VinePair Podcast: Who Wants to Buy an RTD Brand?
The future of canned cocktails remains to be seen, but for the people and brands that were early to the game, perfecting RTDs has been a pursuit of passion. On today’s episode of the “VinePair Podcast,” featuring a brand new format, hosts Adam Teeter, Joanna Sciarrino, and Zach Geballe reflect on some of the most successful RTD brands they see on the market, and which companies they predict will buy them down the road. The article VinePair Podcast: Who Wants to Buy an RTD Brand? appeared first on VinePair.
The future of canned cocktails remains to be seen, but for the people and brands that were early to the game, perfecting RTDs has been a pursuit of passion. On today’s episode of the “VinePair Podcast,” featuring a brand new format, hosts Adam Teeter, Joanna Sciarrino, and Zach Geballe reflect on some of the most successful RTD brands they see on the market, and which companies they predict will buy them down the road.
Then, Teeter sits down with one of the people who led the pack in terms of innovation and creativity in the RTD space: Rocco Milano, co-founder of On The Rocks cocktails. Milano talks about why people doubted him when he got into the canned cocktail business five years ago, the brand’s partnerships with airlines and hotels, and what keeps him so enthusiastic about the industry he loves.
Tune in and learn more about On The Rocks cocktails at https://www.ontherockscocktails.com/.
OR CHECK OUT THE CONVERSATION HERE
Adam Teeter: From VinePair’s New York City headquarters, I’m Adam Teeter.
Joanna Sciarrino: And I’m Joanna Sciarrino.
Zach Geballe: And in Seattle, Washington, I’m Zach Geballe.
A: And this is the “VinePair Podcast.” If you’re a regular listener of the “VinePair Podcast,” you might be wondering, why did three voices just pop into my podcast feed?
Z: It IS Friday, we promise.
A: On a Friday? Doesn’t this usually come to my feed on Monday? No, dear listener, you are not confused. That’s because, moving forward, we’re going to be doing — that’s right — two of these a week.
Z: Oh my God.
A: There’s so much demand. But, we’re going to change things up a little bit. So, you might also be used to getting “Next Rounds” in your feed every week. Those are going to come to an end. What we will be replacing the “Next Rounds” with is this episode. Every Friday, you can expect a really awesome conversation between myself, Joanna, and Zach, about a really interesting topic, followed by an interview that one of us is going to conduct with someone who has experience or expertise in the conversation we’ve just had. We’re really excited about this new format. We’ve heard from a lot of you that the conversations that Joanna, Zach, and I have are your favorite part of the podcast. So, that’s why we want to bring you more. We want to give of ourselves as much as we can, because we just love that you love listening. That’s what you’re going to hear from now on. We hope that you enjoy it. We hope that this helps feed the demand.
Z: We’re feeding the beast.
A: Without further ado, let’s get into this Friday’s topic, which is the world of canned cocktails, but with a twist. There’s so many out there. We’ve had the conversation a bunch on the pod. The majority of people who have started businesses in the U.S. recently — especially these kinds of businesses — raise capital. It’s very unlikely that, in this day and age, you go to the bank, get a loan, and open a business. I think our parents’ generation was able to do that. Most people don’t do that anymore. You usually raise angel funding, venture funding, et cetera. Angels and venture funds don’t invest because they like you. They invest because they want a return, which means they want you to sell. When you sell, you hopefully make a profit, and you sell for more than you told them the value of your company was when they invested. Then, they make a profit. I thought we’d have a fun conversation today — before we jump into our interview with Rocco Milano, the co-founder of On The Rocks cocktails — about what canned cocktails that are out there right now we think are the next ones to get bought? Who would buy them and why?
J: We all know that I, and also Adam, love Tip Top cocktails. I don’t know the answer to the second part of this question. I don’t know who’s going to buy them. Guys, come on. I just love them so much. I think they have such a wonderful concept, and they do canned cocktails really well. They’re based out of Atlanta. Who would buy them?
A: I think because they’re a Southern-based brand, if we’re just going to stick to spirits companies, I think the most likely acquirer, for me, will be Sazerac. It’s the company that owns Buffalo Trace. It’s really well known in the spirit space, but they are Southern-based. They’re based in Louisville. They also have offices in New Orleans. This is an Atlanta-based company. It feels like, if Sazerac isn’t paying attention to Tip Top, they probably should be. They make a really good Old Fashioned. It could be interesting to see how that Old Fashioned tastes with one of their whiskeys. Sazerac dabbles in the worlds of tequila, rum, et cetera. It could be interesting to see how their specific spirits play in those drinks, too. What do you think, Zach?
Z: The fascinating thing to me about this category is that you have two possible paths for a company to come in and buy one of these brands. You have the model that you talk about with Rocco in the interview about On The Rocks, where it stems out of a partnership with Beam Suntory, using their product in the canned cocktails. It makes total sense. They already have an established partnership. Eventually, Beam Suntory says, hey, we think what we’re doing here is really working. We want to buy this out. That would fit the Sazerac model, even if there’s not an established partnership. They see a way to get themselves an RTD presence with a brand that has a lot of acclaim. They can feed their product in through that. I wonder if you could see a different model with Tip Top. That’s another Atlanta-based company: Coca-Cola. To me, what’s fascinating here is that we just saw PepsiCo get into beverage alcohol with the Mountain Dew hard seltzer. Prior to that, non-alcoholic soda companies did not touch alcohol. They didn’t co-market. You didn’t get a pre-mixed rum and Coke or something like that. You know Coca-Cola has got to be looking at RTDs and hard seltzers. They know they have the most recognizable beverage brand in the world, so how are they not leveraging this? That leveraging might look like them putting their own stuff out there. But, if they want to be able to get multiple facets of an alcohol distribution business going, to me, that seems like a natural one. As you talk about with Rocco, not to spoil the entire interview, is that, for them, a big part of the business model was placements in hotels, airlines, and arenas. Coca-Cola’s got all of that locked down.
J: Tip-Top is already involved in that as well. It’s the perfect synergy.
A: Yeah, they’re in Delta.
Z: Coca-Cola can take that global. Tip-Top is probably not going to take airlines and stadiums the world over by themselves. But, Coca-Cola can do that. That would be my guess. It’s a little out there.
A: It’s really interesting. I think that’s smart.
J: It’s pretty good.
A: What about you, Zach? What brand would you throw out there, as one that people should be looking at right now that’s in the canned cocktail game?
Z: Well, I think that’s really fascinating. I will freely admit that the first one I thought of that I see a lot is Cutwater. They’re actually owned by AB InBev. So, they’ve already been bought. I was too late on that one. I know you interviewed the founders of Crafthouse. With a brand like that, there isn’t as much of a natural synergy with a local or regional brand. They’re Minneapolis-based, right, Adam?
A: Yes, but there is a synergy. I’ll get there after you talk.
Z: OK. You talk. You did the interview. I’m going to take this conversation a little bit sideways. I apologize. Will you see a brand that is focused on ultra-premium canned cocktails? So far, the price points have been well under what you would pay for a cocktail at a bar or restaurant, typically. What if someone says they want to start making a Manhattan with ultra- premium bourbon. That might not get the same mass market intention as some of these other brands. But, maybe that catches someone’s eye who asks, why wouldn’t someone get a $15 canned cocktail if we could put a product in it that demands that price point? I don’t know. Maybe we can do that. So, tell me about Crafthouse.
A: The natural synergy here is that Charles Joly, who is one of the two founders, has won Diageo World Class. He’s in the family. They clearly know who he is. I also think Diageo could take that brand and do some really interesting things with it. One of the things that I would fix with Crafthouse, a little bit, is some of the branding. I think Diageo is really good at branding and marketing. Crafthouse is really good at having really high-quality liquid in the bottle. That could be really interesting for them to play around with. Crafthouse is doing some interesting things with packaging and stuff. For me, I have one obvious one and a second one. The first is the question of who would ABI buy? ABI loves acquisitions. I think that’s because their acquisitions are pretty obvious. It’s going to be F!ve Drinks. I think F!ve Drinks will get bought pretty soon by ABI, because ZX Ventures is a pretty big investor in F!ve Drinks, and the founder of F!ve Drinks is a former ABI executive. On The Rocks was not founded by a former Beam Suntory executive, but Beam was a minority investor in the drinks pretty early on and then bought it. I think that’s why it’s going to happen. They also have high-quality cocktails in a can. The other one that I think would be interesting for people to be paying attention to is St. Agrestis. Their branding, quality, and their innovation sets them apart. I know that other places have been doing bag-in-box cocktails, but not to the extent that St. Agrestis has in terms of making it actually feel cool. The branding is really good, and the cocktails inside are great. They’re very much Italian-focused. I was thinking about this for a while, and I think a lot of people might be shocked at the company that I would say I think we should be looking at. I think that’s Gallo. The reason that I say Gallo is because they are very quickly becoming the fifth-largest spirits company in the country. They’re Italian-focused. They’re an Italian-American family. They have a lot of amazing Italian wines. They bring in Renato Ratti, Allegrini, et cetera. I think a lot of people aren’t aware that they have a partnership with Montenegro Select, et cetera. It would actually fit very well. I understand that St. Agrestis is also a distillery, which makes it a little bit different from some of the others we’re talking about who are sourcing their spirits from other places to make their canned cocktails. They’re a canned cocktail brand that also owns a distillery. There could be some issues there. Is Gallo going to immediately insert Select into the box of Negronis that St. Agrestis is currently making? Probably not. Part of what makes those cocktails very popular is that they’re using their own Inferno Bitter. But I think it would be really interesting. Gallo is a company that really understands distribution and marketing. They understand that format, too. Gallo has been selling boxed wine forever as one of these skews that they believe in. For them to be the company that gets behind boxed cocktails would be really cool. I think they could do it really well. That would be mine. We have four companies that really seem to fit the mold for why you would be bought and by whom. Is there anyone we missed?
Z: I can’t believe I didn’t think of this before, but I was thinking back on our podcast episodes, and thought of Ramona, which was founded by Jordan Salcito. You can listen to that podcast interview as well, in the archives. They’re already relatively well established, but it’s hard to know in this whole category where the upward growth potential is for some of these brands. Has Ramona reached its natural equilibrium point? It’s available all over the country, at least to some extent. It’s well regarded. But, is there 10x growth in it? I don’t know. Maybe because of its flavor profile and style, it has just capped out where it is. That’s obviously a big part of this. Anyone who’s looking to acquire is looking for something that they can take and grow massively. They want to take it from where it is to a much bigger state. I just think it would be remiss in not mentioning them because they were one of the first.
A: I don’t see it for them, to be honest.
Z: They may not want it. That’s the other thing.
A: I think the brand is cool, but I think it’s almost too “cool kid.” The other issue is that it’s been around for a really long time. Usually what you see with purchases is a brand that gets bought that’s had very quick momentum. You want a company that says, “We know that with the cash that we could funnel in, we could immediately 5x or 6x this growth.” For wine spritzers, I just don’t know how big that market is. I think if Ramona pivoted and they were making spritzes with an Aperol contingent or whatever, that has a huge potential. Then, the question is, what spirits company would purchase and want to go up against what’s coming very quickly to the American market, which is Aperol Spritz as a canned cocktail. Right. That’s going to be a behemoth. We know how much money Campari put behind Aperol in the American market a few years ago. That would be a lot to compete against. I think it would be difficult. But, who knows?
J: I had another one. I was thinking about Lone River, but that was actually already acquired by Diageo in March. Then, I was just thinking of this category of Ranch Waters and tequila-based RTDs. I thought of Onda.
A: Yes, that’s true.
J: I really liked Onda. I would much prefer to drink that than a White Claw or a hard seltzer. I think that has a lot of potential. It’s also just getting very popular now. I don’t know, I could see Bacardi.
A: That would make a lot of sense for Bacardi. Bacardi owns Patrón. They’ve had some of the biggest acquisitions in the past, so that they’ll be really interesting. So, why don’t we get into this conversation I had with Rocco Milano, the co-founder of On The Rocks. We can hear his story about how, only five years ago, they started a bottled cocktail brand when everyone thought they were crazy. They have sold it, already, to Beam Suntory.
A CONVERSATION WITH ROCCO MILANON, CO-FOUNDER OF ON THE ROCKS
A: Today, I’m really excited to be joined by Rocco Milano, the co-founder, brand ambassador, mixologist of On The Rocks cocktails. It’s probably pretty likely that recently, you’ve seen these in your local liquor store, maybe on a plane or in a hotel. These things are everywhere recently. Rocco, thanks so much for joining me.
Rocco Milano: Adam, it is an absolute pleasure to be here. Thank you for having me.
A: We’ve got to get into this. I’m really curious. We’ve talked to a lot of different canned cocktail brands as part of these conversations, but you guys were some of the earliest. When you started, it really felt like there was a huge white space. 2015 was when you launched, right?
R: In 2015, I was being told flat out that I was pissing away my career by getting involved in a ready-to-drink.
A: And now you’re owned by Beam. Six years changes a lot. It is insane how many bottled cocktails the VinePair staff is sent every single week. I’d say everyone has a desire, now, to get into the business. Could you take us back to that beginning in 2015? Tell me a little bit about what you guys saw, what made you decide to do this then, and how you went about it?
R: Sure. It starts at a restaurant, at a bar. I’ve been a bartender for 15 years. My business partner, Patrick Halbert, owned a restaurant that had formerly been known as Private Social and re-concepted as Barter. I stuck around. I was running his beverage program. We tried doing a lot of different things, and we kept getting known for our cocktail program. It was just a really strong one. Private Social, within six weeks of being open, was in the top 10 places in the city to drink. We kept that trend going. We were a cocktail hotspot to the point that, 10 years ago, I had to pull beer from my taps and I was doing cocktails on tap. I couldn’t sell beer to save my life at that place. Everyone came in, and that’s what we were known for.
A: Let’s tell people where you are. You’re talking about Dallas, right?
R: Yes, my apologies. Dallas, Texas.
A: It’s pretty funny that you couldn’t sell beer in Dallas. I think there’s the stereotype of Texans liking their beer. That’s really interesting.
R: Let me take it a step further, brother. I decided to throw in the towel on the Texas versus OU weekend. I could not sell beer to Texans or Oklahomans. I threw in the towel, at that point, for beer. I said, you know what? We’re going to lean into cocktails. We’re going to play to our strengths and we’re really going to push that. Ten years ago, we were doing something that was fun and different. That was the cool part of working with Patrick. Anything I wanted to do, he was always on board with. He got me away from the Mansion on Turtle Creek — which is a five star, five diamond hotel — to go run a bar in uptown Dallas. It was because he used these two magic words that I desperately wanted at that point. It wasn’t more money and it wasn’t better benefits, even though I technically got both. It was creative control. Adam, that was worth its weight in gold to a bartender who’s lost in cocktail books, who’s just reading, who’s going home and sleeping six to eight hours a night because they can’t wait to get back into the kitchen and try doing all these different things. It was so much fun to kind of live in that place of, “Can I be creative?” There’s a great line from “Willy Wonka and the Chocolate Factory”: “pure imagination — living there, you’ll be free if you truly wish to be.” That’s where I was at. It was just such a fun place and time to be able to do all these cool things. I put a cocktail on my menu called Bartender’s Choice. I would ask you four questions, and I’d customize a cocktail for your experience. It was so much fun because it gave me the chance to just wow every single guest I had come into that bar. The highest compliment I’ve ever been paid was when one woman once told me, “You just served me everything I never knew I always wanted.”
A: That’s pretty dope.
R: Right? It was really, really cool. Virgin America, their in-flight team, was doing a big kick-off out of Love Field. I had a number of friends at LSG Sky Chefs. They brought the in-flight crew. Virgin’s just a cool brand to be affiliated with in any way, shape, or form. Their VP of food and beverage came in with the in-flight crew. It was about six people sitting at this one table. I go to the table and do Bartender’s Choice for all six of them. I asked these four questions to all six people. I go back to the bar. I pull different glassware, and I’m doing different spirit types. I’m doing this bitters, this garnish, this fun throwback, this modern twist. I’m changing it up all depending on what they said. I come over, I drop all six drinks down, and I start going through everything. The VP for Virgin turns to me and says, “Would you consider doing an in-flight cocktail menu for Virgin America? We absolutely love this. We think this is so cool.” I talked to Patrick about it. Patrick comes back and says, I’ve got a better idea. What if, instead of just putting together a menu, we found a way to bottle cocktails and see if Virgin America would be interested in buying them? We started trying to target airlines. Any time you’re starting a business, you can’t get enough good advice. There were a number of people who said, “Man, you are pissing away money trying to sell to airlines.” What we found is that we weren’t trying to compete, necessarily, head-to- head with whiskey providers, vodka providers, or distilleries. What we were doing was offering that extra little step of combining the cocktails for you. So, for that in-flight team, all you have to do is pop and pour. There’s five of these poor people on the plane. There’s 300 passengers. Now, we can do a fun, cool cocktail program at 30,000 feet. Unfortunately, Virgin got acquired by Alaska before the program kicked off, but they took the extra step of introducing us to some of their friends. We ended up working with Hawaiian Airlines, which was our first airline partner. Now, to this point — and it’s still a very surreal thought — our Mai Tai flies everywhere that Hawaiian flies around the world. That’s amazing. You can get a cocktail I made from Honolulu to Sydney. It’s mind blowing, brother. Just mind blowing to me.
A: That’s crazy. You took a path that seems like a no-brainer. I was also really impressed that you targeted hotels early on. Even now, it’s something I don’t think a lot of people making canned and bottled cocktails are doing. I think they’re still going after the restaurant or they’re trying to get in at all these different independent wine shops and spirits stores. What you did was ensure that your brand was exposed to every single person that flew. That’s just incredible.
R: Absolutely, Adam. What we started to develop very early on was a philosophy that we are for where the bartender is not. I remember presenting to Omni Hotels and when I first met with their VP of food and beverage, he pointed at the bar behind him and said, “I have a full bar right there. Why do I need you?” I immediately shot back, “Let’s talk about your in-room dining program. Let’s talk about what you’re serving in your golf carts. Let’s talk about your spa program. Let’s talk about your VIP amenities.” I’m a Hilton Diamond member, a Marriott Bonvoy member, and an Omni Black member. Anyone can send red wine or sparkling. That’s not particularly interesting or sexy. Now, I can send you some Old Fashioneds. I can send you some Margaritas. I can send you an actual cocktail basket if you’re hosting your wedding at my property. That’s innovation. That’s showing up in fun, creative ways that nobody else was doing at the time. It’s what made it so much fun, over the past five years, to go to these conferences and present to these people. You could see it in their eyes when the light switch flipped. All of a sudden, they got what I was talking about. They picked it up and ran with it. You’re exactly right, man. We managed to create demand, effectively, by playing in a space that nobody was playing in.
A: First of all, I’ve had the cocktails. They’re very good. I especially enjoy your Mai Tai. Also, I’ve had a lot of founders and people on this podcast; you are insanely excited and a hell of a salesman. That goes a long way. Your enthusiasm for this is very infectious. It’s something people should take into account. Your enthusiasm has to come through. If you’re not enthusiastic about what you’re doing, you’re never going to sell it, or it’s going to be a much harder sell. I can already see you, five years ago, sitting down with some of these beverage directors and convincing them to be as excited about it as you are. A five-year trajectory from start to sell is insane. It’s really insane.
R: It’s completely mind blowing to me. It really is. First of all, thank you so much for the shout-out on the energy. Much love to 5-Hour Energy. I’m on my third for the day, and that’s definitely helped. Beyond that, we’re talking about a subject that I love and that I am passionate about. There was a guy I used to work with in Florida, he was part of the hotel team for our distributor down there. He would always tell me that just hearing my travel itinerary made him nervous. When people would ask me, “Where are you based?” I would always answer the same way. I fly out of American Airlines and I’d say, I’m based at the nearest Admirals Club. I’m forever on the road. But, you want to know why I’m on the hustle? I love what I’m doing and I genuinely believe in what I’m doing. I’m one of those truly blessed people that gets to do what they love. I also have four little boys, ages 13, 8, 6, and 5. Do you know what that means, Adam? Everyone’s hitting college at the exact same time. You better believe I was out there talking to people, going to the shows, going to the meetings, and trying to make it happen.
A: Let’s go back to, how did you make it happen? We’ve jumped very far ahead. Beam ultimately bought On The Rocks in 2020, very recently. So, Virgin comes in, they ask you to make a menu. Your business partner says, “I’m going to do this one better. Let’s try to bottle these.” So, how did you figure it out? One of the other things that has been really difficult in this specific market is that so many of them suck. So many of the bottled cocktails just aren’t that good. How did you go about trying to figure out how to make these cocktails taste good? It’s not as easy as a lot of people think it will be.
R: I couldn’t agree with you more. First and foremost, it took a solid year of R&D. We had to close down the restaurant to start the cocktail journey. One of the things that we had going for us is that I’m not a guy in a lab coat that’s never made a cocktail. I’ve worked with these drinks day in, day out, 15 years, through every kind of bar you can imagine. I knew what these drinks should look like and what they should taste like. Because I was able to approach it as a bartender would, we very quickly established what our tenets were as a brand. We had to be natural. We had to stick with cane sugar. I didn’t want to use fructose, corn syrup, or any of that garbage that’s out there. Any color variations had to be fruit or vegetable juice. We didn’t want to use these inauthentic parts. We wanted to give you that cocktail experience, and that had to start with what we were going to put into the drinks. There was a lot of trial and error. We sent out emails to purveyors for every kind of ingredient you can imagine. Aside from having been a bartender for the past 15 years, I’m a certified spirits specialist, and I’m a spirits professional in the U.S. Bartenders’ Guild. I took a lot of pride in learning about all these different ingredients that I was going to use. For instance, when we first talked about the Mai Tai, we picked rums of different styles, regions, and ages. Consequently, we blended something together. It follows that great Tiki saying that “what one rum can’t do, three rums can.” That does not mean drink three times as much rum, if that’s the first time you’re hearing this. It means, when you blend different styles, techniques, and approaches, you get something so much better than any one of them could be. It’s greater, fuller, and richer. That’s the approach we took to cocktails. There was no right or wrong way to do it. I’ve got cocktails that call for mezcal. I’ve got cocktails that we could make with pisco. I’ve got cocktails that we could make with rum. We ran the gamut of what we thought would work. And one of the things that we always kept in the forefront with what cocktails we were going to produce was that we looked at it as: what would a bar menu look like? Whatever my guest wanted, that’s what I was able to deliver. That was huge for us.
A: When you were making these cocktails, you were thinking about packaging, et cetera. Did you see this as a brand that would be both single-serve and multi-serve? A lot of the cocktails you’re seeing come out now, at least in the last year, are single-serve. The majority of what I’ve seen for you guys is that you bottle in larger formats. Not larger, like 750, but like 375. What was your thought process around what you were going to put this liquid in?
R: So the 100-milliliter was the first thing that we ever started bottling. That was targeting airlines, like I said. Interestingly enough, we learned with our concession partners, our local football club, and eventually some of our NFL partners, that glass bottles are considered projectiles. While it would never occur to me to throw a bottle at a ref’s head, plastic was something that was very important to them. Since we were targeting those areas where the bartender wasn’t, thinking about how somebody could pop and pour a perfect pour was very important. That 100-milliliter, for instance, will perfectly fill a 10-ounce rocks glass once there’s ice in the cup. It’s a single cup I can hand my guest and be done with. Our 200-milliliter was glass. That was designed more for where people were going to be able to touch the bottle. Think about hotel marketplaces and hotel grab and gos, where the guest is going to be able to pick it up, read the label, see what’s on it, and turn it over. We wanted that experience to be glass. The 100-milliliter was a pouring device. The 200-milliliter was the first step into what somebody would pick up and would pour. Fun fact: That will fill a red Solo Cup. Lastly, we launched the 375-milliliter size when we started getting into retail. That was more about shelf presence. Certainly, as we’ve expanded in our retail placement, that’s been what’s been growing the most.
A: One more question for you about the liquid before we get into the business. How important is the proof of the cocktail? Some people have told me that they think another reason that some of these canned cocktails aren’t so great is because the proof is too low. When someone dumps it over ice, it waters down even more. I’m curious what your thoughts are in terms of proof and what the proof should be when you bottle these items.
R: I absolutely love that question. The whole reason we called it On The Rocks is because we factored in for that dilution. Having been a bartender, we ask ourselves, why do we shake? Why do we stir? Why do we do those things? The answer is to add that dilution to the cocktail. That was very important to us. We wanted to have that strength. There’s a reason we didn’t use vodka with everything. I want you to know you’re drinking rum. I want you to know you’re drinking whiskey. I want you to get the agave notes in that tequila. Proof was very important because, once you pour it over ice, if you factor in for that dilution, that guest is going to be able to sit there and sip on their cocktail and not have to slam it. With so many of the other things out there, as soon as you pour it over ice, in two minutes, you’ve got water. We were after a replication of that authentic bar experience, but one that you have on your terms. You’re having it at 30,000 feet. You’re having it on a cruise ship. You’re having it at a hotel.
A: One more question, because you’re really answering all these questions I’ve always wanted to know. A lot of other people with canned cocktails say that another thing that’s hard to get right is citrus. I think you do a pretty good job with the Margarita. What was that process like? You can’t use fresh citrus. It’s not shelf stable. What did it look like to figure out how to really hit those notes? With your Margarita, it really does taste like a Margarita.
R: It’s actually pretty straightforward. It just depends on the lens you’re looking at it through. When we talk about wine, for instance, we talk Brix, pH, and ABV. The exact same thing is true in cocktails. When I first started getting really into cocktails, I had one mentor who said to me that if you blend to where all three of those components are in sync, whatever you’re making is going to be pretty decent. It’s going to be drinkable, at the very least. When something wasn’t too sour, too sweet, too strong, or too weak, I took that with me throughout the rest of my career. Your ability to deliver a balanced cocktail consistently between those three elements is going to be what’s paramount to keeping us in business. If you’re somebody in a lab coat that’s never made a cocktail before in your life, you may not look at the world that way. As a bartender, I know the thought process. I know the feeling. I’ve seen guests light up when they have something that’s balanced and fresh. I’ve converted wine drinkers. One of the questions I would ask with Bartender’s Choice, is whether there are any spirits you love or hate. If you told me you hated gin, there was a 100 percent chance you were going to get a gin cocktail from me. The reason for that is that gin is a beautiful spirit. It’s an amazing spirit. When executed properly — when you can get some of those softer botanicals in there by taking away the bite and harshness from the spirit, allowing the flavor profile to shine through — you have created something amazing. You have delivered something that is truly a culinary experience in a glass to that guest. That’s when you win people over. Because I saw that in person, I wanted to put that in a bottle.
A: That makes a lot of sense. Talk me through the partnership with Beam. It was a partnership before it was an acquisition. How did that happen? Did they come to you? Did you go to them? When did that happen?
R: It was a few years in, when we actually started partnering with them and using spirits. I’d say it was about two or three years. Our COO at the time was very good friends with some of the people at Beam Suntory. He would make sure that they always knew what we were working on. He just kept those back channels open. We started to pick up steam and show that we were in different places. I remember being asked once, “How did you get into five airlines in five years? That just seems like an insurmountable task.” My response was, “Have you ever heard of the In-Flight Service Association? Every industry has a conference. We were the only people who showed up at that conference. Consequently, we got the business.” It was about showing up in those places. It was about playing in those spaces where a company like Beam Suntory really wasn’t playing. I think it drew them to us. Once I was able to say that I was using Knob Creek or Larios gin in a drink, things really started to take off in an interesting way, because we had that assurance of quality. Guests know exactly what they’re going to get because they know Knob Creek. They know it’s stellar whiskey. Not to jump too far ahead, but with everything that’s happened, I think that there’s enough stability within the category that people generally trust what’s coming out of a bottle and what’s coming out of a can. At the time, if you jump back two and a half years ago, it was a complete game changer.
A: I would assume that the acquisition happened naturally. They were with you. They saw the growth. Covid happened, and the market exploded. All of a sudden, everyone wanted to have a canned cocktail brand. You were there at the right time.
R: I swear to God, I look around sometimes and wonder, “What the hell happened here?” They were phenomenal partners in the years while we were just using their brands and they were helping us. Once Covid happened, that was very terrifying for a multitude of reasons. It’s scary as an industry professional. I’m a bartender. My wife’s a waitress. We met at a restaurant. Neither one of us is a corporate person. By the grace of God, this didn’t happen five years ago when I was still behind a bar and she was still waiting tables. From that standpoint, it was very scary. I have a lot of friends who are still in the industry. The first couple of months for them were brutal. Then, people stopped booking hotels, getting on airlines, and cruise lines got shut down. Almost overnight, all of that went away. I’d always really wanted to start seeing cocktails to go because it didn’t make any sense to me that I could get the pizza from you, but not the Margarita. Once cocktails to go started picking up, we started to be able to help out these restaurants with those kinds of options. Plus, liquor delivery. It’s something that, three or four years ago, we wouldn’t have even thought possible. Now, I can have a full bar sent to me. It’s kind of crazy. You’re exactly right. We were very much in the right place at the right time with the product that we had, plus being branded. It gave people that degree of assurance that they needed. To your point from earlier, ABV does play a part, in that you know what you’re getting is bar-quality.
A: Right. Man, this has been awesome talking to you. I could talk to you for 30 more minutes. I have so many more questions for you. One last one is, how many skews do you currently have with On The Rocks, and how many do you plan to release?
R: Phenomenal question. Right now, we have six. Three more are scheduled to be released over the course of the next 12 to 14 months. We have 52 cocktails formulated that we could potentially draw from.
R: Brother, I joke that during that first year, we had more attorneys than employees. I had a lot of time on my hands to tinker around and come up with new things. That first year was just exploration. It was pure imagination, as I said earlier.
A: That’s amazing. Thank you so much again, Rocco, for taking the time to talk to me. This has been awesome to hear the story of On The Rocks and your story. It went from a brand that I was sort of aware of a few years ago to being everywhere. I almost can’t walk into a liquor store now without seeing the brand. That’s a testament to what you guys have built and the importance of being early, being super aggressive, and your passion for the category. Seriously, a massive amount of congratulations. You should be very proud of what you guys have done.
R: I appreciate it tremendously, Adam. I always like to say that we don’t sit in cubicles all day. We’re out there. We’re having fun. It’s got to stay that way. We’ve got to be having a good time with this, because that’s what OTR is all about. It’s that on-premise experience. It’s that bar experience. It’s that restaurant experience. It’s living in a world of “yes.” I never want to lose that.
Thanks so much for listening to the “VinePair Podcast.” If you love this show as much as we love making it, please leave us a rating or review on iTunes, Spotify, Stitcher or wherever it is you get your podcasts. It really helps everyone else discover the show.
Now, for the credits, VinePair is produced and recorded in New York City and Seattle, Washington, by myself and Zach Geballe, who does all the editing and loves to get the credit. Also, I would love to give a special shout-out to my VinePair co-founder, Josh Malin, for helping make all this possible and also to Keith Beavers, VinePair’s tastings director, who is additionally a producer on the show. I also want to, of course, thank every other member of the VinePair team who are instrumental in all of the ideas that go into making the show every week. Thanks so much for listening, and we’ll see you again.
Ed. note: This episode has been edited for length and clarity.