Straightaway 'Runs Its Own Race.' It's Why Costco & Shake Shack Came Calling.

0:10Hello, friends. I'm Ray Latif, and you're tuned into Taste Radio, the leading podcast for entrepreneurs, makers, and innovators, and innovators, and innovators, creators,

0:26and innovators, is taking a radically different path, embracing the hard way. In this episode, founder and CEO Cy Kane reveals how the Portland-based brand is carving out a distinct space in the booming ready-to-drink category by prioritizing bar-quality cocktails crafted from in-house ingredients and held to uncompromising standards. Sai outlines a strategy rooted in deliberate, thoughtful growth rather than chasing viral trends. He dives into the brand's innovative approach to creative R &D, leveraging limited releases and direct-to-consumer exclusives to experiment boldly and gather insights that shape future core offerings.

1:17He also highlights how investments in in-house production, B Corp certification and sustainability efforts, alongside strategic partnerships with Costco, Alaska Airlines and Shake Shack, demonstrate that a slow, craft -centric mindset and a strong brand identity can make a powerful impact in even the most crowded markets.

1:43hey folks it's ray with taste radio right now i am supremely honored to be sitting down with cy kane who is the founder and ceo of straightaway cocktails cy it is so great to see you great to see you ray thanks for having me back really appreciate it yeah we're in san francisco and t-minus i want to say three or four hours no less than that oh my gosh like two and a half hours from our Taste Radio meetup out here in the city. And you know what? This is like Christmas for me because not only did you arrive here, you arrived here with a whole bunch of new products. You've got a French 77, you got a Piccletini, you got a Last Word, a Cosmos, a Gold Negroni, and then you got something else.

2:24You got a few other things that I think are still under the wraps as it were. Yeah, yeah. I wanted to let you be the first to see a lot of this innovation that we've been working on. And we're in year two of a really fun program we get to do with Costco now annually. It's our advent calendar. And we introduced some new drinks in that calendar that just hit shelves the last two weeks in Costco's across the country. We had the advent calendar. We talked about it in an episode of the podcast. I think it was around October of last year. And I remember Jackie, my co-host, was like, hey, what am I going to get one of those?

2:58You got to go next door to the Costco next to the San Diego office. And I think you guys were so gracious in sending her one, but I'm just continually amazed by what Straight Away does when it comes out with new products, because they're fun, they're exciting, they're differentiated, and they're so high quality. And before we hopped in the mics, we talked about that emphasis on quality as being the hallmark of the brand. I don't know why it isn't the hallmark of every brand. Why isn't quality first and foremost in your mind if you have a company? Yeah, there are a lot of different ways to go to market.

3:35You see it in every mature CPG category. There's things that are entry-level, price points, mid-tier, and then the premium set kind of fills in the rest. And there's players and reasons for all those things to happen. And from our perspective, we came at this from a standpoint of just being deeply in love with cocktail culture and enchanted by it. We were starting, my co-founder and I were making cocktails 20 plus years ago at home. And my roles would take me all across the country. I'd belly up to bars, ask bartenders a million questions, go back and faithfully try to recreate what they were doing, ask why this gin with this vermouth and all those questions.

4:12And I think from that standpoint, we only thought about this through the lens of liquid first. How do you honor the craft of cocktail culture? How do you, if a great bar is going to, the team's going to show up for hours earlier and fresh pressed lemon juice, well, that's what we were going to do. So they're going to make their own bitters and simple syrups. That's what we were going to do too. And I think from the jumping off point, that was the only way we ever thought about doing this. And if you approach it from a liquid standpoint, first packaging is secondary. I think because this category proliferated so quickly, packaging became the first kind of trigger for a lot of brands where it's like, okay, liquid second, I know how to run 355 mil cans or whatever it is.

4:55and I end up making a 12-ounce margarita at 15%, which isn't, that's fine. Like that should be on shelf for consumers to try, but it isn't coming. If you walked into a great bar, if we walk into Trick Dog or True Laurel down after we're done with our interview here and have a drink, you're gonna get a three-ounce pour, three and a half ounce pour. And so we follow the true format of how cocktails are built. We think about ourselves as a cocktail bar instead of a packaging company. And I think that lens and that North Star has served us well throughout. Last time we spoke, the episode that featured the interview was called Step One to Winning a Gold Rush?

5:36Do this straight away. I don't think it's a gold rush anymore. It's very clear that this category isn't about hype, that this category is real. It's founded in consumers' desire to have a better product, a better cocktail, and have one that's convenient and really high quality. What's changed in these past few years where finally consumers have woken up, retailers have woken up, food service operators are identifying this as a potential category for growth or at least to create incremental value? Yeah. Yeah. Yeah. If you look at the other categories, like the original RTDs were beer and wine and you throw spirits in there too.

6:14Those were all categories that grew incrementally. Our category has erupted overnight in the last seven to eight years, really. And I think because of the eruption, because of the explosion, there was a proliferation and consumers had to sort through who's serving their palate. And that happens organically. I think it happened over a longer period of time with beer and wine where people over decades can figure out what was their favorite beer, what was their favorite wine. Here, consumers are having to figure it out really, really quickly. Big retailers, you know, their category reviews and their sets are maybe annual, sometimes twice a year.

6:50And planograms take a long time to shift. If I'm a beer or wine buyer at one of these big retailers and beer and wine is kind of trending down or softer than it used to be in favor or in lieu of cocktails, it takes a long time for those planograms to get changed or reset. So I think we're seeing that now. I think you see retailers sinking their teeth into it, distributors sinking their teeth into it, and the brands that are here to stay, you know, are sinking their teeth into how to keep growing this category together. Yeah. And the consumers that have been buying straight away are in the know.

7:24Seems like a really important part of this journey, a part of this growth is enhancing awareness, getting the product into more places, into more hands, and sometimes in unexpected places. Alaska Airlines is a really good example. They carry your old-fashioned and your margarita. I was so lucky to fly Alaska from Boston to San Diego earlier this week, and I was just really, really happy that I did. But how are you getting the word out? I mean, what's helping build awareness for straightaway in particular? Because as we've talked about, there is consumer interest for sure in better cocktails. But how do you get the word out about your brand specifically?

8:08How are you getting more retailers to say, I want straightaway in my stores? Yeah, that's been a really interesting thing for us. And I'm not going to say we're the tortoise and others are the hare per se, but we've been really hyper-focused on perfecting our craft and our art. We're a small team. We're a self-funded organization. And so you can't just broadly go flip the switch and you're national the next day. You have to incrementally build your brand and opportunities for people to interact with it. And the Alaska partnership started three years ago and has been amazing for us. And 50 million passengers are on those flights and they're looking for something, you know, really interesting to drink on that flight.

8:49And I think for us, it's been a really great opportunity to introduce ourselves to the market in a grander scale. But we also really focused on our backyard. So in Oregon and in Washington, you know, we've been working with really amazing natural focus, natural leaning grocery stores to really kind of seed the market and get going. And we've had partnerships for six and five and four years with some of these retailers. And so people experience this through that. They ask more questions. Other retailers hear about it. They want to put us on their shelf as well. And so I I think we've been really meticulous about where we've tried to show up and what's going to have the most impact.

9:23And then once people taste it, for us, liquid ellipses everything. If people try it, our conversion rate is very high. And our retention rate, our repeat customer rate is really quite strong. Regionality, certainly a good strategy for emerging brands. I think channel strategy is also really important. Where do I go within the market? Is it natural, as you've had some success with? Is it in mainstream? Is it in club? Is it retailers that sort of straddle that line, like a Wegmans or a Trader Joe's? How have you thought about getting in? Because you are in Trader Joe's. You are in Costco. You are in those natural retailers.

10:01Are you still having that same conversation from buyer to buyer? Yeah. Every one of those conversations is still us handling that directly with the buyers on the other end of the phone and the other end of the email. As in you're not going through a broker? We do use brokers from time to time, for sure. It depends on what it is. airlines, it's very handy to have a broker and we'll use that for a million different reasons. And it can be for other retailers as well. I would, you know, from our perspective, having that for some of our key partnerships and retailers has been very, very beneficial to us.

10:31It really matters that you're selective in who you partner with on that front. And for us, we've avoided any kind of brokerage relationships where we don't get to interact directly with the retailer or the customer. We won't sign deals that we don't get to be a part of the pitch or the conversation. That sounds kind of weird, actually. So the broker has complete communication control with the, that, no, that doesn't sound like a good idea. Yeah. Yeah. You're seeding a lot of your brand to someone else to talk about it for you. And so we don't. And yeah, I think from a channel strategy standpoint, you know, the Alaska Airlines partnership has been incredible.

11:02We're leaning into that in new, really deep, meaningful ways that are going to manifest over the next six months. Some really cool stuff on the way. And you can, if you're playing along at home and reading what Alaska's up to, they're growing quickly and they're adding international flights. And I think this is going to be a fun watch the space moment for us with them. And then, you know, they're West Coast and they're flying to East Coast and the Midwest and not as much maybe to the Southeast. And so we have another partnership with an airline that's based out of the Southeast and that's Breeze Airlines.

11:29We've been flying with them for two years as well. I didn't know that. Yeah. Huh. Yeah. It's been amazing. Yeah. I think there's what, 14 or 15 major airlines in the U.S. and we're flying with two of them, which is amazing. They're great as well. And so it gives us an opportunity to introduce ourselves to a market where maybe we're not on Alaska and can't be on Alaska, but get to introduce ourselves to folks in the South and Southeast as well. Costco customers have been introduced to your brand in a couple different ways. And one of the ways is this advent calendar, this brilliant advent calendar that you have so graciously gifted me.

12:02I think it's just for me, right? It's all yours, buddy. Okay, thank you. Take that home. The 12 Nights of Cocktails advent calendar. I don't know if calendar is the right word for it. But anyway, it's a wonderful gift. But then you also have other products or other formats for your products in Costco. And they're doing really well. When I was in San Diego, it seems like you're selling a product there left and right. And that's a good thing. Yeah. Sometimes that presents some challenges. But why is Costco a good retailer for what you're doing? How do they help enhance awareness and trial for you?

12:36Yeah. Yeah, their customer base is they're there for trial. Treasure hunting is one of the things, surprise and delight that Costco Hanks has had on. And quality is at the basis of everything that they're purchasing. And I think members show up realizing that the buyers have been very meticulous in vetting what's on the shelf. There's very few products. I think there's maybe 50 Alkbev SKUs on pallets in those doors. So it's a very small amount of brands that get to be in a Costco. Can we pause there for a second? It's 50, that's it? Well, for spirits, I think that it's somewhere around 50-ish.

13:10Okay. The low 50s oscillates between 49 to 51 brands at any given time that come from the spirits background. There's wine, there's beer that exists beyond those 51. But in our category, it's very hard to break into that set. And I think from our perspective, it's a validator of, you know, they believe in our transparency of process, how we build product. We made a big bet years back to stay vertical as a producer. We invested very early in ourselves. Some might have said that was crazy what we did to invest that much in our own production facility to scale in and stay vertical. But we get to handle every ingredient ourselves.

13:48We get to build as many of the ingredients ourselves that we can. And I think that resonates for buyers who are looking to meet the consumer that is asking for authenticity in this category. like who's building a product like, you know, a trick dog or a true laurel is going to build or a NOPA here in San Francisco might be building. And they want a range of offerings. They're going to want the stuff that maybe feels like entry level price points. And then they're going to want the things that appeal to a consumer that's going to spend a little bit more for a different level of quality and product.

14:19You're like a kid in the candy store because you can do so much. There's so many different new things you can make. And from a marketing perspective, I imagine it's great to be able to always consistently come out with new products to align with and work with world-renowned bartenders. And it certainly helps on a social media and promotional level. But at the end of the day, you're selling tons of old fashions. You're selling tons of margaritas. You're selling tons of Negronis. What's the benefit from a promotion and marketing standpoint? I assume that's the key benefit, but is the innovation strategy very much about just keeping you excited as much as it is keeping the consumer excited?

14:55That's a really interesting question. I think from our perspective, you know, and backing up to earlier in the conversation, looking at our brand through the lens of us being a cocktail bar, every great cocktail bar is innovating all the time. True. they will always any great cocktail bar you're going to walk in and have a margarita an old fashion negroni on menu and then there's a lot of things kind of orbiting that they're seasonal or renditions or riffs on a margarita or an old-fashioned and that to me is what i love so much about our category is it's just infinite like the innovation that can happen and it can be you can back yourself into a a corner of like okay are we innovating to i think last year we made 16 new products and we're building these things ourselves.

15:39And you have to be mindful about what's the go-to-market strategy for sure. I think for all of us, when we walk into a bar, we've got 105 years of IP in our heads around old-fashioned as a brand and margaritas are 85 years old. And so that's been baked in everybody's heads. And you're going in knowing that that's there. It gives you a frame of reference, but then there's some amazing sour that's on the menu or a clarified punch or whatever it is that takes you into a whole new place. So you might've come for the old passion, but you're having a Bovardier next. And that's what's so fun about this category.

16:12I think that's the experience of it is you start with some well known blockbuster hit cocktails. And then the exploration really starts when you're, you start falling in love with cocktails in the category and we have to stay in front of that. Still, it's a small percentage of what you, I would assume, you know, some of the new stuff, maybe it will become part of your top selling products, but I didn't mention this. We're at the office of a Forager project and there's a wall of products that Forager has made in the past that don't exist anymore. They own their own manufacturing and they've done a lot of stuff because they're excited about it.

16:46They're enticed by the idea that we can do this. We can make this on our own. And then they've realized from a market ability standpoint, it didn't work. And someone might say, well, that's taking your eye off the ball of just focusing on your key products and your core value to consumers, which might be two or three cocktails. Yeah. Which is why I ask, you know, certainly making new, exciting, innovative products gets you out of bed every morning and gets you excited. But when the strategic comes knocking or that big investor that you've been hoping for comes knocking and says, you know, the innovation stuff is all well and good, but you're going to make a lot of money with this stuff.

17:27Right. So it's about focus. Yeah. And the question I have for you is, how do you stay focused on the long-term mission of delivering these great cocktails, especially the ones that people are going to be familiar with, while also having your hand in that cookie jar? Yeah. Yeah. For me, I'm not going to build a very compelling brand for myself or for my team. Collectively, we're not going to if I'm thinking about an exit or an investor on the road. What we're looking to do is really honor the cocktail culture. And that takes us in a lot of different directions. You don't want to spend idle time making products that aren't going to be successful at market.

18:06That's for sure. But there's a lot of tests and learned in this category right now. And innovation is actually kind of an important part of how you find out what comes next in this category and where the consumer is heading. The consumer has been fairly interesting as far as our preferences have changed the last six, seven years and what they're doing. So we have to keep in front of that and keep offering new things to go with what we've had in the past. We have structured our innovation cycle in some pretty helpful ways. I would say in the last three years, we learned like you can't just sit here, like all of us walk into our production facility every morning with eight new drinks we want to make.

18:39And then we have to figure out, okay, let's create the brief for what we need to make and why. What's a white space for us? What's a white space for the market? What really lights our lamp from a story standpoint? But I think we're going to need to have, if you look like, you know, Mercedes-Benz racing in an F1, they're building cars that go 250 miles an hour. And that isn't meant to be a commercialized product. That's a$30 ,000 four-door sedan that you can go buy off the lot, but they're taking those learnings and they're pushing that through the rest of their line. And I think for us having Halo limited drop, limited time products.

19:11You know, I brought here a Kingston Negroni and a Singapore Sling that is from our membership model. And our membership model allows us to ship directly to consumers two new bottles every three months. And from our D to C model, we get to test and learn what's resonating. And that's how something like a Thai Gimlet goes out of our R &D process and our membership model and makes its way into an advent counter at Costco. Yeah. Well, you have some lucky subscribers, I'll say that. We talked about production and innovation. We talked about retail. We talked about the emphasis on quality. I think one thing we haven't necessarily talked about that hasn't necessarily been told as outwardly as maybe you want it to be is the story itself.

19:58Like what is straight away? What do we represent? And making sure that people understand that this isn't just a great cocktail, but that there's a story behind it. There's a real vision and mission to what you're doing. Yeah. You know, we were at this for a really long time. There's quite a bit of bootlegging that happened for five and a half years. We talked about this in the last interview. Yeah. Yeah. And, you know, we've been legal now coming up for our seven year marks coming up in two months. So many things have evolved over those seven years, but the core of it is still the same, which is how do we make the best possible product and honor the category the way that we should.

20:33we're a mission-driven brand on a couple different fronts. Since we last spoke, I think, I don't think we had the certification when we last spoke, but we became one of the 50 B Corp certified distilleries around the world. Oh, wow. That was a big deal. Yeah, congratulations. Thank you. Took us a lot of work to get to that. We give 1 % to the planet, 1 % to human rights on every cocktail and can and gift pack that we sell. And the other part that we're on a mission for is just blurring the lines, like doing our best to honor the craft cocktail at the highest level. So all that stays in place. But through those efforts, you know, we were able to, for our espresso martini, our nitro espresso martini, we partnered with Stumptown.

21:14Bon Appetit picked their cold brew as the best cold brew you can possibly buy. And they're our next door neighbors and they're brewing it right there. We go grab it and we put it to work and they're certified B Corp as well. And I think the more that we can continue to build that network of partner brands that we're pulling in the best of Smith Tea, we're working with Salt and Straw on some innovation, and they featured us as well. We're going to keep our foot on the pedal, on the mission-driven side of it. And I don't know how much of this that we really talked about last time either, but most people wouldn't know this at first, but a lot of what we do is farm to glass.

21:50Like we're, every single time that we can source an ingredient in our backyard, we start there. If it's the best of class ingredient, we can get botanicals from the Pacific Northwest just the same as we can from the Alps. And we will first and foremost pick the best ingredient. We can't grow Seville oranges in Oregon. We're going to get Seville oranges from where they come from for the peel. But that's a huge part of what we do in working with farms up and down the West Coast and the East Coast to support them. But it also enhances our product and it keeps it, I think you taste the freshness of fresh pressed juice.

22:22We partnered with Perricone Farms, a third generation citrus farm in SoCal. A few miles down the road from here, they fresh press the juice. It comes cold chain up I-5 in a cold truck into our tank, cold into our can, cold. So our margarita smells like it's fresh pressed lime because it is. And that's different than constructed lime juice that is getting reconstituted in a lab somewhere and replicating fresh lime juice. So that's part of what our mission is, is to help consumers feel like they've landed with an authentic cocktail maker that really cares deeply about getting this right. Yeah, I ask about it.

22:55There are just so many influencers out there, whether it's an established media company or, you know, someone who just follows cocktail culture and is really interested in the space. And the story for them matters. And I think them sharing that story matters and making people aware of and educated about your brand. And, you know, the average end consumer probably isn't going to really know or want to know too, too much about the behind the scenes process. They just want it to taste great. But when you are trying to get the word out via traditional media, via those influencers, what's really resonating?

23:32What's getting them excited? You know, how are you making sure that your story is told in a way that can be recited, but not word for word? Does that make sense? 100%. Yeah. Yeah. Totally get what you're saying. And we have an open invitation. So we're a small team. We have a great PR firm and they're helping get the word out there. But when you're on the West Coast, it's different than being on the East Coast as far as a media hub. So thank you so much for providing an opportunity today to fly out to the West. We have two offices. We have one in San Diego. I appreciate that. Yeah. And so, yeah, I think from our standpoint, that's just kind of how it goes in life.