Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg
Speaker 1: Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2: Alcohol products like beer and wine should carry warnings of
Speaker 2: their links to cancer, the US Surgeon General said, citing
Speaker 2: an increased risk of developing tumors in the breast and
Speaker 2: other parts of the body. Kind of the perfect day
Speaker 2: for us to talk and drink non alcoholic wines. It's
Speaker 2: not just dry January, but this new show via McMurphy
Speaker 2: coming out earlier today, exactly.
Speaker 3: We've slowly been kind of reaching into this space more
Speaker 3: and more aggressively. It is a perfect day to do it.
Speaker 3: Tim have a perfect guest to do it.
Speaker 2: Grehn Hemingway's co founder and CEO of Libby Wines. It
Speaker 2: makes non alcoholic sparkling rose and sparkling white. Grant joins
Speaker 2: us here in the Bloomberg Interactive Brokers studio. Welcome Grant,
Speaker 2: How are you?
Speaker 1: Thank you guys?
Speaker 4: Happy New Year, Happy new year.
Speaker 2: Really cool origin story here because you founded this, you
Speaker 2: have a history in the wine industry. You founded this
Speaker 2: with the former executive chair founder's brewing company back when
Speaker 2: I did drink. I did love All Day Ipa because
Speaker 2: it had a small amount of alcohol in it. Very
Speaker 2: famous All Day Ipa. How did the be wines come together?
Speaker 4: Well, John, my now co founder, and I actually were
Speaker 4: connected through some mutual friends, and yes, a beer guy
Speaker 4: and a winemaker getting together. John did cut his teeth
Speaker 4: in that sessionable category, but I think it was one
Speaker 4: of those early indicators for him and for me watching
Speaker 4: from Afar, that this moderation wave was was forthcoming, and uh,
Speaker 4: we really wanted to lean into my way.
Speaker 3: Did you really see this moderation wave coming on? What
Speaker 3: were you seeing specific?
Speaker 4: I mean, the crystal ball that we saw was which
Speaker 4: we couldn't have predicted was going to be this self
Speaker 4: regulating meaning there are a lot of people out there
Speaker 4: and there's these buzzword terms zebra striping or bookending.
Speaker 3: Which is what that means.
Speaker 4: So a session, it's like a drinking session or a
Speaker 4: socializing session in which you have a full fledged cocktail
Speaker 4: or a glass of wine and then can you mix
Speaker 4: over to a non alcoholic Okay. So it seems to
Speaker 4: me that this is the consumption pattern happening for those
Speaker 4: that still are consuming, not the abstainers which seemed to
Speaker 4: be growing also by the day.
Speaker 3: What can I ask you while you I know you
Speaker 3: have talked about it because you used to drink some alcohol.
Speaker 2: Yeah, and even you know, to be fair, I did
Speaker 2: have a sip of like a really nice stout that
Speaker 2: my wife opened the other night. I get really bad
Speaker 2: headaches when I drank. And when I what I found
Speaker 2: was that the less I drank when I did drink,
Speaker 2: the worse the headaches got. With less alcohol. Yeah, and
Speaker 2: I thought to myself, you know, it's not worth after
Speaker 2: drinking one beer to wake up and have my my
Speaker 2: day the next day completely ruined. So I don't know
Speaker 2: if it's like an allergy or something, but it was. Unfortunately,
Speaker 2: it was very easy for me to stop drinking because
Speaker 2: I wasn't drinking that much anyway. But what I noticed
Speaker 2: grant and maybe it's just kind of like a bias
Speaker 2: of where I am in life, but a lot of
Speaker 2: my friends were having kids, they were getting into their forties.
Speaker 2: They were like, if I, you know, if I need
Speaker 2: to be early, I can't be staying out late. I
Speaker 2: need to be prioritizing rest and sleep. And this was
Speaker 2: how they were dealing with that.
Speaker 4: And that's our exact experience to my wife and I
Speaker 4: we have two kids back in California, and really started
Speaker 4: to almost like this self awareness or observation that we
Speaker 4: were just not drinking wine as much, and it was
Speaker 4: a lifestyle thing. We had young kids and we were
Speaker 4: managing careers and alcohol was kind of getting in the
Speaker 4: way of that. And so it was kind of that
Speaker 4: moment that light bulb were kind of set out and
Speaker 4: surveyed the competitive set and nothing was really enticing from
Speaker 4: a qualitative perspective. But I'd been eighteen years in wine
Speaker 4: making and this was a big loss, Like why am
Speaker 4: I not drinking the product that's supporting our career?
Speaker 2: Well, what are your friends in the wine industry say,
Speaker 2: Because they're getting hit hard right now.
Speaker 4: You're getting hammered. It's concerning, I mean the downward and
Speaker 4: you just reported on the Surgeon General like there's an
Speaker 4: anti alcohol movement, which I don't know that I'm all
Speaker 4: for in our business. I would say I'm four, But
Speaker 4: generally speaking, this moderation is a cultural movement, and I
Speaker 4: think the wine is she's really waking up to it.
Speaker 4: And look no further than the results at the register.
Speaker 3: Yeah, and you know it's funny to watch, you know,
Speaker 3: kind of old television where people are constantly smoking and
Speaker 3: had a cocktail. I even think of like my dad
Speaker 3: coming up from work and had kind of a serious
Speaker 3: you know, spirits and cocktail, you know, fairly regularly when
Speaker 3: we were younger, and then eventually all of that stuff
Speaker 3: started to go a way, even with his generation and
Speaker 3: easing of it.
Speaker 2: Have you heard of California sober?
Speaker 3: What is it now?
Speaker 2: What is it? California so Yesforna apparently California sober as
Speaker 2: you abstained from alcohol, but you partake in.
Speaker 4: TC or everything else.
Speaker 3: Every is he flushing? No?
Speaker 4: Well no, this is just the bronzing that I get
Speaker 4: from being a California.
Speaker 3: All right, So Grant, let's let's talk about because you
Speaker 3: brought us a couple of sparkling.
Speaker 5: You brought us a.
Speaker 3: Sparkling white and a sparkling and I'm curious about I'm
Speaker 3: going to pour some and you can kind of walk
Speaker 3: us through it. But like, tell us, because Tim and
Speaker 3: I have actually tried some non alcoholic beverages.
Speaker 2: And some better than others, we can say, so tell us.
Speaker 3: About how what went into making this.
Speaker 4: I think that was shared around. Yeah, The biggest white
Speaker 4: space for me was was trying to take a wine
Speaker 4: maker's perspective with the wine drinking expectation. Please, it's our expert,
Speaker 4: and so I really tried to deconstruct the whole wine
Speaker 4: making process. So where the grapes growing, when are we
Speaker 4: picking them, how are we fermenting them? Making sure that
Speaker 4: the non alcoholic was the end result. And so the
Speaker 4: whole process I have.
Speaker 3: Oh do you have a glass? Do you already have
Speaker 3: or did you ready pastic glass? The sausage the sausage,
Speaker 3: and non alcoholic wine is being made, so go ahead, please.
Speaker 4: So the whole process for me was trying to appeal
Speaker 4: to a wine drinker's expectations. And so the dealkyalization or
Speaker 4: alcohol removal process is very aggressive. It's not as exact
Speaker 4: as we'd like, and hopefully technology keeps improving. But you
Speaker 4: remove a lot of the aromatics, the texture, and certainly
Speaker 4: the alcohol, which is a massive component to the integration
Speaker 4: of the overall wine experience. So you're limiting, eliminating fourteen
Speaker 4: roughly fourteen percent of your product.
Speaker 2: That's the thing that really interesting. We spoke to Duncan
Speaker 2: Fry earlier, not yet of Bloomberg Intelligence. He's a consumer
Speaker 2: products analyst, and he talked about this at the top
Speaker 2: of our program today that the technology to remove alcohol
Speaker 2: has gotten so much better in recent years. He mentioned
Speaker 2: caliber when he was a kid being a terrible alternative
Speaker 2: to like it was like the alcohol freak Guinness. He
Speaker 2: called it drain back up. I don't know what it
Speaker 2: can like, it was draino or something, and he's so,
Speaker 2: what is the technology and how has it gotten so good?
Speaker 2: Like how do you do it?
Speaker 4: It's a filter or there are various ways that you're
Speaker 4: doing alcohol removal, but it basically is a molecular weight.
Speaker 3: It's pretty nice.
Speaker 2: Thank you, This is good.
Speaker 4: I appreciate it.
Speaker 3: And we're a tough crat.
Speaker 4: The process though. It's very extracted on weight and it's selective,
Speaker 4: but it's not perfect. And so the the the imperfections
Speaker 4: are the removal of aromatics and then remove all varietal character.
Speaker 4: And so that's why some of you know, some of
Speaker 4: the early entrants you might have seen, are adding a
Speaker 4: lot back to try and replace, but it's not adequate.
Speaker 4: And so with this, like it's very bright, it's very refreshing.
Speaker 2: I gotta be honest when Grant walked in with it.
Speaker 2: I saw it and you opened it up. I was
Speaker 2: thinking to myself, Am I going to be drinking Martin
Speaker 2: Ellie's right now?
Speaker 4: Yeah?
Speaker 5: That's what? Right? Yeah?
Speaker 2: And I'm not. I mean, this is.
Speaker 3: Martin elli is the apple juice right that we get
Speaker 3: New Year's Eve?
Speaker 2: This is not the sparkling apple juice. This is something different.
Speaker 2: It is closer to wine for sure.
Speaker 5: So is it.
Speaker 3: Essentially And forgive me because I was kind of running
Speaker 3: around pouring and stuff, but so is it wine just
Speaker 3: with the alcohol pulled out one hundred percent?
Speaker 4: It's it's fully fermented grapes from California that we reduce
Speaker 4: or eliminate the alcohol from and then go through the
Speaker 4: uh you know, flavor composition or formula, and then carbonated
Speaker 4: up to basically a prosecco level. So it's it's really
Speaker 4: meant to replace that sparkle for.
Speaker 3: A seco level.
Speaker 5: Yep.
Speaker 3: Yeah.
Speaker 2: What does your consumer research told you about when people
Speaker 2: buy this and they drink it, if they drink more
Speaker 2: than they drink of the counterpart with alcohol in it.
Speaker 4: I mean, my own consumer research is telling me I
Speaker 4: drink much more of it because there's not the guilt
Speaker 4: or the shame of knowing like oh, I have to
Speaker 4: be tempered or tall like temper my consumption on this
Speaker 4: because of what I have on the horizon. So there's
Speaker 4: I think what you mentioned athletic at the top of
Speaker 4: the call. They have done such a phenomenal job on
Speaker 4: matching quality that people don't have to compromise anymore on
Speaker 4: what they want for a beer occasion. That needs to
Speaker 4: happen in the wine category, and I think there is
Speaker 4: a massive wake up call we talked about the downtick
Speaker 4: and wine sales. Please, I'm gonna, I'm gonna.
Speaker 3: I'm gonna start pouring the rose so you can neither
Speaker 3: bottoms up there, buddies, and we can try this. So
Speaker 3: I'm sorry, keep going oh here, okay, yeah, I'm gonna
Speaker 3: part me. So what's the different same process for.
Speaker 4: The same exact process, just different grapes produced in a
Speaker 4: kind of in a rose style. You hear that clanking,
Speaker 4: that's the swing top we've got on the bottle so
Speaker 4: that you can so you.
Speaker 3: Can put it, close it, pop it back in the fridge.
Speaker 4: Would you like, I'm okay, you're good. Yeah, ok I've
Speaker 4: got a drive very funny, So.
Speaker 3: You close it, pop it back in the fridge and
Speaker 3: it stays.
Speaker 4: Yes. That was one of our learnings from Like I
Speaker 4: think in terms of trying to be innovative around the
Speaker 4: wine category is like, you're never going to see a
Speaker 4: champagne bottle with a swing top on it or a
Speaker 4: proscco bottle. They're etched intrig this is nice to try this,
Speaker 4: and so with the addition of the swing top, we
Speaker 4: wanted to really do preservation.
Speaker 3: Can you do can you do softer touch a little bit?
Speaker 2: Right?
Speaker 4: Yeah?
Speaker 5: Nice?
Speaker 3: Yeah?
Speaker 2: Are you planning to do any non carbonated versions?
Speaker 4: Absolutely? Yeah, R and D. I'll admit sparkling was more
Speaker 4: in my repertoire and our wheelhouse adding easier to do.
Speaker 4: I would say it's easier to replicate or replace a sparkling.
Speaker 4: But the still wine category, I think is is very
Speaker 4: It's a huge opportunity for the category if we're to
Speaker 4: nail a Chardonnay or a savingon Blanc or a pen
Speaker 4: and a war a lot of drinkers out there, and
Speaker 4: you talked about who is this consumer? It is definitely
Speaker 4: the wine consumer that is self moderating.
Speaker 2: What I'm also finding is bars, restaurants, parties, social events,
Speaker 2: professional events have increasingly non alcoholic options that are not soda.
Speaker 4: Huge real estate being being garnered by the mocktails and
Speaker 4: commanding quite a price. But I think it's about, you know,
Speaker 4: more options for inclusive occasions, making sure that everyone is
Speaker 4: able to participate and not feeling sheepish or needing to
Speaker 4: go with the line in a Seltzer water as the chameleon.
Speaker 3: All right, So you introduce this October?
Speaker 4: Is that October? All right?
Speaker 3: So I know this, but we're bloomberg. So give us
Speaker 3: any indications of the kind of demand you're anticipating or
Speaker 3: maybe already seeing.
Speaker 4: So in eighteen years in wine and this would be
Speaker 4: the fifth startup for me, I've never seen something like this.
Speaker 4: And to your point, October, we didn't have a lot
Speaker 4: of data behind us. Yeah, but we have gotten so
Speaker 4: many fortunate retail programs in anticipation of dry January, big
Speaker 4: moment and timing could not be you know, we're blowing
Speaker 4: away goals and obviously the proof will be in the
Speaker 4: pudding with repeat business and velocity. But the early adoption.
Speaker 2: Has been through the roof funding, self funded, raised money.
Speaker 2: Have you done it?
Speaker 4: Raised a fair bit of money, went to the outside
Speaker 4: for the first time, but John and I actually self
Speaker 4: funded the initial Wine is very capital intensive business. You
Speaker 4: guys likely know this, but we feel like the category
Speaker 4: is not a fad. This thing is here to stay.
Speaker 4: It's going to keep growing. The retailers are now starting
Speaker 4: to get behind it, which is a massive win.
Speaker 3: Well Happy drive January, yes, promised to come back see
Speaker 3: unless going. Grant Hemingway, co founder and chief executive officer
Speaker 3: of Libby.
Speaker 2: Wines, Carol, we just talked about sparkling wine.
Speaker 3: Check.
Speaker 2: Let's talk about food because we actually waste a lot
Speaker 2: of it here in the US. The USDA estimates that
Speaker 2: between thirty and forty percent of the food supply is
Speaker 2: actually wasted.
Speaker 3: That kills me.
Speaker 2: It kills me.
Speaker 3: How many times have we talked about there's so many
Speaker 3: people who are on what do.
Speaker 2: They call it, oh, food and secure.
Speaker 3: Food and secure So you've got that going on. And
Speaker 3: then at the same time, we have tremendous waste in
Speaker 3: this country.
Speaker 2: So part of it is us, you know, buying stuff
Speaker 2: and not using it, but a big part of it
Speaker 2: also is just poor planning when it comes to grocery companies.
Speaker 2: When it comes to food spoilage and the supply chain.
Speaker 2: It's a very complicated thing, right. Yeah, it's not good
Speaker 2: for our wallets, it's not good for the cost of food,
Speaker 2: and it's not good for the environment.
Speaker 3: Right. Ronnie Neff is Associate Professor in the Department of
Speaker 3: Environmental Health and Engineering at the Johns Hopkins Bloomberg School
Speaker 3: of Public Health, focusing on the connection between food waste
Speaker 3: and climate change. We should note, of course, the Johns
Speaker 3: Hopkins Bloomberg School of Public Health is supported by Michael R. Bloomber,
Speaker 3: founder Bloomberg LP and Bloomberg Philanthropies NDY joining us from Baltimore.
Speaker 3: It is good to have you here with us. It
Speaker 3: kind of breaks my heart that we continue to have
Speaker 3: these conversations about the amount of food waste that is
Speaker 3: going on. But share with us a little bit more
Speaker 3: in terms of context of how much is being wasted.
Speaker 3: We mentioned a little percentage, a big percentage at the
Speaker 3: kickoff to this and why this continues to happen.
Speaker 5: Yeah, thank you and thanks for the chance to be
Speaker 5: on the show. So, yeah, it's a staggering percentage of
Speaker 5: our food supply, and by one estimate at the national level,
Speaker 5: we're talking about throwing out the equivalent of four hundred
Speaker 5: and ninety five billion dollars. And if you put that
Speaker 5: you were talking about food and security. If you put
Speaker 5: that in terms of meals, it's one hundred and ninety
Speaker 5: five one hundred and over one hundred and ninety billion
Speaker 5: meals per year just thrown out. And so you know
Speaker 5: that's that's you know, I'm sorry, it's one hundred and
Speaker 5: forty nine.
Speaker 2: Yeah, it's incredibly depressing.
Speaker 5: Incredibly depressing. It's so much food and so and then
Speaker 5: if you think within our households, every household on average
Speaker 5: is throwing out about fifteen hundred dollars. And there's not
Speaker 5: many people that you could go to and say like, hey,
Speaker 5: you want to throw out fifteen hundred dollars and they'd
Speaker 5: be like, sure, no problem. It's a lot of money
Speaker 5: that that that we didn't need to have been throwing out.
Speaker 2: Isn't just wish you could talk to my five year
Speaker 2: old like you know that when you're making food for kids,
Speaker 2: it's like you just asked for this, and now you're
Speaker 2: not going to eat this.
Speaker 3: No, but it's like kids, it's you know, it's interesting.
Speaker 3: I was listening to the surveillance team, and I was
Speaker 3: thinking about how I grew up and we had two
Speaker 3: fridge you know, refrigerators, we had a freezer.
Speaker 2: Well, how many kids did you have?
Speaker 3: There was seven kids, It was a big family. But
Speaker 3: nonetheless there was always like you know, major shopping, you know,
Speaker 3: trips and so much food. And I get it. My daughter,
Speaker 3: who spent some time over in Europe, said, you know,
Speaker 3: we used to shop every day and we bought a
Speaker 3: little bit. We had a small fridge.
Speaker 5: You know in our part.
Speaker 3: It's just a different way if they and is it
Speaker 3: the way Americans think? Is that the problem? Like what
Speaker 3: is it? Is it that it's we just are an
Speaker 3: abundant economy, although not everybody feels that way, certainly in
Speaker 3: the US economy, but like, what is it?
Speaker 5: Yeah, it's so many different things, and that's part of
Speaker 5: what makes it challenging to address it because there are
Speaker 5: so many different things going on. But I think that
Speaker 5: you've hit on a lot of really important points in
Speaker 5: terms of the cultural factors, and that we have this
Speaker 5: idea that we need to have abundance and if we're
Speaker 5: not providing abundance, we're not providing well enough for our family.
Speaker 5: Another one is this idea that food is only going
Speaker 5: to taste good if it's absolutely the freshest, and if
Speaker 5: you think about whether it's frozen vegetables cooked into a
Speaker 5: meal or something that's like a little bit older, you
Speaker 5: would never know the difference. And so kind of digging
Speaker 5: into some of those issues as well, there's a lot
Speaker 5: of upstream factors going on in terms of like the
Speaker 5: package sizes and other things that could be done by
Speaker 5: the food industry and elsewhere that could also prevent this.
Speaker 5: And then one other cultural factor that's important, I think
Speaker 5: is just how unplanned a lot of our lives are
Speaker 5: and how you know, we thought we were going to
Speaker 5: be home. We bought this food for that, and then
Speaker 5: something happened and so we weren't, and so really needing
Speaker 5: to strategize around the reality of our lives.
Speaker 2: I'm wondering about the connection with climate change. I mean,
Speaker 2: there's a few issues here. One of them obviously has
Speaker 2: to do with the resources that go into actually bringing
Speaker 2: food to the table greenhouse gases along the way. Then
Speaker 2: there's also the element of raising that food, watering, whatever
Speaker 2: you're doing, whatever you're growing, feeding a cow, all the
Speaker 2: everything associated with the cow. But then there's also throwing
Speaker 2: it away versus composting. What sort of has the biggest
Speaker 2: impact when it comes to ourronment.
Speaker 5: So the biggest impact starts with the production, as you
Speaker 5: were saying, in a particular meat production, but then throwing
Speaker 5: it out in the landfill is also tremendously impactful. And
Speaker 5: so if you think of climate change, we're putting basically
Speaker 5: the equivalent of forty two coal fire power plants worth
Speaker 5: of greenhouse gas emissions into the air every year from
Speaker 5: food that gets wasted. And there's a group called Project
Speaker 5: draw Down that ranks climate solutions and they do all
Speaker 5: this complicated modeling and they come out with, you know,
Speaker 5: the potential impact based on feasible changes, and at a
Speaker 5: global level, wasted food comes out as the top solution
Speaker 5: that could make an impact on global climate change in
Speaker 5: over the next twenty years. It's you know, and again
Speaker 5: if you ask people like what what do you think
Speaker 5: are the top five the top ten climate solutions, I
Speaker 5: don't think food waste would be on very many people's lists.
Speaker 5: So I think that there's a lot of need to
Speaker 5: raise some more awareness about that.
Speaker 3: Totally agree run it, you know, and I do wonder
Speaker 3: you know, sometimes you raise the cost of things and
Speaker 3: people are much more careful right about waste, And I
Speaker 3: don't know if ultimately that leads to change that you're
Speaker 3: less likely to overbuy because you don't want the waste
Speaker 3: because you can't really afford it because it gets so expensive.
Speaker 3: If you could change one thing in our system that
Speaker 3: would get to this thirty to forty percent of the
Speaker 3: food supply being wasted, what one thing might that be?
Speaker 3: And just got about forty seconds.
Speaker 5: Because that's so hard because there's so many different things
Speaker 5: that we need to do and they all needed to
Speaker 5: work together. So I guess, gosh, if there was one thing,
Speaker 5: I think it would be having everybody, whether it's consumers
Speaker 5: or businesses or any anywhere, tune in to the amount
Speaker 5: of waste that's happening, because I think one of the
Speaker 5: biggest challenges is that we're really not aware of it,
Speaker 5: and we just throw out a little bit here and
Speaker 5: a little bit there, and it adds up. And so
Speaker 5: if we look at what's going on, then we can
Speaker 5: strategize about what are the solutions that are most important
Speaker 5: in my household, in my business to reduce the waste
Speaker 5: of food?
Speaker 3: Yeah, right, Awareness and having an understanding what's going on
Speaker 3: that's kind of off in the first step. Hey, Ronnie,
Speaker 3: thank you so much. An important issue and we're so
Speaker 3: glad we could spend some time with you on it.
Speaker 3: Ronnie Neff is Associate Professor in the Department of Environmental
Speaker 3: Health and Engineering at the Johns Hopkins Bloomberg School of
Speaker 3: Public Health.
Speaker 2: I'm looking forward to explaining that to my five year olds.
Speaker 2: It's hard with to stop asking for another chicken nugget
Speaker 2: if you're not going to eat it.
Speaker 3: It's tougher with kids. It is tougher with kids. But
Speaker 3: I think I don't know.
Speaker 4: I don't know.
Speaker 3: I'm guessing that we alwayte a lot of food. Yeah,
Speaker 3: we're trying. We're really interested it. It sounds like a dad, right,
Speaker 3: all right, guys, don't go anywhere. Getting ready to wrap
Speaker 3: up here on the Friday edition of Business Week, and
Speaker 3: this is Bloomberg