1 00:00:00,040 --> 00:00:03,600 Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and 2 00:00:03,680 --> 00:00:08,600 Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Very rough week, 3 00:00:08,640 --> 00:00:10,879 Speaker 1: another one, So we're gonna shift gears for you all 4 00:00:10,920 --> 00:00:12,680 Speaker 1: a little bit as we wrap up are week here 5 00:00:12,680 --> 00:00:15,800 Speaker 1: on Bloomberg Business Week. Brett Berish is founder and CEO 6 00:00:15,880 --> 00:00:18,320 Speaker 1: as Sovereign Brands, a family owned wine and spirits company. 7 00:00:18,360 --> 00:00:20,520 Speaker 1: He's joining us via zoom in Connecticut, and it is 8 00:00:20,600 --> 00:00:22,720 Speaker 1: really great to have you here, although I've got to 9 00:00:22,920 --> 00:00:25,200 Speaker 1: say it would be even better. What's going to happen? 10 00:00:25,239 --> 00:00:27,480 Speaker 1: What do you say, Carol? If we were all together 11 00:00:27,680 --> 00:00:29,240 Speaker 1: and we were sharing a glass of McQueen and the 12 00:00:29,320 --> 00:00:31,680 Speaker 1: Violet Fog, it would be a lot sweeter, That's all 13 00:00:31,680 --> 00:00:34,279 Speaker 1: I'm gonna say. When when's going to happen? Brett? How 14 00:00:34,320 --> 00:00:37,960 Speaker 1: are you? Yeah? Well, for me, it already started. I'm drinking. 15 00:00:38,520 --> 00:00:41,159 Speaker 1: Well that makes one of us. Yeah, I get for 16 00:00:41,200 --> 00:00:45,199 Speaker 1: the three of us. So we'll happy Friday. We'll talk 17 00:00:45,240 --> 00:00:47,280 Speaker 1: to us about the business because I think, you know, 18 00:00:47,640 --> 00:00:49,479 Speaker 1: we cover a lot. We talked with a lot in 19 00:00:49,479 --> 00:00:52,559 Speaker 1: the wine industry, with the spirits industry, talked to us 20 00:00:52,560 --> 00:00:54,200 Speaker 1: about you know, we saw a lot of buying during 21 00:00:54,240 --> 00:00:56,760 Speaker 1: the pandemic. So where are we in terms of the 22 00:00:56,840 --> 00:01:00,840 Speaker 1: business right now? Uh, pre pandemic level is today, And 23 00:01:00,880 --> 00:01:03,560 Speaker 1: I'm curious about what kind of supply chain difficulties you 24 00:01:03,640 --> 00:01:08,800 Speaker 1: might have, if any business. Well, business was pretty wild 25 00:01:08,959 --> 00:01:12,720 Speaker 1: with during COVID, just because it was changing in consumer habits, 26 00:01:12,720 --> 00:01:15,720 Speaker 1: where with the shutting down of bars and restaurants and 27 00:01:15,760 --> 00:01:19,000 Speaker 1: consumers going to stores. I think what you're now seeing 28 00:01:19,160 --> 00:01:24,480 Speaker 1: is is, uh, there's life back in the in the streets. Um. 29 00:01:25,440 --> 00:01:27,400 Speaker 1: I was talking to I mean not just in the US, 30 00:01:27,440 --> 00:01:29,920 Speaker 1: but everywhere. I was talking to one of our colleagues 31 00:01:30,000 --> 00:01:34,280 Speaker 1: in the UK, UM, and they're celebrating the Queen's jubileeem 32 00:01:34,440 --> 00:01:37,200 Speaker 1: and it's is it's the most vibrant it's ever been 33 00:01:37,319 --> 00:01:40,960 Speaker 1: right now. So you're almost you're almost sitting a tilt 34 00:01:41,080 --> 00:01:44,880 Speaker 1: back to the center hopefully and that that's that's everyone's goal. Brett. 35 00:01:44,880 --> 00:01:46,320 Speaker 1: How are you? How are your costs? How are your 36 00:01:46,360 --> 00:01:52,120 Speaker 1: input costs? Supply chain stuff challenges, getting ingredients, employee paying 37 00:01:52,160 --> 00:01:56,320 Speaker 1: employees to attract and retain them. It's tim everything's going up, 38 00:01:56,640 --> 00:01:59,800 Speaker 1: um question. And I think it all you know, it 39 00:01:59,880 --> 00:02:03,320 Speaker 1: all started this. It's a global issue, and it all 40 00:02:03,400 --> 00:02:07,880 Speaker 1: started with uh. Once that chain stops, ever, there's pent 41 00:02:08,000 --> 00:02:10,200 Speaker 1: up all of a sudden, there's so much demand and 42 00:02:10,240 --> 00:02:13,280 Speaker 1: now you know, we're all playing catchup. So we went 43 00:02:13,400 --> 00:02:17,040 Speaker 1: months and months without inventory and because we just couldn't 44 00:02:17,040 --> 00:02:19,880 Speaker 1: get it, and then we're ordering more and more so 45 00:02:20,000 --> 00:02:22,600 Speaker 1: we can play catch up for the future. So we 46 00:02:22,840 --> 00:02:26,320 Speaker 1: personally on our side with our brands bell Air, Bamboo, McQueen, 47 00:02:27,000 --> 00:02:29,920 Speaker 1: um and our new brand Vonne. Now we're in a 48 00:02:29,960 --> 00:02:33,200 Speaker 1: good position because we've over ordered, if that makes sense. 49 00:02:33,600 --> 00:02:35,080 Speaker 1: Now we've actually heard that from a lot of the 50 00:02:35,080 --> 00:02:37,880 Speaker 1: retailers where they did over because their inventory levels were 51 00:02:37,919 --> 00:02:39,600 Speaker 1: up because they were over ordering to make sure that 52 00:02:39,639 --> 00:02:44,240 Speaker 1: they had, um, you know, what they needed for their consumers. Um. So, 53 00:02:44,280 --> 00:02:47,200 Speaker 1: based on what you're seeing, what kind of field do 54 00:02:47,280 --> 00:02:50,760 Speaker 1: you have on the economic outlook? And I do feel 55 00:02:50,760 --> 00:02:52,600 Speaker 1: like to some extent, alcohol might be a little bit 56 00:02:52,840 --> 00:02:55,359 Speaker 1: recession proof, but that's not true. Like when you're spending 57 00:02:56,360 --> 00:02:57,680 Speaker 1: to fill up your tank, you might not have as 58 00:02:57,760 --> 00:03:00,200 Speaker 1: much money to spend on some other things. So how 59 00:03:00,200 --> 00:03:03,480 Speaker 1: do you see it? Yeah, I think, you know, when 60 00:03:03,560 --> 00:03:07,000 Speaker 1: I think back to two thousand six and seven, I 61 00:03:07,040 --> 00:03:10,040 Speaker 1: think there's always gonna be When people talk about recession, 62 00:03:10,240 --> 00:03:14,400 Speaker 1: it's basically, ah, you're trading down in some cases, you 63 00:03:14,400 --> 00:03:17,880 Speaker 1: know which you maybe we're drinking. Uh, you'll you'll drink, 64 00:03:17,880 --> 00:03:20,040 Speaker 1: You'll continue to drink, but maybe you'll trade down to 65 00:03:20,160 --> 00:03:24,640 Speaker 1: something else. Um. So I can see that happening. But 66 00:03:25,000 --> 00:03:29,079 Speaker 1: for us, I don't know. I think I think this 67 00:03:29,200 --> 00:03:30,680 Speaker 1: is one of the reason why I love our industry 68 00:03:30,800 --> 00:03:33,240 Speaker 1: is you know, it's it is true in good times 69 00:03:33,320 --> 00:03:37,040 Speaker 1: people drink and bad times people drink. So um uh, 70 00:03:37,280 --> 00:03:40,800 Speaker 1: it's a very very resilient industry. So they used to 71 00:03:40,840 --> 00:03:42,920 Speaker 1: prove it. What are people drinking? What do they like 72 00:03:43,040 --> 00:03:46,680 Speaker 1: most of all? Just my brands? No, no, no, that's 73 00:03:46,720 --> 00:03:49,920 Speaker 1: not true, Brett, Sorry no, but really is it? Is it? 74 00:03:50,040 --> 00:03:52,440 Speaker 1: Gen's is it? RUMs? Is it? You know? We talked 75 00:03:52,480 --> 00:03:55,119 Speaker 1: to people in the in the brewery business, like what 76 00:03:55,120 --> 00:03:57,120 Speaker 1: what do you think? What are you getting? And and 77 00:03:57,200 --> 00:04:00,200 Speaker 1: who is your demo? I'm curious, Well, you're asking the 78 00:04:00,200 --> 00:04:04,840 Speaker 1: wrong person because I'm I'm not a trend follower. Um. 79 00:04:04,960 --> 00:04:07,440 Speaker 1: We like to build on my side. We like to 80 00:04:07,480 --> 00:04:10,840 Speaker 1: build brands that that uh, and we do it based 81 00:04:10,840 --> 00:04:13,960 Speaker 1: on no advertising where it's that organic brand building. It's 82 00:04:13,960 --> 00:04:16,160 Speaker 1: almost like when a when a TV show is hot 83 00:04:16,200 --> 00:04:18,720 Speaker 1: on Netflix or Hulu and they're not advertising, people are 84 00:04:18,760 --> 00:04:21,800 Speaker 1: just talking about it. So to me, you know, our 85 00:04:21,839 --> 00:04:24,560 Speaker 1: brands do well, but they're they're in different categories. So 86 00:04:24,720 --> 00:04:27,400 Speaker 1: my bel Air brand is in the champagne sparkling category. 87 00:04:27,760 --> 00:04:30,480 Speaker 1: It's now the number one brand the United States. Are 88 00:04:30,560 --> 00:04:33,760 Speaker 1: Rum Bamboo, that's hot, that's the number one premium rum 89 00:04:33,760 --> 00:04:36,280 Speaker 1: and the fastest growing. That's a great segment for us. 90 00:04:37,240 --> 00:04:39,960 Speaker 1: But as an example, Carol is an example. You know, 91 00:04:40,000 --> 00:04:42,440 Speaker 1: when we launched that brand, everyone told us, don't do 92 00:04:42,520 --> 00:04:45,880 Speaker 1: it because it's not hot. So I just don't like 93 00:04:45,960 --> 00:04:47,760 Speaker 1: to follow trends. So what we like to do, what 94 00:04:47,800 --> 00:04:52,120 Speaker 1: we're doing. I'm wondering about you more of your history here, 95 00:04:52,160 --> 00:04:55,680 Speaker 1: because years ago you sold Ace of Spades to Jay Z. 96 00:04:56,120 --> 00:04:58,200 Speaker 1: How do you build? How do you when you know, 97 00:04:58,360 --> 00:05:01,000 Speaker 1: to sell a brand versus to keep holding onto it 98 00:05:01,040 --> 00:05:04,320 Speaker 1: and to connnia build it? Good question. Well, I think 99 00:05:04,680 --> 00:05:07,799 Speaker 1: it all depends in the situation. So in my case, 100 00:05:07,920 --> 00:05:11,200 Speaker 1: I didn't have any money. Uh that's a good answer. 101 00:05:12,400 --> 00:05:16,080 Speaker 1: And I had lots of ideas and no money, and uh, 102 00:05:16,320 --> 00:05:18,720 Speaker 1: it was the most difficult decision I could ever make 103 00:05:18,760 --> 00:05:22,839 Speaker 1: in my life. It's like selling a child. Um. But 104 00:05:22,839 --> 00:05:25,800 Speaker 1: but what it did is it made us bigger and stronger, 105 00:05:25,839 --> 00:05:27,760 Speaker 1: and now I get to do these other brands. So 106 00:05:28,120 --> 00:05:30,760 Speaker 1: I think everyone's position is different and the reason you 107 00:05:30,800 --> 00:05:33,000 Speaker 1: do it and why for me, it gave me capital 108 00:05:33,040 --> 00:05:36,160 Speaker 1: to do all these other brands. Um my team has 109 00:05:36,200 --> 00:05:40,280 Speaker 1: grown sixfold, sevenfold. Um, we're in a hundred plus countries. 110 00:05:40,360 --> 00:05:44,200 Speaker 1: So it's the way I get up the ladder is Uh, 111 00:05:44,440 --> 00:05:46,359 Speaker 1: it's allowed me to get up the ladder. Are you 112 00:05:46,440 --> 00:05:51,039 Speaker 1: always thinking about the breadth of developing your brand, cultivating it, 113 00:05:51,360 --> 00:05:55,560 Speaker 1: you know, and then eventually selling it off or that's 114 00:05:55,600 --> 00:05:59,440 Speaker 1: not necessarily the end game? Always? No, it's funny, and 115 00:05:59,640 --> 00:06:02,400 Speaker 1: I may be it comes from just a reality check, 116 00:06:02,960 --> 00:06:07,480 Speaker 1: you know. I get those presentations that that that uh 117 00:06:07,720 --> 00:06:09,760 Speaker 1: for a pitch book on a brand and you know, 118 00:06:10,240 --> 00:06:12,160 Speaker 1: in five years, if I could get one percent or 119 00:06:12,160 --> 00:06:14,440 Speaker 1: two percent of the category and that there's a multiple 120 00:06:14,480 --> 00:06:17,480 Speaker 1: of acts, and I'll sell it. Um. I was that 121 00:06:17,480 --> 00:06:20,440 Speaker 1: that guy twenty plus years ago. And if you're thinking 122 00:06:20,480 --> 00:06:23,039 Speaker 1: like that, to me, brand building never works. It just 123 00:06:23,080 --> 00:06:26,560 Speaker 1: doesn't work that way. Um, you gotta be patient, you've 124 00:06:26,560 --> 00:06:29,919 Speaker 1: gotta be long term. I don't think like that. Uh. 125 00:06:30,320 --> 00:06:33,520 Speaker 1: If it happens. It happens. But to me it's you're 126 00:06:33,839 --> 00:06:37,960 Speaker 1: you're thinking too narrow and uh and to me it's 127 00:06:38,279 --> 00:06:40,440 Speaker 1: I've learned my lesson. It's not about the money. It's 128 00:06:40,440 --> 00:06:43,360 Speaker 1: about building something special and good things come when you build. 129 00:06:43,400 --> 00:06:45,680 Speaker 1: When you think like that, how do you compete as 130 00:06:45,680 --> 00:06:49,159 Speaker 1: a small player, relatively small player for shelf space and 131 00:06:49,279 --> 00:06:51,880 Speaker 1: for the district distribution. Just in the last minute that 132 00:06:51,880 --> 00:06:55,160 Speaker 1: we have with you, it's everything to mean, it's everything 133 00:06:55,200 --> 00:06:58,480 Speaker 1: from we gotta be we gotta work harder. Um, we've 134 00:06:58,480 --> 00:07:00,839 Speaker 1: gotta be different, we gotta be more creative. We've got 135 00:07:00,920 --> 00:07:04,400 Speaker 1: to constantly try to reinvent ourselves. Um. You know, I've 136 00:07:04,400 --> 00:07:07,680 Speaker 1: got this brand Bamboo, which, as I said, as our rum, 137 00:07:07,760 --> 00:07:10,200 Speaker 1: we have more followers on Instagram than Captain Morgan and 138 00:07:10,280 --> 00:07:13,400 Speaker 1: McCarty and they have hundreds of millions of dollars in advertising. 139 00:07:13,640 --> 00:07:19,400 Speaker 1: That's hard, but it's it shows. I'm the I'm the 140 00:07:19,400 --> 00:07:22,560 Speaker 1: the example of you work real hard, you put everything 141 00:07:22,600 --> 00:07:25,760 Speaker 1: into it and you can get there. And Uh. Just 142 00:07:26,080 --> 00:07:29,960 Speaker 1: the key is don't think you can. Don't don't compete 143 00:07:30,040 --> 00:07:32,559 Speaker 1: with them the way they do business, because you can't. 144 00:07:32,600 --> 00:07:34,960 Speaker 1: You've got to compete. You do business and then you 145 00:07:35,000 --> 00:07:37,720 Speaker 1: can well bottoms up. Next time come in studio and 146 00:07:37,840 --> 00:07:40,840 Speaker 1: next time bring a bottle and we'll talk to there's 147 00:07:40,840 --> 00:07:45,400 Speaker 1: two of using three. Cheers, Cheers, bread, have a good weekend, 148 00:07:45,440 --> 00:07:48,000 Speaker 1: Bred Barrows. He's found in seat at Sovereign Brands, joining 149 00:07:48,080 --> 00:07:50,680 Speaker 1: us via zoom in Connecticut. Great way to wrap up 150 00:07:50,680 --> 00:07:51,040 Speaker 1: this week