Hear from Europe, like whoever I'm talking to, always like, they see The US as the Eldorado and I'm gonna make it and and
Brian Rosen:need I to it anywhere.
Chris Maffeo:Yeah. And I need to go to The US. I just hired a director, sales director for The US, export director for The US market, no? And I'm always smiling when they tell me that because it's just be careful what you wish for.
Brian Rosen:Yeah. So The US is a good market, but everyone says the same thing. You have to be in The US. So everyone that is coming here feels they need to be here, which just makes the competition here a lot more frothy. Couple on top of that, with a three tier system, you take out the ability to go right to your end consumer.
Brian Rosen:You can't go to the market. You have to go through your importer, your distributor, your account, your consumer. Three tiers.
Chris Maffeo:You have
Brian Rosen:to be well overcapitalized. For every dollar you think you need in sales, you need to add $10 in marketing. Then you need to add depletion allowance on top of that for distributors. Then you need to co fund a depletion bank. It's very expensive.
Brian Rosen:If you come here and you're not well capitalized and you think it's just going to go, you're wrong. If you come here and you go through a 3PL like LibDib or MHW or Park Street, you're going to be in market, but you're going to be undercapitalized as well. Because in those models, you don't get paid until someone buys your goods. And as we established earlier here, no one's going to buy your goods because no one knows you exist. And the same way I started yesterday's seminar at Sprout, no one needs your product.
Brian Rosen:Yeah. No one. So using America as make you laugh, the Pollyanna, like the end of the road, the way it needs to be, own your backyard. If you're the best thing in your region, own it and bankroll all that cash. And when you get to a certain level, come to The US and you get guidance on how to do it the right way.
Brian Rosen:But it's not a 40 foot container coming into La Jolla or coming into New Jersey and saying, I hope it works. It's airlifting a 100 cases here, overpaying for it and seeing if it works before you take on that massive expense.
Chris Maffeo:Why do you think they do The US? When you're talking to people entering the market, do they use it as a kind of like, I want to show that I'm in The US so that I can get into other markets? Or do they really truly believe that they're going to make it in The US?
Brian Rosen:Think everyone believes. What's the point otherwise? But people make the mistake. There's a lot of people that I used to deal with way back in the day, Eastern European brands. Czech and Croatia and Slovenia, all these kinds of Eastern European type brands that would come over.
Brian Rosen:And so these guys would say to me, I want to be in Brooklyn. And I would say, okay, tell me the Eastern European population in Brooklyn. Oh, I don't know. Wouldn't you wanna be in the place where the most Czechs are or the most Romanians are? That's where you wanna be because they want a flavor from their whole country.
Brian Rosen:Conquer the backyard. Conquer the low barrier of entry. Do the hurdle jump on the shortest hurdle. Wanting to be in Cipriani in Midtown Manhattan with a drink no one's ever heard of, where your core demographic doesn't go or plan to go to said restaurant is suicide for your brand. I'm not giving you any kind of, hey, here's the secret advice.
Brian Rosen:I'm giving you common sense, and you have to put a you, not you, the royal you, the listening universe, the watching universe. Put away the ego. Think logically. Don't fall in love with your own brand. Know your consumer.
Brian Rosen:Know what they drink. Know how much they drink. Know what price point they're going to drink at. Know what retailers will favor your brand. Know what off premise and on premise accounts will favor your brand.
Brian Rosen:Know them and you'll have a degree of success. If you just throw the goods in The US and say, We're here, you're totally fucked.
Chris Maffeo:Yeah. There's a few elements there because one thing is that a lot of people think too highly of their brands in a way that they say, for example, I don't want to be where Polish people are. I have a Polish brand. I don't want to be where Polish people are because they used to drink mainstream shit in the country. I'm a premium brand.
Chris Maffeo:There is that element of not understanding how the basic occasion can be used to actually subsidize the growth of the fancy occasion. I have an Italian brand. Let me go to an Italian basic restaurant that wants my brand and then I'll go to Cipriani because then I've got some budget to actually discuss with
Brian Rosen:A 100%. And I work with a brand called Hirosaki, H I R O, great brand. They didn't want to be in Japanese restaurants. Hiro sake did not want to be in Japanese restaurants where people drink sake. They wanted to be in high end hotels and create a new drink called the Socatini.
Brian Rosen:Socke margeti, less calories, less hangover. Of course. That part's great. But your layup is in the Japanese restaurants. Take your layup, get your cash flow going.
Brian Rosen:It gives you the leash and the latitude to experiment, to grow, to think, to market. I've had no problem with the Socatini being at the Four Seasons or the Peninsula in New York. No problem. It's great. It's lower calorie.
Brian Rosen:It's better for you. Less hangover. Fine. To negate the core group of people that know sake is foolish. Embrace what you are and then pivot to who you want to become.
Chris Maffeo:To be honest, like it's a little bit like when I started writing on LinkedIn, you know, I'm following a lot of these creators and they tell you like, what are the things you should do and how you should write and so on. And there is a paradox there. And I remember my early days, I used to post something on LinkedIn and my friends and my ex colleagues would write to me and say, what the fuck are you writing? Is you crazy? Like you're saying this stuff online to the world?
Chris Maffeo:But also I was scared of pressing posts because I was like, shit, everybody's gonna read this. And sometimes I would delete the post just after posting it. And the funny thing is that it's a paradox because you don't want to write because you are scared that messer will go out. If you are a celebrity, who's gonna read my post? My first post is gonna be read by 100 people that probably 98 of I don't even know.
Chris Maffeo:So what's the big deal? And there is the same element on brands, you know, it's like, no, my brand cannot be in a cheap Italian restaurant. Cannot do that. Yeah, but that cheap Italian restaurant is doing five kegs per night. Audience.
Brian Rosen:Audience, they want the truth. They want the truth. Don't want to be bullshitted to. They want the truth. And I don't give a shit from the marketing side what I post because it's a truth.
Brian Rosen:The suppliers know it. The distributors know it. If I went on LinkedIn or Instagram and I said, Distributors don't give a shit about your brand. That's the truth. That's the truth.
Brian Rosen:I've heard it from the distributors. They say it at WSWA or Bar Convent or Discus Convention or whatever. These shows, they say it. They've got 3,000 brands and they've got 20 salespeople. If they don't say the words, I don't give a shit about your brand, the actions surely do.
Chris Maffeo:Yeah, that's true.
Brian Rosen:The public needs people like us to give them the workaround on how to be better at what they do, because the liquor business in general is shrouded in this kind of three tier mystery.
Chris Maffeo:Yes. And that's very true because last year, for example, when I was at Barconvent in Berlin and I walk around and you could see there are different kinds of buckets of brands. There's the big brands and everybody's there, like with all the fancy bartenders, everybody hanging around and drinking. Then there's some up and coming brands that people are actually looking for and so on because they build demand before going to the show. And then there's the weirdos kind of thing.
Chris Maffeo:It's just like there's some brands that are there, like they bought a stand. There is a person there on their mobile. It's just like a random bar down the street, where nobody goes in and the waiter and the barman, they're just on their Instagram just because there's no customers. And I feel pity for them now because I think like shit like that, they spend lots of money, but they don't know what to do. They don't know how to interact with the people.
Chris Maffeo:And I stopped last year too many of them just to talk to them because I was like, I want to give them a chance, poor guy. Like this guy is not talking to anyone all day. But even their approach was so cocky to me that I was like, what the hell is wrong, man?
Brian Rosen:I remember going to Bar Convent and walking with Bevstrat and walking, which is a sales company for The US and getting countless business cards. And then coming back to Chicago and emailing everyone, Oh, we don't need a Salesforce because we're with Southern. We don't need a Salesforce because we're with RNDC or Breakthrough or Merch or Peachy or The Wine Group or whatever. Then they come back to me in six months and say, We're dying here. So the business is tailor made for people that want to support each other.
Brian Rosen:We're never going to, you and I and others are never going to have a sliver of the top 500 sellers in the country. That's what real distribution cares about. Bar Convent Berlin and Brooklyn and others is a way for the top 500 brands to keep top of mind to bartenders globally. And it's a way for the other 40,000 brands to get a miniscule share of mind. But no one should ever think they're in the same boat because they're not.
Chris Maffeo:Yeah. That's the that's the hard truth on that. And let's talk a little bit about the one of the the quotes that that you mentioned that I've learned this word from you, I must say, o n d. Yeah. October, November, December.
Brian Rosen:Yeah.
Chris Maffeo:I I love listening to you. I'm waiting for October just to watch your videos of when
Brian Rosen:you baby. It's OND.
Chris Maffeo:When you shout everyone that that it's OND, tell us about this OND because I'm sure that many listeners are not familiar with it.
Brian Rosen:So October, November, December is the peak buying time of the year. 43% of liquor, beer, wine sales happen during O-N-D. And obviously you've got October, you've got Halloween, you've got Thanksgiving here in The States, you've got Thanksgiving Eve and Thanksgiving Day, you've got all the holidays, whether it's Hanukkah, Kwanzaa, Christmas are in December, you've got New Year's Eve. There's four major drinking holidays in the last sixty six selling days of the year, which is OND. Here's the problem with that.
Brian Rosen:The sales in OND have been made already. The retailers that are making shelf sets and cooler sets and planograms and all of those things, that's already happened. So if you're waiting until October 1 to get your head out of your ass, that is already gone. Now you're playing catch up because the Buds, the Millers, the Southerns, they've already secured their shelf position and their orders for the end of the year for accounts. If you don't have a PO from the bigs right now in The US, you're also out of luck.
Brian Rosen:So you put that all in a bucket. Now you say, okay, in The US, you've got terms when you buy boost. You've got 30 terms, net terms to pay the bill. That means that no one is buying anything of substance after December 17 because that bill comes due January 17 and there's no money coming in January 1 to the seventeenth. So everything that they pay the bill with is gonna be accumulated from the seventeenth to the thirty first.
Brian Rosen:And Thanksgiving. November is a four week month, but take away Thanksgiving break and vacation and family time. It's really only a three week month. Halloween, huge holiday, but it's a bar holiday. It's not an at home holiday.
Brian Rosen:Thanksgiving Eve is a bar holiday. Thanksgiving Day is an at home holiday with fam. So put all of this in a bucket, and that's OND. And to be able to navigate it starts at the beginning of the summer. And if you haven't started yet, just hang on to your pants and try and muscle through this thing.
Brian Rosen:But you need to have an OND plan. It's critical. Distributors aren't taking new brands for the first eight weeks of the year because they're recovering from the holiday. No one's going take anything until after WSWA this year, the reimagined WSWA in Vegas. That's all real stuff.
Brian Rosen:So you likely if you're not with big distribution in The US right now, you're likely not going get picked up until March, April. So all these pipe dreams of I'm gonna go to SWA and find a distributor, it's bullshit. You're gonna get a business card and that's gonna start a six month process. This business is about preparation. This business is about doing what's right for the brand six months ago, not today.
Brian Rosen:And so SOND or OND is really the culmination of all the work you did January, February, March, April, May. That's O and D.
Chris Maffeo:So that's the moment of truth of what you've done.
Brian Rosen:That's the moment of truth of the realization of the activities you did months ago.
Chris Maffeo:And what's the biggest thing that prevents people? Is it just like timing that they're just late to the show?
Brian Rosen:They're focusing in their business. There's sales and marketing and there's planning. The real good brands are planning when you and I are sleeping. The real good brands are planning why someone else is selling. If the same guy who's planning for the business is also selling for the business, you're not gonna have a ton of long term success.
