Blitzscaling bourbon: How Fawn Weaver built Uncle Nearest whiskey

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1:30So by lay down, put it in the barrel. And I think the first year we laid down like maybe 10 ,000 barrels.

1:39Startup costs aren't the only reason that the whiskey business is a risky business. Fawn Weaver launched her spirits company, Uncle Nearest Premium Whiskey, in 2017. She faced entrenched, nearly monopolistic competition from international conglomerates, scads of regulations, reams of red tape, and an industry unaccustomed to seeing a Black woman in charge. But Fawn was on a mission, a mission into which she had poured nearly every single penny she had. There were absolutely times where a count is overdrawn. It is so close to zero. We had nothing that we could call our own. But Fawn was so determined.

2:28Because her bourbon was about more than just business. She wanted to lift a brilliant black distiller out of the footnotes of history and into the spotlight. Now she's doing something remarkable. Blitzscaling a bourbon brand. Uncle Nearest is valued at more than a billion dollars.

2:55You've got to have incredible talent at every position. It's like this huge push. There are fires burning when you're going home. Can you believe it? Such an idiot. And then you go back to, this is totally going to be amazing. There are so many easy wins. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops. Working out of a three-bedroom apartment. Stuff that just seems absolutely nut balls. Ten years later, we're like, well, that's just how you do it. We haven't made it just how you do it. This is Masters of Scale.

3:31I'm Jeff Berman, your host.

3:36Fawn Weaver is using every ounce of her experience as a marketer, an investor, and an author to fuel the rise of Uncle Nearest premium whiskey. She never meant to get into the beverage business. Her obsession with the story of Uncle Nearest started as an idea for a book. Vaughn, welcome to Masters of Scale. Thank you for having me. Pleasure to have you. I want to start by having you take us back to your 40th birthday. You decided to take a trip. Some people want to go to a beach or a mountain. You chose to go to... Lynchburg, Tennessee. Why? Because that is where the story of Nearest Green was.

4:17And I had read on the cover of the New York Times International Edition, the headline was, Jack Daniels embraces a hidden ingredient, help from a slave. The credit for being Jack Daniels' teacher and mentor was given to a white man by the name of Dan Kaur, a preacher and a distiller. And the community believed that it was actually an enslaved man on his property, Nearest Green, that was the actual teacher, that was the actual mentor. So that's what the story was about. I think the reason why it struck a chord with me is up until that point, I was almost 40 years old. I couldn't tell you a single ubiquitous American brand where we could say there was an African-American at the start.

4:54There's zero chance that we weren't at the beginning of a lot of these companies, but we weren't allowed to patent. We weren't allowed to trademark. And so we have no way of knowing what our role was. And so that intrigued me. The internet decided almost instantaneously with the headline in the photo that Jack Daniel was a slave owner. He stole the recipe. He had the slave. Hmm. That was not a part of the story. It was not even insinuated. But that is the story that social media ran with. I thought the social media had the story wrong. And so I ordered a book called Jack Daniel's Legacy. I expect that maybe in the book it would refer to an African-American or an enslaved man.

5:37I never expected to see Nearest mentioned by name. And I was shocked that from the very early pages, Nearest Green, his boys George Green and Eli Green, were mentioned throughout the book. Jack Daniels, the book is dedicated to him. The people that are interviewed in the book are all the people who knew him best. His nephew, who he turned the distillery over to four years before he passed his way. His great-nephews that then took over the distillery after that. Just people who were either touched him or one degree of separation from him. And Nears Green and his boys were mentioned more times than Jack's own family.

6:12So this is a hidden figure story where hidden figures are actually hiding in plain sight. Where the hidden figures aren't hidden at all. Right. Okay. So you read the story, you order the book, you devour the book. It's still a leap to say, I want to go to Lynchburg for my 40th and dive into this. Unless you know me. Okay. Well, tell us. So for me, every Sunday, I always take that time off. And the way that I transition from work brain is I will find a subject and it could be something that I read in a newspaper. And I would literally do what my husband calls go into a rabbit hole. And that's something that I just have always loved to do.

6:49I love to do these deep dives into history or just different things that I learn about. And so for me to decide I want to do a deep, deep dive for my birthday, to my husband, it actually wasn't that odd. So what happens when you make this trip? Really what I wanted to do was spend time in the library.

7:09Because when I was doing research, what kept coming up, every photo that involved an African-American from Lynchburg, Tennessee, it all said Moore County Library. So I just figured I was going to go into Moore County Library and just flip through lots and lots and lots of photos. When I got to the library, a woman walked in after I told the assistant librarian what I was looking for. And a woman came in and, as it turned out, second eldest descendant of Jack Daniel. And after I shared with her why I was there, I told her that I did not believe that her ancestor was what they were saying he was.

7:43I believed that the story between Jack and Nerys was a story of love, honor, and respect. I shared with her what research I had done from afar that led me to that conclusion. And she said, I want to help you. I just want to pause for a second because it is extraordinary what happens when we start with the presumption of good intent. Absolutely. And we build a bridge before we begin a conversation about anything that might be harder. Yeah. And what a stunning moment in that library and maybe serendipity, but maybe providence that she came in and you had this conversation the way you had it. Yes.

8:20It's extraordinary. It absolutely is. And what she said before she left, and mind you, she was only in the library maybe 15 minutes. She said, you know, the property where Jack grew up, where everything happened, it's for sale. You ended up buying this land. We did. Which was the original home of… Jack Daniel Distillery No. 7. Vaughn and her husband bought the property, more than 300 acres in Tennessee. They were sold on the idea when they discovered that part of the home was a pristine time capsule from the early distillery days. The wallpaper was hand-painted roses, and behind the wallpaper was the insulation, which was newspaper.

9:00And every single newspaper that was used for insulation was written October 10th or October 11th, 1898. Wow. Then you went into the boys' room and someone was barrel stencil practicing all over the walls. Fawn moved to Lynchburg and went into an even deeper research rabbit hole. She unearthed piles of old photos and historical documents. She also interviewed countless relatives of nearest Green. Along the way, she heard a common request from those relatives. The best way to memorialize their ancestor? Put his name on a bottle. Fawn couldn't shake the idea. She started learning everything she could about how to start a whiskey brand.

9:47And quickly found that, to put it mildly, it's a complicated industry. Many of those complications date back to the Prohibition era. The entire time of Prohibition, the mob is running the liquor business. Then at the end of it, the politicians in their pockets have this brilliant idea. Well, we should make sure the mob is never allowed to run the liquor business again. So let's create a middle tier so that the suppliers can never be the buyers. The person who's making it can't also own a restaurant. They can't own a bar. They can't sell directly to the people who are buying liquor. So there's someone who can make it and someone who can sell it to the customer directly.

10:28And then there's someone in the middle who's distributing it. Correct. Now here's the challenge though, is that that happened, but somehow every single person in that second tier is named Billy, Joey, Louie, like everybody. And now all of these generations later, that's not changed. And so it is a really difficult business to get into because there's a lack of familiarity of both women in power and business in the industry and people of color overall. You've got the intersection of both. And I have the intersection of both. And so imagine coming into this industry and thinking, okay, well, I'll just, you know, take it straight to the consumer.

11:14Right. No, no, you won't. Right. Absolutely, you won't. And so the challenge with that second tier, their bills are paid for by big guys. And that's a huge challenge because you could create the best whiskey in the world. But if you can't persuade a distributor to actually sell your product to the end customer, you've got nothing. You have nothing. So what did you do to figure out, one, how do we make this? And then two, how do we crack that distribution? Yeah. So the how do we make this was quite fortuitous. the realtor who we bought the home from, she said, well, if you ever decide to put his name on a bottle, I'll come out of retirement to make sure you get it right.

11:53So as it turned out, real estate was basically her second career. She spent her entire life in the family business. And when she left Jack Daniel Distillery, she was the head of whiskey operations. So she knew exactly how to get the product right and how to get that in the bottle. So that piece wasn't the issue. It is the cost and the influence of being able to get your product on shelves. And so the process that I took to do this, I don't know that I would recommend it for anybody. It was very risky. So in our industry, the norm is you start off in a single state. And then within about seven years, if you're able to build traction in that single state, then you'll try to get into maybe four states that connect to that one state.

12:42So everything is still touching. Everything you can still kind of drive to it in a day type of thing. And then from there, you know, hopefully after about 25 years, you've built something. In my instance, I thought, there's never been a woman or a person of color to ever succeed in this industry. So I can't take the path that they're suggesting because everyone else has failed. This country is 70 % women and people of color. And we have failed in this industry across the board. And so I said, I want to get into all 50 states in less than two years. And the reason that I wanted to do that is because I knew the only way that I could level the playing field with the hundreds of millions of dollars that the big guys were spending in marketing is I would need to use unearned media to help me to tell the story.

13:28Well, national press has no interest in doing a regional story. They want a national story. Well, if I'm only in three states, I'm regional. But I mean, fun. If you're Dwayne The Rock Johnson. Yeah. Sure. There's a path to that. Yeah. You're a first-time liquor entrepreneur building a brand that has an incredible story behind it. But how do you make that happen? Well, the first thing that I did was people in the industry, on the spirit side, they had this belief that awards don't matter. If you got San Francisco, double gold, gold, best in class, that was the only one that they believed mattered.

14:05But again, I like going against the grain and I like proving people wrong. I don't know what that trait comes from, but it is just in me. And so my thought process was, well, maybe people don't care about winning an award. But if we became the most awarded bourbon in the world out the gate, they would care. And I knew we had a head of whiskey operations with 31 years of experience. I knew that we could make an incredible product, that we could blend an incredible product. And so I said, submit us into every award competition around the world. We began doing that before we ever put a bottle in the marketplace.

14:44Wow. Wow. Because we only had so much time and so much money. So we had to get consumers talking about us even before the distributors were taking us on. You pushed all your chips in on the strategy. Everything. Yeah. And you didn't raise venture. Still haven't. Right. And so how did you fund this? The very first investor was my husband's former employee, employer. Uh-huh. And he did not like the plan at all. Now, mind you, my business plan was really good. It was solid. I'm sure. But it did have to take into account with the SWOT analysis that a massive threat was if Brown Foreman, who owned Jack Daniels, decided to wage a war against us.

15:26They could wage a quiet war. They could have opposed our trademark filings. But wouldn't have been smart. But you've seen big companies do stupid things. And that would have been very costly. And yes, in the end, we would have won, but then we would have had no money left to actually build the brand. When you were talking to your husband's former employer and other prospective investors, were you leaning in to this threat to the business? I was. I was. We talk about doing, because that's, it's a move that I think very few people actually do, saying, here are the reasons not to invest in us. Talk about how you did that, if you would.

15:59So we leaned into it. And I tell entrepreneurs all the time, when you're doing your business plan, if you're only looking at all of the strengths, you're missing a huge part. The weaknesses and the threats are important because if you can't answer how you're going to maneuver around those, how you're going to win, then investors are not going to be comfortable. I absolutely leaned into it and said, listen, this could happen, but the greatest rewards always come from the greatest risks. And so I didn't shy away from the fact that they were massive risks. Right. For all of our strengths and opportunities here are the weaknesses and threats.

16:33But here's how I intend to handle them. Yep. You started raising some capital. You didn't sell too much of the business to anyone. You've held on to control of it. You started making the whiskey. Yes. You started winning the awards. Yes. That you set out to win. Yes. Is that when the distributors started saying, oh, like how did you get them to the place of saying we're ready to take you national? The press. The press. I give all credit to the press because even before we began winning the awards, they just allowed me to come in to share the story and to share the story behind the brand. When we created Uncle Nearest, that was the first time in history that an African-American had been commemorated on a spirit bottle, any spirit.

17:18And so the way that I really did it was I would go to them and I did a lot of these pitches myself. myself. And I'd say, look at all these bourbons you have. Which one is not a white male? Just any of them. And so it was a bit of a wake up call for them because no one had ever asked the question before. And so then they're realizing, yes, our country is 70 % women and people of color and you have never had a bourbon brand that commemorated either. They thought, well, we can't say no. But here's the thing, not saying no and having any idea how to sell my brand are two very different things. So this is how we got the distributors on board.

17:58As I told them, I didn't expect them to do anything but drop off the product. We would sell the brand. We would do the work. They would be a high-priced FedEx. But I told them all at the very beginning, there will come a time where we are going to build this brand and I am going to have an expectation that you will no longer be a high-priced FedEx. But I'll let you know when we get there. In the meantime, we'll go to the BevMo's or the Costco's or whoever it is. We would do it ourselves. We had no expectation of them in those first couple of years. And so we built the entire thing out without having the distributors in mind, other than saying, drop off the product.

18:35Because we legally need you to drop off the product, but we will do the work. So you were going, selling the story, explaining why this matters, explaining the quality of the drink as well, and fighting for that precious shelf space. and promotion, whatever else they might give you. Absolutely. Just it's hand to hand. Absolutely. And it is a, I mean, the nature of the distributor world, even to this day, it's not static. It's constantly changing. It's constantly moving around. Their dynamics are constantly changing. And so I'm always having to re-figure that out. Well, what's fascinating and part about this is it is in some ways a counterintuitive approach to scale because you are going door to door.

19:21That's exactly what we're doing. But because you weren't just doing Tennessee, Kentucky, Georgia, Alabama, like the start one state and go regional, you were able to get it out everywhere, which I imagine created a virtuous cycle because now the press is picking up more. Absolutely. Yeah. Absolutely. And then as there's a little bit of success, then from that little bit of success, then we're able to share that. And the press picks up that little bit of success. And I think a lot of people are not very good about bragging about their brands. But the thing is, is that consumers actually like that.

19:53Being humble about your brand is not the way to go. You can be humble in your life, but don't be humble about your brand. You have to brag because that's what consumers care about. That is what the press cares about. And if you are going to go toe-to-toe with big boys that are spending hundreds of millions of dollars on marketing and you don't have that ability, you better know how to tell your story 10 different ways from Sunday. Still ahead, how Fawn prioritizes company culture in the midst of rapid growth.

20:32Real leaders don't back down when the stakes are high. They innovate, they push forward, and then they take the stage at the Masters of Scale Summit. Join us in San Francisco, October 7th to 9th, to hear from the CEO of the New York Times, scientists using cutting-edge technology to find cures, the leader of crypto powerhouse Coinbase, a retired four-star general, and many, many more. Apply now at mastersofscale.com slash apply25. That's mastersofscale.com slash apply25. If you're ready to take your startup from idea to impact, then AWS is your launchpad. From data storage to machine learning to secure app hosting, AWS gives you the tech trusted by the world's fastest scaling startups.

21:22And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

22:05So if you're scaling, make it simple with Deal. Go to deel.com slash MOS and get up to three months free. Welcome back to Masters of Scale. You can find this interview and more on the Masters of Scale YouTube channel. I'm curious because this is really a blitzscaling journey in a category where blitzscaling does not happen. It does not happen. Yes, it is. So, and when you're blitzscaling, things break. They do. And you have to let some fires burn. You have to attend to others. Was there a moment where you said, oh, my Lord, we're not going to make it? Yeah. So this is the thing about bourbon. When you're starting a new brand, you're spending money to lay down products that you cannot sell for four years.

22:59So by lay down, put it in the barrel. Prices have gone up in terms of grains and barrels and all the rest of that. But at that time, I think it was just about$700 for all in, for a barrel. For a barrel. I think the first year we laid down like maybe 10 ,000 barrels that I can't sell for four years. But add on top of that, I actually need product to be able to build the brand, to be able to justify paying for that. Yep. So there were absolutely times where account is overdrawn. It is so close to zero. In our instance, the only reason the checks didn't bounce is my husband kept a full-time job at Sony Pictures.

23:36We had nothing that we could call our own. Was there a moment where that flipped, where all of a sudden you were able to breathe? No, I don't think I'm breathing yet. Because the thing is, is that we are still going at such a pace. We're acquiring other companies because one of the things I discovered coming into it is a single brand dies in this industry. I might say to a room full of consumers, I say the name Bacardi and people think of rum. But if you're in this industry, that's not what you think of when someone says Bacardi. You think of Patron Tequila. You think of, you know, Grey Goose.

24:12And that's because they are now a conglomerate that has all of these other pillars of business. And so you can just go in with that one portfolio and take care of the whole restaurant. They want you to have more stuff that they can put on their back bar if they're going to give you that meeting. Because it doesn't take them any longer for you to pitch them on your tequila, your rum, your bourbon than it does for you to just pitch them on your bourbon. It's hard enough to win the hill. Then you got to defend it. Then you have to defend it. Right. And so it is a challenge because we're constantly scaling and we're not just scaling Uncle Nearest.

24:49But then we just acquired a vodka company and then we became the largest Grand Champagne vineyard owner in the city of Cognac to raise up a Cognac company. There is so much money that goes out the door every single day. So I can't tell you. I will probably say when all of those companies are built and doing well, maybe I will breathe then. But I'm definitely not there yet. I mean, it's so interesting because we have this fabled story of the entrepreneur who is maxing out credit cards and, you know, a partner is keeping a full-time job and that salary is keeping everything afloat. Yeah. And that feels like the heart is pounding everyday moment.