Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Tim Stenebek on Bloomberg Radio.
Speaker 2: We're wandering. It's Friday. Can you tell it? It's five
Speaker 2: twenty three to gym?
Speaker 3: I need to drink.
Speaker 2: I need a drink. Well, speaking of that, I don't
Speaker 2: know if you saw this news earlier this week, did you, Tim?
Speaker 1: I did, Yeah, axios recording that Uber was shutting down Drizzly.
Speaker 1: You remember Drizzly. It's the alcohol delivery service it shelled
Speaker 1: out more than a billion dollars for back in twenty
Speaker 1: twenty one. You can still order alcohol using the Uber app,
Speaker 1: but Drizzly will stop taking orders in March.
Speaker 2: Ah done, that's it all right, Well, don despair. There
Speaker 2: are other ways to get alcohol deliveredy if you're over
Speaker 2: twenty one. Of course, one of those ways is using
Speaker 2: Reserve Bars Mini bar Delivery, which has been delivering booze
Speaker 2: for more than a decade.
Speaker 1: We've got Derek Correa on with us. He's CEO of
Speaker 1: Reserve Bar. It's an e commerce company specializing in rare
Speaker 1: and high end spirits and also, of course the company
Speaker 1: that runs Mini Bar Delivery. Derek joins us on Zoom
Speaker 1: from Bedford, New York. Derek, good to have you with
Speaker 1: us this afternoon. We made a joke earlier in the
Speaker 1: day about dry January giving up your phone for January,
Speaker 1: but of course, drive January is when people tend to
Speaker 1: give up booze. How is business? Do you notice a
Speaker 1: drop off when it comes to January as a result
Speaker 1: of dry January?
Speaker 3: Hi? Tim? Yeah, thanks for having me on. Yeah, definitely.
Speaker 3: In fact, starting about five or six years ago, it
Speaker 3: started to be a noticeable thing. And I would actually
Speaker 3: say that it seems that dry January is becoming more popular,
Speaker 3: which is a great thing. There's a lot more beverages
Speaker 3: available to satisfy, you know, a not drinking situation where
Speaker 3: you can still drink a quality non alcohol beer or
Speaker 3: a mocktail. So there's a lot better options in the
Speaker 3: market now.
Speaker 2: So how much of that you're Tim? You're into mocktails.
Speaker 1: Oh yeah, And I'm all about the acoholocolic beer, the mocktails.
Speaker 1: It's like, yeah, it's kind of funny. I mean I
Speaker 1: drink more of that than the actual real stuff.
Speaker 2: So Derek, you tell that as well, correct.
Speaker 3: Yeah, we do, and increasingly so. So we have those
Speaker 3: products on our platform as well, and in fact, you know,
Speaker 3: even on an everyday basis, if you're using our platform
Speaker 3: to provision because you're having a party or you're getting
Speaker 3: stuff for your own home, we always encourage people to
Speaker 3: buy non alcohol product as well. If you're a host,
Speaker 3: that's the way to be a good host is to
Speaker 3: serve a great variety of beer, wine, and spirits and cocktails,
Speaker 3: but also have non olk drinks available for your guests,
Speaker 3: many of them who don't drink even when it's not January.
Speaker 1: I see this at restaurants all over the city. Kill
Speaker 1: do you see this where you look at the wine
Speaker 1: list or you look at the beer list and it
Speaker 1: always includes in this in twenty twenty three, twenty twenty four,
Speaker 1: a list of mocktails or non alcoholic options.
Speaker 3: Totally see.
Speaker 1: It hasn't always been like.
Speaker 2: That, No, it hasn't. So this is where I want
Speaker 2: to go. Derek, you guys correct me if I'm wrong.
Speaker 2: I think you started back in twenty thirteen, Is that correct?
Speaker 3: Yeah? Pretty much right around the same time as Drizzly.
Speaker 2: All right, all right, so tell us about that. That's
Speaker 2: a good look at kind of this market. So a
Speaker 2: decade in how has the market changed and what are
Speaker 2: the trends that we were seeing today when it comes
Speaker 2: to ordering this way.
Speaker 3: Yeah, so the market grew pretty steadily and you know,
Speaker 3: relatively conservative, conservatively for a lot of that time. Then,
Speaker 3: of course, COVID came along and shut down bars and
Speaker 3: restaurants and to a certain extent even shut down retail
Speaker 3: because people weren't out, and that really accelerated the e
Speaker 3: commerce adoption rate. When you know, for the most part,
Speaker 3: it was the only way to get beveridge alcohol, So
Speaker 3: that accelerated all the businesses, including Reserve Bar and Drizzly
Speaker 3: and Mini Bar at the time was not owned by us,
Speaker 3: and we acquired Mini Bar Delivery during the midst of
Speaker 3: the pandemic. And since then, you know, now the restaurants
Speaker 3: and bars are open, there's been a little bit of
Speaker 3: a cooling off. People are going back out and enjoying
Speaker 3: restaurants and bars and their favorite contails and drinks out.
Speaker 3: But e commerce, in addition to the platforms, is happening
Speaker 3: in a lot of new ways. So when we saw
Speaker 3: that Uber acquired Drizzly, we fully expected them at some
Speaker 3: point to ingested into the Uber EAT's platform. That makes sense.
Speaker 3: But people are buying on platforms like Minibar Delivery, which
Speaker 3: can get you most products you could ever want in
Speaker 3: an hour. On Reserve Bar, where we offer a little
Speaker 3: bit more curated, higher end information rich experience. That's better
Speaker 3: for people who are enthusiasts and want to explore new
Speaker 3: bourbons and scotches and so forth. But increasingly people are buying,
Speaker 3: you know, they're not just shopping intentionally. That only happens
Speaker 3: about fifteen or twenty minutes a day. That's when you
Speaker 3: end up on a platform like reserve Bar and mini
Speaker 3: Bar Delivery. But when you're reading an article about great spirits,
Speaker 3: or you're out and you're watching a video and it
Speaker 3: includes a great cocktail. We're creating shoppable moments in all
Speaker 3: of those instances, because even though you weren't shopping, if
Speaker 3: you're exposed to the right product at the right moment
Speaker 3: and you can buy it right, then people are and
Speaker 3: that's really the future of e commerce.
Speaker 1: Hey, Derek, So I want to go back to this
Speaker 1: idea of what Carol was talking about in the trend
Speaker 1: of what you're just seeing on the platform. I was
Speaker 1: doing some research ahead of this, and it turns out
Speaker 1: that I'm not alone Carol when it comes to you know,
Speaker 1: not drinking alcohol anymore. So, Gallup says that younger adults
Speaker 1: these days, oh, I don't know if I'm considered younger
Speaker 1: adult anymore. Anyway, are less likely to drink than those
Speaker 1: of the same age two decades ago. So that's happening. However,
Speaker 1: older adults are drinking more. So is there this shift
Speaker 1: happening where young people aren't drinking as much and they're
Speaker 1: going to continue not drinking as much, or they're going
Speaker 1: to actually start to drink more as they get older.
Speaker 3: You know, that's a really interesting question. What we're seeing
Speaker 3: is people are drinking differently. I think the older people
Speaker 3: who have more disposable income are drinking better. And especially
Speaker 3: during the pandemic, we saw a lot of premiumization of
Speaker 3: you know, people weren't spending money at restaurants or bars,
Speaker 3: they were not going on vacation. They had more money,
Speaker 3: so they started to explore higher marks. If they liked scotch,
Speaker 3: they started drinking nicer scotches, drank gin, they drank nicer ones.
Speaker 3: The younger people, I think, when I say they're drinking differently,
Speaker 3: they're drinking more mindfully, They're thinking more about how and
Speaker 3: when they drink. They're more dialed into calories and wellness
Speaker 3: in general. They actually drink cocktails more frequently than younger
Speaker 3: people did, even as recently as four or five years ago,
Speaker 3: when young people mostly drank beer and wine. So the
Speaker 3: things are changing, and you know, the nice thing about
Speaker 3: our platforms is we have an immediate view, literally day
Speaker 3: by day, minute by minute, as to what the consumer
Speaker 3: is doing and can constantly adapt our product assortment and
Speaker 3: our tactics to those those changes.
Speaker 2: You know, we do a beach house typically we have
Speaker 2: with kind of our family and extended family, so it's
Speaker 2: you know, the kids have grown up. They're all teenagers
Speaker 2: or in their twenties and thirties, and it's just interesting.
Speaker 2: It's not beer. It's a lot of wine, but it's
Speaker 2: also a lot of cocktails that we increasingly are making
Speaker 2: and that's what they want to make as well. Having
Speaker 2: said that, is there a core consumer that is doing
Speaker 2: the most business on your platform?
Speaker 3: Derek? Yeah, So you know, we have different platforms and
Speaker 3: different people use them for different occasions and for different things. Right,
Speaker 3: Mini bar delivery is perfect for provisioning your everyday products.
Speaker 3: You have some friends coming over you realize you're out
Speaker 3: of beer or you need some vodka, you can get
Speaker 3: that brought to your house in an hour. Reserve Bar
Speaker 3: is more you know, you're maybe sort of just kind
Speaker 3: of flexing yourself into knowing about bourbon, and so you're
Speaker 3: coming because you can learn more about bourbon. You can
Speaker 3: you know, immerse yourself in deep information about distillation methods
Speaker 3: and ingredients, and that becomes, especially for the younger consumer,
Speaker 3: not only valuable on that path to purchase and that
Speaker 3: customer journey and providing that, but increasingly, you know, beverage
Speaker 3: alcoo is a very social thing and there's kind of
Speaker 3: social currency and knowing about knowing about bourbon and knowing
Speaker 3: how to make a great Manhattan or boulevardier. So younger
Speaker 3: people are often coming to our platform not just to buy,
Speaker 3: but also because it has the content they need to
Speaker 3: continue their journey of education and knowledge.
Speaker 1: Are you seeing more growth on Mini Bar Delivery or
Speaker 1: on Reserve Bar?
Speaker 3: You know, they both again because they serve as different customers,
Speaker 3: they grow differently at different times. Reserve Bar does a
Speaker 3: lot of gifting business and corporate gifting, so it has
Speaker 3: a tremendous you know, October November December. Mini Bar actually
Speaker 3: pops other times a lot of times for parties like
Speaker 3: Halloween for instance. Is not a big deal for Reserve Bar,
Speaker 3: but it is a big deal for Mini Bar. So
Speaker 3: they both grow, and they grow in different ways at
Speaker 3: different times for different occasions.
Speaker 2: And needs time to pop the cork, which I just did.
Speaker 2: And continue with Derek Correa. He is the CEO of
Speaker 2: Reserve Bar, at e commerce company specializing in rare and
Speaker 2: high spirits. As you know, we've just been talking with him.
Speaker 2: He's also the company and it is the company that
Speaker 2: runs minibar delivery. Derek continues with us on Zoom from Bedford,
Speaker 2: New York. I do have a terrible record, Derek, of
Speaker 2: breaking quirks here at home.
Speaker 1: It's just I gotta as long as you're good at
Speaker 1: drinking the wine that.
Speaker 2: It's okay drinking. Yeah, we're going to pour some wine
Speaker 2: that you have been kind enough to share with us.
Speaker 2: But I want to get to some of the brands
Speaker 2: because Tim and I have been kind of all over
Speaker 2: your platforms, both Mini Bar and Reserve Bar, and it's
Speaker 2: really quite a range and quite a variety. So talk
Speaker 2: to us about some of what you want to make
Speaker 2: sure is out there for customers.
Speaker 3: Yeah. So the great thing about these two platforms is
Speaker 3: another difference as Mini Bar Delivery as over thirty five
Speaker 3: hundred retailers and you can buy essentially all of the
Speaker 3: products that are available from those retailers. So that's kind
Speaker 3: of a max assortment, which is great. You can search
Speaker 3: for and find anything. Products are merchandise within categories. The
Speaker 3: shopping ees are easy. All of your favorite brands are
Speaker 3: going to be there, whether it's Teto's vodka or Bullet Bourbon,
Speaker 3: and you can find some unique stuff too. Reserve Bar
Speaker 3: is more curated, so we've actually spent the time with
Speaker 3: our experts to find really the best stuff to have
Speaker 3: a lot more information and education and intrigue and those
Speaker 3: shopping journeys for people who are more passionate to find
Speaker 3: rare and limited products. We are the main platform in
Speaker 3: this industry for launching new products, which includes new products
Speaker 3: from all of the brands and the companies that create
Speaker 3: new brands, as well as a lot of celebrity. We
Speaker 3: just launched the Rolling Stones have a new rum called
Speaker 3: Crossfire Hurricane Cool and that was just launched on our platform.
Speaker 3: So oftentimes you can get products on Reserve Bar that
Speaker 3: really aren't available anywhere else, and including our own cask
Speaker 3: selections for those of you who are really into bourbon
Speaker 3: and tequila, we go to distilleries and pick tasks specifically
Speaker 3: for us that we bottle off and have very limited quantity.
Speaker 1: Derek, how does how does fulfillment work with with Reserve Bar?
Speaker 1: Do you actually have the inventory and you guys are
Speaker 1: responsible for shipping it out or do you do you
Speaker 1: outsource that like you do with Mini bar delivery.
Speaker 3: Yeah, that's a good question. Tim. None of our platforms
Speaker 3: and we as a company do not hold a license,
Speaker 3: so we never touch any bottles of alcohol. We don't
Speaker 3: have any inventory. We're really a technology company that has
Speaker 3: very deep technology to comply with beverage alcohol laws and
Speaker 3: to connect with our network of retailers to match you
Speaker 3: as a as a customer who's interested in buying something
Speaker 3: with a retailer that as that product that a good price.
Speaker 1: So if that overhead, yeah, so if you. But if
Speaker 1: you want to buy something that is exclusively available on
Speaker 1: your platform, who then ends up fulfilling that order?
Speaker 3: Yeah, there's certain retailers in our network that benefit from
Speaker 3: being associated with us and our relationships with the distributors
Speaker 3: and the brands, so we know that they're going to
Speaker 3: be the ones that are getting that prim and were
Speaker 3: then able to route the orders or.
Speaker 1: These But are these retailers like mom and pop liquor stores.
Speaker 1: I mean I remember ordering a bottle of bourbon from
Speaker 1: my mom that she really liked and the only the
Speaker 1: closest place it was available was somewhere in Long Island.
Speaker 3: Nice.
Speaker 4: Yeah, she liked it, but it was it was it
Speaker 4: was something that was kind of hard to find, but
Speaker 4: it came from essentially a local store on Long Island
Speaker 4: that just had it.
Speaker 1: I don't even know. Maybe I used reserve bar, I
Speaker 1: don't remember. But is that how it works? Like they're
Speaker 1: the ones who then ship it and you guys don't
Speaker 1: you guys don't ever touch it.
Speaker 3: Yeah, right, So for widely available products that were available
Speaker 3: near you, if you were wanting it for yourself or
Speaker 3: near your mom, it would come from that local retailer
Speaker 3: and be delivered locally. But you get to shop a
Speaker 3: more interesting assortment that might not be available near you
Speaker 3: or a gift recipient, and will then ship that product
Speaker 3: to them in a compliant fashion, very packaged, very nicely
Speaker 3: and safely. So that's how you can access a more
Speaker 3: compelling product assortment that you might otherwise be able to
Speaker 3: get locally.
Speaker 2: So then for as the business model, we're Bloomberg and
Speaker 2: we're always interested in this kind of stuff, so kind
Speaker 2: of getting in the weeds. So do you guys just
Speaker 2: get a percentage of the order or do you just
Speaker 2: get a set fee on every order that's made? How
Speaker 2: does it work?
Speaker 3: Yeah, that's exactly right. So we're basically a marketing service
Speaker 3: for the retailers in our network, and the reason they
Speaker 3: sign up with us is because we're sending them incremental orders.
Speaker 3: So in exchange for that, they give us a small
Speaker 3: fee associated with sourcing that order because it's incremental to
Speaker 3: their business and they wouldn't have otherwise. Got it, all right?
Speaker 2: Tell us two about pricing strategy, and I'm going to
Speaker 2: pour a little bit of wine. You guys have been
Speaker 2: kind enough to send.
Speaker 3: What's got new? I would have had my own wine
Speaker 3: as well.
Speaker 2: I wish you had. I feel terrible. I'm not quite
Speaker 2: drinking alone, but it would be nice to have you
Speaker 2: as a part of this. You shared with us a
Speaker 2: bottle of Josh Seller's legacy red Bland, Red Bland. Excuse me,
Speaker 2: looking on the website Mini Bar Delivery, it's about fourteen
Speaker 2: dollars a bottle. But you guys have quite a range
Speaker 2: of stuff that's out there. How do you think about
Speaker 2: price point in terms of I'm going to share it,
Speaker 2: this is.
Speaker 1: This, I'm going to share this one is a meme?
Speaker 2: Now did you know that? I know it is a meme?
Speaker 2: Our producer was talking about one of our producers. How
Speaker 2: do you think about price point? Is there any strategy
Speaker 2: behind that? Yeah?
Speaker 3: So, you know, one of the hardest things about operating
Speaker 3: in this industry is the regulations federal, state, county, city,
Speaker 3: and one of those that's very clear is that retailers
Speaker 3: have to be the ones that sell you beverage alcohol, wine, spirits, beer,
Speaker 3: and they have to set the price for it. That
Speaker 3: is a universal regulatory situation. So the prices that you
Speaker 3: see on our platforms are actually the prices from the
Speaker 3: retailers in our network, and so our technology is seeing
Speaker 3: is the product you want available, which retailer has the
Speaker 3: best price, which one is closest to you, and kind
Speaker 3: of doing all of that hard work for you as
Speaker 3: a shopper to match you with a retailer and a
Speaker 3: product that can get to you quickly at a good price.
Speaker 1: Derek, what was the strategy of getting all these retailers
Speaker 1: on the platform? Was it old fashioned shoe leather? Was
Speaker 1: it picking up the phones like it's it's a one
Speaker 1: off thing, it's I mean, this is tough to do.
Speaker 3: Yeah, it's all of those things. And in the early
Speaker 3: days it was a slog you know, when you were
Speaker 3: calling you were telling me you were calling from reserve
Speaker 3: bar and they'd say, who what, and you'd have to
Speaker 3: explain the entire concept of e commerce. Nowadays, I think
Speaker 3: it's pretty universally understood and the retailers. We are still
Speaker 3: you know, reaching out to retailers, but many are coming
Speaker 3: to us curious about the benefits to them and the
Speaker 3: commercial terms of joining our platform. And it is open
Speaker 3: to you know, expansion, and we are still in the
Speaker 3: process of adding more throughout the country.
Speaker 2: Hey, Derek, just got about twenty seconds left here, twenty
Speaker 2: five seconds. What's next for you guys? As we are
Speaker 2: going to sample the wine and because it is Josha
Speaker 2: clock somewhere, but what's next for you guys?
Speaker 3: Well, what's next is what's right now? Actually, which is
Speaker 3: because we don't hold license a license, we're able to
Speaker 3: syndicate our technology in all kinds of interesting places, like
Speaker 3: if you were to read an article on Whiskey Advocate
Speaker 3: about the twenty best scotches, you could buy any of
Speaker 3: those scotches right there without leaving Whiskey Advocate and continue
Speaker 3: consuming that content and also buy whatever you wanted. And
Speaker 3: we're also powering the websites of brands because lots of
Speaker 3: people go to visit sites like Tennessee dot com or
Speaker 3: the McAllen dot com and they can't sell you about
Speaker 3: of alcohol directly because of the three tier system. But
Speaker 3: our technology enables you to shop and buy because you
Speaker 3: actually are buying from a license retailer, You're going to
Speaker 3: take a lot more innovation of that kind.
Speaker 2: Yeah, it's interesting you guys are doing. Hey listen, come
Speaker 2: back soon and hopefully then we can share a drink together.
Speaker 2: But I'd love to kind of hear as you continue
Speaker 2: on in this business. Derek Correa, who's CEO Reserve Bar
Speaker 2: and also of course to the company that runs many
Speaker 2: bar delivery