Brewbound Live Winter 2020: Orchestra Insider Interview: Why Best-Run Breweries Integrate Everything

Brad Wendecker [00:10] All right, well, welcome everybody. Thank you for joining this Brewbound Live session. I'm really, really excited to be here with you today. My name is Brad Wendecker. I'm the founder of Orchestra Software, and we're going to be talking to you a little bit today about what's going on in the industry and in particular what we've seen, our customers, how they've adapted to it and what we've seen from a technology perspective over the course of the Last 9 months during COVID and we've got a really exciting Q&A session after this uh with two great guests that are going to help us round out really what's going on out there in the market. So really excited to chat with you today. Uh, we're just going to go through this for about 15 or 20 minutes to lay the foundation. We really want the focus of this session to be about, uh, to hear from Phil and Matt about what's really going on. So we're going to just jump in here and talk a little bit about who we are at Orchestra. I want to give you a foundation of what we do and where our, where our customers, where their perspective is really coming from and where we play in the industry. What we deliver to the market is what we call a single source of the truth. So we are helping beverage manufacturers, primarily breweries and distilleries, but also our customers are making seltzer and kombucha and cider and non-alcoholic beverages now, and we're delivering them a full suite of software that they. to run their business. So everything from the core accounting function through purchasing inventory, manufacturing the products, managing some aspects of quality control, the entire sales flow, and then the reporting on top of it, whether that be financial, regulatory TTV like reporting, and so on. And really the problem that we are helping our customers solve is they have many different systems before they move to something like orchestrated, and so they've got spreadsheets and they've got usually something like QuickBooks or a basic accounting system and putting all those things together is a key part of taking the next step in your business. And really what our customers, what we, what we hear them say is, I need to get a single source of the truth. I'm really looking to understand what's going on in my business, and we talk about the first step of that is put a system in place that can help you do it. And we deliver a solution that's based on industry best practices. We've got about 30-400 customers. Uh, every time we learn something from a customer, we build it back into the product so the reporting continues to evolve, the workflows continue to evolve. And we really have this focus around digitizing the industry. And so we spent about the last 10 years helping breweries and distilleries and other beverage manufacturers run their business and ultimately helping them make the best business decision. That's really where we started. Over the course of 2020, we've continued to evolve our our business and take the next step on our vision. And so you probably might have heard the news last month. We merged with a company called Encompass Technologies. And so one of our guests here today is also on that side. And so Encompass, just like orchestra, we are the system of record for the manufacturing side of the industry, the first tier, and Encompass is the system of record for beverage distributors. And so when we look at digitizing the industry over the last 10 years, we've really done that in the core aspects of what it takes to run a brewery or a distillery or a ciderry. And when we look at the next 10 years, it's really about bringing the entire industry together and digitizing the workflow, digitizing the data that everybody needs to run their business, and we, we see that doing that by merging with Encompass, bringing our two systems together. And bringing that data together in one is a big part of what we're going to go do. And so what I want to talk to you as that lays the foundation of who we are and where we're going in this next step, gives us our focus for today in today's conversation. We're going to focus on a couple of key things. First, what's the state of technology and what's happening out there in the industry? What's really going on that's driving, driving businesses to look at things in new ways? Or in many cases, it's not anything new, it's just more important now, now that things have, then we'll take a look at what are, what are the best run businesses doing? What's, what's going on out there in the market that is actually delivering returns on the investment or the effort it takes to make that change. I think many of us have heard of challenges in the market. There's, there's no shortage of articles telling you how challenging things can be, how bad things are, things that are happening to other businesses. But there's also a lot of stories of what people are doing, that's how they're adapting to it, and it's actually delivering positive returns and impacts to the business. And so we'll talk a little bit about some of those things today and start a conversation. And ultimately, we would like the audience to be able to come away with some idea of what can I do, you know, where can I start? How can I start thinking about this. Come away with some ideas as we, you know, we're, we're now 9 months into the challenges that started earlier this year, and I think a lot of people we're not out of it yet, but they're starting to ask what comes next? What should I be doing right now at this point and where do we go from here? So I want to start with how do we see the industry. Let's lay a little bit of a foundation here so that we've got a background of really what's, what's going on. And I think there's, there's again no shortage of articles and conversations about, you know, how challenging things can be. What I really want to focus on is much of what we're talking about today is not new. We've been, I know I've been talking about it for nearly 10 years as the beer industry has evolved over time. What's different is now the rate of change. So when I look at 2020, industry disruption, I've been talking about disruption in the industry for a long time. We are in an industry that evolves and grows and changes. It's cyclical throughout the year and it's, it's, it's highly complex because it's regulated, so the aspects of industry disruption and complexity are not new. The need to manage your costs and your cash is not new, and the decisions about that you need to make in a business strategically. These are all things that have been around for a long time. They've been in our industry the entire time of its evolution, but 2020 really accelerated the rate of change in these areas. And so when we look at what does it take to be successful in a business, you've always had to deal with disruption and complexity and strategy decisions. Certainly managing your cost in cash has always been important. But when you look at the, the state of things today, the unknowns in the future. Um, what it really is leading to is a lot of impact to the demand and the supply chain. And so we can talk about the challenges, all, you know, for endlessly, especially today. At Orchestra, what we've really focused on is how do those translate into real problems in the business that we can leverage technology to solve. And so really what, when you look at the challenges in the marketplace and, and businesses being shut down, one of the things that truly shows up in a business is. The impacts to the demand chain and the supply chain. And so one of the things that, that has certainly shown up over the course of the last year is the need to integrate and better understand your demand and supply chain to have better visibility into the future. It's the, the number of unknowns has grown for people. And so the benefit of getting more visibility into what is going to happen in the future through forecasting, anticipating what's going on, having a better connection to your business partners, those are the things that have become more important and delivered a lot of return for businesses during this time period. And so what's, what are some of the things that are that it's actually impacting? What is, what are the benefits and people are looking for when they're trying to solve and address those problems? First and foremost, this is a time where decisions are more important than ever before. So empowering decision making is really It's, it's what our customers come to us and talk about. I have different systems. I depend on both of them. The data in each of them is critical for us to plan our supply chain, plan our plan our sales process, plan the sales flow, uh, anticipate what products we need to package, and so on. And so having being able to make a good decision across a landscape of complexity, I need to make good decisions, and removing the barriers to do so is a big part of why we talk about connecting systems together and it's one of the reasons why we see one of the biggest values that we think we can deliver to the market is to start to bring suppliers, distributors, retailers, and ultimately the consumer data, bringing all that together to empower decision making. And so we look at integrating critical systems, critical business partners, getting data into people's hands when they need it. And one of the impacts that has drive efficiency again. Costs are more important than ever. Managing cash is more important than ever. So get the barriers out of the way for people to be able to do their business or work, for the work to process through the business. So that's getting your simple systems connected, automating standard tasks, things like that. You know, and lastly, as we go in, whatever it looks like to come out of this period of challenge and, and things that haven't happened before, what it looks like to come out of that as, as we do that, doing it in a way that reduces the risk of things like this happening in the future and putting your business at a disadvantaged position. And so now that you've gone through the period and you've adapted to it, how do we remove the weak points in the business that as disruptions continue to happen, we know that we're not going to come out of this period overnight on January 1st. It's not just all going to be OK, it's going to take some time and so, and it might take an extended period of time. What can you do to even prepare the business for this next period, whatever it might look like? And that's starting to get your data in place again automating processes helps do that, and so on. And so when we look at across customers big and small, uh, different business models, whether they're very retail focused and they've had to adapt to that with COVID or they were a larger customer and very heavy into the distribution side and managing the relationships with their wholesaler partners, um, these things are, are the universal drivers of how people are thinking about adapting to challenges in the marketplace. And so when we, when we look at where should we devote our energy, how should we think about things, uh, it's really about what can we go do. So how do we help businesses do that and what are our customers doing that's actually leading to results. And so let's talk about some examples. People are integrating uh just basic workflow. So whether that's the sales flow from the initial order all the way through through the invoicing process and how you how you communicate with your wholesaler partners, uh, automating that workflow. Connecting to key supply chain partners is really a big driver now that we've seen major disruptions to the raw materials supply chain in the industry. And so under being able to communicate your forecast and integrate more in a two-way relationship with key partners that you depend on from a raw materials standpoint and starting to do that more digitally that streamlines that process and. Doesn't mean a whole lot more phone calls and more cost and labor in the business, but means better data flow and understanding of what's going on. Then as you kind of work your way around around the wheel, you get to more complex and larger projects, but that deliver potentially a lot more efficiency gains and so on like your major systems that are in your business, start to connect those so the data flows between those systems and ultimately the entire value chain because what we're all, what we're all trying to get to is The barriers and the gates built into the business process, what it takes to sell something, what it takes to purchase raw materials, manufacture it or distribute it into the retail chain, get it in the hands of the consumer to streamline that process means that the ultimate goal that everybody has happens faster and easier, which is there's a product that's been produced. We need a consumer to buy it, enjoy it, and want to share that experience and, and buy it again. And so the, the more that we streamline the business process and all of the work that it takes to accomplish that, uh, the, the more mature the industry gets, and I think the better off everybody is. So we, we see a wide range of things that are happening out there in the market, uh, different strategies, different approaches, leading to different, different focus areas here of how to get through this period and get to the next step. But what we definitely see is that the companies that are not just getting through this period, but actually putting themselves in a position to do well as things evolve to get through it. Uh, and maybe even thrive on the other side of the period of the challenges. Those are the companies that are finding the things that they can invest in today during the challenges and really set you up for success as those challenges start to dissipate and evolve into, uh, call it more of a stabilized period that I hope we go into over the course of the next year. So a couple of key takeaways. First and foremost, the, the accelerating change in the marketplace, it really demands businesses be agile. So your ability to adapt to what's going on, your ability to take change, understand what's going on by being able to make good decisions, and then having a platform and business partners that can help you adapt your business as things change that, that impact your goals and, and, and your performance. I think the second thing is the best companies are the ones that are relentlessly pursuing getting the burden out of their business that it takes to accomplish the ultimate goal of getting that product into the hands of the consumer. At each stage of the value chain, there's, there's barriers to do that. The companies that are removing those barriers by integrating those aspects of their business, those are the businesses that are succeeding through a challenging period and setting themselves up for the future. And the way that companies are doing that is by leveraging their technology platform. So thinking of technology as a lever that you can pull to be able to adapt your business to things and working with key partners that understand what's happening in your business and understand the technology and its role to play in what you do, that's really what we see as the differentiators that are out there in the marketplace. So I hope that everybody found a little bit of insight in terms of what's going on in the marketplace and what we're seeing out there in terms of what customers are doing and what's working for people and what's driving value. And as we go into our Q&A session, I think we'll have a good conversation here about what's actually happening out there in the market, you know, from the real folks that are out there on the floor, out there on the ground. Um, and then we can really start to, to get into some answers, and so on. So I hope you guys enjoyed it and we'll jump into the next session. All right, well, uh, welcome everybody to the Q&A session. Really excited for this part. Uh, you know, I, I enjoy talking about what's going on in the industry, but the thing that I enjoy the most is getting to talk, getting to talk to the people in the industry and really what's going on. So I've got two guests here with me today, uh, Phil and Matt. I'm gonna have you guys introduce each other. Uh, Matt, let's go first. Go ahead and introduce yourself.

Speaker 2 [16:18] Sure. Hey, Brad, uh, yeah, my name is Matt um Shulman. I'm uh one of the co-founders of Serene Craft Beer Distributors. Uh, we're a multi-state, uh, wholesaler, um, and, uh, you know, Brad, a lot of stuff you're talking about, we can certainly, uh, uh, contribute to being we're an encompassed customer and we definitely, uh, so, so, you know, in understanding what you're talking about and, and with integration, that's been one of the key pieces of software that we've used to, to, thankfully, we were set up with ahead of time. Uh, turns out it helped us navigate this thing pretty well, so. Awesome.

Brad Wendecker [16:48] Phil,

Speaker 3 [16:49] Hey, Brad, uh, good to see you. I'm Phil Bates. I work for Night Shift Brewing based out of Everett, Massachusetts. Uh, we are also, uh, customers of Orchestrated, uh, and we use Encompass on our distribution side, so, uh double dip in there. Uh, we use Orchestrated for about the last 5 years or so. I, I use it pretty regularly and, um, as Matt said, it is a piece of software that we've used to help us navigate through the last 9 months or so, um, to give us some good insights into our business as well as make good decisions for going forward.

Brad Wendecker [17:20] Cool. Uh, well, first question for you, Matt. Uh, you know, I, I talk a lot about what's going on in the industry, and I just love to hear it from your perspective where you sit. What's the last 9 months been like? What sticks out for you? You know, what's, how do you describe that to somebody outside the industry, you know, and then both inside the industry?

Speaker 2 [17:39] Uh, I mean, I think a lot of it's probably relatable to, to a lot of people. I mean, certainly a lot of changes. I mean, for me, most notably, it's just the, the everyday routine changes, it still sticks out to me. I mean, you used to just, you do, you do your morning ritual, you get in the shower, you get your coffee, you hit the road, and wherever you're going to an office or a sales call or whatever it is, and That's gone, you know, I head upstairs to my, my, uh, my home office, um, you know, and, and, and working around distractions around the house and with family and giving a whole shift of, you know, my time and energy and working a lot at nights to, you know, uh, to work around some of that. And so, that's been a big impact. And obviously, just, I mean, how remote everything is, is just, uh, you know, we're, we're, this is such a, in general, from my experience in business, it's very people-oriented and, and, you know, now we're doing things like We would never ever have considered before. I mean, we're hiring people who we've never met or shook their hands, you know, other than a, you know, half an hour phone call and it, you know, so that stuff is, it still stands out to me every day when it still hasn't, some of this is normalized, some of it still hasn't, so, um, yeah, this has been some of the biggest standouts.

Brad Wendecker [18:44] All right, Phil, same question to you. I think everybody. It's always good to know what's, what's happening and how has this been impactful to, you know, different people, different situations and points of view. Same question, last 9 months.

Speaker 3 [18:58] Yeah, it's It has not been without its challenges, to put it lightly, um, you know, there's the personal shift, uh, and, you know, I was working from home for the 1st 10 weeks and thankfully I was fortunate enough to come back when some of the quarantine restrictions lifted, so I'm back here at the brewery with, uh, my co-workers, um, and that's, that's been a great, um, morale boost here, uh, for everybody to be back, not just because I'm back. Uh, but you know, from a business standpoint, it's also been, uh, pretty challenging to, uh, pivot and adapt on the regular to the, the different quarantine phases and the different, uh, health and safety protocols, which, you know, I'm sure we'll touch on in a few minutes here. Uh, but even looking at how the industry has changed in terms of what consumers are demanding, uh, and even what the market can bear. So, um, it's, it's been an interesting 9 months. Um, thankfully, uh, we're still here and we're still driving forward. Yeah.

Brad Wendecker [19:51] Uh, you know, Matt. Does anything stand out in terms of things you've had to do that you didn't expect to do this year? You know, how, you know, how you've had to adapt to it, you know, what, what's changed or what have you had to do to deal with what's going on?

Speaker 2 [20:07] Yeah, I mean, uh, Brad, we made a, we've made a number of changes throughout the company to, to adapt to what's going on. Um, like, you know, 1st, 1st and foremost was just safety-wise, um, you know, doing everything as remote as possible, keeping contact to a minimum. We instituted contactless delivery, um, you know, all our meetings are remote, you know, we're trying to keep everyone as engaged as possible, doing happy hours with our suppliers to try to stay connected where we couldn't, you know, have them at a meeting in, in, you know, in the office or anything like that. Um. We did some additional things. We took on some additional geographic footprint. We started sending trucks out to Western Pennsylvania and Western New York where we hadn't previously. Um, we, we had to repurpose a number of our people, which was just not something we had ever done previously. We have, you know, New York City being the way it's been. Some of our on-premise reps who just don't have as much to do with, with obviously retail, uh, you know, on-premise retailers being really affected by this. Um, so, I mean, we've had some of them doing telesales and other markets that we represent. We've had one of them's been helping a ton in the accounting department, uh, uh, and, and doing data entry and really, uh, anything we can do to keep, keep people engaged and keep our people employed, uh, and make them feel valued, uh, you know, some of that stuff is, uh, was unthinkable before, but, um, you know.

Brad Wendecker [21:27] Yeah, that I, you know, again, that, that trend of being agile, not just in the business or in the market or in the products, but in how you support the team and your ability to move people around the organization and having, having a culture where, you know, that's OK and, you know, and, and can adapt to that, all those things, just that, that ability to be agile, uh, just keeps coming up for me. How about you, Phil? Uh, as you guys, you know, as you've gone through this period and figured things out, anything stand out for you of, hey, when we did that, you know, it helped, it, it helped us get through this.

Speaker 3 [22:02] Certainly, so, um, of course, you know, when the situation started back in March, all the restaurants and bars essentially closed down, which meant Our draft business dried up with that as well. Um, and so that posed a unique challenge in that at least on the production side, you know, profit margins are generally better for draft beer. And so, um, that was something that we had to figure out financially what happens when a large Portion of your profit disappears immediately and how do we continue operating in a, in a fiscally solvent way, um, you know, like, like other breweries, you know, we pivoted to packaging cases and lots, lots and lots of cases. Um, there is a big change in our rhythm, you know, increased packaging was impacts on our supply chain and its reliability um. Physical warehousing space, wear and tear on equipment and even staff because that's pretty physically rigorous, uh, task to undertake, um. You know, but for us, things that, that changed, um. Mass Brewers Guild is an organization here in Massachusetts that lobbies for, um, you know, craft, craft breweries, and larger brewers as well. Um, and so for us it was interesting that legislators, um, were able to listen to our concerns and our needs and they loosened some of the restrictions, uh, and that allowed us to pivot, so we were able to um engage direct to the consumer and in different ways we hadn't before. So, um, one of the things we did was we launched home. Delivery program, um, for our customers, um, that was very popular, um, you know, like Matt said, um, touchless pickup, touchless drop off, so, um, consumers could come to our tap room and grab stuff but still be safe and we can maintain, um, health and safety protocols. Um, and then, you know, finally. Uh, we're fortunate enough that we own our own distribution company. Uh, so we were able to work very closely with our sales team, uh, who have pretty good pulse on consumer sentiment out in the field, uh, as well as our marketing team. Uh, and so the result of that was we use that data to push the release of a variety of new products. So, you know, we packaged our flagship IPA in 12 ounce cans and 12 packs. We launched a hard seltzer brand called Hoot. So I play the owl there. Um, we launched our own hard cider brand, uh, and most recently and very exciting for my wife, uh, we launched our first, uh, bottled wine, which is, which is pretty cool. So, um, all this was an effort to, to keep our exciting, our offerings exciting rather, and fresh.

Brad Wendecker [24:41] Yeah, yeah, the diversifier double down, again, seeing that across the board and certainly diversify is definitely a very common approach right now as consumer tastes continue to evolve and, uh, you know, things, things change. Hey, Matt, a question for you around, you know, metrics. When, you know, pre-COVID, when you think about what was important to you from a numbers perspective, how you measured the business, you know, it's, it's performance and so on, has any of that changed? Is it, is anything, is anything truly different in the business now or have things just got more important? How do you think about numbers now as, you know, going through this, this time period?

Speaker 2 [25:21] Yeah, I mean, you know, I think overall the same numbers are important, but how we've sort of I guess use that, those numbers to to run our organizations, I think changed a lot. I think this year we've we've probably de-emphasized a lot of metrics in terms of, of taking action to try to, we, we sometimes joke about, you know, coming from when I first started the industry being In sales and, and out on the road every day and now we're, you know, a lot of us are sitting at a computer looking at spreadsheets, trying to get a 0.5% improvement here, a percentage improvement there, and some of that just didn't, didn't feel as, as, you know, as important or we didn't feel the gravity of that this year and it was more about the health and safety of our people and realizing we're a family company made up of, of actual people and so we're trying to put them first. I mean, we had, uh, I mean, you know, some of the biggest metrics we always look at in a growing wholesaler. We're we're still new to the market and There are several markets, uh, as we continue to grow, being only 6 or 7 years old, so, you know, new account growth is, is a huge, I mean, it's one of our most important, if not our most important, uh, uh metric for sales, uh, for the sales side. We, you know, we, we just paid our guys out in full on all their bonuses this year because there was no way they were gonna hit it. It's just not, it's not fair to ask them to, to emphasize a figure like that during something like this. Um. You know, I, so I think ultimately, uh, it probably would, I don't know if we really looked at it like this, but um I think probably one of the metrics that stands out to me is that we've had the highest rate of employee retention retention this year and something like that, and especially in the time of crisis, some of us are working so remotely, we have guys that are out there killing it every day, you know, drivers and warehouse people that don't get to, you know, operate as contactless as, as we'd like, there's no way around physically moving some of this product and so. Um, you know, uh, keeping them, uh, happy and engaged and, um, and we're seeing the result and retention and it gives everyone else the ability to work remotely where possible to keep the environment as safe as, as safe as we can. So, um, you know, ultimately we're also hoping that some of our competitors who had to make different decisions or made different decisions, if, you know, we're, we're still intact after this whole thing, uh, with our sales team, hopefully we can hit the ground running, uh, pretty quick.

Brad Wendecker [27:27] So, yeah, that's great. Focus on the people during a challenging time period. Phil, I'm gonna, you know, flip that one back to you too. I think that's a good one. You're, you're in the numbers all day, you know, you're in the spreadsheets and running queries and all that stuff. Uh, same question, just looking at different things now or just looking at things differently?

Speaker 3 [27:51] Uh, in, in terms of metrics, yeah, definitely, uh. Keep a much closer eye on costs, you know, as I mentioned before, when, you know, profit margins change and shift, and it's important that we make sure that we change and shift with them. So, um, lots more cost-benefit analysis. So looking closer at item prices, um, and then, you know, even making the decision, do. I buy bulk, so over the long term, save more money, or am I buying smaller lots, but it's a shorter term decision and I think current cash flow less and so I found that from a purchasing side I'm working much closer with my finance team to make sure that You know, one, the cash flow is good, uh, but two, that we're not, we're not stepping on each other's toes cause I only have visibility into my purchasing side. I don't know about other decisions. So, um, much better communication and awareness of costs. Um, and then in terms of metrics, uh, that might not have been something that, uh, we've thought about as, as, as much in the same way, uh, that we are now is, is we're looking at employee and community health. Um, and I think Matt did a great job touching on this, looking at, you know, how can we go contactless and people work from home. Uh, you know, we've always had a pretty, pretty serious approach with employee health and welfare, you know, being a large. manufacturing facility with lots of machinery. Um, it's really important that, you know, people are properly trained on equipment and, you know, safe with chemicals and all that stuff. Um, but, you know, with, with the recent troubles, um, it's a, it's a whole different level for us to take into account. Um, and so I reflect on when our taproom closed up front, like other restaurants and bars did, um, rather than Just lay off our employees, uh, you know, the owners of the company decided that we were going to furlough, uh, uh, majority of our, our staff that worked in those establishments. Um, but part of that commitment to their health and their welfare was, uh, we maintain health benefits for all of them, uh, and we, we paid the full boat. So since they weren't working, they weren't paying their part of the premium, um, but the company stepped up and did that. And so I thought that was, um, pretty strong. Uh, and then in terms of community health, um, like, you know, I'm sure Matt, you saw this happen. You had restaurants and bars closed and they had uh kegs that got old and went a little bit long in age that weren't salable anymore. Um, so we collected a lot of those and we donated them to local distilleries who in turn agreed to distill that beer down into You know, higher octane alcohol from uh production hand sanitizer, um, most of which was donated to local community organizations and first responder groups, uh, and that was particularly, um, poignant early on in the situation when there was a big shortage of that, um, and we wanted to make sure that the most vulnerable people in our community, uh, were taken care of as best we could. Um, and then finally, um, things that we're looking at differently or a different way, um, is really data-driven decisions. So, you know, we've been around long enough that we have a couple of years of good data with our, uh, our distribution company as well as, um, you know, efficacy of introducing different products at different times of year and different brands at different times of the year, uh, and we're We're able to use that data to drive some decision making, one in part saying, OK, well, you know, we're packaging lots of cases right now. What, what do we think people will like? What have people liked in the past? What, what's going to work well, um, help people maybe forget some of their woes for a Friday night. Uh, and then also look ahead, uh, planning for, you know, so this is early 2020, we could look and, uh, say, OK, Q3, Q4, 2020, and then, you know, Q1, Q2, 2021. What does the data tell us, uh, is a, is a good data-driven decision to make to help support, um, you know, good business practices going out. So, uh, that was, that was a very impactful exercise for us to really transition to having some strong data-driven decision making. Yeah.

Brad Wendecker [31:48] Right. Uh, let's start to shift gears a little bit about where we go from here, uh, rather than look backwards. My question for you, Matt, you know, as you look to wrap up 2020 and then get into next year and, uh, what that looks like for you guys, how do you think about technology, you know, leveraging what you have today to operate differently or better as, as we quote unquote, potentially come out of things? How do you think about like that time period and what you do about it as a business leader?

Speaker 2 [32:20] Uh, yeah, it's, it's a really interesting question. I mean, um, you know, there's a number of different changes, short and long term, uh, and, you know, in, in any time horizon from this, and, and as you had said, both you and Phil touched on this in different ways, but talking about how, uh, this didn't necessarily change trends but more sped, sped up the rate of change. Um, and there's a number of impacts going on. And Phil, you touched on One of the, the big ones is, uh, you know, the trend of, of direct to consumer and, and what that looks like for our tier. Um, obviously, if, you know, if brewers are going direct to consumer, that, you know, that, that eliminates, uh, two parts of the, you know, of the chain there. And so how do we navigate that landscape and, and, and keep our, uh, um, you know, keep growing in our own way. Um. And, uh, you know, some of the other aspects of it. I mean, so I'll give you one example in terms of, you know, going forward, uh, in terms of watching costs and things like that. I know a number of, of wholesalers, ourselves included, are looking for ways to integrate technology on the sales side, for example, where, uh, trying to, whether it's getting pre-orders done through some sort of online system where it automatically, you know, connects to. Uh, to our customers when the product comes in and, and invoices it out on their next, on their next order to to help us to, to stay in front of those and give us better insight into, uh, what we should be ordering. And for us, it's sometimes we're, we're taking guesses as to what brand might take off. We, we deal with a lot of suppliers and they all have a lot of items that they brew throughout the year. And so, uh, things like that can help us eliminate risk on taking on too much inventory or keeping things too old or sta in the trade. Um, uh. In terms of operationally. Yeah, I think we've already adopted a number of things that will, that'll help us going forward, but um, Software like Encompass and tying together everything from, from routing to the invoicing to the, to the accounting side. uh uh we're looking to do more and more of that as we go forward.

Brad Wendecker [34:20] Great. So, how about you? You know, you, I know you've, you've been a heavy user of our system and you've talked about it and spoken at our conference. Um, when you think about our merger with Encompass and potentially bringing those things together and you already use both systems, does anything come to mind for you about things that you think we might be able to do in the future that would help you run your business, do the, do the role, do the job? What,

Speaker 3 [34:48] well, you know, in terms of, um, integrating Compass into orchestrated, one of the things that comes to mind is, you know, getting, getting immediate real-time feedback on sales so we can have live data, we put a product out on the market. How's it selling, you know, we don't have to wait till the next day, we don't have to wait till a week out to get reports pulled and see how things went. So, um, having, having instant access to metrics is nice, uh, and then also being able to use that information, uh, with our, uh, distributor partner. Partners to better plan out, you know, future releases or future demand, um, be certainly helpful. Uh, I will say one thing that we, we employed over this past 6 months, and you'll be pleased to know a lot of the trainings I attended were very helpful in the spread. Uh, we implemented our MRP, uh, system, uh, so our material requirements planning, and, and I bring this up because I want to touch on a point you made which is partnering up with outside vendors. Um, so once we got our MRP set up, we were able to utilize that to plan, you know, 48, 1216, however many weeks in the horizon, we had a production plan for. I could then punch that information in and I had uh demand requirements for my ramen. Materials. I brought that to my vendors and I said, hey, I want you to know over the next 4 months, I'm gonna need x amount of this. 1, can you provide that given that there's been supply chain disruptions and even something as simple as trucks weren't running for a little while, at least not like they used to be. Um, and then 2. I'm gonna be buying this much. I'm gonna commit to this. Let's talk about pricing. So from both ends of the spectrum in terms of um getting the product but also getting it at a, um, you know, a better price because on both ends they're getting the business and and I'm getting the discount. Um, that was really, really helpful for us. So definitely keeping that going forward. Yeah,

Brad Wendecker [36:37] I think, you know, there's, you both touched on, you know, I think a question about what you've done in metrics. You, you got right back to the people side, taking care of the people, empowering the team. Keeping them safe. A lot of times, all of the data and all that, it comes down to how does it empower the individuals or relationships. So, Phil, it's a, you've got insight into your MRP plan and demand on raw materials, but what it ultimately helps you do is have a good conversation with the vendor that you depend on for a raw material. And because you've got more data, more insight, you can have a better conversation. It's easier to negotiate, uh, and it's really just, it's all about, you know, the individuals, people, the, the players in the business, and Everything else is supporting all of that. So really cool that I think we came back to that a number of times. All right, guys. Well, I think, uh, final question here for each of you. Uh, we'll start with Phil. We'll finish up with Matt. Uh, what do you see for the next couple of months in terms of, are we, do you describe it as coming out of it? Do you, are you sit tight, not sure? You know, how do you think about the future in terms of your optimism or, or you know, pessimism about uh what things look like? You first though.

Speaker 3 [37:46] Well, yeah. Brad, if, if, if nothing else, I'm an optimist to a fault, um, and I've seen some pretty extraordinary people and pretty extraordinary stories come out the last 6 months, um, and with very exciting announcements of the vaccines coming out, um, even though we're starting to see a little bit more, uh, you have a caseload right now, uh, I'm hopeful that people will continue to be responsible and make the decisions, and I think that hopefully in the next few months we'll find ourselves coming out of the tail end and You know, in spring when it warms up, we'll all be sitting outside having beer together. That's what I'm looking for.

Brad Wendecker [38:20] All right, I like it.

Speaker 2 [38:22] Matt, how about you? Yeah, you know, I think we're internally we're thinking mostly along the along the same lines as Phil there, you know, I think this is going to be a long winter for a lot of people unfortunately, but coming into spring, news about vaccine coming out, coming into next summer possibly. We're hoping caseloads will be diminished below what they were this past year and obviously, especially in the Northeast. I know it's regional for a lot of people, but Uh, the winter is not easy up here being cooped up indoors or or trying to stay socially distance, so, um, uh, we'll take,

Brad Wendecker [38:53] we'll take the warm weather

Speaker 2 [38:54] when it comes back regardless, so.

Brad Wendecker [38:56] Yeah. And I said to somebody, I hope that old, you know, darkest before the dawn. We're gonna have a, you know, it's winter, it's cold, it's dark, you know, caseloads are up. Uh, but I, I just really hope that that's what that means. We start to come at it after that and it will take some time, right? We'll go through a transition period. But I really hope, you know, by the time we get to the middle of next year, uh, people are starting to enjoy life in ways that's been a little pushed down for a while, so. Uh, you guys really, really, really appreciate you joining me for this Q&A. Fantastic insights from you about what's going on for the last 9 months and how you think about the business, where you're gonna take it from here. Really appreciate your time. Uh, wish you all the best and happy holidays and happy New Year. If I don't get to see you and hopefully the next time we do this, you know, we're sitting together and then we clink our glasses together at this moment, you know, and take a drink on stage. That'll be, that'd be a lot of fun. Really, really appreciate it.

Speaker 2 [39:53] I'm looking forward to that for sure.

Brad Wendecker [39:54] All right, thanks guys. Take care. Thanks everybody for joining us, uh, for that Q&A. Uh, I would normally ask you to give us an applause for, uh, for Phil and Matt, uh, but, uh, we can't do that here. So just thanks so much for, for joining us. Um, it was really great to have both of the guys here and got a lot of good insight. I hope you did too. Thanks.