LISTEN TO THE EPISODE

SPREAD THE WORD ON:

EPISODE SPONSORS
Juhll Online Marketing Agency
A boutique digital marketing consultancy with over 20 years of experience. Transparent, data-driven, committed to your goals.
CONTACT
EPISODE
43
Published on
June 15, 2020

043 | Bottling Success in the Craft Cocktail Industry with On The Rocks Cocktails

Summary

When it comes to taking chances, sometimes you have to be stupid or crazy - just ask the co-founders of On The Rocks Cocktails. Rocco Milano, Patrick Halbert, and Andrew Gill left behind a successful Dallas restaurant to start a bottled craft cocktail business from scratch with little more than a great idea and a few good connections. The rest is, as you would say, history - On The Rock craft cocktails are now distributed nationwide through airlines, hotel chains, and major retailers.

Highlights

  • The philosophy of creating craft cocktails
  • The story behind how the Social House in Dallas was started
  • From restaurateurs to moonshiners: the decision to start a distillery
  • Landing an in-flight cocktail deal with Virgin America
  • Expansion into additional airlines and hotels
  • Creating a craft cocktail experience without a bartender
  • How the On The Rocks helped keep restaurants in business during COVID-19 shutdowns

Mentioned Resources

Episode Sponsors

This episode is sponsored by Juhll. They are a full service digital marketing consultancy that has over 20 years of experience helping your business grow sales online. They've helped most of their clients grow more than 50% year over year by helping them meet their digital marketing goals.

Juhll Digital Agency works with companies who are doing $50 million in top line revenue that have a marketing budget of $2 million. They build your company from the ground up and they also help you in creating a strategy that will work best for your team.

You can email Chris Snyder, President of Juhll Digital Agency, at chris@juhll.com, or contact their team today and find out which of their services will work best for your success story.

Tweetable Quotes

"So I was studying systematic theology with an emphasis in 1st-Century Greek and Hebrew. And as I like to say, what you do with that degree is you bartend." - Rocco Milano, On The Rocks

TWEET THIS QUOTE

"So, you know, was Descartes at the bottom of a demijohn of wine when he started saying, "I think therefore I am?" Possibly man, we don't know." - Rocco Milano, On The Rocks

TWEET THIS QUOTE

"But as the bar manager at Per Se in New York said to me, I think it's so well said: there's no money and fifteen dollar cocktails when you're selling thousand dollar bottles of wine." - Rocco Milano, On The Rocks

TWEET THIS QUOTE

"The thought that I could create a drink or I could make a drink that somebody was drinking back in the 1890s, and we could share that commonality of experience, was almost to me at the moment like reaching back in time." - Rocco Milano, On The Rocks

TWEET THIS QUOTE

"I had a cocktail on the menu called Bartender's Choice, and it was about giving you an experience. So I'd ask you four questions. And then based on your response to those four questions, I would create a drink for you." Rocco Milano, On The Rocks

TWEET THIS QUOTE

"I've heard it once said that crazy and genius are neighbors and they lend each other sugar." Rocco Milano, On The Rocks

TWEET THIS QUOTE

"You don't accidentally come up with a bottle that's perfect for airlines. So we really kind of zeroed in on that and made that a key focus for us." Rocco Milano, On The Rocks

TWEET THIS QUOTE

"You know, if you look at 2020, it has been an insane year. We started with, you know, losing Kobe and COVID kicks off. Now we're at Gary Busey Pet Judge, which is a real thing. Please, we're not getting any saner. OK? Have a drink, relax, de-stress." - Rocco Milano, On The Rocks

TWEET THIS QUOTE

Rocco Milano

Co-Founder, On The Rocks

On The Rocks is a Dallas-based craft cocktail manufacturer. Through partnerships with distilleries like Knob Creek and Cruzan Rum, On The Rocks has created a collection of bottle cocktails made with high-quality spirits, all-natural ingredients, and no preservatives.

Patrick Halbert

Co-Founder, On The Rocks

On The Rocks is a Dallas-based craft cocktail manufacturer. Through partnerships with distilleries like Knob Creek and Cruzan Rum, On The Rocks has created a collection of bottle cocktails made with high-quality spirits, all-natural ingredients, and no preservatives.

Andrew Gill

Co-Founder, On The Rocks

On The Rocks is a Dallas-based craft cocktail manufacturer. Through partnerships with distilleries like Knob Creek and Cruzan Rum, On The Rocks has created a collection of bottle cocktails made with high-quality spirits, all-natural ingredients, and no preservatives.

Episode Transcript

Chris Snyder [00:00:43] Welcome, everybody. Chris Snyder here, host of the Snyder Showdown, president at Juhll.com and founder of Banks.com. We usually talk with industry leaders and entrepreneurs about what's working and what's not with their growth programs. We actually decided to pivot a little bit on this show and hear how industry leaders are guiding their teams through this tough time of COVID-19. Of course, we'll still talk about all the same business stories. Just a quick word from our sponsor. Juhll is a full-service digital consultancy, and we focus on helping executives solve their toughest digital growth problems. We do this while working as an extension of the executive team. We quickly identify the biggest problems impeding growth. We propose solutions that give you the best opportunity for success. Finally, we all know the work has to get done. So we bring a private marketplace, a vetted world-class talent to execute your plan. Of course, we manage that whole process. To learn more, go to juhll.com or you can email Chris directly Chris@juhll.com. OK. Without further ado, super excited about our guests. Today we have Rocco Milano. Patrick Halbert and Andrew Gill. They are the co-founders of On The Rocks, a Dallas craft cocktail manufacturer. Through partnerships with distilleries like Knob Creek and Cruzan Rum, On The Rocks has created a collection of bottle cocktails made with high-quality spirits, all natural ingredients, and no preservatives. On The Rocks ready-made concoctions are available nationwide on airlines, hotel chains and at select liquor retailers. Welcome, everybody. 


Rocco Milano [00:02:32] Thank you for having us, Chris. Happy to be here. 


Chris Snyder [00:02:35] Absolutely. Absolutely. You got it for sure. I'm super excited about this show because I think it goes without being said. While to say this out loud, if you're an American, you love alcohol. It's just between the beer and the whiskey and the rye. That's right. So it would bet would be un-American to have this show without entrepreneurs in the in the alcohol and cocktail business. So I appreciate you guys being on today. So, Rocco, maybe we start with you. What do you tell us a little bit about your upbringing, where you grew up, how you got to where you are today? 


Rocco Milano [00:03:09] Sure. To be honest with you, it's quite a tale of how I end up sitting here as the team will tell you, I've lived a lot of different lives. I was born in Virginia. I grew up in New Jersey, moved out to California 12. Lived there till I was twenty-seven. I enlisted at 18. I did a couple of years in the army. And then I was in. I got out of that, went in to automotive forbid. Did that decided I hated that industry with a passion that few can dream of. So why not getting a liquor? So I started bartending on the Jersey Shore. So as I like to say, it was fist pumping, sorry, fist pumping before it was cool. 


Chris Snyder [00:03:53] And did you have the necklace on and the tank top? 


Rocco Milano [00:03:58] And the incredibly deep tan. I mean, it was just insane.  So I did that for a few years, went down to Guatemala like you do, and started there for a bit. Came back to the states. Went back to California just in time for the housing crash. Ended up at a biker bar in the Santa Cruz Mountains. So did that for a bit. That was a hell of an experience. My car moved here to Texas and took a job at the Winstar Casino in Thackerville, Oklahoma. So one of the largest Indian casinos in the country ended up at a five star hotel down in Dallas about two years later. And then one day I got a call from my now business partner, Patrick Halbert, saying, You don't know us. We know you. Would you like to have a conversation? And he ended up luring me away from a five star, five Diamond Hotel to run a program for him at a restaurant he was opening. And the rest is history now. Now we're here doing this. 


Chris Snyder [00:05:00] Wow. That OK. There's so much to unpack there. 


Rocco Milano [00:05:05] Most of It's true, Chris. That's the best part. There's a little bit of bullshit, but most of it's true. 


Chris Snyder [00:05:09] No, that is. I like. I like the part where you go from a biker bar to a five star hotel. I really love that. Or actually, what did you do in the Army? 


Rocco Milano [00:05:20] I worked. So I was studying systematic theology with an emphasis in first century, Greek and Hebrew. And as I like to say, what you do with that degree is you bartend. I was helping out a lot in the chaplain corps. And that's kind of where I was thinking that my life was headed at that point. And I do still, you know, to this day, listen to people's problems and dispense advice. And I have performed two weddings. But I am not technically I am technically ordained. It is technically the Reverend Rocco. But yes. Yes. I could be a bartender. You damn well have better led an interesting life. Otherwise, what the hell are you doing? 


Chris Snyder [00:06:03] So let me. So let me guess your role at the company is wisdom and philosophy? 


Rocco Milano [00:06:12] Wit and wisdom. And philosophy and bullshit. So it all kind of comes from the same place and just kind of spews forth. 


Chris Snyder [00:06:17] It's a lot. Well, I think philosophy and bullshit. Do they go hand in hand? They might. They might. 


Rocco Milano [00:06:22] In a lot of ways, because I think it starts with, you know, kind of a you know, I'm a couple drinks and let's talk about how the world actually works. And then you can build a series of principles off that. So, you know, was Descartes at the bottom of a demijohn of wine when he started saying, "I think therefore I am?" Possibly man, we don't know. 


Chris Snyder [00:06:43] You lost me at Descartes, so. So another quite another follow up question I have. What kind of what possible wisdom could you have served at a biker bar or what what possible cocktail apart from a Budweiser or Coors? Could you have served at a biker bar? 


Rocco Milano [00:07:03] You know, there was a lot of Coors frankly. That was definitely, I would say before I'd say the Mansion on Turtle Creek. When I started working, there was the first time I ever actually got into the cocktail movement. Up to that point, man, you're exactly right. It's it's one and one's, it's vodka soda's, it's beers it's shots, etc. When I was at the Mansion on Turtle Creek, that was the first time somebody actually handed me a bottle - it was our sommelier - handed me a bottle of Domaine De Canton Ginger Liquer, and said, here -see what you can do with this. And I had never thought about drinks like that before because every place I've ever worked, it's, hey, liquor costs, liquor costs, liquor cost. But as the bar manager at Per Se in New York said to me, I think it's it's it's so well said: there's no money and fifteen dollar cocktails when you're selling thousand dollar bottles of wine. So the bar at the Mansion was a fun place. We were not expected to be this huge revenue driver. It was, hey, do cool things, do creative things. And I got to experience cocktails in a really interesting way. That kind of was two prongs for me. One. And it's kind of hard to see. You're just seeing my face. But I'm a fat guy and I like flavor. So the ability to create something with some cool flavor to it was so, such a great experience and with creating that culinary experience in a glass that someone could like and enjoy and get balance and oh my God, what is that component to this side? A tremendous amount of fun with that. And then two, as I started to read more and more about cocktail history, just kind of going from how, you know, people drank in the eighteen sixties, the eighteen seventies, and you go forward in time and you see this arc of creativity in this arc of the stock process, the thought that I could create a drink or I could make a drink that somebody was drinking back in the 1890s, and we could share that commonality of experience was almost to me at the moment like reaching back in time. And I think about a little bit different now. At the time, you know, I think was Patton Oswald that said, you know, if you really want to get good at comedy, you need to lose yourself in it for a couple of years and you just really become that. And for me, that's what the bar world was. I mean, I would you know, you closed down the bar at two. I'd sit there at the Mansion bar and we'd work on recipes. We do whatever. It's all between three and four. And, you know, I go home, I crash for five, six hours. I go back the next day and start working on things. And I just completely lost myself in that for a few years. And that's really where kind of a lot of the the fun that I was experiencing in that in that industry kind of came from for me. And it was incredibly freeing almost in a lot of ways. 


Chris Snyder [00:09:47] Yeah. You know, it's interesting, you know, when I started this show, I said we all love alcohol. But really, I think that's maybe a second or third order of what we're really looking for, which is that social component. And you mentioned that conversational and social. I think just having the alcohol there and having a creative source of alcohol there drives that conversation. So, you know, I think you're a perfect example. 


Rocco Milano [00:10:19] I mean, I had, at the last restaurant that Patrick owned, I had a cocktail on the menu called Bartender's Choice, and it was about giving you an experience. So I'd ask you four questions. And then based on your response to those four questions, I would create a drink for you. And I could be something from antiquity. Could be something I threw together at the moment, would have you. But I would present to you something in a way that you never quite saw before. So if you told me, for instance, you hated gin, I promise you I was giving you a gin cocktail. Yeah. 


Chris Snyder [00:10:47] I would never say I hate gin. I love it.


Rocco Milano [00:10:51] Please, for the longest time my XBOX handle was Gin Rum or Mezcal, because those are the three things I drink. But, no, it was all about, you know, showcasing that in a fun, creative way, engaging my guests at the bar in an essentially story time and how we go about, you know, having that communal experience. Or if I could tell you, hey, this spirit you're drinking. Let let me tell you a little bit about it. You know what was so cool or different or this, you know, whiskey. Well, what did they do to what are the history of this drink? It has a lot of fun, cool tie ins from it. And you can really see a societal change to some extent. You can see it just kind of what's happening in the world with drinks as they change throughout time and different ingredients are used. And why? Well, what were people running short on at this period of time? So they switched up to the spirit, which is what we use with it today. Or how does the old fashion change over time? What influences the tiki movement has? There's a great lecture I once attended at Tales of the Cocktail called What Would Aristotle Drink? And it was, you know, a theoretical roundtable on is there a cocktail found in nature? You know, so somebody posited if a peach falls off a tree and cracks open in some wild yeast blows in and it rains, do you have a crude Bellini? Just those types of kind of random conversations that you can have were pretty cool. Yeah, well, yeah, it was great. There's a phenomenal learning experience and it really helped. At a bar, you could have anyone come up to you at any time that wants to talk about anything. So you have to be, you know, kind of a jack of all trades if you're a good barman. 


Chris Snyder [00:12:27] Well, you have to...you can't. So I'm so glad you told me this story. And obviously, Patrick and Andrew, I'm sure you've got equally interesting stories. We're gonna get there. I was gonna make a comment. I'd never really thought about restaurants, social houses, I'll call them bars loosely, which almost seems a little bit insulting at this point to call it that given your eingxpertize. But I think just the amount of passion and knowledge you bring to the table can make that experience completely different. Obviously, you guys have figured out how to bottle this and put that into a brand that's replicable. Not to say you don't love staying up until 3:00 in the morning drinking cocktails, but this might be a little bit as you get a little older. This might be a little bit easier to scale this thing right. 


Rocco Milano [00:13:18] I'm very happy I'm no longer behind the bar. I have four kids. Twelve, six, five, and four. They are up at six thirty no matter what. I agree. I am very happy I'm not behind the bar. It was phenomenal at the time, but I'm glad I'm not doing it. 


Chris Snyder [00:13:30] Well, it got you on the path to where you guys are all are today. Patrick, can we hear a little bit about how you grew up in your path? 


Patrick Halbert [00:13:41] Absolutely, yeah. I grew up in a town called Colleyville, Texas. Pretty normal childhood. It's a suburb outside of Dallas. And, you know, I went to college out in West Texas where my family was originally from, and a town called Abilene, a small private Christian school there. And where I met my soulmate, married my wife, moved back to Dallas. And when I moved back to Dallas, you know, I always kind of wanted to make something of myself be an entrepreneur and  decided when I got here that I was going to start a business and living in uptown Dallas, where I was pretty much millennials or younger people, whatever the generation, that college genesis, the X, Y, Z. You know, out here I see everybody was really just, you know eating and drinking - going to restaurants and bars. And, you know, I kind of look around, look left, look right, and think maybe I should just focus on this and the hospitality piece. I don't have to be a chef. I don't have to be a bartender. I don't have to be a general manager. Why don't I get the crew together and start something up? And that's what I did. And so I had, you know, met some friends in the industry and got some family together, got some money together and really got a cool Top Chef celebrity chef to bring in the food - her name is Tiffany Derry. Phenomenal chef. I mean, we did some really cool stuff out of that restaurant was called Private Social. So the idea is to have like a private dining room side and a social element to the bar. And I thought, well, who's gonna bring this mixology bartender vibe to the business? And so when I was building the restaurant out. Yeah. You know, Rocco kind of mentioned it, but I was searching the town. Find who's going to set the tone and the bar. And this guy from the Mansion on Turtle Creek just kept coming up. Everybody. Everywhere I look. And so I was like, alright. I'll call this guy. And he didn't pick up. So I was like, you know, you don't know who this is, but I know who you are. So call me back. And he did it .


Chris Snyder [00:16:07] And by the way, in Texas that could mean a couple different things. I mean, y'all carry guns down there, don't you? You don't know who this is. 


Rocco Milano [00:16:16] I was terrified over whose brother that may have been, believe me. 


Chris Snyder [00:16:19] Right. Right. I'm already getting a little nervous. So. So he called you back. And then what? 


Patrick Halbert [00:16:27] And so I said, I'm opening up a restaurant here in uptown Dallas and I'll talk to you about round the bar. Being a beverage director. So he says ok, I'll come over there. So he shows up in, I kid you not, cargo shorts, flip flops, t-shirt, you know, kind of strutting up into the restaurant like, hey, how's it going, man? I was like, Oh, you know, you're the guy from the Mansion on Turtle   Creek??


Chris Snyder [00:16:53] The Mansion on Turtle Creek.


Patrick Halbert [00:16:57] I expected, you know, this guy's from Rosewood Hospitality - I thought he was gonna be like this, like buttoned up, you know, mixologist probably with a swirly mustache or something. But, you know, he just shows up in his cargo shorts and I start asking them, you know. So, you know, I'm going to run this restaurant and I'm thinking about, you know, just kind of letting let loose here and let you kind of dream where you can dream up and execute, you know, a next level beverage program here, you know, and just whatever you can dream of, let's make it happen. You and me -  let's do this. He's like, OK, I'm going to tell you a little bit about, you know, my life. And he just starts talking to me about these stories that, you know, I went to Guatemala for a year and ran a bar in Guatemala and I went to his place. So he starts talking, telling these stories. He's bartender stories for like an hour and a half. I'm like, well, we have really talked about anything that I want. I want to talk about this restaurant. And he goes, you know, he's wrapping up a story. He goes, Oh, I got to get to work. OK. All right. See you later, man! Did that go well? I don't know. I think he wants to do it. And you know, the rest is history. We ended up launching the restaurant and become one of the, you know, best restaurants in Dallas. Best place to lift a glass by Dallas Morning News. All the accolades. It's a great restaurant. But it's funny how I, you know, I want to start, you know, building myself up - my own entrepreneurial future. And, you know, as we ran the restaurants for this, but for four years, five years, we started to realize that the biggest we can grow this thing is within these four walls these customers have come in here. This is the only way we can make money. And that limit, that limiting factor of me in my business was kind of looming over me over the years. I was like, there's only so, so big I can get. And I've got to think of something different. And, you know, we'll get into On The Rocks and how we do all that and end up launching a bottled cocktail company. But, you know, I always want to be an entrepreneur and really started that off right away. Right after college. 


Chris Snyder [00:19:20] Let me let me ask a follow up a couple follow up questions on that to you. You born and raised in Texas, stayed in Texas, went to a small private - was it a Christian school? Small, small, private Christian school in Texas. And you leave school, you move to Dallas, so you're like, what? Twenty two years old. Twenty one years old. And so I want to say, like, you probably won't go to the bar at a small private Christian school in Texas. Did you get. Was there a little bit of hey, man, I need to cut loose a little bit and then you're like, I really like this lifestyle. Really like it. Like, how did that? Because you skipped over a little bit. How did you decide that owning, operating, running an establishment like this was what you wanted to do? 


Patrick Halbert [00:20:17] Know it was a little bit of a shock. I've always was kind of like, not quite a rebel, but you kind of have to make your own fun at a small school in West Texas. So everybody is just getting into their own trouble, getting into, you know, whatever. At my school, you know, you were not allowed to drink alcohol. You had a curfew at eleven thirty in college there. And for me, I was like, what is happening? I mean, I like school. Good people who are like this. But like these limitations, I really kind of fear their own fun, things like that. You go to a bar in Abilene and you know, early 2000s it was 10 cent drinks. I've sent beers. Yeah. I mean, honky-tonk dancing. It was goofy. And you go to Dallas. It's not like that. You know, a lot of people may think that about Texas that, you know, it's a lot of you know, it's a lot of guns in your pocket and cowboy hats, but not really in Dallas or Austin really either for that matter. But it was cool seeing, you know. You know, the high rises and the high speed, you know, lifestyle and the innovation in food and beverage and not really drew me to it. And I was like, let's do this. 


Chris Snyder [00:21:30] Yeah, that's great. That's great. Andrew, off to you. Tell us your story. 


Andrew Gill [00:21:35] Yeah. My story is far less interesting than these guys, I kind of fit right in when all of this project started getting going. Patrick is my wife's cousin. So I've known Patrick for a long time. We've been buddies. I started dating my wife after high school. So kind of before and kind of during college. I met Patrick all the time and I went to school down in from Dallas, Texas, went to school UT Austin. And when I would come up from, you know, graduated UT, was working in Austin, was working in the construction industry, actually working on high rise construction. And I'd come to town and go to Patrick's restaurant soon as he opened it. I'd sit at the bar with Patrick and Rocco and just shoot the shit and just love those guys and loved hanging out with Rocco and it's just, you know, passionate personality, great stories. You flash forward, you know, years down the road. I got a job offer in Dallas. My parents live in Dallas. And, you know, there's some needs at home. And I kind of felt the need to move back to Dallas so immediately and back it and back at Patrick and Rocco's restaurant all the time. Except this time, Patrick, me and Patrick are sitting there drinking late night and he's talking about me - I want to start a distillery. Yeah. Rocco's in it. And these guys are like, I think it's the coolest thing ever. Just kind of fell in love with the concept of - I love cooking, you know, and I grew up with a pretty unique kind of cultural background. And so I love exotic flavors. And as this kind of all started coming together and talking with Patrick late night about these projects, I definitely wanted to be involved. So it kind of made a pivot. And as soon as these guys sold the restaurant, I joined them, started working on getting our distillery put together while we all started working on the craft cocktails. So I'm really just kind of I'm kind of the third wheel to this piece. But we've had so much fun together. And I think a lot of our success has come from having three pretty different unique individuals. I'm looking at the same problem, same puzzle, and we're all really good at communicating with each other. And so it's been the most fun thing you could ever imagine to make those with these guys and start growing, you know, a sales force, strategies, developing, marketing so, you know, couldn't be with a better team kind of riding the coattails of these guys. Fun, fun, early starts. 


Chris Snyder [00:24:23] Well, I get the sense you're being humble, Andrew. I know you know, you're a baller in this group, too. So tell me a little bit about UT Austin. And they have a pretty good engineering program, I think. Are you the quant of the group or what's your formal background outside of alcohol? 


Andrew Gill [00:24:42] I can't do basic math. I actually started as a music major, OK? And then I actually moved into environmental science because really, I mean, really just kind of fell in love with different classes I was taking at UT. I really enjoyed being at school there and kind of really enjoyed the academic process. But also, as you know, just trying to power through and get that degree and finally be done with school for a minute. So I wasn't as focused on and I started studying music. I studied some environmental science and some. Yes. And then I graduated and, you know, a week after I graduated, I got a job with a construction management firm. So I'm all over the place. 


Chris Snyder [00:25:28] That's good. That's good, though. Keeps you guys all balanced. It sounds like. So, you know, one of the things. So Andrew and Patrick, you guys have known each other, what, 20 years, 15 years. How long have you known each other? 


Andrew Gill [00:25:43] Patrick for at least fifteen years. Fifteen years. 


Chris Snyder [00:25:48] So. So one of the things I'm going to put you on the spot here. One of the things people always advise against is working with friends and family. Yes, I say that's all I meant to say about that. So you guys seem to be making it work. Why don't you know Patrick or Andrew, whoever wants to go? Why don't you tell us some of the ways that you've been able to maintain this relationship? Because when economics get involved, it could get sticky. Right. Why don't you give us a little, you know, a little commentary about that? 


Patrick Halbert [00:26:21] No doubt about it. My father was an entrepreneur and he started a company with his brother. And they ended up. It was a successful company. And so I always want to be an entrepreneur, seeing, you know, seeing it all work. And, you know, I was starting this company and Andrew's like, I want in too. All right. Awesome. Sounds good. And then, you know, we got to get some money together. So we brought in my father to bring some money and then we need more money. So now my brother and my sister and her husband are also in it. And Andrew is married to my cousin was super close and her father's now, my uncle, is also in the company with board seats. And Andrew and I and Rocco are operating the company. 


Chris Snyder [00:27:16] Oh my God. It sounds like. Well, I'll just make the assumption you guys are all still alive in Texas.


Rocco Milano [00:27:28] The way to do it, Chris, is copious amounts of liquor. OK. That is how it greases all the skids. It gets everyone on the same page. Booze.


Chris Snyder [00:27:37] Wow. Wow. I can only I would love to be in those board meetings. That's all I could really say. You know what? As long as you all hit your numbers, I think it's probably fine, right? 


Andrew Gill [00:27:48] Yeah. I got to say, doing pretty well. It helped out a lot. 


Patrick Halbert [00:27:53] Yeah. We went through quite a lot of hardships. You know, growing a company from scratch is way different than, you know, acquiring something smaller, midsize. And so the things you learn, you know. You have to sometimes put personality aside and try to figure out what the best thing is for the company, and we kind of all ended up on the same type of mindset. You know, as far as that goes, you know, but there's some big personalities in this family. So, you know, there's a lot to weigh being that CEO type of thing where I've got Ford and family and I've got family and company running, you know, and I've got friends, you know, like me and Rocco friends, you know. So it's it was a whole life. It's not just like you work for me. You work for me. So that's my company. You know, this goes it was like, let's all work together and try to make this thing successful. 


Chris Snyder [00:28:49] Yeah. Too often I think people get focused on the people rather than the problem. And however, this may sound, if you can just eliminate the personality and the people for a minute, just put that out of your mind. Let's focus on the problem. That's just stay focused on the problem here right now. 


Rocco Milano [00:29:10] Chris, you're exactly right. And frankly, coming from an F and B background, I think really helped Patrick and I with that in that, you know, chefs are known to have egos. And, you know, one of the things that he and I kind of said very, very early on is this is going to be about a successful company that's going to thrive and we're going to be able to take care of our families, et cetera, et cetera. And the big thing for us was egos have to be checked at the door. And it's it's about how we're we're providing a solution to whatever whoever we're dealing with. It was that that was integral to us. And I mean, I used to see it all the time in the restaurant world where, you know, an app didn't go out and I run to the kitchen, hey, we have a problem. And they immediately start trying to figure out, well, who messed up? I don't care who messed up. Doesn't matter. Look, we'll figure that out in three hours when the restaurant closes. Let's get this guest what they need right now. And then we'll do an after action. We'll talk about it then. And that's kind of that type of philosophy of, OK, this is what needs doing, OK? Tomorrow we'll talk about, you know, how we can do better going forward. But right now we're going to make it work. And that's very much the philosophy that we've had. 


Patrick Halbert [00:30:26] And I think we've all been unified in a mindset to show up every ever since the beginning. I mean, even when we're sitting around learning about food science and making drinks and trying them and getting a little drunk during the day, that never stopped us from putting the pedal down work. So the end of the day, you know, we're coming in here or risking, you know, family cash or risking, you know, our careers, our trajectories. And we're just taking every problem. One problem at a time, finding solutions, talking about them. I don't think we've ever had any conflict in our group. That wasn't surface level. I don't think anyone's ever, you know, woke up except the next day. We just put our heads together, knows the ground, keep grinding. 


Chris Snyder [00:31:18] That's that's amazing. So how much would it cost if I if you all had to guess, how much would it cost to start a company like this? A million dollars. Five hundred thousand dollars. Ten million dollars. How much does it cost to get to where you guys have gone. 


Patrick Halbert [00:31:41] To start it, you need five and a thousand, maybe a million bucks to get started. Depends how far you scale it. You can go national. You want to go every vertical market you want to carry. How many salespeople you want, you know, get and get upwards. Ten, fifteen million dollars depending how risk averse you want to be. 


Chris Snyder [00:32:04] But it sounds like what it sounds like is you started the, I'm going to call it the Social House or the regular between these four walls business, it feels like once you get that go in, which is cash flow positive, it allows you guys to have a playground or a sandbox to really get to work. Like if you started On The Rocks before you started a restaurant bar, Social House business, do you think it would've worked? 


Patrick Halbert [00:32:34] Well, the margins are really slim in restaurants and bars. So the only way to get past into the kind of a cash machine model is keeping your costs really, really low and having a significant amount of volume at all times and be able to turn tables, turn drinks, turn the bar and move through a lot of people. And when what we add was kind of your higher-end restaurants. So if you have less people then you need to bring in more money per person, I would call it a PPA per person average. So if you've gotten less people, we need more money. And so we learned that it's really dinners where you bring in all your bigger money, not really lunch. And so there's a lot of those decisions that you have to make to try to scale and become a, you know, a real profitable business and restaurants and bars. They're already really, really slim. So watching COVID -9 closed down so many restaurants for such a long period of time, it's heartbreaking and crumbling to so many different business owners. 


Chris Snyder [00:33:41] Yeah. So do you guys still have a restaurant bar component? 


Patrick Halbert [00:33:47] Yes. So when we decided we were to go full steam and started distillery and had a bottle cocktail option, we sold the restaurant because the federal government was establishing an agency called the Tax and Trade Bureau, the TTB, formerly known as the ATF. And the TTB does not allow you to own two of one of the three tiers, the alcohol system. So you can be a supplier. You can be like basically a distillery. You can be a restaurant and bar and serve it to customers. Or you can be a retailer and sell it to people. You cannot be two of those. Or you'd be a distributor. But you cannot be a restaurant and a supplier. This is why you won't find any Bacardi liquor stores or you won't find any, you know, private label, brand, anything, you know. So it's all really broken up. We had to sell the restaurant to do distillery. 


Chris Snyder [00:34:50] Wow, that's so. So let me just get this straight. So you started in the restaurant business. Andrew's part of the family. You brought him in. Rocco, well-known theologian and philosopher from abroad. 


Rocco Milano [00:35:07] Thank you for recognizing that. 


Chris Snyder [00:35:09] Of course. And you know, you got this crew together, you realized, you know, probably one night at three a.m. that this would never, ever be anywhere. You guys would probably be like 60 years old, still standing around the bar. This is what I would be thinking. You God, you're like, holy shit. Like I'm going to be that guy in the airport with a wheelie bag. I better get my shit together. 


Patrick Halbert [00:35:35] Trying to launch my third restaurant, you know. 


Chris Snyder [00:35:38] Yeah, right. Or I'm going to be that guy behind the bar. That's like seventy five years old, still telling the same jokes. I know you came up with new stuff though, Rocco. So you decided to do that. But what that meant was you had to go all in on this distillery idea. So. How did that work with the group, because you guys obviously did not need to take that risk. You could have just stayed where you're at. So how did that conversation go? 


Andrew Gill [00:36:07] Well, all that I'll say from my perspective is we kind of get into a little some of the key elements or moments or drivers that helped shape the idea to do the bottled cocktail, which is, you know, Patrick and Rocco own from my perspective. It was this sort of you know, I had a lot of confidence talking with Patrick. I remember late night at my apartment in Dallas at my condo. We're on the balcony in uptown one night. And he's talked to me about it. And he is Patrick is dreaming big. He's talking with positivity. And, you know, it's kind of a rebound from the four walls. And the restaurants say, you know what, we're going to go get Virgin America. We're going to go after big hotel chains. We're gonna go after name brand high quality stuff and we're gonna make a premium product. And so I was sort of the expansive thought was really the most attractive thing to me. It never felt like, oh, man, we're going to this thing's going to muddle along. And this is such a dumb idea. We're sort of like, we're going to make this a great thing. We're going to make this happen because we've got the drive and the positive mindset to go and get it done. And so far, we've checked every box. We've gone out and done everything we've attempted to do. 


Rocco Milano [00:37:34] Andrew, I'm just going to say absolutely - I think you're 100% spot on. It's, you know, go big or go home. Right. And I completely agree that at every turn Patrick is like, oh, no, we could totally do this. We could totally do this. And there were times I turn to Andrew and I'm like, I think this man is crazy. But it was the, you know, just the yes, we can do this. Yes, we can make it right. And well, there's a very thin line. I've heard it once said that between crazy and genius or neighbors and they lend each other sugar. So, I mean, it absolutely, you know, you're got to straddle that edge. And it really, really did work. I mean, to Andrew's point about Virgin America, I mean, at the restaurant, we would have, you know, these airlines come in and they would try, you know, different things. And one day when Virgin America came in, I did that drink for them - Bartender's dhoice. And they're like, oh, my God, this is amazing. Would you consider doing an in-flight cocktail program? And Patrick and I and Andrew had already been talking about a distillery. And then Patrick then had the idea, well, what if instead of just putting together a menu, what if we find a way to bottle these cocktails and sell them to you? And that kind of is what, you know, led us down this road. And to be candid with you, everyone, we talk to and I mean batting a thousand. Everyone we talk to when we said we want to go after airline business told us we're pissing away our money. We're stupid for even trying. And even if we did get airlines, we would be losing money because airlines don't want to pay, you know, X, Y or Z. But it was creative thinking. It was an out of the box, you know, option. Hey, a bottled cocktail. That's all complete. Your in-flight cruise can just execute keep it very, very simple and easy. And we were able to do it and we were able to do it profitably. And if we listen to anyone in that first year, we wouldn't be where we are now. 


Chris Snyder [00:39:26] Yeah, someone told me a long time ago, and I don't know if this was an insult or of just trying to help me out. He's like, yeah, sometimes you just got to be dumb enough to try. So that was like, are you talking about me personally or is that some kind of words of wisdom? But, you know, you're either crazy or stupid. And, you know, I think I think it's just being able to take the risk and not not playing it safe. I think playing it safe is stupid. You know, candidly, I think I think that's stupid. And having someone else in control of your life and how you want to operate, going into an office every day and being told what to do or being asked to do things you don't believe are going to work. That's to me, that's crazy and kind of stupid. So put the risk if you're okay with risk. This is actually the smartest thing for all of us to do is to take our own chances and carve your own path. So let's talk a little bit about. So now you guys have all agreed to do this. You're going to go do this. I can't even imagine the operational load in thinking around building a distillery. So when I think about, OK, building a distillery, I literally think of monks with these big vats or what's that show on the History Channel or Discovery Channel where these moonshiners are out like trying to produce illegal alcohol and these are running from the law. Tell me about how you build a distillery or tell me how that works. 


Rocco Milano [00:40:56] Now, Chris, you're exactly right. We wore Monk outfits out in the woods. 


Patrick Halbert [00:41:02] We moonshine at night. 


Chris Snyder [00:41:05] So walk me through that process, a little bit of getting established. Getting your licenses. Do you actually own real estate with big containers that have fire and they actually produce alcohol? How does this work? 


Andrew Gill [00:41:21] Well, what we started was it's got a warehouse that we do not own, we're leasing. But did some research on, you know, eligible geographies because you can't just put a distillery next to a school or within certain proximities. And so while I was still wrapping up, you know, and doing my due diligence to the job I was in that I was leaving to join these guys, Patrick and Rocco moved into the warehouse space and ordered went ahead and orders and distillery equipment. So you get started. But it takes a really long time to get your federal permit, to get your state certifications and then your municipal certifications. That's a lengthy process. And so, you know, a lot of distilleries usually make a white spirit while they're aging their whiskey or rum in barrels. So we kind of saw the cocktail program as kind of our white spirit. Is this going to take? This distillery is going to take a while to get going. It's going to. You know, when you're starting to kind of realize the realities of the manufacturing process on that, it's I was kind of really attractive to us to have this double-sided business. So even though, you know, we got, you know, fully setup's fully certified, we're doing all the reporting every month. But we were distilling very little because we've gotten so far so quickly with the bottle cocktail project. And so we initially started sourcing our alcohol from really interesting places because we couldn't get make it all ourselves. And so the bottle cocktail project pretty much, you know, it's sort of plan a sort of one and took over the distillery. That's where we just didn't even have time to mess with anyone. 


Chris Snyder [00:43:10] So you had what I'm guessing is based on your relationships and your hustle, you probably had preordered these concoctions from customers that were expecting delivery. Did you go straight? Did you go big straight to the airlines or did you do some local stuff first to deliver these these these concoctions to get into a test and learn mode? How did you guys get all this done and then realize, well, wait a second, we can't even fulfill our own demand now we outran our supply line? 


Andrew Gill [00:43:43] Well, we did move quick to set it up, move quick to kind of figure out some other ways to manufacturers and manufacturing partnerships. But it is so true. I mean, we've we've just we're trying for home runs all day, every damn day. Our very first meeting and pitch was with Virgin America. So Rocco got back in touch with them, said, hey, I'm starting a bottled cocktail company with Patrick. We're working on concepts for you guys. And what you know, maybe two months later, our first actual meeting with a potential client -  it wasn't a retail store, it wasn't a local chain or a local business, wasn't a restaurant. It was Virgin America before Alaskan bought them. And so that kind of really set the tone for how we went from there. 


Chris Snyder [00:44:37] How was that experience? I'd love. Man, I'm so pissed off that they pushed that airline the other way. Nothing against Alaska Airlines. Good for those guys. But I got to a point where I would not fly anywhere without if they if a Virgin trip wasn't going there, I wouldn't do it. I think it's absolutely wouldn't do it. So maybe tell me how that process went with Virgin. It sounds like you had an in because you guys already have some cred and they love your work, which is awesome. But you have, you know, candidly have no business. Right. Thinking about distributing hundreds of thousands of bottles of stuff to a well-known, you know, brand like that. So tell me how that meeting went. 


Rocco Milano [00:45:25] Well, I'd say it went very well. We had we known everything that was involved with what we were agreeing to. We probably would have been more hesitant to agree to it. But having agreed to it, we were damn well going to figure out how to make it happen. I mean, the Virgin team was phenomenal. You know, Rob Gallagher is still one of my favorite people. You know, he was the F&B director for Virgin America at the time. And just great vision as to what direction things were moving in. And it speaks to the entire that that that company as a whole. I mean, Virgin was just such a fantastic airline, as you said. If it was something that if we ever had the opportunity to fly them and when they kicked off at a love field, that's when we actually started having those conversations with them. So phenomenal partners, phenomenal vision. They actually introduced us to a couple other - Alaska being one of them, Hawaiian Airlines being the other airline that they introduced us to. And that first show that we went to, you know, you mentioned Hussle. One of the things people sometimes ask us is, you know, well, how is it such a young company? You are doing business with airlines. And I said, well, we found out where they go and we went there. So they actually have a convention. And we knew the In-Flight Service association here in the U.S. or the World Travel and Catering Expo in Hamburg, Germany. And you know what? We went to where they are. And we got a booth and we set up and we started engaging with them. That first year, we didn't get a booth. I swear to God, I had a shoulder bag with cocktails crammed in there and we were just trying to hand them out to people as they were walking by introductions. But it's all about that hustle. 


Chris Snyder [00:47:13] Yeah, the self, the self-proclaimed fat guy. Were you in Germany with a bag? 


Rocco Milano [00:47:18] No, no, no, no. I was in Portland. Right. I went to Portland, Portland, Oregon. I was the fat guy in Portland and read about me. 


Chris Snyder [00:47:26] You were dying. You were dying. I'm sure of it. 


Rocco Milano [00:47:29] Germany was a lot of fun. That was a different experience. But, yeah, I was just being able to engage with those people, though, in their environment was huge. And it gave us. I always like to say, if you didn't start out focused on airlines, you wouldn't accidentally end up there. The airline industry is just very, very specific in terms of packaging and weight requirements and will it fit the tray, etc. You don't accidentally come up with a bottle that's perfect for airline. So we really, really kind of zeroed in on that and made that a key focus for us. And then in terms of growing our business, as we then started engaging people on a more local level or as I like to say, below 30000 feet, we had a phenomenal trial base. You know, you're flying 30000 feet in the air. You're in a tube of 300 people. Your captain left for entertainment to the point that the magazine in front of you likes to talk about where Kevin James like to eat in Phenix, who gives a shit. But that's what you have for entertainment. My God, you need a drink more than anyone. And we were able to provide that. And so when people came back down, the number one question we were getting is on our social media, hey, I had, you know, on X, Y and Z flight, where can I find you? And that became huge. 


Chris Snyder [00:48:42] Yeah, I love it. So let me ask so let me ask a quick question, because I think I glossed over this a little bit. I feel like the problem that we identified was the problem that you guys had between your four walls. Right. Just kind of classify that as that. But what was the problem you saw in the marketplace that you felt like this thing had a chance making our own craft cocktails, putting them in little bottles and pushing them out? Right. We solved the problem with you guys in your careers and advancement going big and being entrepreneurial like that. Problem solved. How did what was the market problem you were trying to solve? How did you get hip to that? 


Rocco Milano [00:49:22] Well, it really came down to how do you serve a cocktail where the bartender isn't, you know, how do you execute where you have, you know, a need, i.e., I want a balanced, flavorful cocktail, but I don't necessarily have somebody who can execute that. And again, starting with airlines, flight attendants are phenomenal people, but they're not bartenders. You know, you're looking at your 50 Amelle, you're looking at your mix, what have you. You know, very rapidly we transition from airlines to hotels where, OK, can we explore how to use corporate speak? This vertical channel. And then, you know, that became an opportunity. OK, well, I'm not right for the bar, right. Because I'm sitting in a hotel bar because I want to show this juice, that bottle, that bitters, etc.. And I want to have that bartender engagement. But what about in room dining? What about VIP amenities? What about those places again, where the bartender isn't? So can we work there? Well, what about stadiums and events centers? Those people aren't necessarily bartenders at the concourse level. You know, you're waiting 15, 20 minutes in line for your beer. So you go back and sit down and watch a game. Well, could we help smooth and streamline that? So then it was just a philosophy of we're not going to approach anything with a preconceived notion of this will work here. This won't work here. We're gonna say this can work anywhere, but we have to be able to provide a solution within your channel for it to make sense. So how do we find that? And then, most importantly, how do we validate that out? So when we started working with hotels, it wasn't necessarily, you know, hey, we want to start working with every hotel under the sun. But can we. Can we go to a couple of different hotels that have expressed interest, you know, Hilton's Four Seasons et cetera. Can we validated on that level and then turn around to the corporate team and say, listen, this is what your own hotels are doing and show them that and say this is what's happening. This is the need more fulfilling and can we validate things out that way? And that became a huge opportunity for us as we helped solve that. 


Andrew Gill [00:51:18] I would say just to add on to that, because it really is a pretty elemental part of our strategy was, you know, we've done all this with. I mean, even in the beginning, we didn't plan how much money we were putting in this words as we needed trying to trying to get where we're going. We weren't about to go and raise huge sums of money and do crazy marketing plans. And we weren't. We were about taken on that level of risk. So we had we put together a strategy that we'd go after on-premise accounts, captive audiences, hotels, airlines, places that nobody's going after because they don't see them as volume drivers or profitability drivers. But we saw them, as, you know, marketing experiences. If even if you don't. Drink the cocktail that's in your room, in the minibar. You might still see it and make an impression on you. So we sort of developed an early marketing platform by going after these transient commercial airlines, hotels, hotel, then venues, stuff like that, so that the consumer would start to get familiar with our product and experience it in different places. And then over time, we could translate that awareness to the retail level as we thought if we went to the retail level. Right. Right away, you know, the amount of brand awareness marketing you're going to need to do to get the consumer to feel comfortable to go in there and try a bottle cocktail. It's just too much. 


Chris Snyder [00:52:53]  They would race you to the bottom, right? I can just imagine walking in a Target, you know. You know, you see Skinny Girl blew up and there was a bunch. There's so many people on the shelf now. It's a chicken and egg thing. Right. They're gonna be like, well, you have to commit hundreds of thousands of SKUs and products. And then we're going to put you head to head with Makers' or Jim Beam or any of these other mix things. And then good luck, gentlemen. Give me all your money and to have a nice day. And if we don't sell it, we're going to discount it. Then you're going to lose money. Is that is that kind of how that works? 


Andrew Gill [00:53:31] It is a little bit of a learning curve for the retailers for sure. So, you know, historically they know what a bottle cocktail is, but their ready to drink category is like Skinny Girls or your ready to drink convenience-based products where, hey, you know. Crack it. Drink it. You know, five bucks, you know, type of thing. They don't you know, it's not this premium. Bottled cocktails, spirits. Oh, I'm going to shop this Knob Creek old fashion, take it home and pour it over ice and enjoy this thing. It's like, where do you where do we place you guys? I mean, does it go next to White Claw or does it go next door Knob Creek? And we're like, yes. 


Chris Snyder [00:54:18] Both OK. You know, one thing that I was thinking about, too, is you've obviously done a great job of building some relationships. You just mentioned Knob Creek. And I know you have large relationships with Knob Creek, Cruzan. But one thing I wanted to get into before we get into that question, you had mentioned an experience, Andrew. And it doesn't matter who comment the comments on this, really. But you'd mentioned an experience. And so I'm thinking in my mind, are you guys building a retail brand or are you helping your clients create their own experience with your ingredients and the quality? And, you know, let's say someone like. You know, a football team or a baseball team or a basketball team in a stadium now has something incremental and of brand value to offer their audience. Can you talk to me about that a little bit? 


Patrick Halbert [00:55:19] Well, I would say that. You know. We we've always known that the long term play in the long term success of our brand to be profitable has been to eventually move and succeed into the retail space. People need to be able to pick this up and bring it home. So I guess the on premise strategy was really a unique and totally out of the box way of building that platform that no one else ever does. And once again, everyone told us it wouldn't work. So I'll let the guys expand on it. But for me, it was really about slowly building that brand DNA and the familiarity with the product so that when we finally take that chance of building a big team and going for national retail, you know, we know it's not going to flop. You know, I only get one shot at this. You get into a retail store. They don't move your products. They're pissed. They spent that money and getting your cases, you're never sold again. 


Chris Snyder [00:56:29] So is the Virgin brand Virgin or the Virgin brand On The Rocks? Because you could potentially or you maybe already are. And that's kind of the question is, do you give the Dallas Cowboys or do you give the Los Angeles Lakers or do you give the Dodgers their own branded, you know, drink or is it an On The Rocks drink that you're serving to their audience? How does that work? 


Andrew Gill [00:56:57] Well, we certainly have the capability to do custom cocktails for the right partners, but we've always emphasize our branding being forward and prominent. Perfect. So we want that. We need that brand awareness. Our first big airline was Saline Airlines, and we still have a fantastic partnership with Wine Airlines. We love them. Patrick and I are both different times in our lives in Hawaii and we still do custom cocktails for them. And so we initially kind of going back to this strategic approach to get our brand in premium places and kind of, you know, take on that alignment. We were totally down to figure out and do custom label stuff for, you know, your really exclusive group. So one of our first really cool projects was Four Seasons was opening its resort Ko Olina on Oahu. And we got just like we tried to get in touch with every food and beverage director, food and beverage director. And Rocco kind of hit it off. We started talking. I was like, man, you're doing these cool custom drinks with Hawaiian Airlines. We'd love to talk about something like that. So we ended up actually making custom three different custom cocktails for the Four Seasons Collina with their branding on it. Our branding mixed in. And really I'm kind of saying this story because, one, we wanted to kind of build that alignment and those connections. But it also was always all these projects were learning experience for us. They were all a piece of our brand evolution, how we kind of evolved, how we want our brand to be represented, how we wanted to be on the bottle. We've kind of gone through a couple of different designs, label designs. So they've all been experiences that we've just we've never left anything on the table. Everything we've we've worked on, we just try to take the best from it and move to next. 


Chris Snyder [00:59:04] So if you had to guess how many, you know, because we've talked about Hawaiian, we've talked about Virgin and got bought by Alaska. We've talked about how many customers do you have? You have tens of customers or you have a half a dozen or you have hundreds of customers. How does that work in your business model? 


Patrick Halbert [00:59:24] Well, we started and started launching with our distributor in Texas first and started selling some retail hotels mainly. Then we added Hawaii and when Hawaiian Airlines came onboard and then we added California with a distributor there, too. And so we had a kind of a two-pronge approach. One was to service all the accounts that we're going after by ourselves, which is all the hotel relationships. We have airline relationships, we have sporting venue relationships. We have. And, hey, you know, we also have a call to action if people want to try to buy it in stores. We've got to get some retail accounts going, too. And so at this time, yeah, it is more like dozens of accounts in each state as we're growing. And we could name every single account. We could name every single buyer and a name every single beverage director at all these places. I mean, we sold all this ourselves. And that was our whole model for over two years, we would create a Google doc, Google Dallas hotels, and we would start typing them in and their phone numbers and we call them and e-mailing and send them samples. Or talk to them and sell it in ourselves. Because being a small brand, you don't you don't get the attention from wholesalers like you do on your luck. So, yeah, we made it happen ourselves. 


Chris Snyder [01:00:57] Yeah, that's yeah. That's super important. I want to talk about the partnerships with the distilleries. So do you still run a distillery or do you scrap that. And then did you pivot into the Knob Creek. Tell me about the distillery partnership thing. 


Patrick Halbert [01:01:18] Oh it was set. It was such a funny, fun time coming up with this company because we are like, you know, we're not in this to make ready to drink product. We're in this to make some cool liquor brands and On The Rocks Cocktail's was flying through everything. Every account we call and everything we were doing, it was going right in the beginning. Yes. Every single day. So we had to use a third party bottling company to keep up this demand. So that's basically where we kicked it off with a third party bottler. And in turn, we were still trying to launch our distillery. And as a few months go by, we get the start to receive the equipment and start to get the permits. We start to get the design plans. We draw them all the way up. And that took quite a few months. And by the time we were ready to. Hey, are we going to install this and actually get going with this distillery plan? We scrapped it. Then we hit the stop sign and said, let's just keep selling these cocktails. This is already on the race. So we decided to sell the distillery equipment and it was like brand new is it is like literally in the box in our beer house, just ready. We could we had everything from grain to glass. Oh, my God. You could break down the grain. You could ferment it. You could distill it. You could filter it. You could bottle it. I mean, I'm talking every spirit. We had barrels. You could lay it down. We had it all the way ready. Didn't do it because the cocktail concept was becoming a reality and a brand. 


[01:03:11] Andn the cocktail concept is basically like, you know, like Rocco said a little bit earlier, like you can't bring your favorite bartender around to make these great drinks. And when you're working at a bar, you have access not to unknown brand names and people that set up their own distillery. You have access to Knob Creek. You have access to Jack Daniels. So what you've done is you basically so you've just brought that mixologist to these unique drinks. Is that what drove the Knob Creek and some of these partners that you have? You're like, hey guys, we're making these drinks for you guys. You have to license their name or Brit. Like, how does it work with Knob Creek as an example? 


Andrew Gill [01:03:49] Yeah. So back in the day, we would have to source these spirits from third party brokers or different distillers are buying all the said. That would be a good fit for flavor profile, the cocktail we're trying to make. And at once, we're in a few different states of distribution. We actually did have a couple phone calls with Beam Suntory, which is the company that owns all the brands that you'll see on our products today. I don't know how many brands, maybe 40, 50, 60 different alcohol brands under that family of fair company theme's entry. And so they said, hey, you know, you guys are doing some pretty cool here. How about you just work exclusive with all of our spirits and you launch a brand, a line of cocktails with all of our products and do a brand license agreement, blah, blah. And yeah, you will sell some Beam-branded cocktails. Right. You know, that sounds cool. And, you know, this whole business model really transformed at that point with a company of that size, really acknowledging that we were kind of developing this whole category of this premium bottle cocktail and creating the space and owning the space. 


Chris Snyder [01:05:11] You're getting that. It's such a brilliant marketing thing to get that brand association. So is t like co-branded on the label or is it, you know, On The Rocks mixed with, you know, how does that work? 


Patrick Halbert [01:05:27] Yeah, we did a co-branded label. So it's it was the same design as our current label On The Rocks premium cocktails, you know, old fashioned. And then a subset would be crafted with Knob Creek. So and so forth. Every cocktail for our margarita it would be crafted with Hornitas tequila and, you know, cosmopolitan, crafted with Effen vodka. And so they have huge brands. And, you know, it adds another element to our offering where if you're going into retail or you're selling to a customer when you hold it up and say Cosmopolitan made with vodka or you have Cosmopolitan, you happened. Oh, yeah, I know. Okay. And it kind of connects the whole completed bottle cocktail product, as you know. Now it's really a brand and it's something that you understand and you're willing to pour it on ice and give it a shot. 


Rocco Milano [01:06:27] So when you go to see your exact point, there I was with a V.P. of food and beverage for a major, major hotel group. And I was doing my little story time. And he holds up the bottle of Knob Creek, old fashioned and pointed that Knob Creek logo and says, that's my guarantee of quality. Yeah. My guest knows exactly what it is that they're going to get. And frankly, you know, we can explain the price point on it. You're getting something balanced and crafted and you know something that's that recognizable that you have that guarantee, which was huge. 


Chris Snyder [01:07:03] Yeah. So let's talk a little bit about how you, I mean, you guys obviously built your business on airlines, hotels, OK? So now what the fuck is going to happen? Because, look, we've got a great it's been fun guy. But what's going on now? Because this is really tough stuff. I can't think of a better equipped. Team to tackle this in pivot around, you guys are all creative. You've solved some big problems already. What are you going to do? You've seen Shark Tank, right? Mr. Wonderful. Mr. Wonderful is always like, what are you going to do? And it's a good question. You had a billion dollars. You had a million dollars. You could do anything you wanted to do. Like, what are you guys going to do now? Because it's absolutely from the outside. It would appear that it is absolutely decimated your business. And a lot of businesses are decimated. So what are you going to do? 


Andrew Gill [01:08:02] Well, fast forward. You know, we ended up getting a number of on premise accounts to really fall in love with us in the brand. So I'm talking every hotel chain, talking cruise lines, talk in almost every concessionaire running every movie theaters and hotel and airline. We now have six airlines and they all went. You know, flat to zero. No business. Yeah, and. We were kind of like, well, you know, who's open and what do they call is not going anywhere? So what are people drinking? You know, what are the trends and what's up? What's going to happen now? And our COO will tell you. He had been speaking with the National Restaurant Association and also the Texas Restaurant Association over the last two years to try to get this delivery to go legislation in place for restaurants being able to serve spirits to go serve beer, wine. Why can't you deliver spirits? Texas actually approved this and went into place in December of 2019. It's already legal in Texas just recently, but no one would do it because it was a brand new law and it was kind of like, OK, you sure I can give liquor now? No. Yeah, it's it has to be in a 375ml original manufacturer-sealed container or smaller and it can be mixed cocktails and you can serve it with food to go. And no one really did it. And when COVID happened and restaurants were limited to to-go delivery only, they needed an opportunity to have a new revenue center bring product out to their customers, you know, bringing the bar to you is our tagline. It's bringing the bar and we fit right in that in the way that the laws are written and we fit into a perfect offering for all their customers, you know. So first wants to grasp it. We're at a number of Mexican restaurants on the border, a bunch of regional Mexican chains. So they made a ton of sense to sell, you know, our margarita to go or jalapeno pineapple margarita to go as a fit the legislation. So those those went in pretty quickly. And now we've added about 700, maybe 800 new restaurants since this happened because it is a perfect fit and provides the restaurants with a whole new revenue center and they're improving their per person average. They're PPA to go delivery with adding these bottle cocktail. 


Chris Snyder [01:11:02] You handle this volume through a distributor. So you work with a distributor and they handle all your sales, marketing, all that stuff. 


Andrew Gill [01:11:10] They do not handle our marketing, they don't handle a number of things. One thing that they do really well is provide. You know, the customer with a number of options, they bring in all the product and each state to each state has a different distributor. They're all mainly the same company where we use their name, Southern Glazer's Wine and Spirits. They're the largest and class spirits wholesaler. But, you know, they really gravitated to, you know, the education piece in this. They got it. And pretty quickly helped scale and bring in the product, bring it to the customer. And there are no legal distributor in each state. 


Chris Snyder [01:11:57] Yeah, you'd mentioned a hundred restaurants. And I was kind of like, oh, my God, that sounds like I mean, awesome. But from a customer service, in an account management standpoint, it sounds like a nightmare. It's just a lot of work. It feels like. Which actually brings me to another point. Sure. You guys are familiar with drizzly. How does your retail product and your retail brand, you know, correspond to some online sales? How is that going to work or is it working right now? 


Patrick Halbert [01:12:32] It's working in a big way. You know, consumers are gravitating to delivery. For sure right now. And not just in their food, but for alcohol. Not me. Most people want to stay home, stay safe, stay away from possible infectiousness of this horrific disease. So people are ordering delivery all the time. There's local delivery companies. There's nationals' like drizzly minibar delivery. Number. And so what they're doing is the way it works, they have to go find retailers, carry your product and deliver it through their app. And we have Amazon, Amazon, fresh go, prime minibar delivery and just all different states has different laws and different companies that deliver in different regions. So it's all just specific to where you live, really. But from a national perspective or a regional perspective, they're all gravitating to all this liquor delivery to make things a lot easier on people. 


Chris Snyder [01:13:31] How many states are doing liquor delivery? I mean, it seems like you have to literally go state by state here and figure this out. You got to have like feels like a full-time lawyer, for Christ's sake. How many states are you guys in? 


Patrick Halbert [01:13:47] We're carried every state cross country. The ones that deliver. Yeah, we do. We do. We try. We keep our own spreadsheet and try to figure out what the latest law is on. You know, is it a is a temporary law that they're allowing it? Is it permanent law? You know who can do it? How they can do it? So I think there is some 40 odd states that are allowing it right now to go as a COVID legislative change from a restaurant on premise perspective to do delivery. Retail, I think that number is around that same number. 


Rocco Milano [01:14:26] Right. And Chris, it's actually not that much of a change or much of a pivot in that each state has its own liquor laws and they vary widely state to state. So you almost have to be familiar with what's happening in each one all the time anyway. Obviously, you know, this this epidemic has shifted things. So things are happening definitely a lot faster. But as things operate so differently, essentially, once Prohibition was repealed, they threw it onto the states and said, you guys figure this out. And almost every single state took a different, slightly different approach. But that's slightly different approach is very, very important to know. 


Chris Snyder [01:15:09] So, you know, I want to I'm going to wrap it up here. But I what I like to do at the end is just leave the audience with something that you know from each of you. By the way, full disclosure, first time we've had three guests on the show and I couldn't be more pleased for the. This is going to be tough to replicate. You guys have been great. But if if each one of you guys could just give our audience a word of advice, a word of wisdom. The only people that come on this show are C-level executives and entrepreneurs that have sat in your chair like we don't want advice from someone that doesn't run a company or own a company or or deal with the things that you guys have dealt with. So, you know, I don't you know, just go ahead. Someone rip off, you know, some advice, some sage advice for our listeners as we wrap this up. 


Rocco Milano [01:16:03] All right, guys, I'll pick this one off. You know, if you look at 2020, it has been an insane year. We started with, you know, losing Kobe and COVID kicks off. Now we're at Gary Busey Pet Judge, which is a real thing. Please, we're not getting any saner. OK? Have a drink, relax, de-stress. We all need to get through this together. And I think OTR provides a phenomenal solution for that. 


Chris Snyder [01:16:32] Awesome, awesome that. Well, that's great words of advice. Oh, yea, even the acronym for On The Rocks. That's right. All right, who's next, Patrick or Andrew? 


Patrick Halbert [01:16:44] Oh, I just say, you know, everybody listening out there, you know, we started On The Rocks, cocktails with just three guys with a dream trying to bring the best bottle cocktail we can to and just know that there's tons of different entrepreneurs and people out there trying to create things and be innovative just like us and give it a try and, you know, have an open mind. Kind of like what Rocco was saying.


Andrew Gill [01:17:14] Yeah, I would say, and I've definitely learned this working with these guys. I think It's great to be humble and to not presume you know everything, I think. I think questioning questioning your business decisions to an exhaustion can sometimes be counter counterproductive. But you get to the right answer if you listen to yourself and you don't be too confident. 


Chris Snyder [01:17:42] I love it. I love it. Well, everyone, you've got Rocco Milano, Patrick Halbert, and Andrew Gill, co-founders of On The Rocks. So glad they came on the show today. Can't wait to publish this episode, so it'll help folks out, hopefully just even a little bit. 

Episodes you might like

SUBSCRIBE TO THE PODCAST

LIKE IT? SHARE IT!

Get in touch

SNYDER STARTUPS