Cocktails Distilled
Cocktails Distilled
If You Love Canned Cocktails, Then Curitif Are Bringing Out A Pina Colada
No matter what you think of RTDs, you can’t argue with the convenience factor - a fact that has driven the sector into a meteoric rise since COVID.
Although figures show that the sector is beginning to plateau, the premium end of the category is still seeing growth and a demand for new variations.
One such premium brand that has been making its mark is Australia’s Curitif - a brand that believes its expressions empower consumers to redefine their occasions.
With a luxury, high-end image, the brand seeks to constantly express its core values of quality, convenience, and sustainability.
To find out more about this, we talked to the brand’s founder, Matt Sanger, about cocktails, the future of the category, and a shiny, new expression the brand is about to release.
Tiff Christie
No matter what you think of RTDs, you can't argue with the convenience factor, a fact that has driven the sector into a meteoric rise since COVID. Although figures show that the sector is beginning to plateau, the premium end of the category is still seeing growth and a demand for new variations. One such premium brand that has been making its mark is the Australian Curatif, a brand that believes its expressions empower consumers to redefine their occasions With a luxury, high-end image. The brand seeks to constantly express its core values of quality, convenience and sustainability. To find out more about this, we talked to brand founder Mark Sanger about cocktails, the future of the category and a shiny new expression that the brand is about to release.
Thank you for joining us, Matt.
Matt Sanger
Thanks, tiff, great to be here, great to talk to you.
Tiff Christie
Now the company must be what? Six years old at this stage.
Matt Sanger
We're rapidly running up on our fifth birthday. It's our fifth birthday in June. We launched in Negroni Week 2019.
Tiff Christie
Would you say that you have achieved all that you set out to do?
Matt Sanger
I think so. Well, not all that we've set out to do, but I think our primary aspiration has always been to make great drinks. I think that we've made a lot of really great drinks. I think that's reflected in our accolades, but it's also reflected in what we get to do around here on a Tuesday afternoon, Wednesday afternoon, and Thursday afternoon. I guess we never really set out to transform any sort of industry or to be any sort of seismic shift in how cocktails go to market. But I guess one of the other things that has happened since we've launched, and we've played a small part in it, no doubt, is a massive shift around the perception of RTD and premix and RTD cocktails and the environment where those cocktails are being served in that format. If you had said in 2018 or 2019, okay, well, premix cocktails are going to be a significant part of the service offering in on-premise in hotel accommodation. If I had said to you when we last spoke, oh, we're going to put our margarita on Qantas, and I probably did, it wouldn't have been believable. But look, that's, that's where it's at is is the whole world has shifted this, this category of premix cocktails, you know, set aside from RTD because RTD is RTD and it's been around forever and Australians love it, everyone, you, a lot of countries love it. But RTD cocktails as a category didn't really exist, and then all of a sudden it's kind of come sort of out of nowhere to be. You know, it was a $20 billion category in 2020. It'll be a $140 billion category by 2030. And it's a really exciting category from the aspect of the opportunity for innovation.
I just had another call today on this exact topic, which is the opportunity for innovation in synthetic cocktails, especially, is almost limitless.
If you have a tequila brand, for example, you might be able to have a Blanco expression, a Reposado, and yeah, it's kind of this. There's a limit to how far you can go. You can make, you can do certain different things in barrel ageing, whatever else, but you can't come out with a rum or uh, you know this, these other sorts of variations. There's only so far outside of the train tracks you can step, whereas we can draw on 216 years of published cocktail recipes. We can talk to bartenders who are creating brand new recipes today, and we can take a recipe from 10 years ago. We can take one from five years ago that we already made and we can make it with a new spirit or a new fresh ingredient. So I think to answer your question, we set out to make great drinks; we set out to prove a concept. I think we've done a lot of both of that, and then, in our own small way, we've been part of a transformation of an entire category.
Tiff Christie
Looking at what you were saying, there are 260 years of cocktails available. How do you choose what to bring out, and how do you know if it's going to work?
Matt Sanger
So the choosing we do it a few different ways. One is we have cocktails that we just love. We just love the idea of it. Pina Colada is one of those. For example, we brought out a Pina Colada. We have a program called the Club, which is a subscription program where we put out two new cocktails every month. We've been doing it now for about four years and that's an environment it's our safe space to play around with weird and wonderful and wacky. That's also a place where we've got these really engaged consumers who love to see what we try, and we use a great passive feedback model from them, which is if we put out a really fun cocktail in the club and we get a email three days later saying, hey, I want to buy some more of those, we go, okay, well, that's great, that can sit in the innovation timeline, and maybe we'll pitch that into retail further down the track. If we hear nothing at all, then we believe, okay, well, we've achieved our customers' expectations for us. You know this expectation of excellence that we believe we've set. And then if they write an email saying, hey, take me, cancel my subscription, then we go, okay, we've probably missed the mark on that one. Maybe we've gone a bit too wacky. So that's kind of one way is we've got these really great engaged consumers that we have that two-way communication with.
Another is just watching trends. I'm an avid consumer of cocktail culture. We talk with a lot of people in the industry all the time Because of where we're positioned and everywhere in airlines, hotels, bars, pubs, clubs, cinemas, and people's homes and retail. So we have a lot of conversations as well and so we see a lot of those trends potentially as they're happening. And so we see a lot of those trends, you know, potentially as they're happening. And then we set some of the trends occasionally. So I think a lot of it as well is saying, okay, well, this is what feels like it's coming ahead. And so you know, we've flagged that coconut is a flavour for this year.
Obviously, we've flagged that peach is a flavour. We've been looking at some more mindful serves, so lower ABV serves of classic cocktails. So from that perspective, I think we've got this massive pool to draw from. But then we are guided by this North Star always, which is would it be fun? So the example that I would put of that is, Taylor Swift was here the other week. She was everywhere, and on the Monday afternoon we go. Wouldn't it be fun if we did Taylor's favourite cocktail, this French blonde cocktail that everyone was talking about? So we did the label artwork, we did the formulation, we did the testing, we released it on the Thursday morning. Three days later, we sold it out on Thursday night, and all of that on the behest of would be fun and it was fun and so it came and it blinked out very quickly last time we spoke, we were talking about the espresso martini and the amount of work that you needed to do with the can to get it to froth the way the cocktail needs to.
Tiff Christie
But what you were just saying about the Taylor Swift cocktail sounds like you can actually turn around quite swiftly. Excuse the pun. What sort of turnaround are you looking at?
Matt Sanger
You make a good point. So, yeah, no, you're right. We spent years on the coffee for espresso martinis, and we were trying to solve for a variety of things. It was shelf stability—shelf stability without adding preservatives, you know, benzos, sulfites, whatever else. It was flavour, texture, colour, authenticity to distill it down, you know.
08:37
So then we went through all of that again with fresh citrus for margarita, pineapple, daiquiri, Mai Tai, all the stuff that we do with fresh citrus, which was how do we get authentic fresh juice shelf-stable? How do we get it shelf-stable in an environment where it can travel around the world on a truck and in a car and a post or whatever? And we've learned an enormous amount. We learned an enormous amount to get to day one and then, beyond that, we've done a huge legacy of work, developing shelf stability, processes, and theories around how we would get to that point Again, mindful of the authenticity, that if you walk into a bar and you ask for a margarita, they don't pull out the little jar with the cup of sodium benzoate or the little teaspoon of potassium bisulfate.
09:25
So, fortunately, from all of those learnings and then talking about putting out 24 cocktails a year in the club and then the same again in short-run collabs. We've learned a lot around flavour profiles. We've learned a lot around what works. We have some really great relationships with distilleries and manufacturers all around the world and especially locally as well.
09:46
So we can move very quickly from that perspective. But I think the other aspect of it is over the course of the last couple of years we've raised a bit of money through a private consortium who are significant shareholders in our business, and what that's allowed us to do is to build out this facility here in Port Melbourne so that we do everybody's here. Everybody in our business works here; everything happens here. We brew the coffee, we formulate, we can, we pack, we blend. Our creative studio is up here. I've just been built. The reason why I'm a little bit sweaty is I've just been building a bar in the back of the office. Here we're doing the streets and more content. Our design team is here, and admin, ops, sales, and fulfilment are downstairs. The lab is here for all of our QA and QC work, like it all happens here.
So, you know the, the challenge for innovation for a lot of other businesses is they go, okay, well, how are we going to do this flavour work? And they send it out to a flavour house, and the flavour house has to send samples back and that takes time. And then, you know, somebody has actually to formulate it all and we do it all here, right, so we can have a meeting on a Monday afternoon and go. Wouldn't it be fun if and then that cocktail could exist as a real life? Buy it from the website, buy it from retail, you know, days later product.
Tiff Christie
That's extraordinary. You've come a long way.
Matt Sanger
It was, you know, when we last spoke. It really still was garage days you know we were.
I think we take a little bit of seed investment, but we really weren't. We had. We had a co-packer doing all of our manufacturing. So we had no control over quality, we had no control over time, we had no control over waste. You know we had a digital agency doing a lot of digital marketing agency market where everything was outsourced. Yeah, and you so quickly.
The thing that we've learned, you know, firstly, when we took manufacturing in-house, and we never set out to be a manufacturer, to be very clear, you know, the thing was, hey, let's make some great drinks, let's have some fun, right? Yeah, you know, let's take a different approach to it. We didn't want to set up a food manufacturing facility and go through all that qualification and become a dual bonded warehouse and then all of this other stuff that goes with it. Much the same as we didn't want to become a fulfilment centre. I didn't want to be running a customer success team, that kind of wasn't there.
11:53
But what we have learned, and it's probably the number one lesson for us out of a lot of this journey, is once we've learned it, we can do it better ourselves. Specific to our business. We might be a terrible fulfilment business for another company, but for our needs, we're very, very good at it. Our customer service, fulfilment, and logistics are excellent, so that's been a big aspect for us. The benefit of it is you get that agility and speed to market. The benefit of it is it all happens here so it can happen. I can converse with any team member on any given day by taking five steps this way or 10 steps that way.
Tiff Christie
It's funny. I was talking to someone last night actually, who said nobody really cares about natural ingredients in RTD. But that is your primary selling point, isn't it?
Matt Sanger
Yeah, so I think, you know, we put a lot of effort in early to say, oh, we're going to differentiate from RTD. Right, because the concept is that RTD incumbent, RTD has always been low innovation, brand extension stuff. You know, it's spirit and mixer, or it's spirit and flavour, and it's, you know, and it's designed super convenient, super cheap, bright, colourful. The imagination all goes into packaging. Our thing has always been, let's make real cocktails. So originally, we tried to differentiate. We're like, oh, we're ready to serve. I've heard the category called a million different things - Premium Plus. It got differentiated in major retailers pre-batch or pre-bottle. There was all of this stuff going on, whereas we've kind of wound it back a little bit now and gone look, we are RTD. We're not RTD like your spirit mix of low innovation stuff. We're an RTD cocktail, but at the end of the day, we're a cocktail, and real cocktails are made with real ingredients, right? So that's why we don't use a combination of citric, malic, and ascorbic acid to emulate lime juice.
When you have one of our margaritas, what people say is they go. I can't believe that's a real margarita. That's a fresh margarita. I can taste how fresh that is, when you might try something else and you go oh yeah, that reminds me of a margarita. Our stuff is just a real cocktail. So I do have one of my little cans here.
So in our Tommy's Margarita, for example, the International Bartending Association standard is 60 ml of Blanco tequila, 30 ml lime juice, 15 ml of Agave nectar. By the time you account for dilution, it's 130 ml at 18.5%. That's all that's in the can. It's 130 ml at 18.5%. It's just tequila, fresh lime and Agave nectar. That's kind of our obsession it's got to be fresh ingredients. You really can't fake authenticity. The reality for us is lime juice changes from season to season, farm to farm. Some get more sun; some get more rain. That changes the level of pith in the fruit. The level of pith in the fruit changes the acidity and the acerbity of it. Then you have to account for that because that reflects how much sugar is in it. You have to really balance that back at the end. That's what you do with real cocktails, and that's why we have to do it that way.
Tiff Christie
Now, you mentioned earlier that you're making a larger can for the US market. Does that mean you're changing your formulation for that market?
Matt Sanger
No, and that's what's potentially so unhinged about this American. Can you know, at 200 mils, at 18 and a half percent, there are 2.9 standard drinks in there? Now I know I just did this whole big spiel about it. You know the IBA standard is 130 mil at 18 and a half percent. So, there are two aspects of that.
We didn't want to change the formulation. You know this margarita is one more medals and accolades and recognition around the world than any other margarita, than almost any other premix cocktail. So we had to maintain the integrity of the liquid. There is a reality, and I'm sure this has been in every conversation you've had with an Australian spirit maker recently, which is tax. The scenario over there is totally different. We're not, you know, over here. We're paying whatever. We're paying $101 a litre, and more than 50 per cent of our cost of goods is tax, is excise tax in Australia, significantly less in the states, you know, in most states. So it does mean that we're even at that size and at that ABV, we're very price competitive for when we launch there, us is a very large market.
Tiff Christie
Are you going to have to transplant or replicate what you have in Port Melbourne and have it in the States to be able actually to meet the demand?
Matt Sanger
Look longer term for us; we have our online experience through curative-com. We've invested a lot of time, effort and energy into multiple aspects of that. Obviously, design and aesthetics are a bit of a no-brainer. Another aspect of it is the actual experience of the site itself. You know the many benefits of connecting with us through the site, whether through the rewards program, the loyalty program or simply just through the comms that occur through it. So for us, we're going to be launching into these new territories that we're launching into. We're launching with the website first, direct-to-consumer first. For the foreseeable time, we will be able to satisfy production from Port Melbourne for our external market. Longer term, I think realistically, we are going to have to set up manufacturing facilities in other countries, but at this stage, that's not in the plan, it's not, it's not in the budget, that's for sure, yeah, it would be a major operation, I think, to be able to to do that we already work with a number of companies.
You know, in the UK, in the States, you know the time, and you know even, even with us connecting with the time difference that we've got, you know, there's Australia, especially in Melbourne, is the time difference for those markets, is just killer. So you kind of have to have representation there and that's a bit of a piece of the puzzle that we're working through on that. You know there's still plenty of opportunity for us in the Australian market. But then once you start looking at these markets, you know, with the US having up to 400 million people who are sophisticated in their cocktail consumption, who are mature in RTD, who are mature in cans, you know, there's a significant opportunity there if you can get it right. There's also a significant amount of risk as well.
Tiff Christie
I was about to say that the market is relatively oversaturated, especially in the RTD space.
Matt Sanger
Agreed.
Tiff Christie
How difficult is it going to be to express to them the real taste of your product? Because they've heard that a million times before from every single RTD brand. How do you say yes, but we are actually different?
Matt Sanger
Host
18:35
That's a great question. I think there are a few aspects to it there. We kind of haven't made up our minds yet about whether consumers care about the awards. You know we've won them all. You know, International Wine and Spirit Competition, global RTA, producer of the Year, back-to-back, two years in a row, world's Best Classic Cocktail and World's Best Contemporary Cocktail the world drinks awards back to back, again two years in a row. We've won every accolade at the San Francisco Sip Awards, wherever else, and they've kind of they've been a useful bellwether for us because, as I mentioned before, we're super, super serious about a process but we don't communicate that to our consumers because consumers don't care about how sophisticated or clever our process is. You know this isn't it's not like communicating about wine and whiskey. We're not talking about the provenance and legacy. You know we don't have a seventh-generation RTD cocktail. You know formula master here, like that sort of stuff, is madness. That's not what people care about. People go I'm having, it's an espresso martini, it's fun, I'm having fun. Nobody got home from the worst day of work ever and go oh, trudges over the fridge, I guess I'll have an espresso martini. They're having one when it's fun.
So we're like, okay, we've won all the awards; we are very serious about it. It is best in category product, you know. Do you attempt to try and communicate it that way or do you follow some of the principles that we've followed here which we've got? We've got a very successful paid search and paid social strategy here. We're very good at communicating about our product through our content and social work. I think we've got some really great multinational partners who would be great to launch within the accommodation and travel catering space as well. But look to answer your question, I don't know at this stage what the goal is about, how we are going to get that cut through there, and it's going to be one of those things where we're just going to have to test and learn as we go through the process.
Tiff Christie
And how close are you to a US launch?
Matt Sanger
We just received formulation approvals, so we need to send updated labels. That's all going to be signed off. There's a bit of bureaucracy involved in getting a product approved there, and then we won't be able to make it for this summer, so I'd like to hope that we'll be ready for summer 2025.
Tiff Christie
In the meantime, we should probably discuss what we're here to discuss, which is the Pina Colada you're about to release. Yes, to be honest with you, I'm surprised you didn't have one before now.
Matt Sanger
Do you know? So we've released the Pina Colada through the club every Christmas for the last three or four years and it is by far and away our most reordered, popular, requested cult cocktail. That we do right without question, and I think there are a few reasons for that. We, touching back on that authenticity piece, we've made them with Coco Lopez. We've been really genuine around the original Puerto Rican recipe. We've been really genuine around using original Puerto Rican recipe. We've been really genuine around using super top-shelf rum, and while we've been dialling that in, is we go okay, well, for a retail product, we can do Coco Lopez in the club because you can have a big, you know 1,000-litre tank with all the cans of Coco Lopez in the hot water and then you can pull them out and, you know, decant them and filter them and add them right, and then you've got a day of cleaning the equipment after that.
The challenge for Coco Lopez as a product, and I love it, I'm not putting anything on it. The challenge for Coco Lopez as a product is it's a long way removed from a real coconut, right? As you can imagine, the evolutionary chain on that coconut is Australopithecus, and Coco Lopez is whatever Homo Deus is now. So there's that challenge, which is a materials handling challenge. We actually had a pallet or more of Coco Lopez ready to leave Miami last year or the year before, but we're just looking at it from a materials-handling perspective. It's not right. So then the question is how do we solve, for how do you get real coconut flavour using real coconut that has the colour, that has the texture?
The challenge that I think about when I think about Pina Coladas is everybody that I've ever spoken to has had a Pina Colada, and it's one of those cocktails. It's an evocative cocktail. It's transportive, at that moment. Yeah, I was in bora, bora, I was in Fiji, or I was in the Maldives, or wherever I was. I was in this beautiful place, yeah, right, and I was sitting at the pool bar, and I ordered one, and the bartender made it in a blender, and it was massive, and it had, you know, a hat on it or whatever. That was when we got engaged, or I just was celebrating. You know, I'd had this massive texture. It's evocative of this moment in time and it takes people to this special place, which I think is something that many cocktails do, but none do it so much for so many people.
So we're like, look, we've got to get this right. We've got to get this right. We've got to get this coconut flavour right. We've got to be authentic to what we're about, which is, let's just do this the best way we possibly can. So there has been this long-term challenge of towing that line between being authentic to the very, very original recipe and then going, okay, well, let's modernise this and find a way to use real fresh coconut. You know, find a way to use real fresh coconut.
You know, if you look at coconut syrups, for example, a lot of them use natural coconut flavouring and that coconut flavouring either comes from flour or flesh. The flour is quite bitter, you know. So, even though it's got that beautiful coconut smell that you even affiliate all the way down to like a creamy sunscreen type flavour, it's, it's bitter on the palate, and so then we're working through real coconut milk, and then we're balancing that with different types of natural sugar and everything else to get that right. Meanwhile, pineapple juice fresh pineapple juice is more reactive oxidatively I don't know if that's a word, but anyway, let's pretend it is then citrus, for example. So getting that balance right. So that's shelf stable because there are markers that we have to hit in relation to the length of shelf stability for this to be an appropriate product for the major retailers and for us to be able to ship internationally.
So there's a whole bunch of challenges to get that right and it is one of those cocktails that we know how popular it's going to be, so it has to be perfect.
One of our main things is we don't want anything to go out the door without it being perfect. I'd rather agonise on something and have it take more time, or twice as much time, or three times as much time because once it's out, it's out right, and that's kind of it's trapped forever. And so if you just take the time to make it perfect, then it's trapped out there, perfect forever, whereas if you take the time to make it perfect, then it's trapped out there, perfect forever. Whereas if you go, oh, we've got to get this out the door by X date, otherwise it's not going to be on this shelf by that time. That's where corners are cut, and that's when you lose the authenticity. And consumers know, they know. And going back to your earlier question, where you go, no one cares about natural flavours and RTD, that you know, there's an aspect of that consumer that might not, but really somebody who's spending 45-50 on a four-pack of cocktails. They're looking for the real deal
Tiff Christie
I was surprised when you said earlier that your cocktails are being used on-premise.
Matt Sanger
Yeah, it's a huge, it's a huge chunk of our business, and do you know? What's funny about it is we never set out to replace a bartender, and I don't think you can. I think a great bartender is a master craftsperson right, and cocktail bars and great cocktail situations will always exist. But you've also got this shift in consumer aspirations now where they want cocktails in more environments. They want cocktails at the cinemas, they want cocktails at the pub, they want cocktails in every environment on the aeroplane, and those are environments that typically don't have the capability for training, or they don't have the time as well.
One of the things that we talk about when we do talk on-premise is look at the time that it takes to make a great cocktail, and maybe it takes three minutes, maybe it takes five. Maybe you've got a jet bartender who takes 90 seconds, and it kind of doesn't matter how long it takes. If it takes more than 15 seconds, it takes to shake up one of these and pour it into a glass. The rest of that time is that's lost productivity time. That's time that they could be used to take orders, pour a glass of wine, or pour a beer. Running orders, wiping down tables, doing a tiktok dance in the cool room. However, it is that they add value back to the business.
That's time that's lost while they're doing this like caveman yeah so, you know, we, we kind of never set out for it to be that, but then what we've really discovered is it's it's kind of perfect in that environment and some of our biggest accounts outside of retail are on-premise accounts, you know, and, and that's places like surf, lifesaving clubs, that's places like village cinemas, that's you know their environments, that, and I mean I can't forget Sydney, my Melbourne music, ball and art centre. You know, those are the environments where they've got to turn customers quickly. They're looking to do two things as well they're looking to provide, to provide maximum value to the customer. So they want to be able to serve a great cocktail, serve a great beer, serve a great food, whatever else. But they also want to maximum value, so they need to be able to charge as much as they can reasonably because we're all in the business of making money, and in order to be able to charge a premium, you need to serve a premium product. So it fits perfectly in that environment.
That's again where, in this larger format, we might have been talking off air. The kegs that we're releasing at the moment, that the kegs that we're releasing at the moment that's again another opportunity for these incumbent venues who might have all these beer taps. And you've got craft beer shrinking as people are making certain decisions around craft beer. It's like, well, hey, you can put a Curatif margarita on, charge what you like for it. It's going to be more than what you're charging for a beer any day of the week at a relatively similar cost to a pint of beer. So you know, in that environment, we've kind of when we started the business, we never really thought that that would be it, but it has become a really big channel for us.
Tiff Christie
So, in fact, you are providing an easy way for people to have cocktails on tap in their venue with those kegs.
Matt Sanger
And more than just cocktails on tap, good cocktails on tap in their venue, and more than just cocktails on tap, good cocktails on tap. Do you know what I mean? And you know you've got a lot of venues who are trying to solve the productivity problem right now. So you've got venues who go, yeah, okay, well, pre-batching is the way to go, and so then all that they're doing there is they're front-nosing their labour on right. So if somebody's coming in at 2 o'clock in the morning and they're pre-batching this stuff, they're putting it into a bottle, or they're putting it into the keg.
The challenge you've got there is the same challenge that you've got in any other environment is as soon as you are decanting or squeezing your lime juice, it starts to oxidise, and you're starting to get degeneration. If you're putting it into, for example, a corny keg and then you're pressurising that with CO2, you're going to have an issue, depending on what your pH is around developing carbonic acid, or you're going to be oxidising it and you're going to be rapidly oxidising it. So you're going to be degenerating your product. So you're front-nosing this labour to save this time, and then what you're then doing is you're serving a worse product. Then the same issues.
If you're pre-batching into bottles, and this is something that the catering industry has done for as long as I can remember, you know you've got two more problems. There is all that you're doing is front-nosing the mix, right, but you're still trying to measure out the poor. You're still wasting your time there. So it solves a lot of problems while creating a better opportunity to serve a better product. You know. Earn better revenue, make better margins, get home earlier.
Tiff Christie
There must be some cocktails, though, where it is a bit difficult to create them in that format.
Matt Sanger
Yeah, so a big part of our keg program we worked on for a long time was this final mile aspect. So we have our own bespoke dispensers that we've designed with nitrogenating capabilities. Now they're small enough to fit on a bench top, but the idea there is. We pride ourselves on the quality of our product, and if that product, for example, our espresso martini or amaretto sour, if that doesn't go through a nitrogenating tap, it doesn't get the same amount of nitrogenation, which, has the equivalence of the aeration that you get from the shakes. That's what creates the foam and the texture. So we've got that equipment in place. And then for the typically shaken cocktails Cosmo, margarita, whatever else, they can go through traditional tap outlets, and that makes that pretty straightforward. But look, the thing for us is we're not about our spot, has never been. We're just going to sell a product, and then you bought it. It's your problem. Now. We really like being a great partner for the businesses that we work with, and that's about helping them solve problems, and you know it's. It might be a bit of a first-world problem to have a set of great cocktails, but it's one that we like fixing now we've talked about how quickly you can turn cocktails around.
Tiff Christie
How far ahead do you actually work?
Matt Sanger
Everybody in the business would burst into this room in a minute if I didn't say not long enough. It's funny where, you know, I guess a big aspect of that agility is it gives you all this confidence in being reactive. We have planned a lot of our NPD for the rest of the year but you know, we know that there are going to be opportunities that come up. You know, we know that there are going to be opportunities that come up. You know we've got an opportunity coming up with another major cinema group for a couple of collabs this year. We know that there'll be stuff that drops in. We also have a small private label slash, white label aspect to our business as well, and so you kind of of an afternoon, you know the slip comes under the table.
32:15
Okay, well, I need an all Australian native ingredient cocktail for this hotel group, and so that stuff you wish you could plan for a little bit better, but we don’t, and I think there's still very much the mentality here scrappy, post-startup, both boots in on all things at all times. So we certainly don't have the runway of planning in front of us, and we're supposed to be doing the Christmas stuff at the moment, and we haven't done it yet, and then the majors are listening to it, we'll get it, we'll get it to you, we'll get it to you next week. Uh, so there's still that. There's still that aspect of it where where it's like okay, we, we should get better at planning, um, but probably having too much fun.
Tiff Christie
As you start reaching new markets, though, as the business gets bigger and bigger, that scrappiness is going to be lost, isn't it? Yeah, yeah, and that reactiveness is also going to be lost.
Matt Sanger
Correct, correct, look, I think. And that's the challenge for any little business that's trying to extend beyond its own neighbourhood a little bit. You know, I think there is going to be that situation there. It is a big part of the fun of our business, though, so I hope that for as long as possible, we can hold on to the balloon of … let's get this silly cocktail out, let's do this, let's use ChatGPT and get an idea for a label, and we'll give that over to the design, and we'll get that out. You do that. I'll quickly run downstairs and work on some formulation, and this awesome little bottle of rum came in from these local guys. Let's see if they'll do a 220-litre barrel. So I think I'd hope that we can. As I said, I hope we can still hang on to that for as long as possible.
Tiff Christie
Now, where are you? I mean, obviously, you're available across Australia, and I would imagine New Zealand, Australia, and I would imagine New Zealand. You're looking at getting into the States.
Matt Sanger
I would say, probably next year, the way you were talking. Where are you available now? So we are just talking with our Dutch warehouse at the moment. Once the stock goes in there, which will be imminently, we'll be able to switch on the UK for our direct-to-consumer model. We have the facility at the same time to do Germany, Sweden, France, Ireland, Netherlands, and Belgium. But I think we'll sort of go one step at a time. For us, we really want to turn the UK on and get that ticking over. We've got a really great relationship with Amazon, so we'll be switching on to Amazon UK as well shortly. If we can get the UK ticking over, humming, get some great direct-to-consumer happening in the next six months and pick out a couple of great lighthouse accounts, that'd be a great flag to plant in that period.
Tiff Christie
So this next sort of couple of years is going to be huge for the business in terms of the market expansion.
Matt Sanger
Correct. Look, we've been positioning for this for a while. This is a big aspect for us of taking everything in-house over the last few years to get to the point where everything is in-house except for our digital media planning and buying. That's the only thing that we don't do ourselves. It's put us in a position where we are masters of our own destiny a little bit, and we've been positioning for this for a long time. So now we're getting to the point of execution, and that's an exciting time as well because there's lots of things to learn in new markets. There are lots of opportunities to go after, as well as expanding our footprints with our current multinational partners.
Tiff Christie
Therefore, it's safe to say that the plateauing that the rest of the RTD industry is experiencing is not really impacting you very much.
Matt Sanger
We've been looking at this a lot over the last couple of weeks. In our channels that we really directly control, so our direct-to-consumer channel, in any of our major direct national care accounts, export, travel, catering no, we're in significant growth. We're in growth year-on-year. We're in growth against budget. Major, major retail I was literally looking at these numbers yesterday is flat year on year, taking into account the breadth of the portfolio.
I think there's probably a variety of factors on that. I would also say, yeah, look, there's been a bit of flattening across the entire industry, and you know, some categories have taken a bigger hit than others. You know, craft beer and craft gin are having a nightmare run at the moment that I hope they can bounce back from. For us, though, I think we're pretty insulated. I don't know what a great example is. I don't know whether the great example is French champagne or, in times of discretionary spending constraints and cost of living concerns, whether people still need a little treat. You know, I don't think somebody's going to forego their trip to Fiji to take out a curative subscription for the year, but instead of potentially the expensive bottle of wine, the box of cocktails is there, and that becomes the occasional consumption over a couple of nights instead of one, I don't know.
Tiff Christie
Or even just going out compared to staying in.
Matt Sanger
Yeah, correct Look for us; we really look at everything through the micro democracy of our e-commerce environment because that's kind of what we know. We know all the data, we know all the people, we know all the analytics, we know all the demographics. We can see it all happening in real time and we're certainly not seeing a softening in those consumers that buy from us regularly. As it relates to the rest of the industry, I can't speak to how anyone else is doing. You certainly hear that times aren't as great as they were potentially a year or two ago, but for us, we're still on a good path.
Tiff Christie
I suppose one interesting thing that we should discuss is if you are producing cocktails, and some of those are low ABV, will there come a time when you will produce non-alcoholic?
Matt Sanger
My board would have me say yes, but the reality is probably not. When I say that we're producing lower alcohol expressions, it's not necessarily because we're setting out to create a lower ABV expression by intention. It just happens to be that it's part of our exploration at the moment. The challenge with non-alcoholic, from my perspective, is cocktails are made with spirits, cocktails are made with rums or gins or tequilas, vodkas or whatever else, and in order to replicate those, you kind of end up going down this route of having non-alcoholic gin or non-alcoholic rum and it just isn't the same texture, mouthfeel, flavour profile. I, I love what a lot of brands are doing out there in the functional drinking space, whereas instead of creating a rum that is not or a gin that is not, they're creating, you know, a special drink for that occasion of drinking, and we've met some really great makers in that space Whenever we've looked at it I'm still yet to find something that's made me go. This is awesome. This is going to stand shoulder to shoulder in our little portfolio of things that we do.
We've done some non-out cocktails in our private label business of stuff. That's fun it's. It's not something that I think that we really want to go and take to market. As soon as you go into non-alc, you start going into grocery. As soon as you start going into grocery, you start competing with Coke, Schweppes, whoever remedy, whoever else, for shelf inches, and it's. I think it's hard to differentiate at that point as well. The last one on a lot of our shelf stability has to do with our ABV. So there is a big part to play around toxicity to microbiological life at certain ratios of ethanol in solution.
Tiff Christie
I suppose there's also an element where alcohol-based cocktails are recognized amongst consumers. They know the names of these cocktails, whereas there is no no-alcohol drink that people immediately go, oh, that’s a no-alcohol drink, and I know what that means. I know what the flavour is going to be, I know what it's going to taste like.
Matt Sanger
Yeah, and there's a lot in relation to people's journey on Nine Hour, you know, I think there's huge growth in it, and there's huge opportunity and there's some people making a lot of cool things and some people making a lot of money, which is also cool to do. But yeah, look, it's not on our horizon right now.
Tiff Christie
But the Pina Colada is. What do you think it is about these ‘70s and '80s drinks that have made such a revival in recent times?
Matt Sanger
Two things straight away on that. The first one is the Pina Colada. To make a Pina Colada at home is an enormous pain in the arse, right. What sort of day are you having? Where you've got, you know, pineapple. You've got where you've got, you know, pineapple. You're fresh pineapple. You've got fresh lime. You've got cacao, Lopez or your preferred substitute. You've got rums. You know, we use two different types of rum
And it's such hard work, right and making cocktails at home is hard work, full stop. Right, it's a pain in the ass, and that's kind of why we exist in the first place. Yeah, so that's a thing. Number one is the challenge of it, and I spoke before about how evocative they are and how everybody has a little love affair with a painting writer. Secondarily, it's nostalgia, right. So before the cocktail renaissance, there were some cocktails out there that people would order from time to time that were available in places like Pina Colada and Madori Illusion. Those are the ones where you go. Oh, and again, it's evocative. I remember being in the Armadale Hotel in 1999, you know, we were drinking Madori Illusions, right? I was, it was my holiday, and I had a Pina Colada. I think there's that big aspect of it that is transportive and that's super, super fun.
Tiff Christie
So this Pina Colada will be added to your main regular range. How many cocktails are in that mainstay range at the moment?
Matt Sanger
Too many. So we go through this process. We go, yeah, the hierarchy that I mentioned to you before, wouldn't it be fun to make a? And then we make it, and we put it in a club, and people go, that's delicious. And then we go, okay, well, maybe the retailers will like it. The retailers go, yeah, we love it. And then we do all of that, we bring a new product out, but then we forget to sunset something, or we don't forget, or we're having too much fun or whatever else. So we're kind of we're available on the website today I think there's 11 or 12. We're probably going to have to go through the process of sunsetting a couple this year in order to make room for some of the new flavours that are coming.
The other challenge is raw materials, wet materials, as you know. You know to make a mai tai, a bunch of different rums that you need. Well, for us, that means it's ibcs and ibcs and ibcs, or you know, big thousand-liter bulk containers of different rums. There's a lot of materials. So there's, there's, there's probably some optimisation around that. That would make sense a, from a capital intensity perspective, but then it's also hard to let go of something like a Mai Tai. The Mai Tai is one of my favourite cocktails, so it's hard to say maybe this year is the year that we retire the Mai Tai, so we can make room for Pina Colada or peach-tea or coconut espresso.
Tiff Christie
Is there a sweet number of stock cocktails that you need?
Matt Sanger
Yeah, the number is six. This is, this is this is the challenge.
Tiff Christie
Does that give people enough variety, though as long as it rotates, right.
Matt Sanger
So this is the challenge that we see is, you know, for example, for the distributor, you know, they go out to see an on-premise customer, and you kind of don't have that time to be able to pull out a whole big, icy, cold briefcase of eight or ten different cocktails and step through it and go, okay, well, here's the inspiration, here's the flavour, whatever else. So in that retail environment, and you look at retail, for example, people get dwarfed in retail. You know you walk into any of the major retailers and you stand in front of the shelf of gin. You're overwhelmed. So I think the spot where we need to be at in retail probably is six. You probably have three cores and then three rotating, and you would rotate them, say, every six months.
That gives an opportunity for some of this really cool NPD to get its moment in the sun. That gives an opportunity for people to discover things. That gives us an opportunity to develop the platform for partner brands and to keep fresh and to keep conversations going with our consumers as well. Having said that, I think we can have as many as we like on the website. I think the club is fun. I think that's a really great way to explore and then, you know, the collab cocktail environment for us as well is super fun as well because that means we can do stuff that only has, you know, a short period of time that it's alive for, but you can do something weird and wonderful that may not have the same entry-level aspect for us to consider around bulk spirits and bulk ordering and whatever.