Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Very rough week,
Speaker 1: another one, So we're gonna shift gears for you all
Speaker 1: a little bit as we wrap up are week here
Speaker 1: on Bloomberg Business Week. Brett Berish is founder and CEO
Speaker 1: as Sovereign Brands, a family owned wine and spirits company.
Speaker 1: He's joining us via zoom in Connecticut, and it is
Speaker 1: really great to have you here, although I've got to
Speaker 1: say it would be even better. What's going to happen?
Speaker 1: What do you say, Carol? If we were all together
Speaker 1: and we were sharing a glass of McQueen and the
Speaker 1: Violet Fog, it would be a lot sweeter, That's all
Speaker 1: I'm gonna say. When when's going to happen? Brett? How
Speaker 1: are you? Yeah? Well, for me, it already started. I'm drinking.
Speaker 1: Well that makes one of us. Yeah, I get for
Speaker 1: the three of us. So we'll happy Friday. We'll talk
Speaker 1: to us about the business because I think, you know,
Speaker 1: we cover a lot. We talked with a lot in
Speaker 1: the wine industry, with the spirits industry, talked to us
Speaker 1: about you know, we saw a lot of buying during
Speaker 1: the pandemic. So where are we in terms of the
Speaker 1: business right now? Uh, pre pandemic level is today, And
Speaker 1: I'm curious about what kind of supply chain difficulties you
Speaker 1: might have, if any business. Well, business was pretty wild
Speaker 1: with during COVID, just because it was changing in consumer habits,
Speaker 1: where with the shutting down of bars and restaurants and
Speaker 1: consumers going to stores. I think what you're now seeing
Speaker 1: is is, uh, there's life back in the in the streets. Um.
Speaker 1: I was talking to I mean not just in the US,
Speaker 1: but everywhere. I was talking to one of our colleagues
Speaker 1: in the UK, UM, and they're celebrating the Queen's jubileeem
Speaker 1: and it's is it's the most vibrant it's ever been
Speaker 1: right now. So you're almost you're almost sitting a tilt
Speaker 1: back to the center hopefully and that that's that's everyone's goal. Brett.
Speaker 1: How are you? How are your costs? How are your
Speaker 1: input costs? Supply chain stuff challenges, getting ingredients, employee paying
Speaker 1: employees to attract and retain them. It's tim everything's going up,
Speaker 1: um question. And I think it all you know, it
Speaker 1: all started this. It's a global issue, and it all
Speaker 1: started with uh. Once that chain stops, ever, there's pent
Speaker 1: up all of a sudden, there's so much demand and
Speaker 1: now you know, we're all playing catchup. So we went
Speaker 1: months and months without inventory and because we just couldn't
Speaker 1: get it, and then we're ordering more and more so
Speaker 1: we can play catch up for the future. So we
Speaker 1: personally on our side with our brands bell Air, Bamboo, McQueen,
Speaker 1: um and our new brand Vonne. Now we're in a
Speaker 1: good position because we've over ordered, if that makes sense.
Speaker 1: Now we've actually heard that from a lot of the
Speaker 1: retailers where they did over because their inventory levels were
Speaker 1: up because they were over ordering to make sure that
Speaker 1: they had, um, you know, what they needed for their consumers. Um. So,
Speaker 1: based on what you're seeing, what kind of field do
Speaker 1: you have on the economic outlook? And I do feel
Speaker 1: like to some extent, alcohol might be a little bit
Speaker 1: recession proof, but that's not true. Like when you're spending
Speaker 1: to fill up your tank, you might not have as
Speaker 1: much money to spend on some other things. So how
Speaker 1: do you see it? Yeah, I think, you know, when
Speaker 1: I think back to two thousand six and seven, I
Speaker 1: think there's always gonna be When people talk about recession,
Speaker 1: it's basically, ah, you're trading down in some cases, you
Speaker 1: know which you maybe we're drinking. Uh, you'll you'll drink,
Speaker 1: You'll continue to drink, but maybe you'll trade down to
Speaker 1: something else. Um. So I can see that happening. But
Speaker 1: for us, I don't know. I think I think this
Speaker 1: is one of the reason why I love our industry
Speaker 1: is you know, it's it is true in good times
Speaker 1: people drink and bad times people drink. So um uh,
Speaker 1: it's a very very resilient industry. So they used to
Speaker 1: prove it. What are people drinking? What do they like
Speaker 1: most of all? Just my brands? No, no, no, that's
Speaker 1: not true, Brett, Sorry no, but really is it? Is it?
Speaker 1: Gen's is it? RUMs? Is it? You know? We talked
Speaker 1: to people in the in the brewery business, like what
Speaker 1: what do you think? What are you getting? And and
Speaker 1: who is your demo? I'm curious, Well, you're asking the
Speaker 1: wrong person because I'm I'm not a trend follower. Um.
Speaker 1: We like to build on my side. We like to
Speaker 1: build brands that that uh, and we do it based
Speaker 1: on no advertising where it's that organic brand building. It's
Speaker 1: almost like when a when a TV show is hot
Speaker 1: on Netflix or Hulu and they're not advertising, people are
Speaker 1: just talking about it. So to me, you know, our
Speaker 1: brands do well, but they're they're in different categories. So
Speaker 1: my bel Air brand is in the champagne sparkling category.
Speaker 1: It's now the number one brand the United States. Are
Speaker 1: Rum Bamboo, that's hot, that's the number one premium rum
Speaker 1: and the fastest growing. That's a great segment for us.
Speaker 1: But as an example, Carol is an example. You know,
Speaker 1: when we launched that brand, everyone told us, don't do
Speaker 1: it because it's not hot. So I just don't like
Speaker 1: to follow trends. So what we like to do, what
Speaker 1: we're doing. I'm wondering about you more of your history here,
Speaker 1: because years ago you sold Ace of Spades to Jay Z.
Speaker 1: How do you build? How do you when you know,
Speaker 1: to sell a brand versus to keep holding onto it
Speaker 1: and to connnia build it? Good question. Well, I think
Speaker 1: it all depends in the situation. So in my case,
Speaker 1: I didn't have any money. Uh that's a good answer.
Speaker 1: And I had lots of ideas and no money, and uh,
Speaker 1: it was the most difficult decision I could ever make
Speaker 1: in my life. It's like selling a child. Um. But
Speaker 1: but what it did is it made us bigger and stronger,
Speaker 1: and now I get to do these other brands. So
Speaker 1: I think everyone's position is different and the reason you
Speaker 1: do it and why for me, it gave me capital
Speaker 1: to do all these other brands. Um my team has
Speaker 1: grown sixfold, sevenfold. Um, we're in a hundred plus countries.
Speaker 1: So it's the way I get up the ladder is Uh,
Speaker 1: it's allowed me to get up the ladder. Are you
Speaker 1: always thinking about the breadth of developing your brand, cultivating it,
Speaker 1: you know, and then eventually selling it off or that's
Speaker 1: not necessarily the end game? Always? No, it's funny, and
Speaker 1: I may be it comes from just a reality check,
Speaker 1: you know. I get those presentations that that that uh
Speaker 1: for a pitch book on a brand and you know,
Speaker 1: in five years, if I could get one percent or
Speaker 1: two percent of the category and that there's a multiple
Speaker 1: of acts, and I'll sell it. Um. I was that
Speaker 1: that guy twenty plus years ago. And if you're thinking
Speaker 1: like that, to me, brand building never works. It just
Speaker 1: doesn't work that way. Um, you gotta be patient, you've
Speaker 1: gotta be long term. I don't think like that. Uh.
Speaker 1: If it happens. It happens. But to me it's you're
Speaker 1: you're thinking too narrow and uh and to me it's
Speaker 1: I've learned my lesson. It's not about the money. It's
Speaker 1: about building something special and good things come when you build.
Speaker 1: When you think like that, how do you compete as
Speaker 1: a small player, relatively small player for shelf space and
Speaker 1: for the district distribution. Just in the last minute that
Speaker 1: we have with you, it's everything to mean, it's everything
Speaker 1: from we gotta be we gotta work harder. Um, we've
Speaker 1: gotta be different, we gotta be more creative. We've got
Speaker 1: to constantly try to reinvent ourselves. Um. You know, I've
Speaker 1: got this brand Bamboo, which, as I said, as our rum,
Speaker 1: we have more followers on Instagram than Captain Morgan and
Speaker 1: McCarty and they have hundreds of millions of dollars in advertising.
Speaker 1: That's hard, but it's it shows. I'm the I'm the
Speaker 1: the example of you work real hard, you put everything
Speaker 1: into it and you can get there. And Uh. Just
Speaker 1: the key is don't think you can. Don't don't compete
Speaker 1: with them the way they do business, because you can't.
Speaker 1: You've got to compete. You do business and then you
Speaker 1: can well bottoms up. Next time come in studio and
Speaker 1: next time bring a bottle and we'll talk to there's
Speaker 1: two of using three. Cheers, Cheers, bread, have a good weekend,
Speaker 1: Bred Barrows. He's found in seat at Sovereign Brands, joining
Speaker 1: us via zoom in Connecticut. Great way to wrap up
Speaker 1: this week