fighting for, right?

Kate Jerkens (47:33)

8.

Business Of Drinks (47:45)

Absolutely.

Jessie Ott (47:46)

That was a big one.

Kate Jerkens (47:47)

Billions of dollars worth of fight. mean, that's huge. Huge.

Caitlyn LuBell (47:50)

Yeah.

Jessie Ott (47:51)

some data year to date and I was kind of surprised to be honest. I'll just quick show this slide I always like to share.

It shows you the sales by rank and then it shows you the percentage of distribution. So let me see if I can make this bigger.

Tito's. Yeah, so this is by brand and it's year to date only. So it's just from January on. They're up almost 2 % Tito's, which I was pretty surprised. Did they come out with an RTD or something? I don't know what's going on there.

Caitlyn LuBell (48:12)

Is this Brands?

Kate Jerkens (48:24)

That's wild.

No,

but like a slight difference in like who you're getting distributed by and maybe you showed up in a few extra accounts, you know?

Jessie Ott (48:36)

Yeah,

that's the other possibility, which what I'll do is I'll go back and look at see and see a year ago or whatever what this percentage was because that could be the difference.

Kate Jerkens (48:47)

Yeah, it'd be interesting

to see, because I was a pretty, I mean, just in California alone, that was a huge change, right, to go from RNDC seed to Reyes, and it'd be interesting to see.

Jessie Ott (48:53)

Yeah, huge.

Caitlyn LuBell (48:58)

Well, do you think maybe they just bought more product because they were having trouble moving stuff over, so they just bought some more and then that inflated the numbers a little bit?

Jessie Ott (48:58)

Yeah.

Yeah, I'm done.

Kate Jerkens (49:07)

Maybe.

But this is pulled through, is this through the register or depletions?

Jessie Ott (49:09)

this.

Caitlyn LuBell (49:11)

Is this depletions too or? Yeah.

Jessie Ott (49:12)

you

This is Nielsen, ⁓ Circana. Yeah. High Noon is flattened out. ⁓ We talked about that ⁓ in a previous podcast about how, you know, they have pretty good distribution. The only way that they're like in Crown Royal mode, they're going to have to come out with a new flavor, you know, and to keep the momentum going. And then look at Cutwater. It's still got a lot of room to grow.

Caitlyn LuBell (49:18)

So that's depletions.

Kate Jerkens (49:18)

So Neal said, wow, that's

a big deal.

Jessie Ott (49:43)

But then look at this. It's just sad. Private label, I don't know what that is. I'll have to dig into that. And then you've got Surfside here, you know, less than 60 % distribution. So they've got a lot of law.

Kate Jerkens (49:58)

But Surfside had so

much runway. I saw it in Pennsylvania in their liquor stores four years ago and it wasn't even in California yet. Now I'm starting to see it in California. I just feel like their runway is long.

Jessie Ott (50:13)

Yeah, absolutely. ⁓ not a lot of surprises, but at the same time, I'm happy to see Tito's kind of get back in, you know, not bleeding any longer. So we'll see how long that trend continues and keep an eye on this High Noon. We'll see what happens.

Business Of Drinks (50:33)

And

Kate Jerkens (50:33)

Yeah,

Business Of Drinks (50:34)

Tito's

Kate Jerkens (50:34)

that's interesting.

Business Of Drinks (50:34)

has just acquired Lalo Tequila. So they're probably in growth mode at this moment.

Kate Jerkens (50:37)

Correct, yep.

Caitlyn LuBell (50:37)

⁓

Jessie Ott (50:39)

Yeah.

Kate Jerkens (50:40)

I think that was the smartest, that's like to me like the smartest grouping of two brands together. So smart.

Business Of Drinks (50:45)

Yeah, I agree. I

Caitlyn LuBell (50:45)

What?

Business Of Drinks (50:46)

think it was very smart. Very smart.

Caitlyn LuBell (50:47)

Also, talked

to a lot of people that are kind of building out portfolios lately, and they understand now that if I have one scrappy skew going to a distributor compared to I'm bringing something to the table that's a well-rounded portfolio, it gives me a little more leverage and power with the distributor and a little more attention. So a lot of people are building out little portfolios with multiple skews.

group called Tag and they work with brands. help invest in brands and help brands financially but then also they help them with a sales piece and they're putting them together portfolios because they're like strength in numbers right and so they're getting more attention so I think yeah I mean Tito's is Tito's right but Lalo I think was perfect.

Kate Jerkens (51:32)

Absolutely.

Caitlyn LuBell (51:40)

match for that just to make them that much stronger right in the top one of the top categories i don't know what the top category is today i think it changes every day right

Jessie Ott (51:51)

Well, awesome. there anything that we feel like we missed out to talk about? think the only thing that stands out to me is THC. I don't know if you guys saw, but I did a live podcast and I had on a brand owner, an advocate, a actual industrial hemp grower who did do CBD and an investor in the industry. And I learned so much from that podcast. ⁓ Just

Caitlyn LuBell (52:16)

Yeah, I jumped on that.

Thank you. That was good.

Jessie Ott (52:19)

about the hemp

industry, just the industrial impacts that are unable to do because of our stupid laws. And the fact that hemp could be paper instead of eliminating trees. It can make fabrics. It's stronger than concrete. ⁓ And with this bill that got flown under the radar,

Kate Jerkens (52:35)

Interesting.

Caitlyn LuBell (52:36)

close.

Yep.

Jessie Ott (52:45)

And the fact that it could be outlawed. This billion-dollar industry that just has grown so fast could be turned off by November.

Kate Jerkens (52:55)

That's a travesty.

Caitlyn LuBell (52:56)

Listen, I talked to a lot of them at events and things like that. And I'm sure Erica, you probably talked to even more of them, but they, they agree. Most of them agree that they do need regulations and they, know, there was some apples that kind of, you know, I remember going around to an event, walking around the room and they were like, all I heard was loophole, loophole, loophole. And I remember leaving the event going like, this is going to explode. And what do you

Jessie Ott (52:57)

End.

100%.

Caitlyn LuBell (53:26)

no, six months later, was like all of a sudden it exploded. you I think they all agree and they're very comfortable that regulations need to be imposed. You know, I think a lot of us are hoping that they align with the wine and spirits regulations, because that would just make everything easier. Maybe all this distributor consolidation will help that because maybe the southern's of the world and the Reyes of the world will push and say, hey, let's just align regulations with wine and

It's easier for us, right? Yeah.

Jessie Ott (53:57)

Yeah.

Business Of Drinks (53:58)

Yeah, well, that's that is happening. So ⁓

WSWA, the Wholesalers Association is very strongly in favor and lobbying for Hemp and THC to fall under their purview. I mean, it's literally billions of dollars of potential revenue for them annually. So there's every motivation to make this happen. And I think, you know, from the the THC

Kate Jerkens (54:15)

Yeah.

Jessie Ott (54:15)

Yes.

Caitlyn LuBell (54:16)

Sure.

Jessie Ott (54:17)

Yep.

Business Of Drinks (54:23)

brands that I talk with, there is a hope that by fall of this year, there will be some sort of extension put in place because to effectively put legislation like this through all of the wheels that it needs to get through takes like two years. You can't do it in a one year window.

Kate Jerkens (54:40)

Yeah.

Jessie Ott (54:41)

Right.

Business Of Drinks (54:42)

So there's a hope that there will be a stay on this or that there will be some sort of extension granted. But I think we will see, you know, the wholesalers already are very strongly in favor of this and are pushing for it. So I would find it very surprising that some of the most powerful lobbyists in the world would not be able to find a way to make something happen in this space that benefits the BevAlk industry.

Jessie Ott (55:08)

Yeah.

Kate Jerkens (55:09)

I agree. I would like to just say on one thing on regulation, something that I'm seeing out in the world right now is I think falling into that category and then having being able to categorize levels of THC and making them a little bit easier to understand. And also to flag ones that just don't feel safe. I'm sorry. I am seeing dangerous levels of THC out there. No one needs to take a 50 milligram or a hundred milligram shot of THC. It's so dangerous and like mind altering.

Caitlyn LuBell (55:27)

100 milligrams.

Jessie Ott (55:29)

It's crazy.

Caitlyn LuBell (55:31)

No.

Jessie Ott (55:32)

No.

Kate Jerkens (55:36)

So I actually think Falling in that category. There's some ways to clean that up because there are some dangerous dangerous stuff out there in my opinion you do that and then you have a drink because you don't understand like my gosh, just it's There needs to be something there has there's regulation has to be there somehow

Jessie Ott (55:44)

Yeah.

Caitlyn LuBell (55:48)

Yeah.

Jessie Ott (55:53)

There is some movement ⁓ on the state level where people are trying to say, okay, let's exclude beverages and if they're more than 10 milligrams, they don't need to be sold, in my opinion. mean, what do need more than 10 milligrams for? But that being said, they go through so much scrutiny as a beverage company, at least, know, Happy does with Pete Olander, his factory is out in California.

Caitlyn LuBell (55:54)

I agree.

Kate Jerkens (56:06)

I don't disagree.

Jessie Ott (56:19)

So he's like, we have three checkpoints that we have to go through before the beverages even are able to be sold. And so that is actually a really good point, like versus the gummies, which is the other whole impact of this industry that we shouldn't have to pay for because we're already set up on a ID system, right? Where the checkpoints, well, are you old enough to buy beer?

Kate Jerkens (56:27)

Interesting.

Great.

Jessie Ott (56:40)

well, you gotta be old enough to buy this. But the gummies, I think are kind of creating a lot of the disruption because there's not a lot of regulation on those. And if they're sold in convenience, it's not, they should be IDing them too. But I think, I don't know, Agegate, I think is what Gene calls it. So that is something that, if you can impact something at a state level.

Kate Jerkens (56:51)

Very is true.

Agreed.

Yeah.

Jessie Ott (57:06)

It'll be a lot faster to Erica's point than two years because they're not going to move on.

Caitlyn LuBell (57:11)

Yeah, I was gonna say why,

why does it take so long? Because you have to align all the states? Is that why? mean, like, red tape is such a waste of time.

Kate Jerkens (57:18)

stakeholders and yeah.

Business Of Drinks (57:19)

Yeah, and all of the stakeholders,

the legislators, you know, effectively have to individually be lobbied. ⁓

Caitlyn LuBell (57:28)

God, just get them in a room and be like, let's just make

a decision right now. Seriously, and just get it done.

Kate Jerkens (57:31)

That's why I don't understand. Like just someone book a ballroom. Let's go.

Reyes will bring them all the coke that they need. We'll just, figure it out.

Jessie Ott (57:39)

There you go.

I like and you it has been deregulated to a schedule three from a schedule one, which meet, which is a good thing. And that finally, that finally came out in the news. at least I didn't see it in the news before that I knew about it. but that is good, because we can, it'll allow more research to be done behind the benefits, especially with PTSD and our troops and, and the uses for it. so, you know,

Caitlyn LuBell (57:47)

which is great.

Yeah.

Jessie Ott (58:04)

and not just troops, there's just general people. My mother-in-law used a patch for five years and she said she went from a 10 and paying to a six or to a five. And so there's a lot of information out there, people just, you know, and then the safety, the regulation of the monies and all that, that just banks, this is ridiculous. Like I have, we have a pot company that we represent and

Kate Jerkens (58:14)

That's incredible.

Jessie Ott (58:30)

Bob went to the Bank of America or something and they're like, oh, you have pot on here. You can't open a bank. And we're like, what? Okay, we'll take it off. And they're like, no. You know, I mean, it's just this crazy.

Caitlyn LuBell (58:41)

Yeah.

Kate Jerkens (58:45)

What are they supposed to do with their money? Just keep it in bags under their beds? I don't understand.

Jessie Ott (58:48)

Yeah, I guess.

But that's a safety issue for thousands of business owners out there that it needs to be fixed.

Kate Jerkens (58:50)

That's crazy.

Yeah.

Caitlyn LuBell (58:55)

Meanwhile, no disrespect

to our industry, but people don't die from cannabis. mean, so where people die from a lot of other things, right? And so it's ridiculous that the banks won't play with them. I mean, this is not something that's like, you know.

Kate Jerkens (59:07)

Yeah.

It's very true. Yeah.

Caitlyn LuBell (59:14)

illegal substance that's killing people. don't know. I that in my opinion, it just it doesn't make sense. I think they're over regulating it like relax. It also has medicinal purposes. So

Kate Jerkens (59:23)

Agreed.

Jessie Ott (59:25)

Yeah.

Mm-hmm.

So, you know, that's something that is certainly, you know, if that goes through and all of a sudden all these beverages aren't available anymore, you know, what are they gonna drink? It's gonna be a whole shift in the industry.

Kate Jerkens (59:29)

Great.

Yeah. Yeah.

Caitlyn LuBell (59:43)

I they'll figure it out. mean, one of the other things that they do realize is that depletions, like when you have 1.5 milligrams, people are going to drink two or three of them. So, you know, if the brand pays attention to that, the 10, 20, 50, 100 milligrams, nobody, you're not going to get depletions on that. You're going to get one and done or like you said, a shot, you know, and that's it. Whereas like 1.5 is that they

Jessie Ott (59:44)

I think I'm free. I think one thing. Thank you.

Kate Jerkens (1:00:06)

Yeah.

Caitlyn LuBell (1:00:13)

have in Colorado, like, I think, you know, that is a little low, but at least people are going to order 1234 of them.

Jessie Ott (1:00:17)

and thank

you

Kate Jerkens (1:00:22)

It makes it sessionable.

That's that word, right? You could have more than one, yeah. And be in control much more. Yeah.

Jessie Ott (1:00:25)

Yep.

Caitlyn LuBell (1:00:26)

Yeah.

Yeah.

Jessie Ott (1:00:32)

Alright, well ladies, anything we didn't talk about that you want to mention, can introduce you to my store back here if you like.

Caitlyn LuBell (1:00:33)

Watch watching closely.

Kate Jerkens (1:00:35)

It'll be interesting.

So many bottles!

Caitlyn LuBell (1:00:45)

It makes me thirsty.

Jessie Ott (1:00:46)

Yeah,

we have these shelves up for those that are that are listening. I have shelves up in my in my office now and it's full of bottles that we had at the show. Plus some people that I've had on the podcast and whatnot. ⁓ Yeah, so.

Kate Jerkens (1:00:54)

You look good.

Caitlyn LuBell (1:00:59)

Yeah, it looks great.

Kate Jerkens (1:01:00)

Yeah. I've got a little

retail store going behind me too. They're just a lower.

Jessie Ott (1:01:05)

I

can kinda see them. The tops of the bottles anyway.

Kate Jerkens (1:01:08)

I don't know. can't

unblur this. I have no idea what's going on. So one day I'll get that right.

Caitlyn LuBell (1:01:11)

Hahaha

Jessie Ott (1:01:13)

no problem. All right, well, ladies, this has been fun. ⁓ I'm really glad we were able to get together.

Kate Jerkens (1:01:18)

Absolutely.

Jessie Ott (1:01:20)

are you guys up for doing it again?

Kate Jerkens (1:01:22)

Yeah, absolutely.

Caitlyn LuBell (1:01:22)

yeah, definitely.

I love to do these.

Jessie Ott (1:01:24)

Okay.

Alrighty.

Caitlyn LuBell (1:01:25)

I

Jessie Ott (1:01:26)

say goodbye and I'll stop recording. Bye.

Caitlyn LuBell (1:01:27)

Okay. Bye. Thanks, guys.

Kate Jerkens (1:01:27)

All right, bye you guys. Good to see your faces. Thank you.

Business Of Drinks (1:01:28)

Okay, bye.