Brewbound 2022 Rising Stars Interview: Waterbird Spirits

Zoe Locata [00:06] Hi, I am Zoe Locata, reporter for Brewbound, and I am here with one of our rising stars here with Wilson Craig, the founder of Waterbird Spirits in Charlottesville, Virginia. Hi, Wilson.

Speaker 2 [00:18] Hey, Zoey, thank you so much for having us.

Zoe Locata [00:21] Yeah, thank you for joining me and congratulations on your Rising Star award. Really excited to chat with you and get to know a little bit more about waterbird spirits today. Um, I think the best place for us to start is kind of give us an insight into what your 2022 looked like for Waterbird. Yeah,

Speaker 2 [00:38] absolutely. So we're Waterbird Spirits started in 2019 in Charlottesville, Virginia. Uh, we've been growing, started in one county in Virginia. This year we're gonna be in over 45 states. So, uh, growing, uh, like crazy, uh, building out our team, bringing on Jim DiTulio, our VP of sales, bringing on Drew. Hennigan, our VP of national accounts and bringing a sales team and market, uh, really, really excited, launched one of the first spirits-based 24 ounce cans, uh, in resealable format. So we're, we're very, very excited for, uh, finishing out 2022 strong and then, uh, really kicking off 2023 with a bang.

Zoe Locata [01:15] That's awesome. So you guys make spirits-based, ready to drink canned cocktails. Um, what is it like being in that increasingly competitive and becoming more crowded space?

Speaker 2 [01:27] Well, it's awesome, you know, we, we love spirits-based RTDs. Uh, it's our sole focus. Uh, you know, some of our competitors do malt or sugar bases as well as spirits-based RTDs. We believe in quality products and, uh, we think that's a differentiator. You know, roughly, according to Nielsen, about 30% of the, of the, uh, ready to drink spirits, uh, based sales are off. Authentic brands, and so we think that's our sweet spot. We think that younger drinker really wants to identify with the brand, and that's exactly where we are. Uh, it's amazing, and, and to see more people get in the space is just, uh, a sign of unbelievable growth, you know, category up 72%, uh, through September. So, uh, we think that's a great sign, and, and we're looking forward to more continued growth.

Zoe Locata [02:10] So, as you mentioned, you guys have had, on your own, have had extreme growth over the past couple of years. It was 600% growth last year and aiming to do more than that this year. What do you credit with that such rapid growth?

Speaker 2 [02:25] Well, we really believe in making spirits-based RTDs and selling and merchandizing through the beer network. Uh, a lot of our competitors have gone through wine and beer wholesalers. We think that's a huge differentiator. But at the end of the day, it's, it's one thing and one thing only, which is the quality of our product. We think that's why we have organic repeat buys and, and And that's something we stand behind. So we're really, really proud of our product, but it's an, it's an incredibly, uh, exciting time, and we think if we want to continue to grow like we have, uh, you know, we're gonna have to continue to innovate. That's, uh, I think that's, you know, the standard nowadays with, as you said, more people getting in the category, so we're very excited.

Zoe Locata [03:02] Mhm. I wanna get into your guys' strategy with beer distributors in a second, um, but first, I wanna talk about since you brought up innovation. Um, you guys brought out this year a 24 ounce single serve can that has a resealable top. What was the motivation there? Why did you guys want to bring that to market?

Speaker 2 [03:22] Absolutely. So we think beer distributors are better in small format. We think not only do they understand it, but they visit small format more and see stores more. So we think that's a competitive advantage. In order to get into the single-serve business, we had to do a resealable top per TTB standards of fill uh rules and regulations. So 700 mL just so happens to be 24 ounces. Uh, and we started working in a company over in Germany called XO, uh, who has a resealable top. It's an amazing technology. Uh, we think it's really the future of beverage. And, and the only reason it hasn't been adopted in the US, uh, is because it hadn't had a use case. And so we think this is a perfect use case, not only for our spirits-based RTDs, but the resealable tops. You know, if you're going hiking or you're going to the beach, you don't have to drink everything at once. You can, uh, enjoy it throughout the day. It keeps that carbonation. So something we're really excited to continue to innovate with. We've got two more products. Coming out, uh, this spring and going into some massive chain retailers, uh, and then we also have some more innovations later this year, which, uh, we're really excited for.

Zoe Locata [04:26] You spoke with my colleague Justin Fonte earlier this year when these launched, and you described this as not a cliche innovation. This is actually like meeting a need. How would you describe like the landscape of innovation in beer and Beyond right now and how that word has kind of morphed?

Speaker 2 [04:44] Absolutely. And so, you know, one thing we get a lot is why resealable, and one thing we always like to stress is, you know, this isn't like, uh, you know, like a vortex top or, or something that, you know, in the past, people used to maybe sell, uh, a few extra cases. This is true innovation, uh, a totally new use case. So we think innovation's always, you know, used, but true innovation doesn't wait up. For anyone, uh, and that's something we believe in, and that's why we think we're in an amazing position with our beer wholesalers to capture not only the single serve business, but also, uh, you know, the keg business in a couple of years as well, once, once we get that law changed. So, innovation's always used, you hear it on virtually every earnings call, but true innovation doesn't hold up for anyone. And also, it's, it's not just exclusive to big suppliers, you know, uh, suppliers like ourselves can innovate and really, really grow like crazy, and so that's what we've been doing.

Zoe Locata [05:37] Mhm. So, like you mentioned, you guys use primarily beer wholesalers. It seems almost counterintuitive to some because RTDs are seen as almost like a threat to beer. Why is that something that's so important to you guys and why does it give that what you call the competitive advantage?

Speaker 2 [05:56] You know, what's awesome, Zoey, is, you know, I, I think, uh, a lot of people in the past thought spirits were a threat to beer, but look, our interests are perfectly aligned with beer wholesalers. Not only do we think beer wholesalers are better, but we think our product also gives them more profit, uh, than the average case of beer, and that's an amazing, amazing position to be in. So, uh, we think it's, it's not either or. Beer distributors are better, and they're turning every single day into beverage wholesalers, you know, like. Later this year and earlier next year, we're testing out our bottled spirits. We're actually distributing those through a lot of traditional beer wholesalers. So, we're very, very excited. Beer wholesalers are better, uh, and quite frankly, I don't think there's a supplier in the US whose interests are more perfectly aligned with the beer network than us at Waterbird, and, and we really, really value that. So we work with, uh, some of the biggest, uh, and best beer wholesalers across the US from Reyes to Colombia. We're, we're really, really excited.

Zoe Locata [06:51] So, something that you've talked about in the past is your excitement for future opportunities with pre-mixed draft cocktails, which kind of have some legal blockers right now. How do you envision that coming to fruition in the future?

Speaker 2 [07:04] We're really excited. And just like the single serve business, you know, uh, it actually originated in, in, uh, for the scotch whiskey made in Japan, who are producing a 700 mL bottle, and so the TTB adjusted the standards of fill to match. The Scotch whiskey, never, I don't think the TTD wanted to, or was thinking rather about getting into single-serve RTD cocktails. So innovation really, really allows us to get in and do a single-serve cocktail, uh, because we wanna drive the business for us and our wholesalers. So, I think the same thing about spirits-based RTDs being on, on tap. And one thing I really wanna emphasize is we're not looking to takeover bartenders. That's not what it's about. It's at those high volume. Volume bars and restaurants, uh, not only is it more consistent for the drinker, you know, a consistent floor where you don't know if there's gonna be 5% alcohol or 50% alcohol, depending on how much coffee the bartenders had. But if you're a bar owner, it's an amazing, amazing way to fix your cost. So, I think that's a really challenging thing. You know, you look at a state like Virginia, there's virtually no way for a bar owner to fix their cost with a bottle and a mixer, uh, and that's really challenging. As a business owner. So not only do we think it makes sense for the consumer, we also think it makes sense for, for the bar owner, uh, and it's a no-brainer. Obviously, our beer distributors are excellent at, uh, handling cooperage, uh, merchandizing and selling kegs as well. Uh, so we think that's a huge opportunity and, and add on the fact that, uh, this is where the drinker is going. Spirits are really, really exploding, uh, in growth, and, uh, we, we think it's a win-win for, for virtually everyone.

Zoe Locata [08:40] So, you mentioned at the top of this that, you know, you're dealing with a space that's not just spirits-based RTDs. You also are having those malt and sugar-based competitions out there. How do you navigate marketing to a consumer when you are having to deal with kind of these uh other forms of RTDs out there?

Speaker 2 [09:00] I think it's, I think that's an awesome question, Zoe, and I don't think it's ever been more blurry than now. You know, you, you've got a lot of, uh, producers out there that are trying to blur the lines, maybe between wine, malt, spirits, and, you know, RTD in unto itself, is kind of a term, uh, that a lot of people didn't even understand until 6 to 9 months ago, and me included, and I think there were a lot included in that term, so. Uh, really focusing on what RTD means, uh, I think is really, really important. But the consumer is the, is the number one most important person. Uh, right now, they're voting with their dollar, uh, overwhelmingly in spirits-based RTDs over malt in the, in the wine-based stuff. So, uh, we think that's really, really important, and it's, again, really important to educate the consumer, uh, not only that we're a higher quality product, really. Spirits, real juice, but also the difference between us and the wine, you know, and malt-based and sugar-based stuff. We think that's really, really critical. I think, you know, our price point too, uh, certainly, you know, us and the other spirits-based RTD competitors we have is higher. And I think, uh, also the consumers are starting to make that connection, you know, often, uh, price and quality are correlated, and they certainly are in our case.

Zoe Locata [10:13] The reason why we're having this conversation is because you guys are a rising star, so you've obviously been doing something right in the past couple of years. Is there a piece of advice that you could give to entrepreneurs who are entering this space? Something that you have learned over these past few years or anything that they really need to know before entering?

Speaker 2 [10:33] Of course, well, uh, uh, a little bit of like a personal reflection, you know, I was in Santa Monica at the Brewbound Live conference in, I think 2019, right before COVID hit, looking at the stage, being like, that's amazing, you know, looking at the rising stars, you know, three years ago, being like, that's so cool. I really, really wanna envision myself there and my company there. So, I think, you know, if you're an entrepreneur and you're going to these conferences and you're looking at all these brands, it's like you can do it. I mean, you know, I, I, I, I say that to everyone, it's like, uh, you know, it's a competitive industry, but it's competitive for a good reason. It's because the consumer, uh, loves this industry. It's an amazing industry with great people. The connections are unbelievable. You get to meet fantastic people. People. So I think if I had one piece of advice is envision yourself up there and uh keep rocking, you know, don't listen to anyone. Uh, really, really focus on what you're passionate about, and you're, you're gonna be there. So, uh, it's really cool to kind of look back and see us 2019, looking at the stage and then now being honored as a rising star, which is a huge honor.

Zoe Locata [11:36] That's so awesome to see it. It, I mean, obviously it works. You're here, so

Speaker 2 [11:40] that's great. It was, it, it's, it's, uh, it's really cool too, you know, we, we went 3 years ago and obviously right before COVID, a couple months before COVID, so to get to meet folks, uh, interact, uh, not just in, you know, your category, spirits-based RTDs. But maybe in for kombucha, uh, you know, non-au, you learn a ton, and I think each conversation is valuable, you know, I, I, I went into a lot of conversations not knowing and coming out with more information, which I think is critical.

Zoe Locata [12:06] I'll end this with just let us know. You've mentioned that a little bit, but what can we expect from Waterbird in 2023?

Speaker 2 [12:14] Yeah, you can expect um a lot of focus on uh 24 ounce. We think that's where, where the category is really going. We have an amazing group of retailers, big retailers, national retailers that have gotten behind Waterbird in our innovation. So you can expect more innovation in our single. Serve cans, which is absolutely awesome. But, uh, as well as we're coming out with 28 packs, which is unbelievable, and we've got a couple of, uh, exciting, exciting innovations up our sleeve as well. So it's gonna be an exciting year, uh, gonna be a very, very busy year, but 2023 is gonna be an amazing, amazing year.

Zoe Locata [12:48] Awesome. Well, thank you so much, Wilson, and congratulations on being a rising star.

Speaker 2 [12:53] Thank you so much, Zoe, and uh we look forward to seeing you all shortly for the awards.